EX-99.1 2 exhibit991q12017er.htm EXHIBIT 99.1 Exhibit


pebonewlogo.jpg
P.O. BOX 738 - MARIETTA, OHIO - 45750
NEWS RELEASE
www.peoplesbancorp.com
 
 
 
 
 
FOR IMMEDIATE RELEASE
 
Contact:
John C. Rogers
April 25, 2017
 
 
Chief Financial Officer and Treasurer
 
 
 
(740) 373-3155

PEOPLES BANCORP INC. REPORTS RECORD QUARTERLY NET INCOME
__________________________________________________________________________________________________

MARIETTA, Ohio - Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for the quarter ended March 31, 2017. Net income totaled $8.8 million for the first quarter of 2017, representing earnings per diluted common share of $0.48. In comparison, reported earnings per diluted common share were $0.41 for the fourth quarter of 2016 and $0.44 for the first quarter of 2016.
"The first quarter of 2017 was a good start to the year. We generated record quarterly net income and had a return on average assets of 1.04%. We also reported a return on average stockholders' equity of 8.14% and a return on average tangible stockholders' equity of 12.95%, up from 6.72% and 10.99% in the fourth quarter of 2016, and 7.59% and 12.70% in the first quarter of 2016, respectively," said Chuck Sulerzyski, President and Chief Executive Officer. "We had another strong quarter of loan growth and our commercial credit metrics showed improvement from December 31, 2016."

Statement of Operations Highlights:
•
Net interest income for the first quarter of 2017 increased 1% compared to the linked quarter and 5% compared to the first quarter of 2016.
◦
Net interest margin was 3.55% for the first quarter of 2017, compared to 3.54% for the linked quarter and 3.53% for the first quarter of 2016.
•
Provision for loan losses was $0.6 million for the first quarter of 2017 and was reflective of the improvement in the commercial loan credit quality.
•
Total fee-based income for the first quarter of 2017 grew 10% compared to the linked quarter and 2% compared to the first quarter of 2016.
•
Total non-interest expense was $27.3 million for the first quarter of 2017, flat compared to the linked quarter and up 4% compared to the first quarter of 2016.
◦
The efficiency ratio was 64.9% for the first quarter of 2017, compared to 66.9% for the fourth quarter of 2016 and 64.3% in the first quarter of 2016.

Balance Sheet Highlights:
•
Period-end total loan balances at March 31, 2017 grew 4% on an annualized basis compared to December 31, 2016 and 7% compared to March 31, 2016.
◦
Indirect consumer loans at March 31, 2017 grew $30.9 million, or 49% annualized, compared to December 31, 2016, while total consumer loans grew $15.6 million, or 6% annualized, compared to December 31, 2016.
◦
Total commercial loans at March 31, 2017 increased $9.0 million, or 3% annualized, compared to December 31, 2016.
•
Asset quality improved during the quarter.
◦
Nonperforming assets decreased to 0.98% of total loans and other real estate owned ("OREO") at March 31, 2017 compared to 1.16% at December 31, 2016.
◦
Nonaccrual loans at March 31, 2017 decreased $3.0 million, or 14%, compared to December 31, 2016.
◦
Net charge-offs as a percent of average gross loans were 0.11% annualized for the first quarter of 2017, compared to 0.09% for the linked quarter and the first quarter of 2016.
◦
Classified loans, which are those categorized as substandard or doubtful, decreased 2% during the first quarter of 2017 compared to both December 31, 2016 and March 31, 2016.
◦
At March 31, 2017, allowance for loan losses of $18.5 million was relatively flat compared to December 31, 2016.

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◦
Allowance for loan losses as a percent of originated loans, net of deferred fees and costs, decreased slightly to 1.05% at March 31, 2017, compared to 1.08% at December 31, 2016.
•
Period-end total deposit balances increased $192.4 million at March 31, 2017, or 8%, compared to December 31, 2016.
◦
Growth in governmental deposit balances during the first quarter of 2017 of $78.8 million, or 31%, was due primarily to seasonality.
◦
Non-interest-bearing deposits increased $50.6 million, or 7%, compared to December 31, 2016 and, as a percent of total deposits, remained at 29% as of March 31, 2017.
Net Interest Income:
Net interest income was $26.9 million in the first quarter of 2017, a 1% increase compared to the linked quarter and a 5% increase over the first quarter of 2016. Net interest margin has been relatively stable over the last year and for the first quarter of 2017 was 3.55%, compared to 3.54% for the fourth quarter of 2016 and 3.53% for the first quarter of 2016. The increase in net interest income compared to both prior periods was due primarily to loan growth.
The accretion income, net of amortization expense, from acquisitions was $0.8 million for the first quarter of 2017, compared to $0.9 million for the fourth quarter of 2016 and $1.0 million for the first quarter of 2016, which added 11 basis points, 11 basis points and 12 basis points, respectively, to the net interest margin.
Net interest margin, excluding net accretion income from acquisitions, improved 1 basis point compared to the fourth quarter of 2016 and improved 3 basis points compared to the first quarter of 2016. The changes in net interest margin were the result of the sustained shift in the mix of the balance sheet, for both assets and liabilities, coupled with the interest rate increase by the Federal Reserve.
Provision for Loan Losses:
The provision for loan losses was $0.6 million for the first quarter of 2017, compared to $0.7 million for the fourth quarter of 2016 and $1.0 million for the first quarter of 2016. The lower provision for loan losses recorded during the first quarter of 2017 was reflective of the improvement in the commercial loan credit quality.
Fee-based Income:
Total fee-based income increased $1.2 million, or 9%, compared to the linked quarter, and grew $0.3 million, or 2%, compared to the first quarter of 2016. The increase compared to the linked quarter was due largely to the annual performance-based insurance commissions, which, for the most part, are recognized in the first quarter of each year. The growth compared to the first quarter of 2016 was due mainly to an increase in bank owned life insurance income, which increased $326,000 due to the $35 million of polices that were purchased late in the second quarter of 2016. In addition to the increase in bank owned life insurance income, Peoples generated growth in trust and investment income and mortgage banking income compared to the first quarter of 2016, which was offset by declines in insurance income and deposit account service charges.
Non-interest Expense:
Total non-interest expense, on an as reported basis, for each of the first quarter of 2017 and the fourth quarter of 2016 was $27.3 million, compared to $26.3 million for the first quarter of 2016. Total non-interest expense, adjusted for non-core charges, was $27.3 million for the first quarter of 2017, $26.5 million for the fourth quarter of 2016, and $26.3 million for the first quarter of 2016. There were no non-core charges recorded in the first quarter of 2017 or 2016. In the fourth quarter of 2016, Peoples recorded $0.7 million of non-core charges, which represented one-time costs associated with the system upgrade of Peoples' core banking system that occurred on November 7, 2016.
Salaries and employee benefit costs for the first quarter of 2017 increased compared to both the fourth quarter of 2016 and the first quarter of 2016. The increase of $0.9 million, or 6%, in salaries and employee benefit costs compared to the fourth quarter of 2016 was due primarily to health insurance costs, which were the result of higher claims, and higher stock-based compensation. The increase of $1.2 million, or 8%, in salaries and employee benefit costs compared to the first quarter of 2016 was due primarily to increased incentive compensation, which is tied to the corporate incentive plan; increased health insurance costs, which were the result of higher claims; and higher stock-based compensation. The increase in stock-based compensation was partially due to the annual stock grant that was tied to the performance level achieved with respect to 2016 corporate incentive awards, for which the common shares were granted in the first quarter of 2017. The increase in total non-interest expense compared to the first quarter of 2016 was also impacted by higher data processing and software costs, which were offset by lower communications and FDIC insurance expenses.
The efficiency ratio for the first quarter of 2017 was 64.9%, compared to 66.9% for the linked quarter and 64.3% for the first quarter of 2016. The efficiency ratio, when adjusted for non-core items, was 64.9% for the first quarter of 2017,

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64.8% for the linked quarter and 64.3% for the first quarter of 2016. The efficiency ratio, when adjusted for non-core items, has remained below 65% for the last six quarters, with the slight increase compared to the first quarter of 2016 due primarily to the increase in total non-interest expense.
Loans:
Period-end total loan balances at March 31, 2017 increased $24.6 million, or 4% annualized, compared to December 31, 2016. Indirect consumer lending continued to be a key component of loan growth, as balances increased $30.9 million, or 49% annualized, during the quarter. The growth in indirect consumer lending included continued diversification in the portfolio beyond automobile loans, including recreational vehicles and motorcycles. Commercial loans grew $9.0 million, or 3% annualized, with commercial and industrial loans growing $6.4 million, or 6% annualized, during the quarter.
Compared to March 31, 2016, period-end loan balances at March 31, 2017 increased $144.4 million, or 7%. The growth was primarily the result of indirect consumer lending contributing loan growth of $100.0 million, or 54%, compared to March 31, 2016. Commercial and industrial loan balances grew $60.9 million, or 17%, from March 31, 2016. At March 31, 2017, indirect consumer loan balances comprised 13% of the total loan portfolio, compared to 11% at December 31, 2016 and 9% at March 31, 2016, and commercial and industrial loan balances comprised 19% of the total loan portfolio at March 31, 2017, compared to 19% at December 31, 2016 and 17% at March 31, 2016.
Quarterly average gross loan balances increased $59.9 million, or 11% annualized, compared to the linked quarter, due primarily to the increase in commercial and industrial loans and indirect consumer loans. Compared to the first quarter of 2016, average gross loans increased $152.6 million, or 7%, largely due to growth in indirect consumer loans and commercial and industrial loans.
Asset Quality:
Asset quality metrics improved during the first quarter of 2017. Nonperforming assets as a percent of total loans and OREO decreased to 0.98% at March 31, 2017, compared to 1.16% at December 31, 2016 and 1.00% at March 31, 2016.
Annualized net charge-offs were 0.11% of average gross loans during the first quarter of 2017, compared to 0.09% in both the fourth and the first quarter of 2016.
Criticized loans, which are those categorized as watch, substandard or doubtful, increased $2.1 million, or 2%, compared to December 31, 2016 and decreased $18.1 million, or 15%, compared to March 31, 2016. As a percent of total loans, criticized loans were 4.50% at March 31, 2017, compared to 4.46% at December 31, 2016 and 5.67% at March 31, 2016. Classified loans, which are those categorized as substandard or doubtful, decreased 2% compared to both December 31, 2016 and March 31, 2016. As a percent of total loans, classified loans were 2.51% at March 31, 2017, compared to 2.59% at December 31, 2016 and 2.73% at March 31, 2016.
At March 31, 2017, the allowance for loan losses increased to $18.5 million, compared to $18.4 million at December 31, 2016, and $17.3 million at March 31, 2016. The ratio of the allowance for loan losses as a percent of originated loans (which does not include acquired loan balances), net of deferred fees and costs, was 1.05% at March 31, 2017, compared to 1.08% at December 31, 2016, and 1.17% at March 31, 2016.
Deposits:
Period-end deposit balances at March 31, 2017 increased $192.4 million, or 8%, compared to December 31, 2016. The growth was mainly attributable to an increase of $78.8 million in governmental deposits, $67.7 million in brokered certificates of deposit and $50.6 million in non-interest-bearing deposits. Balances in governmental deposits are seasonally higher in the first quarter of each year compared to the other quarters. The increase in brokered certificates of deposit was the result of adding relatively shorter term funding on the balance sheet. Over 40% of the increase in non-interest-bearing deposits was due to the increase in one commercial customer's account, with the remaining increase in both commercial and individual customer accounts.
Period-end deposits increased $115.1 million, or 4%, compared to March 31, 2016, with $68.8 million of growth in non-interest-bearing deposits, $51.5 million in brokered certificates of deposit and $37.9 million in interest-bearing demand deposits. The increases in non-interest-bearing deposits and interest-bearing demand deposits were attributable to customer activity for both commercial and individual customers, with no significant change in any one deposit account. The increase in brokered certificates of deposit was the result of adding relatively shorter term funding on the balance sheet.
Average deposits for the first quarter of 2017 increased $45.0 million, or 2%, compared to the linked quarter, with an increase of $29.9 million in interest-bearing deposits and $15.1 million in non-interest-bearing deposits. Compared to the first quarter of 2016, average deposits increased $25.6 million, or 1%, with non-interest-bearing deposits increasing $48.1 million and interest-bearing deposits declining $22.5 million.

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Non-interest-bearing deposits comprised 29% of total deposits at March 31, 2017 and December 31, 2016, compared to 28% at March 31, 2016.
Stockholders' Equity:
At March 31, 2017, the tier 1 risk-based capital ratio was 13.34%, compared to 13.21% at December 31, 2016 and 13.41% at March 31, 2016. The total risk-based capital ratio was 14.27% at March 31, 2017, compared to 14.11% at December 31, 2016 and 14.29% at March 31, 2016. The improvement in these capital ratios compared to the linked quarter was due mainly to increased earnings, which exceeded the dividends declared and paid during the quarter by $5.2 million.

Peoples Bancorp Inc. is a diversified financial services holding company with $3.5 billion in total assets, 76 locations, including 67 full-service bank branches, and 75 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 first quarter 2017 results of operations today at 11:00 a.m., Eastern Daylight Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285. A simultaneous webcast of the conference call audio will be available online via the "Investor Relations" section of Peoples' website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the "Investor Relations" section for one year.

Use of Non-GAAP Financial Measures
This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management uses these "non-GAAP" financial measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the non-GAAP financial measures used in this news release:
◦
Core fee-based income is non-GAAP since it excludes the impact of revenue waived in connection with the system upgrade of Peoples' core banking system.
◦
Core non-interest expenses are non-GAAP since they exclude the impact of costs associated with the system upgrade of Peoples' core banking system, acquisition-related costs, pension settlement charges, severance charges and legal settlement charges.
◦
Efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total fee-based income. This measure is non-GAAP since it excludes amortization of other intangible assets and all gains and/or losses included in earnings, and uses fully tax-equivalent net interest income.
◦
Tangible assets, tangible equity and tangible book value per common share measures are non-GAAP since they exclude the impact of goodwill and other intangible assets acquired through acquisitions on both total stockholders' equity and total assets and the related amortization from earnings.
◦
Pre-provision net revenue is defined as net interest income plus total fee-based income minus total non-interest expense. This measure is non-GAAP since it excludes the provision for (recovery of) loan losses and all gains and/or losses included in earnings.
◦
Return on tangible stockholders' equity is calculated as net income (less after-tax impact of amortization of other intangible assets) divided by tangible stockholders' equity. This measure is non-GAAP since it excludes the after-tax impact of amortization of other intangible assets from earnings and the impact of goodwill and other intangible assets acquired through acquisitions on total stockholders' equity.

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A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included at the end of this news release under the caption of "Non-GAAP Financial Measures".
Safe Harbor Statement:
Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate", "estimate", "may", "feel", "expect", "believe", "plan", "will", "would", "should", "could" and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to:
(1) Peoples' ability to leverage the system upgrade (include the related core operating systems, data systems and products) without complications or difficulties that may otherwise result in the loss of customers, operational problems or one-time costs currently not anticipated to arise in connection with such upgrade;
(2) the success, impact, and timing of the implementation of Peoples' business strategies, including the successful integration of acquisitions and the expansion of consumer lending activity;
(3) Peoples' ability to integrate any future acquisitions which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;
(4) Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;
(5) local, regional, national and international economic conditions and the impact these conditions may have on Peoples, its customers and its counterparties, and Peoples' assessment of the impact, which may be different than anticipated;
(6) competitive pressures among financial institutions or from non-financial institutions which may increase significantly, including product and pricing pressures, changes to third-party relationships and revenues, and Peoples' ability to attract, develop and retain qualified professionals;
(7) changes in the interest rate environment due to economic conditions and/or the fiscal policies of the United States ("U.S.") government and the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which may adversely impact interest rates, interest margins, loan demand and interest rate sensitivity;
(8) changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated;
(9) adverse changes in the economic conditions and/or activities, including, but not limited to, continued economic uncertainty in the U.S., the European Union (including the uncertainty created by the June 23, 2016 referendum by British voters to exit the European Union), Asia, and other areas, which could decrease sales volumes, add volatility to the global stock markets, and increase loan delinquencies and defaults;
(10) uncertainty regarding the nature, timing 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;
(11) deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses;
(12) changes in accounting standards, policies, estimates or procedures which may adversely affect Peoples' reported financial condition or results of operations;
(13) Peoples' assumptions and estimates used in applying critical accounting policies, which may prove unreliable, inaccurate or not predictive of actual results;
(14) adverse changes in the conditions and trends in the financial markets, including political developments, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;
(15) changes in law and policy accompanying the new presidential administration and uncertainty or speculation pending the enactment of such changes;
(16) Peoples' ability to receive dividends from its subsidiaries;

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(17) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
(18) the impact of minimum capital thresholds established as a part of the implementation of Basel III;
(19) the impact of larger or similar sized financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity;
(20) the costs and effects of regulatory and legal developments, including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations;
(21) Peoples' ability to secure confidential information through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, may prove inadequate, which could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;
(22) ability to anticipate and respond to technological changes which can impact Peoples' ability to respond to customer needs and meet competitive demands;
(23) changes in consumer spending, borrowing and saving habits, whether due to changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;
(24) the overall adequacy of Peoples' risk management program;
(25) 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, military or terrorist activities or conflicts;
(26) significant changes in the tax laws, which may adversely affect the fair values of deferred tax assets and obligations of states and political subdivisions held in Peoples' investment securities portfolio; and
(27) 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, 2016.
Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website.
As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its March 31, 2017 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.

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PER COMMON SHARE DATA AND SELECTED RATIOS
 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
 
2017
 
2016
 
2016
PER COMMON SHARE:
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
   Basic
$
0.49

 
$
0.41

 
$
0.44

   Diluted
0.48

 
0.41

 
0.44

Cash dividends declared per common share
0.20

 
0.17

 
0.15

Book value per common share
24.25

 
23.92

 
23.60

Tangible book value per common share (a)
16.28

 
15.89

 
15.39

Closing stock price at end of period
$
31.66

 
$
32.46

 
$
19.54

 
 
 
 
 
 
SELECTED RATIOS:
 
 
 
 
 
Return on average stockholders' equity (b)
8.14
%
 
6.72
%
 
7.59
%
Return on average tangible stockholders' equity (b) (c)
12.95
%
 
10.99
%
 
12.70
%
Return on average assets (b)
1.04
%
 
0.87
%
 
0.98
%
Efficiency ratio (d)
64.89
%
 
66.87
%
 
64.26
%
Pre-provision net revenue to total average assets (b)(e)
1.52
%
 
1.35
%
 
1.54
%
Net interest margin (b)(f)
3.55
%
 
3.54
%
 
3.53
%
Dividend payout ratio
41.25
%
 
41.70
%
 
34.37
%
(a)
This amount represents a non-GAAP financial measure since it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release.
(b)
Ratios are presented on an annualized basis.
(c)
This amount represents a non-GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from earnings and it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release.
(d)
Total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total fee-based income. This amount represents a non-GAAP financial measure since it excludes amortization of other intangible assets, and all gains and/or losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release.
(e)
This ratio represents a non-GAAP financial measure since it excludes the provision for (recovery of) 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.
(f)
Information presented on a fully tax-equivalent basis.


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CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
Total interest income
$
29,817

 
$
29,350

 
$
28,443

Total interest expense
2,872

 
2,683

 
2,676

Net interest income
26,945

 
26,667

 
25,767

Provision for loan losses
624

 
711

 
955

Net interest income after provision for loan losses
26,321

 
25,956

 
24,812

 
 
 
 
 
 
Net gain on investment securities
340

 
68

 
96

Net loss on loans held-for-sale and other real estate owned
—

 
(33
)
 
(1
)
Net loss on other assets
(3
)
 
(76
)
 
(30
)
 
 
 
 
 
 
Fee-based income:
 
 
 
 
 
Insurance income
4,102

 
2,912

 
4,498

Trust and investment income
2,682

 
2,739

 
2,382

Electronic banking income
2,561

 
2,486

 
2,535

Deposit account service charges
2,429

 
2,663

 
2,603

Bank owned life insurance
493

 
503

 
167

Mortgage banking income
387

 
452

 
160

Commercial loan swap fee income
268

 
79

 
164

Other income
412

 
277

 
545

  Total fee-based income
13,334

 
12,111

 
13,054

 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
Salaries and employee benefit costs
15,496

 
14,552

 
14,325

Net occupancy and equipment expense
2,713

 
2,580

 
2,806

Professional fees
1,610

 
2,193

 
1,459

Electronic banking expense
1,514

 
1,424

 
1,433

Data processing and software expense
1,142

 
1,260

 
749

Amortization of other intangible assets
863

 
1,007

 
1,008

Franchise tax expense
583

 
642

 
538

FDIC insurance expense
433

 
193

 
617

Communication expense
410

 
531

 
628

Marketing expense
280

 
402

 
398

Foreclosed real estate and other loan expenses
196

 
319

 
251

Other non-interest expense
2,091

 
2,179

 
2,070

  Total non-interest expense
27,331

 
27,282

 
26,282

  Income before income taxes
12,661

 
10,744

 
11,649

Income tax expense
3,852

 
3,336

 
3,654

    Net income
$
8,809

 
$
7,408

 
$
7,995

 
 
 
 
 
 
PER SHARE DATA:
 
 
 
 
 
Earnings per common share – Basic
$
0.49

 
$
0.41

 
$
0.44

Earnings per common share – Diluted
$
0.48

 
$
0.41

 
$
0.44

Cash dividends declared per common share
$
0.20

 
$
0.17

 
$
0.15

 
 
 
 
 
 
Weighted-average common shares outstanding – Basic
18,029,991

 
18,009,056

 
18,071,746

Weighted-average common shares outstanding – Diluted
18,192,957

 
18,172,030

 
18,194,990

Actual common shares outstanding (end of period)
18,270,508

 
18,200,067

 
18,157,932


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CONSOLIDATED BALANCE SHEETS
 
March 31,
 
December 31,
(in $000’s)
2017
 
2016
 
 
 
 
Assets
 
 
 
Cash and cash equivalents:
 
 
 
  Cash and due from banks
$
56,376

 
$
58,129

  Interest-bearing deposits in other banks
7,939

 
8,017

    Total cash and cash equivalents
64,315

 
66,146

 
 
 
 
Available-for-sale investment securities, at fair value (amortized cost of
 
 
 
  $782,947 at March 31, 2017 and $777,017 at December 31, 2016)
786,961

 
777,940

Held-to-maturity investment securities, at amortized cost (fair value of
 
 
 
  $44,161 at March 31, 2017 and $43,227 at December 31, 2016)
44,022

 
43,144

Other investment securities, at cost
38,371

 
38,371

    Total investment securities
869,354

 
859,455

 
 
 
 
Loans, net of deferred fees and costs
2,249,502

 
2,224,936

Allowance for loan losses
(18,468
)
 
(18,429
)
    Net loans
2,231,034

 
2,206,507

 
 
 
 
Loans held for sale
1,842

 
4,022

Bank premises and equipment, net of accumulated depreciation
53,258

 
53,616

Bank owned life insurance
60,719

 
60,225

Goodwill
132,631

 
132,631

Other intangible assets
12,874

 
13,387

Other assets
33,249

 
36,359

    Total assets
$
3,459,276

 
$
3,432,348

 
 
 
 
Liabilities
 
 
 
Deposits:
 
 
 
Non-interest-bearing deposits
$
785,047

 
$
734,421

Interest-bearing deposits
1,917,118

 
1,775,301

    Total deposits
2,702,165

 
2,509,722

 
 
 
 
Short-term borrowings
105,752

 
305,607

Long-term borrowings
174,506

 
145,155

Accrued expenses and other liabilities
33,844

 
36,603

    Total liabilities
3,016,267

 
2,997,087

 
 
 
 
Stockholders' Equity
 
 
 
 Preferred stock, no par value, 50,000 shares authorized, no shares issued
   at March 31, 2017 and December 31, 2016
—

 
—

Common stock, no par value, 24,000,000 shares authorized, 18,941,282 shares
   issued at March 31, 2017 and 18,939,091 shares issued at
   December 31, 2016, including shares in treasury
343,597

 
344,404

Retained earnings
115,469

 
110,294

Accumulated other comprehensive income (loss), net of deferred income taxes
392

 
(1,554
)
Treasury stock, at cost, 729,218 shares at March 31, 2017 and
   795,758 shares at December 31, 2016
(16,449
)
 
(17,883
)
    Total stockholders' equity
443,009

 
435,261

    Total liabilities and stockholders' equity
$
3,459,276

 
$
3,432,348

 
 
 
 

9


SELECTED FINANCIAL INFORMATION
 
March 31,
December 31,
September 30,
June 30,
March 31,
(in $000’s, end of period)
2017
2016
2016
2016
2016
Loan Portfolio
 
 
 
 
 
Commercial real estate, construction
$
103,317

$
94,726

$
81,080

$
98,993

$
81,381

Commercial real estate, other
730,055

736,023

728,878

708,910

728,199

Commercial and industrial
428,737

422,339

400,042

378,352

367,810

Residential real estate
524,212

535,925

545,161

555,123

565,749

Home equity lines of credit
110,028

111,492

111,196

109,017

107,701

Consumer, indirect
283,762

252,832

230,286

207,116

183,797

Consumer, other
68,670

70,519

71,491

70,065

68,395

Deposit account overdrafts
721

1,080

1,074

1,214

2,083

    Total loans
$
2,249,502

$
2,224,936

$
2,169,208

$
2,128,790

$
2,105,115

Total acquired loans (a)
$
491,819

$
516,832

$
551,021

$
591,967

$
627,819

    Total originated loans
$
1,757,683

$
1,708,104

$
1,618,187

$
1,536,823

$
1,477,296

Deposit Balances
 
 
 
 
 
Non-interest-bearing deposits
$
785,047

$
734,421

$
745,468

$
699,695

$
716,202

Interest-bearing deposits:
 
 
 
 
 
  Interest-bearing demand accounts
292,187

278,975

270,490

252,119

254,241

  Retail certificates of deposit (b)
353,918

360,464

390,568

385,456

417,043

  Money market deposit accounts
386,999

407,754

411,111

401,828

395,022

  Governmental deposit accounts
330,477

251,671

286,716

300,639

313,904

  Savings accounts
445,720

436,344

438,087

438,952

434,381

  Brokered certificates of deposit (b)
107,817

40,093

33,017

37,636

56,290

    Total interest-bearing deposits
1,917,118

1,775,301

1,829,989

1,816,630

1,870,881

    Total deposits
$
2,702,165

$
2,509,722

$
2,575,457

$
2,516,325

$
2,587,083

Asset Quality
 
 
 
 
 
Nonperforming assets (NPAs):
 
 
 
 
 
  Loans 90+ days past due and accruing
$
3,006

$
3,771

$
4,161

$
5,869

$
6,746

  Nonaccrual loans
18,293

21,325

19,346

15,582

13,579

    Total nonperforming loans (NPLs)
21,299

25,096

23,507

21,451

20,325

  Other real estate owned (OREO)
677

661

719

679

679

Total NPAs
$
21,976

$
25,757

$
24,226

$
22,130

$
21,004

Criticized loans (c)
101,284

99,182

99,294

106,616

119,368

Classified loans (d)
56,503

57,736

53,755

51,762

57,409

Allowance for loan losses as a percent of NPLs (e)(f)
86.71
%
73.43
%
77.50
%
83.16
%
84.92
%
NPLs as a percent of total loans (e)(f)
0.95
%
1.13
%
1.08
%
1.01
%
0.97
%
NPAs as a percent of total assets (e)(f)
0.64
%
0.75
%
0.72
%
0.66
%
0.64
%
NPAs as a percent of total loans and OREO (e)(f)
0.98
%
1.16
%
1.11
%
1.04
%
1.00
%
Criticized loans as a percent of total loans
4.50
%
4.46
%
4.58
%
5.01
%
5.67
%
Classified loans as a percent of total loans
2.51
%
2.59
%
2.48
%
2.43
%
2.73
%
Allowance for loan losses as a percent of originated
   loans, net of deferred fees and costs (e)
1.05
%
1.08
%
1.13
%
1.16
%
1.17
%
Capital Information (g)
 
 
 
 
 
Common Equity Tier 1 risk-based capital ratio
13.05
%
12.91
%
13.04
%
13.03
%
13.10
%
Tier 1 risk-based capital ratio
13.34
%
13.21
%
13.34
%
13.33
%
13.41
%
Total risk-based capital ratio (Tier 1 and Tier 2)
14.27
%
14.11
%
14.24
%
14.23
%
14.29
%
Leverage ratio
9.60
%
9.66
%
9.71
%
9.56
%
9.45
%
Common Equity Tier 1 capital
$
310,856

$
306,506

$
301,222

$
295,148

$
288,787

Tier 1 capital
317,826

313,430

308,099

301,977

295,569

Total capital (Tier 1 and Tier 2)
340,147

334,957

328,948

322,413

314,896

Total risk-weighted assets
$
2,382,874

$
2,373,359

$
2,309,951

$
2,265,022

$
2,203,776

Tangible equity to tangible assets (h)
8.98
%
8.80
%
9.13
%
9.10
%
8.88
%

10


(a) Includes all loans acquired in 2012 and thereafter.
(b) Prior periods reclassified.
(c) Includes loans categorized as a watch, 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) March 31, 2017 data based on preliminary analysis and subject to revision.
(h) This ratio represents a non-GAAP financial measure since it excludes the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets. Additional information regarding the calculation of this ratio is included at the end of this news release.


PROVISION FOR LOAN LOSSES INFORMATION
 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
Provision for Loan Losses
 
 
 
 
 
Provision for loan losses
$
400

 
$
480

 
$
858

Provision for checking account overdrafts
224

 
231

 
97

  Total provision for loan losses
$
624

 
$
711

 
$
955

 
 
 
 
 
 
Net Charge-Offs
 
 
 
 
 
Gross charge-offs
$
1,100

 
$
1,076

 
$
2,003

Recoveries
515

 
575

 
1,530

  Net charge-offs
$
585

 
$
501

 
$
473

 
 
 
 
 
 
Net Charge-Offs (Recoveries) by Type
 
 
 
 
 
Commercial real estate, other
$
(102
)
 
$
3

 
$
(1,136
)
Commercial and industrial
117

 
(56
)
 
1,012

Residential real estate
19

 
(22
)
 
139

Home equity lines of credit
—

 
(7
)
 
3

Consumer, indirect
277

 
238

 
325

Consumer, other
(10
)
 
143

 
37

Deposit account overdrafts
284

 
202

 
93

  Total net charge-offs
$
585

 
$
501

 
$
473

 
 
 
 
 
 
As a percent of average gross loans (annualized)
0.11
%
 
0.09
%
 
0.09
%



SUPPLEMENTAL INFORMATION
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
(in $000’s, end of period)
2017
 
2016
 
2016
 
2016
 
2016
 
 
 
 
 
 
 
 
 
 
Trust assets under administration and management
$
1,362,243

 
$
1,301,509

 
$
1,292,044

 
$
1,280,004

 
$
1,254,824

Brokerage assets under administration and management
805,361

 
777,771

 
754,168

 
729,519

 
706,314

Mortgage loans serviced for others
$
399,279

 
$
398,134

 
$
389,090

 
$
380,741

 
$
383,531

Employees (full-time equivalent)
776

 
782

 
799

 
803

 
821








11


CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
 
Three Months Ended
 
March 31, 2017
 
December 31, 2016
 
March 31, 2016
(in $000’s)
Balance
Income/
Expense
Yield/ Cost
 
Balance
Income/
Expense
Yield/ Cost
 
Balance
Income/
Expense
Yield/ Cost
Assets
 
 
 
 
 
 
 
 
 
 
 
Short-term investments
$
7,415

$
15

0.82
%
 
$
8,520

$
13

0.61
%
 
$
12,436

$
16

0.52
%
Investment securities (a)(b)
862,614

5,976

2.77
%
 
862,355

5,816

2.70
%
 
875,644

5,926

2.71
%
Loans (b)(c):
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate, construction
94,215

993

4.22
%
 
89,113

889

3.90
%
 
80,202

781

3.85
%
Commercial real estate, other
734,442

8,423

4.59
%
 
722,003

8,456

4.58
%
 
736,036

8,492

4.56
%
Commercial and industrial
433,068

4,545

4.20
%
 
399,614

4,201

4.11
%
 
356,375

3,695

4.10
%
Residential real estate (d)
531,457

5,769

4.34
%
 
547,640

5,938

4.34
%
 
565,514

6,166

4.36
%
Home equity lines of credit
111,112

1,159

4.23
%
 
111,417

1,214

4.33
%
 
106,968

1,190

4.47
%
Consumer, indirect
269,821

2,232

3.35
%
 
241,290

2,130

3.51
%
 
173,629

1,634

3.79
%
Consumer, other
70,206

1,218

7.04
%
 
73,321

1,209

6.76
%
 
73,015

1,051

6.23
%
Total loans
2,244,321

24,339

4.35
%
 
2,184,398

24,037

4.34
%
 
2,091,739

23,009

4.38
%
Allowance for loan losses
(18,585
)
 
 
 
(18,254
)
 
 
 
(16,845
)
 
 
Net loans
2,225,736

 
 
 
2,166,144

 
 
 
2,074,894

 
 
Total earning assets
3,095,765

30,330

3.93
%
 
3,037,019

29,866

3.89
%
 
2,962,974

28,951

3.90
%
 
 
 
 
 
 
 
 
 
 
 
 
Intangible assets
145,546

 
 
 
146,489

 
 
 
149,528

 
 
Other assets
205,040

 
 
 
203,011

 
 
 
160,133

 
 
Total assets
$
3,446,351

 
 
 
$
3,386,519

 
 
 
$
3,272,635

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Savings accounts
$
439,206

$
59

0.05
%
 
$
436,733

$
58

0.05
%
 
$
421,797

$
56

0.05
%
Government deposit accounts
283,605

131

0.19
%
 
273,263

126

0.18
%
 
298,685

147

0.20
%
Interest-bearing demand accounts
286,487

78

0.11
%
 
275,653

65

0.09
%
 
251,341

45

0.07
%
Money market deposit accounts
398,839

187

0.19
%
 
407,171

202

0.20
%
 
398,515

160

0.16
%
Retail certificates of deposit
342,837

726

0.86
%
 
375,347

807

0.86
%
 
437,647

827

0.76
%
Brokered certificates of deposits
84,929

306

1.46
%
 
37,859

151

1.59
%
 
50,452

366

2.92
%
Total interest-bearing deposits
1,835,903

1,487

0.33
%
 
1,806,026

1,409

0.31
%
 
1,858,437

1,601

0.35
%
 
 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
205,296

251

0.50
%
 
213,852

207

0.39
%
 
135,689

87

0.26
%
Long-term borrowings
172,053

1,134

2.66
%
 
145,677

1,066

2.92
%
 
113,370

988

3.50
%
Total borrowed funds
377,349

1,385

1.48
%
 
359,529

1,273

1.41
%
 
249,059

1,075

1.74
%
Total interest-bearing liabilities
2,213,252

2,872

0.53
%
 
2,165,555

2,682

0.49
%
 
2,107,496

2,676

0.51
%
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing deposits
758,446

 
 
 
743,389

 
 
 
710,297

 
 
Other liabilities
35,663

 
 
 
39,337

 
 
 
31,299

 
 
Total liabilities
3,007,361

 
 
 
2,948,281

 
 
 
2,849,092

 
 
Stockholders’ equity
438,990

 
 
 
438,238

 
 
 
423,543

 
 
Total liabilities and equity
$
3,446,351

 
 
 
$
3,386,519

 
 
 
$
3,272,635

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income/spread (b)
 
$
27,458

3.40
%
 
 
$
27,184

3.40
%
 
 
$
26,275

3.39
%
Net interest margin (b)
 
 
3.55
%
 
 
 
3.54
%
 
 
 
3.53
%
(a) Average balances are based on carrying value.
(b) Interest income and yields are presented on a fully tax-equivalent basis using a 35% federal statutory tax rate.
(c) Average balances include nonaccrual 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.

12


 
NON-GAAP FINANCIAL MEASURES
The following non-GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:

 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
 
 
 
 
 
 
Core fee-based income:
 
 
 
 
 
Total fee-based income
$
13,334

 
$
12,111

 
$
13,054

Plus: System upgrade revenue waived
—

 
85

 
—

Core fee-based income
$
13,334

 
$
12,196

 
$
13,054


 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
 
 
 
 
 
 
Core non-interest expenses:
 
 
 
 
 
Total non-interest expense
$
27,331

 
$
27,282

 
$
26,282

Less: System upgrade costs
—

 
746

 
—

Core non-interest expenses
$
27,331

 
$
26,536

 
$
26,282


 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
 
 
 
 
 
 
Efficiency ratio:
 
 
 
 
 
Total non-interest expense
$
27,331

 
$
27,282

 
$
26,282

Less: Amortization of intangible assets
863

 
1,007

 
1,008

Adjusted non-interest expense
$
26,468


$
26,275


$
25,274

 
 
 
 
 
 
Total fee-based income
$
13,334

 
$
12,111

 
$
13,054

 
 
 
 
 
 
Net interest income
$
26,945

 
$
26,667

 
$
25,767

Add: Fully tax-equivalent adjustment
513

 
517

 
508

Net interest income on a fully tax-equivalent basis
$
27,458

 
$
27,184

 
$
26,275

 
 
 
 
 
 
Adjusted revenue
$
40,792

 
$
39,295

 
$
39,329

 
 
 
 
 
 
Efficiency ratio
64.89
%
 
66.87
%
 
64.26
%
 
 
 
 
 
 
Efficiency ratio adjusted for non-core items:
 
 
 
 
Core non-interest expenses
$
27,331

 
$
26,536

 
$
26,282

Less: Amortization of intangible assets
863

 
1,007

 
1,008

Adjusted non-interest expense
$
26,468

 
$
25,529

 
$
25,274

Core fee-based income
$
13,334

 
$
12,196

 
$
13,054

Net interest income on a fully tax-equivalent basis
$
27,458

 
$
27,184

 
$
26,275

 
 
 
 
 
 
Adjusted core revenue
$
40,792

 
$
39,380

 
$
39,329

 
 
 
 
 
 
Efficiency ratio adjusted for non-core items
64.89
%
 
64.83
%
 
64.26
%


13



 
At or For the Three Months Ended
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
 
2016
 
2016
 
 
 
 
 
 
 
 
 
 
Tangible Equity:
 
 
 
 
 
 
 
 
 
Total stockholders' equity
$
443,009

 
$
435,261

 
$
440,637

 
$
437,753

 
$
428,486

Less: goodwill and other intangible assets
145,505

 
146,018

 
147,005

 
147,971

 
148,997

Tangible equity
$
297,504

 
$
289,243

 
$
293,632

 
$
289,782

 
$
279,489

 
 
 
 
 
 
 
 
 
 
Tangible Assets:
 
 
 
 
 
 
 
 
 
Total assets
$
3,459,276

 
$
3,432,348

 
$
3,363,585

 
$
3,333,455

 
$
3,294,929

Less: goodwill and other intangible assets
145,505

 
146,018

 
147,005

 
147,971

 
148,997

Tangible assets
$
3,313,771

 
$
3,286,330

 
$
3,216,580

 
$
3,185,484

 
$
3,145,932

 
 
 
 
 
 
 
 
 
 
Tangible Book Value per Common Share:
 
 
 
 
 
 
 
 
 
Tangible equity
$
297,504

 
$
289,243

 
$
293,632

 
$
289,782

 
$
279,489

Common shares outstanding
18,270,508

 
18,200,067

 
18,195,986

 
18,185,708

 
18,157,932

 
 
 
 
 
 
 
 
 
 
Tangible book value per common share
$
16.28

 
$
15.89

 
$
16.14

 
$
15.93

 
$
15.39

 
 
 
 
 
 
 
 
 
 
Tangible Equity to Tangible Assets Ratio:
 
 
 
 
Tangible equity
$
297,504

 
$
289,243

 
$
293,632

 
$
289,782

 
$
279,489

Tangible assets
$
3,313,771

 
$
3,286,330

 
$
3,216,580

 
$
3,185,484

 
$
3,145,932

 
 
 
 
 
 
 
 
 
 
Tangible equity to tangible assets
8.98
%
 
8.80
%
 
9.13
%
 
9.10
%
 
8.88
%

 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
 
 
 
 
 
 
Pre-Provision Net Revenue:
 
 
 
 
 
Income before income taxes
$
12,661

 
$
10,744

 
$
11,649

Add: provision for loan losses
624

 
711

 
955

Add: net loss on loans held-for-sale and OREO
—

 
33

 
1

Add: net loss on other assets
3

 
76

 
30

Less: net gain on securities transactions
340

 
68

 
96

Pre-provision net revenue
$
12,948

 
$
11,496

 
$
12,539

 
 
 
 
 
 
Pre-provision net revenue
$
12,948

 
$
11,496

 
$
12,539

Total average assets
$
3,446,351

 
$
3,386,519

 
$
3,272,635

 
 
 
 
 
 
Pre-provision net revenue to total average assets (annualized)
1.52
%
 
1.35
%
 
1.54
%


14


 
At or For the Three Months Ended
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
(in $000’s)
2017
 
2016
 
2016
 
2016
 
2016
 
 
 
 
 
 
 
 
 
 
Annualized Net Income Excluding Amortization of Other Intangible Assets:
Net income
$
8,809

 
$
7,408

 
$
7,792

 
$
7,962

 
$
7,995

Add: amortization of other intangible assets
863

 
1,007

 
1,008

 
1,007

 
1,008

Less: tax effect (at 35% tax rate) of amortization of other intangible assets
302

 
352

 
353

 
352

 
353

Net income excluding amortization of other intangible assets
$
9,370

 
$
8,063

 
$
8,447

 
$
8,617

 
$
8,650

 
 
 
 
 
 
 
 
 
 
Days in the quarter
90

 
92

 
92

 
91

 
91

Days in the year
365

 
366

 
366

 
366

 
366

Annualized net income
$
35,725

 
$
29,471

 
$
30,999

 
$
32,023

 
$
32,156

Annualized net income excluding amortization of other intangible assets
$
38,001

 
$
32,077

 
$
33,604

 
$
34,657

 
$
34,790

 
 
 
 
 
 
 
 
 
 
Average Tangible Stockholders' Equity:
 
 
 
 
 
 
 
 
 
Total average stockholders' equity
$
438,990

 
$
438,238

 
$
438,606

 
$
430,072

 
$
423,543

Less: average goodwill and other intangible assets
145,546

 
146,489

 
147,466

 
148,464

 
149,528

Average tangible stockholders' equity
$
293,444

 
$
291,749

 
$
291,140

 
$
281,608

 
$
274,015

 
 
 
 
 
 
 
 
 
 
Return on Average Stockholders' Equity Ratio:
 
 
 
 
Annualized net income
$
35,725

 
$
29,471

 
$
30,999

 
$
32,023

 
$
32,156

Average stockholders' equity
$
438,990

 
$
438,238

 
$
438,606

 
$
430,072

 
$
423,543

 
 
 
 
 
 
 
 
 
 
Return on average stockholders' equity
8.14
%
 
6.72
%
 
7.07
%
 
7.45
%
 
7.59
%
 
 
 
 
 
Return on Average Tangible Stockholders' Equity Ratio:
 
 
 
 
Annualized net income excluding amortization of other intangible assets
$
38,001

 
$
32,077

 
$
33,604

 
$
34,657

 
$
34,790

Average tangible stockholders' equity
$
293,444

 
$
291,749

 
$
291,140

 
$
281,608

 
$
274,015

 
 
 
 
 
 
 
 
 
 
Return on average tangible stockholders' equity
12.95
%
 
10.99
%
 
11.54
%
 
12.31
%
 
12.70
%

END OF RELEASE


15