EX-99 2 exhibit99.htm PEOPLES BANCORP INC. ANNOUNCES SECOND QUARTER EARNINGS exhibit99.htm
 
 
                                                                                                                        PEOPLES BANCORP INC. – P.O. BOX 738 - MARIETTA, OHIO – 45750
www.peoplesbancorp.com

                                                                                           NEWS RELEASE

FOR IMMEDIATE RELEASE
Contact: 
Edward G. Sloane
July 29, 2008
  
Chief Financial Officer and Treasurer
   
(740) 373-3155


PEOPLES BANCORP INC. ANNOUNCES
SECOND QUARTER EARNINGS
_____________________________________________________________________

MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced second quarter 2008 net income of $2.0 million, or $0.19 per diluted share, compared to $5.3 million, or $0.51 per diluted share, for the second quarter of 2007.  On a year-to-date basis, net income totaled $7.6 million and diluted earnings per share were $0.73, versus $11.0 million and $1.04, respectively, for the same period in 2007.
Peoples’ second quarter 2008 earnings included $4.5 million of additional provision for loan losses ($2.9 million or $0.28 per diluted share after-tax) related to a single $12.6 million commercial real estate loan identified as impaired in connection with management’s quarterly analysis of the allowance for loan losses for the second quarter.  Management determined that the value of the collateral, which is located in west central Florida, had decreased substantially, causing the loan to be under–collateralized.  Accordingly, this loan was placed on non-accrual status and charged down to the estimated realizable fair value of the collateral of $6.5 million, less estimated costs to sell of $0.3 million, at June 30, 2008.
“Although out-of-market loans are not a big part of our portfolio, our second quarter results, like those of many other financial companies, were impacted by sluggish economic conditions and the deteriorating housing market, specifically in Florida,” said Mark F. Bradley, President and Chief Executive Officer. “Our remaining exposure to Florida real estate is less than $3 million and these unrelated loan relationships are performing in accordance with their original terms.  While nonperforming assets and the loan loss provision have increased, our capital levels remain well above the amounts needed to be considered well-capitalized and serve as a source of strength as we work through the isolated issues in the loan portfolio.”
Bradley continued, “Despite lower earnings, we still achieved success in key areas, including deposit growth, increased net interest income, net interest margin expansion and lower operating expenses which led to improved operating efficiency.  We will continue to work through the recent loan challenges while focusing on strategies for long-term revenue growth, with an eye on efficiency in these challenging economic times.”
 During the second quarter of 2008, Peoples sold preferred stocks issued by the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”) with a recorded value of $2.7 million, at a net pre-tax loss of $191,000, which was partially offset by a $138,000 pre-tax gain from the sale of mortgage-backed securities with a recorded value of $18.7 million.  These securities were sold as part of the ongoing management of Peoples’ credit and interest rate risk exposures in its investment portfolio.  At June 30, 2008, Peoples held in its investment portfolio FNMA preferred stocks with a market value of $1.9 million, resulting in a $260,000 other-than-temporary impairment charge in the second quarter of 2008. In July, Peoples sold these remaining preferred stocks, which completely eliminated all holding of preferred stocks issued by FNMA and FHLMC.  As a result of the July sales, Peoples will recognize a pre-tax loss of $594,000 ($386,000 after-tax) in the third quarter of 2008.
For the quarter ended June 30, 2008, net interest income was $14.9 million, up 12% over the prior year second quarter, with the net interest margin expanding 30 basis points to 3.61%.  On a linked quarter basis, net interest income increased 4% and net interest margin expanded 10 basis points.  Through six months of 2008, net interest income has grown 9% compared to the same period last year and net interest margin was 3.56% versus 3.32%.  These improvements were largely attributable to the reduction in short-term market rates and widening of credit spreads, as well as Peoples’ growth of lower cost retail deposits.  As a result, Peoples’ second quarter cost of funds dropped 38 basis points to 3.13%, from 3.52% for the linked quarter and fell 88 basis points compared to the second quarter of 2007, while asset yields declined 25 and 50 basis points over the same periods, respectively.  On a year-to-date basis, the average cost of funds decreased 69 basis points and the average yield on assets was down 39 basis points.
 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 2 of 10 -
 
Second quarter 2008 net interest income and margin included $226,000 additional income, or five basis points, from the net impact of loan prepayment fees and reduction in interest income for non-accrual loans.  In comparison, second quarter 2007 net interest income and margin were reduced by $309,000 or seven basis points due to loan and investment interest reductions.  The net impact in first quarter 2008 was additional income of $126,000, or three additional basis points of net interest margin.
“Second quarter net interest income and margin exceeded expectations, as asset yields dropped less than anticipated due to wider credit spreads,” said Edward G. Sloane, Chief Financial Officer and Treasurer.  “While the lower cost of funds negated the drop in asset yields thus far in 2008, we expect net interest margin to be pressured in the near term by assets repricing downward and limited additional opportunities to lower funding costs.  Given the uncertainty regarding the timing and magnitude of future interest rate changes, we continue to focus on positioning our balance sheet to optimize Peoples’ net interest income stream, while also minimizing the impact of future rate changes on our earnings.”
Non-interest income was at a consistent level compared to the prior year, totaling $7.9 million and $16.1 million for the three and six months ended June 30, 2008, respectively, as higher trust and investment income and electronic banking revenues were offset by lower insurance commissions and deposit account service charges.  On a linked-quarter basis, non-interest income was down 4% in the second quarter of 2008, due to the recognition of annual performance-based insurance commissions in the first quarter.  Excluding the impact of this seasonal fluctuation, non-interest income grew 6% in comparison to the first quarter of 2008.
Peoples’ trust and investment revenues experienced 9% growth year-over-year for both the second quarter and on a year-to-date basis, attributable to increased assets under management from new business, which more than offset the decline in asset values caused by the recent downturn in the financial markets.  At June 30, 2008, total managed assets were $987.6 million, up 1% compared to a year ago.  Increases in debit card activity have produced double-digit growth in electronic banking revenues, with second quarter 2008 revenues up 13% versus a year ago and 10% from the first quarter of 2008.  Insurance sales commissions (excluding performance-based commissions) were up 5% from the linked quarter, despite a softer insurance market that is producing tighter pricing margins within the insurance industry.
Total non-interest expense was $13.0 million for the three months ended June 30, 2008, down 1% from the same period a year ago, due mostly to a modest decrease in professional fees.  Second quarter 2008 salary and benefit costs, Peoples’ largest non-interest expense, were comparable to last year’s amount, as higher sales-based compensation and increased base salaries from annual merit adjustments were offset by lower incentive expense tied to corporate results. Compared to the first quarter of 2008, total non-interest expense decreased 5% in the second quarter, due to lower incentive and stock-based compensation expenses and reduced professional fees.  Through six months of 2008, non-interest expense totaled $26.8 million versus $26.5 million for the first half of 2007, with the increase largely the result of higher sales-based compensation expense and employee medical benefit costs.
“Operating expenses are in line with expectations, while total non-interest income levels were relatively flat,” said Sloane.  “We improved our efficiency ratio in the first half of 2008 by expanding net interest margin and controlling operating costs.”
At June 30, 2008, portfolio loan balances were down $10.9 million for the quarter and $16.1 million since year-end 2007, totaling $1.10 billion.  These declines were due to commercial loan payoffs outpacing new production, coupled with the charge-down of the previously-mentioned impaired commercial loan.  Peoples’ serviced real estate loan portfolio continues to increase steadily, reaching $182.3 million at June 30, 2008, versus $176.7 million at December 31, 2007.
In the second quarter of 2008, the provision for loan losses was $6.8 million compared to $1.4 million last quarter and $0.8 million in the second quarter of 2007.  On a year-to-date basis, Peoples’ provision for loan losses totaled $8.2 million versus $1.5 million a year ago. The provision for loan losses continues to be based on management’s quarterly evaluation of the loan portfolio and is directionally consistent with changes in Peoples’ overall loan quality.
Non-performing loans totaled $21.2 million, or 1.92% of total loans, up from $17.5 million, or 1.57%, at March 31, 2008, and $9.4 million, or 0.83% at December 31, 2007.  The increased amount of non-performing loans during the first half of 2008 was due to the previously-mentioned impaired loan being placed on non-accrual status during the second quarter and a $7.0 million, unrelated commercial loan being placed on non-accrual status during the first quarter of 2008.  No specific reserves were made for these loans at June 30, 2008, since they have been charged down to the estimated realizable fair value of the underlying collateral.  As a result, the allowance for loan losses was $15.2 million, or 71.8% of non-performing loans, versus $16.0 million, or 91.2%, at March 31, 2008, and $15.7 million, or 168.0%, at year-end 2007.  Management believes the allowance for loan losses was adequate at June 30, 2008, based on all information currently available.
Second quarter of 2008 net loan charge-offs were $7.5 million compared to $1.2 million last quarter and $0.7 million for the second quarter of 2007, with the increase due to the $6.4 million charge-down on the impaired commercial loan.  Through six months of 2008, net loan charge-offs totaled $8.7 million versus $1.3 million a year ago.  A portion of the change was attributable to a recovery that occurred during the first quarter of 2007 on a group of commercial loans charged-off in 2002, which reduced first quarter 2007 net charge-offs by $609,000.
 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 3 of 10 -
 
“We believe the nature of the increase in non-performing loans in the current credit environment is manageable because of our limited out-of-market lending activities and sound underwriting practices,” said Sloane.  “The two large commercial loans placed on non-accrual status in 2008 were appropriately considered in establishing the level of allowance for loan losses at June 30, 2008 and in prior periods.  We will continue to monitor and evaluate these two relationships closely through our review process.”
Peoples’ total out-of-market loans comprised $108.2 million at June 30, 2008, or approximately 10% of total outstanding loan balances, with $68.8 million of these loans located in Ohio, West Virginia and Kentucky.  Of the remaining $39.4 million of loans, the largest concentrations are in Arizona and Florida, with outstanding balances of $10.1 million and $8.5 million, respectively at June 30, 2008.  In all other states, the aggregate outstanding balance in the state was less than $5 million at June 30, 2008.  Except for the previously-mentioned impaired loan, these loans are performing in accordance with their original terms.
Retail deposit balances, which exclude brokered deposits, grew $32.0 million during the second quarter of 2008, attributable to higher money market and non-interest-bearing balances.  For the quarter, money market balances grew $15.8 million, due to Peoples offering more competitive rates.  Retail certificates of deposit and savings balances increased $8.0 million and $2.1 million, respectively, while interest-bearing demand deposits fell $9.6 million, due in part to seasonal changes in governmental deposit balances.  Non-interest-bearing deposits grew $15.8 million during the second quarter of 2008, due almost entirely to higher commercial balances at June 30, 2008.  Since year-end 2007, total retail balances have increased $114.5 million, or 10%, due mostly to higher interest-bearing retail balances from Peoples attracting approximately $60 million of funds from customers outside its primary market area instead of using higher-costing brokered deposits. The retail deposit growth during 2008 has allowed Peoples to reduce higher rate brokered certificates of deposit balances by $19.8 million and contributed to the $71.2 million, or 15%, overall reduction in borrowed funds since year-end 2007.
In the second quarter of 2008, Peoples increased its dividend 4.5% to $0.23 per share, from the $0.22 per share declared for both the first quarter of 2008 and second quarter of 2007.  Through six months of 2008, Peoples’ dividend payout ratio was 61.5% of net income versus 42.3% for the same period last year.
Peoples Bancorp Inc. is a diversified financial products and services company with $1.9 billion in assets, 50 locations and 38 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, Inc.  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 US 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 2008 results of operations today at 11:00 a.m. Eastern Daylight Time, with members of Peoples’ executive management participating.  Analysts, media and individual investors are invited to participate in the conference call by calling (800) 860-2442.  A simultaneous Webcast of the conference call audio will be available online via the “Investor Relations” section of Peoples’ website, www.peoplesbancorp.com.  Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software.  A replay of the call will be available on Peoples’ website in the “Investor Relations” section for one year.
 
Safe Harbor Statement:
This news release may contain certain forward-looking statements with respect to Peoples’ financial condition, results of operations, plans, objectives, future performance and business.  Except for the historical and present factual information contained in this news release, the matters discussed in this news release, and other statements identified by words such as “feel,” “expect,” “believe,” “plan,” “will,” “would,” “should,” “could” and similar expressions are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder.  These forward-looking statements are subject to risks and uncertain­ties that may cause actual results to differ materially.  Factors that might cause such a difference include, but are not limited to: (1) deterioration in the credit quality of Peoples’ loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be worse
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
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than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions, which may increase significantly; (3) changes in the interest rate environment, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, sale volumes, and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) general economic conditions, either national or in the states in which Peoples and its subsidiaries do business, which may be less favorable than expected; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions, which may adversely affect the business of Peoples and its subsidiaries; (8) adverse changes in the conditions and trends in the financial markets, which may adversely affect the fair value of securities within Peoples’ investment portfolio; (9) a delayed or incomplete resolution of regulatory issues that could arise; (10) Peoples’ ability to receive dividends from its subsidiaries; (11) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (12) the costs and effects of regulatory and legal developments, including the outcome of regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; and (13) other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples’ reports filed with the Securities and Exchange Commission (“SEC”), including those risk factors included in the disclosures under the heading “ITEM 1A. RISK FACTORS” of Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2007.  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.

 
PEOPLES BANCORP INC.  (NASDAQ:  PEBO)
PER SHARE DATA AND PERFORMANCE RATIOS



 
Three Months Ended
  
Six Months Ended
 
June 30,
  
March 31,
  
June 30,
  
June 30,
(in $000’s, except per share data)
2008
  
2008
  
2007
  
2008
  
2007
Net income per share:
                  
   Basic
 $      0.19
  
 $      0.55
  
 $      0.51
  
 $      0.74
  
 $      1.04
   Diluted
 $      0.19
  
 $      0.55
  
 $      0.51
  
 $      0.73
  
 $      1.04
Cash dividends declared per share
 $      0.23
  
 $      0.22
  
 $      0.22
  
 $      0.45
  
 $      0.44
Book value per share
 $    19.55
  
 $    20.15
  
 $    18.78
  
 $    19.55
  
 $    18.78
Tangible book value per share (a)
 $    13.03
  
 $    13.58
  
 $    12.19
  
 $    13.03
  
 $    12.19
Closing stock price at end of period
 $    18.98
  
 $    24.11
  
 $    27.07
  
 $    18.98
  
 $    27.07
Dividend payout as a percentage of net income
122.38%
  
40.46%
  
43.41%
  
61.51%
  
42.29%
Return on average equity (b)
3.81%
  
11.00%
  
10.81%
  
7.41%
  
11.19%
Return on average assets  (b)
0.41%
  
1.21%
  
1.16%
  
0.81%
  
1.19%
Efficiency ratio (c)
54.55%
  
58.09%
  
58.68%
  
56.31%
  
58.57%
Net interest margin (fully tax-equivalent) (b)
3.61%
  
3.51%
  
3.31%
  
3.56%
  
3.32%
 
     (a)
Excludes the balance sheet impact of intangible assets acquired through acquisitions.
     (b)
Ratios are presented on an annualized basis.
     (c)
Non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income (less securities and asset disposal gains/losses)
 

 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 5 of 10 -
 
PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME
 
 
Three Months Ended
  
Six Months Ended
 
June 30,
  
June 30,
(in $000’s)
2008
  
2007
  
2008
  
2007
Interest income
 $   26,548
  
 $     28,080
  
 $   53,847
  
 $     56,440
Interest expense
      11,674
  
       14,747
  
      24,687
  
       29,586
     Net interest income
      14,874
  
       13,333
  
      29,160
  
       26,854
Provision for loan losses
        6,765
  
            847
  
        8,202
  
         1,470
Net interest income after provision for loan losses
        8,109
  
       12,486
  
      20,958
  
       25,384
               
Net (loss) gain on securities transactions
         (308)
  
             21
  
           (15)
  
             38
Net gain on asset disposals
               3
  
             34
  
               3
  
             34
               
Non-interest income:
              
    Deposit account service charges
        2,375
  
         2,445
  
        4,670
  
         4,813
    Insurance commissions
        2,225
  
         2,409
  
        5,155
  
         5,359
    Trust and investment income
        1,403
  
         1,286
  
        2,649
  
         2,429
    Electronic banking revenues
        1,013
  
            900
  
        1,931
  
         1,728
    Bank owned life insurance
           405
  
            408
  
           829
  
            819
    Mortgage banking income
           192
  
            264
  
           396
  
            4710
    Other
           270
  
            208
  
           487
  
            415
            Total non-interest income
        7,883
  
         7,920
  
      16,117
  
       16,034
Non-interest expense:
              
    Salaries and benefits
        6,906
  
         6,870
  
      14,466
  
       14,167
    Net occupancy and equipment
        1,399
  
         1,352
  
        2,825
  
         2,684
    Data processing and software
           560
  
            551
  
        1,101
  
         1,064
    Electronic banking expense
           516
  
            554
  
        1,040
  
         1,014
    Professional fees
           456
  
            631
  
        1,066
  
         1,245
    Franchise taxes
           416
  
            448
  
           832
  
            887
    Amortization of intangible assets
           403
  
            489
  
           818
  
            989
    Marketing
           367
  
            379
  
           737
  
            728
    Other
        2,021
  
         1,876
  
        3,901
  
         3,714
            Total non-interest expense
      13,044
  
       13,150
  
      26,786
  
       26,492
Income before income taxes
        2,643
  
         7,311
  
      10,277
  
       14,998
Income tax expense
           690
  
         1,962
  
        2,676
  
         4,003
            Net income
 $     1,953
  
 $      5,349
  
 $     7,601
  
 $     10,995
               
Net income per share:
              
    Basic
 $       0.19
  
 $        0.51
  
 $       0.74
  
 $        1.04
    Diluted
 $       0.19
  
 $        0.51
  
 $       0.73
  
 $        1.04
               
Cash dividends declared per share
 $       0.23
  
 $        0.22
  
 $       0.45
  
 $        0.44
               
Weighted average shares outstanding:
              
   Basic
10,304,666
  
10,503,952
  
10,303,690
  
10,544,199
   Diluted
10,352,135
  
10,574,250
  
10,347,720
  
10,619,815
               
Actual shares outstanding  (end of period)
10,304,597
  
10,464,741
  
10,304,597
  
10,464,741

 
 
 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 6 of 10 -

PEOPLES BANCORP INC. CONSOLIDATED BALANCE SHEETS
 
 
June 30,
  
December 31,
(in $000’s)
2008
  
2007
       
ASSETS
      
Cash and cash equivalents:
      
   Cash and due from banks
 $       44,715
  
 $        43,275
   Interest-bearing deposits in other banks
            1,801
  
             1,925
          Total cash and cash equivalents
          46,516
  
           45,200
       
Available-for-sale investment securities, at fair value (amortized cost of $577,436
    
   at June 30, 2008 and $535,979 at December 31, 2007)
        576,207
  
         542,231
Other investment securities, at cost
          23,735
  
           23,232
           Total investment securities
        599,942
  
         565,463
       
Loans, net of unearned interest
     1,104,852
  
       1,120,941
Allowance for loan losses
        (15,229)
  
          (15,718)
   Net loans
     1,089,623
  
       1,105,223
       
Loans held for sale
               471
  
             1,994
Bank premises and equipment, net of accumulated depreciation
          24,954
  
           24,803
Bank owned life insurance
          51,120
  
           50,291
Goodwill
          62,520
  
           62,520
Other intangible assets
            4,697
  
             5,509
Other assets
          27,038
  
           24,550
          TOTAL ASSETS
 $  1,906,881
  
 $    1,885,553
       
LIABILITIES
      
Non-interest-bearing deposits
 $     193,265
  
 $       175,057
Interest-bearing deposits
     1,087,783
  
       1,011,320
     Total deposits
     1,281,048
  
       1,186,377
       
Federal funds purchased, securities sold under repurchase agreements,
      
   and other short-term borrowings
        129,370
  
         222,541
Long-term borrowings
        253,885
  
         231,979
Junior subordinated notes held by subsidiary trusts
          22,478
  
           22,460
Accrued expenses and other liabilities
          18,654
  
           19,360
          TOTAL LIABILITIES
     1,705,435
  
       1,682,717
       
STOCKHOLDERS’ EQUITY
      
Common stock, no par value (24,000,000 shares authorized, 10,946,025 shares
    
   issued at June 30, 2008, and 10,925,954 shares issued at December 31, 2007)
        164,190
  
         163,399
Retained earnings
          55,453
  
           52,527
Accumulated comprehensive (loss) income, net of deferred income taxes
          (1,849)
  
             3,014
Treasury stock, at cost (641,428 shares at June 30, 2008, and
      
   629,206 shares at December 31, 2007)
        (16,348)
  
          (16,104)
          TOTAL STOCKHOLDERS’ EQUITY
        201,446
  
         202,836
                  TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 $  1,906,881
  
 $    1,885,553

 
 
 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 7 of 10 -

PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
 
 
June 30,
  
March 31,
  
December 31,
  
September 30,
  
June 30,
(in $000’s, end of period)
2008
  
2008
  
2007
  
2007
  
2007
LOAN PORTFOLIO
                  
Commercial, mortgage
 $     499,043
  
 $     498,426
  
 $     513,847
  
 $     481,341
  
 $     468,241
Commercial, other
       186,346
  
       180,523
  
       171,937
  
       174,753
  
       177,651
Real estate, construction
         53,170
  
         72,326
  
         71,794
  
         83,714
  
         96,690
Real estate, mortgage
       234,870
  
       237,366
  
       237,641
  
       240,599
  
       243,080
Home equity lines of credit
         44,595
  
         43,101
  
         42,706
  
         43,506
  
         43,118
Consumer
         83,605
  
         81,108
  
         80,544
  
         80,661
  
         77,482
Deposit account overdrafts
           3,223
  
           2,879
  
           2,472
  
           2,047
  
           2,147
     Total loans
     1,104,852
  
     1,115,729
  
     1,120,941
  
     1,106,621
  
     1,108,409
                   
DEPOSIT BALANCES
                  
Interest-bearing deposits:
                  
   Retail certificates of deposit
 $     557,406
  
 $     549,439
  
 $     499,684
  
 $     515,432
  
 $     517,910
   Interest-bearing transaction accounts
       202,063
  
       211,708
  
       191,359
  
       178,880
  
       179,430
   Money market deposit accounts
       172,048
  
       156,206
  
       153,299
  
       147,848
  
       149,791
   Savings accounts
       116,485
  
       114,433
  
       107,389
  
       112,507
  
       115,691
   Brokered certificates of deposits
         39,781
  
         39,756
  
         59,589
  
         57,507
  
         66,601
        Total interest-bearing deposits
     1,087,783
  
     1,071,542
  
     1,011,320
  
     1,012,174
  
     1,029,423
Non-interest-bearing deposits
       193,265
  
       177,449
  
       175,057
  
       171,319
  
       173,675
Total deposits
     1,281,048
  
     1,248,991
  
     1,186,377
  
     1,183,493
  
     1,203,098
                   
ASSET QUALITY
                  
Nonperforming assets:
                  
   Loans 90 days or more past due
 $           290
  
 $           438
  
 $           378
  
 $           190
  
 $           313
   Nonaccrual loans
         20,910
  
         17,061
  
           8,980
  
           5,979
  
           7,096
         Total nonperforming loans
         21,200
  
         17,499
  
           9,358
  
           6,169
  
           7,409
   Other real estate owned
              411
  
              343
  
              343
  
              343
  
              213
         Total nonperforming assets
 $      21,611
  
 $      17,842
  
 $        9,701
  
 $        6,512
  
 $        7,622
                   
Allowance for loan losses as a percent of
                  
   nonperforming loans
71.8%
  
91.2%
  
168.0%
  
237.3%
  
198.3%
Nonperforming loans as a percent of total loans
1.92%
  
1.57%
  
0.83%
  
0.56%
  
0.67%
Nonperforming assets as a percent of total assets
1.13%
  
0.94%
  
0.51%
  
0.34%
  
0.41%
Nonperforming assets as a percent of total loans and
                
   other real estate owned
1.96%
  
1.60%
  
0.87%
  
0.59%
  
0.69%
Allowance for loan losses as a percent of total loans
1.38%
  
1.43%
  
1.40%
  
1.32%
  
1.33%
                   
REGULATORY CAPITAL (a)
                  
Tier 1 risk-based capital
12.10%
  
12.12%
  
11.91%
  
11.82%
  
11.74%
Total risk-based capital ratio (Tier 1 and Tier 2)
13.33%
  
13.43%
  
13.23%
  
13.04%
  
12.97%
Leverage ratio
8.72%
  
8.81%
  
8.48%
  
8.67%
  
8.67%
Tier 1 capital
 $     159,242
  
 $     158,919
  
 $     154,933
  
 $     156,209
  
 $     155,361
Total capital (Tier 1 and Tier 2)
 $     175,397
  
 $     176,083
  
 $     172,117
  
 $     172,263
  
 $     171,592
Total risk-weighted assets
 $  1,315,523
  
 $  1,310,895
  
 $  1,301,056
  
 $  1,321,367
  
 $  1,323,359

                                        (a) June 30, 2008 data based on preliminary analysis and subject to revision.
 
 
 
 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 8 of 10 -
 
                                                PEOPLES BANCORP INC. PROVISION FOR LOAN LOSSES INFORMATION
 
 
Three Months Ended
  
Six Months Ended
 
June 30,
  
March 31,
  
June 30,
  
June 30,
(in $000’s)
2008
  
2008
  
2007
  
2008
  
2007
PROVISION FOR LOAN LOSSES
                  
Provision for Overdraft Privilege losses
 $          160
  
 $              37
  
 $            136
  
 $          197
  
 $            159
Provision for other loan losses
 $       6,605
  
 $         1,400
  
 $            711
  
 $       8,005
  
 $         1,311
     Total provision for loan losses
 $       6,765
  
 $         1,437
  
 $            847
  
 $       8,202
  
 $         1,470
                   
NET CHARGE-OFFS
                  
Gross charge-offs
 $       7,720
  
 $         1,638
  
 $            965
  
 $       9,358
  
 $         2,610
Recoveries
              231
  
               436
  
               297
  
              667
  
            1,323
     Net charge-offs
 $       7,489
  
 $         1,202
  
 $            668
  
 $       8,691
  
 $         1,287
                   
NET CHARGE-OFFS BY TYPE
                  
Commercial
 $       6,900
  
 $            862
  
 $            523
  
 $       7,761
  
 $            811
Real estate
              294
  
               160
  
               (14)
  
              455
  
                 (1)
Overdrafts
              148
  
                 87
  
               133
  
              235
  
               186
Consumer
              148
  
               101
  
                 29
  
              249
  
               295
Credit card
                 (1)
  
                 (8)
  
                 (3)
  
                 (9)
  
                 (4)
     Total net charge-offs
 $       7,489
  
 $         1,202
  
 $            668
  
 $       8,691
  
 $         1,287
                   
Net charge-offs as a percent of loans (annualized)
2.70%
  
0.43%
  
0.24%
  
1.57%
  
0.23%
 
 

PEOPLES BANCORP INC. SUPPLEMENTAL INFORMATION
 
 
June 30,
  
March 31,
  
December 31,
  
September 30,
  
June 30,
(in $000’s, end of period)
2008
  
2008
  
2007
  
2007
  
2007
                   
Trust assets under management
 $     770,714
  
 $     775,834
  
 $     797,443
  
 $     805,931
  
 $     766,417
Brokerage assets under management
 $     216,930
  
 $     221,340
  
 $     223,950
  
 $     218,573
  
 $     209,858
Mortgage loans serviced for others
 $     182,299
  
 $     178,763
  
 $     176,742
  
 $     176,380
  
 $     172,314
Employees (full-time equivalent)
              554
  
              556
  
              559
  
              553
  
              556
Announced treasury share plans: (a)
                  
   Total shares authorized for plan
        500,000
  
        500,000
  
        925,000
  
        425,000
  
        425,000
   Shares purchased
                  -
  
          13,600
  
          84,600
  
        139,000
  
          70,000
   Average price
 $               -
  
 $         21.59
  
 $         24.25
  
 $         24.05
  
 $         26.79
                   
 
                                                (a) 2008 data reflects shares purchased under the repurchase plan announced on November 9, 2007, authorizing the repurchase of up to 500,000 common
                                                shares, upon the completion of the 2007 Stock Repurchase Program. 2007 data reflects shares purchased under the repurchase plan announced on
                                                November 9, 2007, and under the 2007 Stock Repurchase Program announced on January 12, 2007, authorizing the repurchase of up to 425,000 common
                                                shares.  The number of common shares purchased for treasury and average price paid are presented for the three-month period ended on the date indicated.
 
 
 
 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 9 of 10 -

PEOPLES BANCORP INC. CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST INCOME
 
 
Three Months Ended
 
June 30, 2008
  
March 31, 2008
  
June 30, 2007
(in $000’s)
Balance
Income/
Expense
Yield/
Cost
Balance
Income/
Expense
Yield/ Cost
Balance
Income/
Expense
Yield/ Cost
ASSETS
                      
Short-term investments
 $         3,391
 $         17
2.17%
  
 $        4,017
 $          32
3.11%
  
 $        3,505
 $        44
4.98%
Investment securities (a)
        598,111
       7,991
5.35%
  
       581,638
        7,810
5.37%
  
       540,614
      6,820
5.05%
Gross loans (a)
    1,114,474
    18,954
6.81%
  
    1,113,023
      19,879
7.17%
  
    1,130,555
    21,540
7.64%
Allowance for loan losses
        (16,243)
      
        (16,240)
      
        (14,656)
    
Total earning assets
    1,699,733
    26,962
6.36%
  
    1,682,438
      27,721
6.61%
  
    1,660,018
    28,404
6.86%
                       
Intangible assets
          67,395
      
         67,831
      
         68,142
    
Other assets
        127,190
      
       128,307
      
       128,315
    
Total assets
    1,894,318
      
    1,878,576
      
    1,856,475
    
                       
LIABILITIES AND EQUITY
                      
Interest-bearing deposits:
                      
Savings
        115,625
          140
0.49%
  
       108,525
           122
0.45%
  
       117,149
         188
0.64%
Interest-bearing demand deposits
        203,411
          890
1.76%
  
       197,998
           982
1.99%
  
       175,831
         910
2.08%
Money market
        165,592
          816
1.98%
  
       152,202
        1,058
2.80%
  
       147,385
      1,451
3.95%
Brokered time
          39,767
          509
5.15%
  
         53,334
           695
5.24%
  
         67,637
         867
5.14%
Retail time
        549,642
       5,426
3.97%
  
       523,929
        5,608
4.31%
  
       529,481
      5,931
4.49%
    Total interest-bearing deposits
    1,074,037
       7,781
2.91%
  
    1,035,988
        8,465
3.29%
  
    1,037,483
      9,347
3.61%
                       
Short-term borrowings
        148,854
          778
2.07%
  
       188,615
        1,539
3.24%
  
       220,758
      2,841
5.09%
Long-term borrowings
        270,746
       3,115
4.58%
  
       257,598
        3,009
4.65%
  
       210,657
      2,559
4.81%
Total borrowed funds
        419,600
       3,893
3.69%
  
       446,213
        4,548
4.05%
  
       431,415
      5,400
4.96%
    Total interest-bearing liabilities
    1,493,637
    11,674
3.13%
  
    1,482,201
      13,013
3.52%
  
    1,468,898
    14,747
4.01%
                       
Non-interest-bearing deposits
        180,399
      
       172,994
      
       173,565
    
Other liabilities
          14,214
      
         16,889
      
         15,495
    
Total liabilities
    1,688,250
      
    1,672,084
      
    1,657,958
    
                       
Stockholders’ equity
        206,068
      
       206,492
      
       198,517
    
Total liabilities and equity
 $ 1,894,318
      
 $ 1,878,576
      
 $ 1,856,475
    
                       
Net interest income/spread (a)
  
 $ 15,288
3.23%
    
 $   14,708
3.09%
    
 $ 13,657
2.85%
Net interest margin (a)
    
3.61%
      
3.51%
      
3.31%
                       
(a) Information presented on a fully tax-equivalent basis.
              


 
 
 
PEOPLES BANCORP INC.
Second Quarter 2008 Earnings Release
- Page 10 of 10 -
 

 
Six Months Ended
 
June 30, 2008
    
June 30, 2007
(in $000’s)
Balance
Income/
Expense
Yield/ Cost
  
Balance
Income/
Expense
Yield/ Cost
ASSETS
                
Short-term investments
 $           3,704
 $          49
2.68%
    
 $             3,693
 $           90
4.89%
Investment securities (a)
          589,876
      15,801
5.36%
    
            549,902
       14,100
5.13%
Gross loans (a)
      1,113,748
      38,833
6.98%
    
         1,130,041
       42,909
7.64%
Allowance for loan losses
          (16,241)
        
            (14,693)
    
Total earning assets
      1,691,087
      54,683
6.49%
    
         1,668,943
       57,099
6.88%
                 
Intangible assets
            67,613
        
              68,364
    
Other assets
          127,703
        
            128,455
    
Total assets
      1,886,403
        
         1,865,762
    
                 
LIABILITIES AND EQUITY
                
Interest-bearing deposits:
                
Savings
          112,075
           261
0.47%
    
            115,649
            354
0.62%
Interest-bearing demand deposits
          200,705
        1,873
1.87%
    
            176,300
         1,756
2.01%
Money market
          158,897
        1,874
2.37%
    
            144,410
         2,820
3.94%
Brokered time
            46,550
        1,204
5.19%
    
              69,069
         1,764
5.15%
Retail time
          536,785
      11,034
4.12%
    
            530,622
       11,780
4.48%
    Total interest-bearing deposits
      1,055,012
      16,246
3.10%
    
         1,036,050
       18,474
3.60%
   
        9,031
            
Short-term borrowings
          168,734
        2,317
2.72%
    
            234,967
         6,056
5.14%
Long-term borrowings
          264,172
        6,124
4.61%
    
            208,513
         5,056
4.86%
Total borrowed funds
          432,906
        8,441
3.87%
    
            443,480
       11,112
4.99%
    Total interest-bearing liabilities
      1,487,918
      24,687
3.32%
    
         1,479,530
       29,586
4.02%
                 
Non-interest-bearing deposits
          176,696
        
            172,351
    
Other liabilities
            15,509
        
              15,817
    
Total liabilities
      1,680,123
        
         1,667,698
    
                 
Stockholders’ equity
          206,280
        
            198,064
    
Total liabilities and equity
 $   1,886,403
        
 $      1,865,762
    
                 
Net interest income/spread (a)
  
 $  29,996
3.17%
      
 $    27,513
2.86%
Net interest margin (a)
    
3.56%
        
3.32%

END OF RELEASE