EX-99 1 a2qex99.txt SECOND QUARTER EARNINGS RELEASE 2001 EXHIBIT 99 NEWS RELEASE FOR IMMEDIATE RELEASE Contact: John W. Conlon, Chief Financial Officer --------------------- (740) 373-3155 July 23, 2001 PEOPLES BANCORP ANNOUNCES EARNINGS GROWTH -------------------------------------------- MARIETTA, Ohio - Peoples Bancorp Inc. (Nasdaq: PEBO) announces increases in diluted and cash basis net income and related earnings per share. Net income totaled $3,005,000 in the second quarter of 2001, up $305,000 (or 11.3%) compared to $2,700,000 for the three months ended June 30, 2000, and up $409,000 (or 15.8%) compared to the first quarter of 2001. Diluted earnings per share were $0.45 for the second quarter of 2001 versus $0.39 per share for the first quarter of 2001, or linked quarter, and $0.41 per share a year ago. On an operating basis, income was $2,978,000 for the second quarter of 2001 compared to $2,820,000 a year ago, an increase of $158,000 (or 5.6%), due primarily to net interest income growth. Diluted operating earnings per share grew to $0.45 for the three months ended June 30, 2001, versus $0.43 in the second quarter of 2000, an increase of $0.02 (or 4.7%). Compared to the first quarter of 2001, second quarter operating income increased $270,000 (or 10.0%) and diluted operating earnings per share grew $0.04 (or 9.8%). Operating income removes the after-tax impact of significant non-operating income and expenses such as gains and/or losses on asset disposals and securities transactions, mark-to-market adjustments on Peoples' interest rate caps, adoption of new accounting standards, etc. "We are pleased with second quarter performance, considering the sluggish economy and other challenges facing the financial services industry," said Robert E. Evans, President and CEO. "Net interest income growth has boosted our short-term earnings outlook, but our long-term focus continues to be non-interest income growth, which we believe is key to sustaining our long-term profitability and further improving shareholder value." Operating return on average equity ("ROE") was 13.34% for the second quarter of 2001 versus 12.67% last quarter and 15.81% a year ago. Operating earnings were $0.86 per diluted share for the first half of 2001 and 2000 while operating ROE was 13.01% and 15.88% for the same periods, respectively. On a cash basis, earnings per share totaled $0.51 in the second quarter of 2001 compared to $0.45 per share for the previous quarter and $0.47 in the second quarter of 2000, increases of $0.06 (or 13.3%) and $0.04 (or 8.5%), respectively. Cash basis ROE was 19.27% for the second quarter of 2001 compared to 17.76% for the linked quarter and 23.75% for the second quarter of 2000. Cash basis earnings exclude the effects of intangible assets and related amortization expenses. In the second quarter of 2001, Peoples had amortization expense related to goodwill of $457,000 and core deposit intangibles of $125,000, compared to $432,000 and $139,000, respectively, for the same period a year ago. On a year-to-date basis, net income totaled $5,601,000 in 2001 compared to $5,561,000 a year ago. Diluted earnings per share were $0.84 for the first half of 2001, unchanged from the same period in 2000. Cash basis earnings were $0.96 per diluted share through six months in 2001 and 2000. For the six months ended June 30, ROE was 12.81% in 2001 versus 15.41% in 2000 while cash basis ROE was 18.53% and 24.20% for the same periods, respectively. In the second quarter of 2001, net interest income totaled $10,796,000, up $571,000 (or 5.6%) compared to $10,225,000 for the same period last year and up $485,000 (or 4.7%) versus the linked quarter. Through the first six months of 2001, net interest income grew $778,000 (or 3.8%) to $21,107,000 compared to the first half of 2000. Net interest income growth in 2001 is due to Peoples' increased volume of earning assets compared to the previous year. Peoples' net interest margin continued to improve gradually during the second quarter of 2001, reaching 4.07% for the second quarter compared to 3.98% in first quarter 2001. On a year-to-date basis through June 30, 2001, net interest margin was 4.02% compared to 4.22% last year. Non-interest income totaled $2,270,000 in the second quarter of 2001 compared to $2,201,000 and $2,233,000 in the linked quarter and second quarter of 2000, respectively. For the six months ended June 30, 2001, non-interest income grew $110,000 (or 2.5%) to $4,471,000 compared to the previous year. Peoples' largest source of non-interest income is deposit account service charges, which reached $889,000 for the three months ended June 30, 2001, versus $810,000 in the linked quarter and $793,000 a year ago. On a year-to-date basis, deposit account service charges totaled $1,696,000 in 2001, up $151,000 (or 9.8%) from $1,545,000 the previous year, due largely to higher volumes of overdraft fees on checking accounts. In the first half of 2001, insurance and investment commissions totaled $584,000 compared to $530,000 for the first half of 2000, an increase of $54,000 (or 10.2%). Peoples continues to pursue new ways to provide asset and risk management products as a method to grow non-interest revenues. Insurance and investment commissions totaled $263,000 for the second quarter of 2001, down from $321,000 for the linked quarter and $374,000 for the second quarter of 2000, due primarily to slower annuity sales and reduced brokerage income. The current interest rate environment has reduced the volume of Peoples' annuity sales, and associated revenues, in the second quarter of 2001, while brokerage income has been impacted by US stock market conditions and corresponding decreased client investment activity. In the second quarter of 2001, fiduciary income, Peoples' other major source of non-interest income, totaled $628,000, up from $614,000 for the first quarter of 2001. Fiduciary revenues were unchanged compared to a year ago. In the second quarter of 2001, electronic banking income totaled $354,000 compared to $319,000 last quarter and $310,000 for the second quarter of 2000. On a year-to-date basis, electronic banking income increased $84,000 (or 14.2%) to $676,000 in 2001 from $592,000 in 2000 as a result of volume increases in ATM and debit card usage by Peoples' clients. A key performance indicator for Peoples is its non-interest income leverage ratio (defined as non-interest income as a percent of operating non-interest expense). Through six months in 2001, Peoples' non-interest income leverage ratio was 29.9%, compared to 30.7% a year ago. For the second quarter of 2001, Peoples' non-interest income leverage ratio was 30.0% versus 29.8% in the linked quarter. "Peoples' targeted non-interest income leverage ratio in 2001 remains 34%, although we believe short-term non-interest income levels will be challenged due to current economic conditions and the general state of the US equity markets, and their impact on Peoples' revenues such as fiduciary fees and investment income," said Jack Conlon, Chief Financial Officer. "Our long-term strategy continues to focus on growing top-line revenues without proportional increases in non-interest expense." In the second quarter of 2001, non-interest expense totaled $8,168,000, up $217,000 (or 2.7%) compared to the linked quarter and up $374,000 (or 4.8%) compared to second quarter of 2000. On a year-to-date basis, non-interest expense totaled $16,119,000 in 2001, an increase of $771,000 (or 5.0%) compared to the previous year. Non-interest expense in the second quarter of 2001 was impacted by approximately $100,000 of expenses related to the conversion of Peoples' ATM and debit cards to a new vendor. Management believes that this change enhances Peoples' ability to remain competitive in electronic banking services through improved client service levels and enhanced long-term operating efficiencies. Salaries and benefits, Peoples' largest non-interest expense, grew $633,000 (or 9.6%) to $7,227,000 for the first six months of 2001, compared to the same period in 2000. Salaries and benefits increased in 2001 due to wage increases and rising benefit costs as well as increases in the number of full-time equivalent associates in customer service positions. For the quarter ended June 30, 2001, salaries and benefits totaled $3,642,000, an increase of $341,000 (or 10.3%) from $3,301,000 for the second quarter of 2000, and up only $57,000 (or 1.6%) compared to the linked quarter. Peoples' other non-interest expenses were at or below their amounts in recent periods, except marginal increases in non-income based taxes. "Rising medical costs are a contributor to our increased expenses, and all indications are these costs will continue to rise over the next several years," said Conlon. "Given this probability, we will work to manage those expenses and have implemented strategies to better prepare the company to control rising costs while providing a competitive benefits package for our associates." Late in the second quarter of 2001, Peoples invested $20.0 million of matured investment securities in business owned life insurance ("BOLI"). The BOLI investment, which accounts for most of the increase in other assets, will produce a tax-advantaged revenue stream and enhance Peoples' operating efficiency as rising employee benefit costs are offset by the anticipated increased revenue stream of BOLI. Loan balances at June 30, 2001, remained stable compared to the previous quarter end. Economic conditions and intense rate competition in Peoples' primary markets and contiguous areas continue to challenge loan growth. Most of Peoples' loan growth in 2001 is the result of an acquisition completed during the first quarter of 2001. As a result of less favorable loan loss experience and general economic conditions, provision for loan losses remained at $675,000 for the three months ended June 30, 2001, compared to $600,000 in the same period last year. Net chargeoffs totaled $549,000 in the second quarter of 2001 compared to $543,000 in the first quarter of 2001. Commercial and consumer loan net chargeoffs comprised a majority of Peoples net chargeoffs in the second quarter of 2001, totaling $281,000, or 51.3% of total net chargeoffs, and $125,000, or 22.8% of total net chargeoffs, respectively. At June 30, 2001, the allowance for loan losses totaled $12.2 million, or 1.61% of total loans, up $1.2 million from year-end 2000 when the allowance was 1.48% of total loans. At June 30, 2001, nonperforming assets totaled $5.1 million, or 0.43% of total assets, compared to 0.36% at March 31, 2001, and 0.46% at year-end 2000. Although the amount of nonperforming assets increased compared to the previous quarter-end, the current amount is below Peoples' peer levels and management believes Peoples' allowance for loan losses is adequate for risks inherent in the loan portfolio. Peoples has implemented tax reduction strategies, which include investments in low-income housing and historic tax credits, to reduce Peoples' tax burden and effective tax rate. During the second quarter of 2001, these strategies helped produce an effective tax rate of 29.6% compared to 30.4% for the same period last year, and 30.5% in the linked quarter. The tax strategies employed are long-term in nature and may marginally reduce Peoples' tax burden in future years, depending on economic and regulatory issues. "The second quarter met our expectations," summarized Evans. "Our long-term focus remains increasing our shareholders' investment value, and we continue to look for new ways to integrate our client service opportunities to produce an optimum result for our customers, associates, and shareholders." Peoples Bancorp Inc., a diversified financial products and services company with $1.2 billion in assets, offers a complete line of banking, investment, insurance, and trust solutions through Peoples Bank's 40 sales offices and 25 ATM's in Ohio, West Virginia, and Kentucky. Peoples' common stock is traded on the NASDAQ exchange under the symbol "PEBO." Learn more about Peoples or enroll in Peoples OnLine Connection, Peoples' Internet banking product, at www.peoplesbancorp.com. Conference Call to Discuss Earnings: Peoples will conduct a facilitated conference call to discuss the results of operations for the second quarter of 2001 on July 25, 2001, at 3:00 p.m. local time. The conference call is open to the public; however, management asks that questions be limited to investment analysts, interested members of the media and shareholders. To participate in the call, please dial (877) 735-0939 approximately five minutes before the scheduled start of the conference call. Members of Peoples' executive management will participate in the conference call. Brief opening remarks will be followed by a question and answer period. A complete transcript of the conference call will be placed on peoplesbancorp.com, in the "Investor Relations" section under "Conference Call Transcripts". Safe Harbor Statement: The statements in this press release which are not historical fact are forward looking statements that involve a number of risks and uncertainties, including, but not limited to, the interest rate environment, the effect of banking and tax regulations, the effect of economic conditions, the impact of competitive products and pricing, and other risks detailed in Peoples' SEC filings. Although management believes that the expectations in these forward-looking statements are based on reasonable assumptions within the bounds of management's knowledge of Peoples' business and operations, it is possible that actual results may differ materially from these projections.
PEOPLES BANCORP INC. (Nasdaq: PEBO) Financial Highlights (Unaudited) -------------------------------- -------------------------------- Three Months Ended Six Months Ended (in $000's, except share and per share data) June 30, June 30, 2001 2000 2001 2000 -------------------------------- -------------------------------- PER SHARE DATA Operating income per share (a): Basic $ 0.45 $ 0.43 $ 0.87 $ 0.87 Diluted $ 0.45 $ 0.43 $ 0.86 $ 0.86 Cash basis earnings - diluted (b) $ 0.51 $ 0.49 $ 0.98 $ 0.98 Net income per share: Basic $ 0.46 $ 0.41 $ 0.85 $ 0.85 Diluted $ 0.45 $ 0.41 $ 0.84 $ 0.84 Cash basis earnings - diluted (b) $ 0.51 $ 0.47 $ 0.96 $ 0.96 Dividends declared per share $ 0.15 $ 0.14 $ 0.29 $ 0.28 Book value per share $ 13.68 $ 11.17 $ 13.68 $ 11.17 Tangible book value per share (b) $ 10.90 $ 8.25 $ 10.90 $ 8.25 Dividend payout as a percentage of net income 32.98% 36.93% 34.24% 34.69% Actual shares outstanding (net of treasury shares) 6,546,426 6,527,092 6,546,426 6,527,092 Weighted average shares outstanding: Basic 6,571,387 6,515,837 6,551,796 6,520,208 Diluted 6,668,300 6,600,252 6,644,193 6,615,283 PERFORMANCE RATIOS Return on average equity 13.46% 15.13% 12.81% 15.41% Cash basis return on average equity (a) 19.27% 23.75% 18.53% 24.20% Return on average assets 1.03% 1.00% 0.97% 1.04% Cash basis return on average assets (a) 1.19% 1.17% 1.13% 1.21% Operating return on average equity (b) 13.34% 15.81% 13.01% 15.88% Cash basis operating return on average equity (a)(b) 19.12% 24.76% 18.78% 24.92% Operating return on average assets (b) 1.02% 1.04% 0.99% 1.06% Cash basis operating return on average assets (a)(b) 1.18% 1.21% 1.15% 1.23% Non-interest income leverage ratio (c) 29.96% 30.92% 29.89% 30.70% Efficiency ratio (d) 56.39% 56.62% 57.36% 56.38% Net interest margin (fully tax equivalent) 4.07% 4.20% 4.02% 4.22% Net loan chargeoffs as a percentage of average loans 0.07% 0.05% 0.15% 0.07% -------------- -------------- --------------- -------------- (a) Excludes after-tax impact of non-operating income and expenses relating to securities transactions, OREO and other asset disposals, and mark-to-market adjustment on interest rate caps. (b) Excludes after-tax impact of intangible amortization expense and/or balance sheet impact of intangible assets acquired through use of purchase accounting for acquisitions. (c) Non-interest expense (less intangible amortization and non-direct operational expenses) as a percentage of fully tax equivalent net interest income plus non-interest income. Significant non-recurring items are excluded from the calculation. (d) Non-interest income (less securities and asset disposal gains) as a percentage of non-interest expense (less intangible amortization and non-direct operational expenses). Significant non-recurring items are excluded from the calculation.
PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME -------------------------------- -------------------------------- Three Months Ended Six Months Ended (in $000's) June 30, June 30, 2001 2000 2001 2000 ------------- ------------- ------------- ------------- Interest income $ 21,992 $ 20,924 $ 44,112 $ 41,036 Interest expense 11,196 10,699 23,005 20,707 ------------- ------------- ------------- ------------- Net interest income 10,796 10,225 21,107 20,329 Provision for loan losses 675 600 1,350 1,122 ------------- ------------- ------------- ------------- Net interest income after provision for loan losses 10,121 9,625 19,757 19,207 Net (loss) gain on securities transactions (1) (45) 1 (56) Net gain (loss) on asset disposals 5 (140) 25 (145) Mark-to-market adjustment on interest rate caps 42 - (131) - Non-interest income: Service charges on deposits 889 793 1,696 1,545 Trust revenues 628 628 1,242 1,326 Insurance commissions 263 374 584 530 Electronic banking revenues 354 310 676 592 Other non-interest income 136 128 273 368 ------------- ------------- ------------- ------------- Total non-interest income 2,270 2,233 4,471 4,361 Non-interest expense: Salaries and benefits 3,642 3,301 7,227 6,594 Occupancy and equipment 962 1,018 1,907 1,994 Trust preferred 659 651 1,311 1,306 Amortization of intangibles 582 571 1,148 1,142 Data processing and software 231 268 478 513 Other non-interest expense 2,092 1,985 4,048 3,799 ------------- ------------- ------------- -------------- Total non-interest expense 8,168 7,794 16,119 15,348 ------------- ------------- ------------- -------------- Income before income taxes 4,269 3,879 8,004 8,019 Income taxes 1,264 1,179 2,403 2,458 ------------- -------------- -------------- -------------- Net income $ 3,005 $ 2,700 $ 5,601 $ 5,561 ------------- -------------- -------------- -------------- Fully tax equivalent net interest income $ 11,057 $ 10,506 $ 21,630 $ 20,834
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION ---------------------------------- --------------------------------- Three Months Ended Six Months Ended (in $000's) June 30, June 30, 2001 2000 2001 2000 ---------------------------------- --------------------------------- CONSOLIDATED AVERAGE BALANCES Average gross loans $ 752,429 $ 686,606 $ 746,447 $ 674,753 Average earning assets 1,086,887 999,137 1,075,003 988,313 Average total assets 1,163,924 1,078,382 1,150,889 1,067,579 Average non-interest bearing deposits 87,917 82,588 85,795 81,456 Average interest bearing deposits: Savings 78,417 86,848 77,100 87,803 Interest-bearing demand deposits 274,772 226,911 270,693 221,046 Time deposits 374,186 338,448 359,814 342,290 --------------- --------------- --------------- --------------- Total average interest bearing deposits 727,375 652,207 707,608 651,139 Average stockholders' equity $ 89,318 $ 71,510 $ 87,414 $ 72,175 NET CHARGEOFFS Gross chargeoffs $ 701 $ 375 $ 1,343 $ 641 Recoveries 152 60 251 168 --------------- --------------- --------------- --------------- Net chargeoffs $ 549 $ 315 $ 1,092 $ 473 --------------- --------------- --------------- ---------------
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
----------------- ----------------- ----------------- June 30, December 31, June 30, 2001 2000 2000 ----------------- ----------------- ----------------- LOAN PORTFOLIO (in $000's, end of period) Commercial, financial, and agricultural $ 313,806 $ 310,558 $ 283,157 Real estate, construction 20,683 20,267 20,243 Real estate, mortgage 293,817 283,323 271,274 Consumer 125,450 122,817 126,739 -------------------------------------------------------- Total loans $ 753,756 $ 736,965 $ 701,413 ASSET QUALITY Allowance for loan losses as a percent of total loans 1.61% 1.48% 1.58% Allowance for loan losses as a percent of nonperforming loans (a) 240.1% 212.6% 487.2% Nonperforming loans as a percent of total loans (a) 0.67% 0.70% 0.32% Nonperforming assets as a percent of total assets (b) 0.43% 0.46% 0.22% Nonperforming assets as a percent of total loans and other real estate owned real estate owned (b) 0.68% 0.71% 0.35% Nonperforming assets (in $000's, end of period): Loans 90 days or more past due $ 466 $ 344 $ 304 Renegotiated loans $ 511 $ 518 $ 573 Nonaccrual loans $ 4,085 $ 4,280 $ 1,363 Other real estate owned $ 32 $ 86 $ 211 ----------------- ----------------- ----------------- Total nonperforming assets $ 5,094 $ 5,228 $ 2,451 REGULATORY CAPITAL (in $000's, end of period) Tier 1 risk-based capital 12.75% 12.83% 12.53% Total risk-based capital ratio (Tier 1 and Tier 2) 14.08% 14.21% 14.11% Leverage ratio 8.84% 8.69% 8.46% Tier 1 capital $ 101,336 $ 97,056 $ 91,427 Total capital (Tier 1 and Tier 2) $ 111,871 $ 107,428 $ 102,901 Total risk-weighted assets $ 794,781 $ 756,195 $ 729,490 SUPPLEMENTAL DATA (in $000's, end of period) Trust assets under management $ 492,877 $ 498,563 $ 519,000 One year cumulative repricing gap $ (96,404) $ (26,132) $ (66,696) Employees (full-time equivalent) 401 388 383 Full service offices 34 32 32 Supermarket offices 4 4 3 ATMs 25 27 27 Announced treasury share plans: (c) Total shares in plan 125,000 165,000 165,000 Shares purchased (d) 52,423 8,995 33,084 Average price (d) $ 19.07 $ 13.78 $ 17.53 ----------------- ----------------- ----------------- (a) Nonperforming loans include loans 90 days past due and accruing, renegotiated loans, and nonaccrual loans. (b) Nonperforming assets include nonperforming loans and other real estate owned. (c) 2001 data reflects 2001 Stock Repurchase Program of 125,000 shares (or 2% of outstanding shares); 2000 data reflects 2000 Stock Repurchase Program of 165,000 shares (or 2.5% of outstanding shares). All share amounts adjusted for stock dividends. (d) Reflects treasury shares purchased and average price paid for the three month period ended on the date indicated.
PEOPLES BANCORP INC. CONSOLIDATED BALANCE SHEETS ------------------ ------------------ (in $000's) June 30, December 31, 2001 2000 ------------------ ------------------ ASSETS Cash and cash equivalents $ 42,691 $ 28,449 Available-for-sale investment securities, at estimated fair value (amortized cost of $317,592 and $335,111 at June 30, 2001, and December 31, 2000, respectively) 316,182 330,521 Loans, net of unearned interest 753,756 736,965 Allowance for loan losses (12,155) (10,930) ----------------- ----------------- Net loans 741,601 726,035 Bank premises and equipment, net of accumulated depreciation 16,405 15,565 Goodwill 16,282 15,702 Other intangibles 1,884 2,146 Other real estate owned 32 86 Other assets 39,187 17,330 ----------------- ----------------- TOTAL ASSETS $ 1,174,264 $ 1,135,834 ----------------- ----------------- LIABILITIES Non-interest bearing deposits $ 87,475 $ 84,974 Interest bearing deposits 737,635 672,647 ----------------- ----------------- Total deposits 825,110 757,621 Federal funds purchased, securities sold under repurchase agreements, and other short term borrowings 82,586 119,915 Long-term borrowings 140,665 138,511 Accrued expenses and other liabilities 7,318 7,572 ----------------- ----------------- TOTAL LIABILITIES 1,055,679 1,023,619 Guaranteed preferred beneficial interests in junior subordinated debentures 29,038 29,021 STOCKHOLDERS' EQUITY Common stock, no par value (12,000,000 shares authorized, 6,697,011 shares issued at June 30, 2001, and 6,679,028 shares issued at December 31, 2000) 66,410 66,364 Accumulated comprehensive income, net of deferred income taxes (917) (2,983) Retained earnings 27,065 23,381 Treasury stock, at cost (150,585 shares at June 30, 2001, and 189,357 shares at December 31, 2000) (3,011) (3,568) ----------------- ----------------- TOTAL STOCKHOLDERS' EQUITY 89,547 83,194 ----------------- ----------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,174,264 $ 1,135,834 ----------------- -----------------
END OF RELEASE