Peoples Bancorp Inc. Announces 4th Quarter And Full Year 2015 Earnings

Jan 29, 2016, 08:30 ET from Peoples Bancorp Inc.

MARIETTA, Ohio, Jan. 29, 2016 /PRNewswire/ -- Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for the quarter and year ended December 31, 2015.  Net income totaled $2.6 million for the fourth quarter of 2015, representing earnings per diluted common share of $0.14.  In comparison, earnings per diluted common share were $0.22 and $0.28 for the third quarter of 2015 and fourth quarter of 2014, respectively.  For the year, net income was $10.9 million in 2015 versus $16.7 million in 2014, representing earnings per diluted common share of $0.61 and $1.35, respectively.

"We continue to see results from the execution of our strategy to reduce expenses, which were overshadowed again for the quarter by another large provision for loan losses.  The large provision for loan losses was the result of the one commercial loan relationship that had been evaluated throughout the year as the borrower's business continued to deteriorate, but is behind us now as our recorded investment in the loan is zero.  The amount charged-off related to the relationship was in line with the amount previously reported on December 1, 2015," said Chuck Sulerzyski, President and Chief Executive Officer.  "With respect to loans, we achieved our stated loan growth for the year of 7%, which given the large charge-off experienced during the quarter, and the slow start to 2015, was encouraging as we move into 2016."

Income Statement Highlights:

  • Total revenue grew 25% compared to the fourth quarter of 2014, 1% compared to the linked quarter and 32% for the year.
    • Net interest income was the main contributor to the growth compared to the prior year periods.
      • Net interest income increased $5.7 million, or 28%, compared to the fourth quarter of 2014, $0.3 million, or 1%, compared to the linked quarter, and $28.1 million, or 40%, compared to the full year of 2014, due largely to loan growth, both organic and from acquisitions, and accretion income from acquisitions.
      • Net interest margin expanded 7 basis points compared to the fourth quarter of 2014, 1 basis point compared to the linked quarter, and 8 basis points compared to the full year of 2014, due largely to the reduced funding rate.
    • Non-interest income grew 19% compared to the fourth quarter of 2014, 2% compared to the linked quarter, and 18% compared to the full year of 2014.
  • Provision for loan losses was $7.2 million for the quarter and $14.1 million for the year, due primarily to the charge-off for one large commercial loan relationship.
  • Core non-interest expenses were $26.0 million, which was consistent with the linked quarter's core non-interest expenses.
    • Non-interest expenses for the fourth quarter of 2015 were $27.3 million and were impacted by the following non-core charges:
      • Acquisition-related charges were $0.8 million for the quarter and $10.7 million for the full year.
      • Pension settlement charges of $5,000 were incurred during the quarter, totaling $459,000 for the full year.
      • Other non-core charges totaled $407,000 for the quarter and $592,000 for the full year.

Balance Sheet Highlights:

  • Period-end total loan balances, excluding NB&T acquired loans, reflected annualized growth of 10% for the quarter, and 7% for the year.
    • Commercial loan balances, excluding NB&T acquired loans, grew at an annualized rate of 12% for the quarter, or $27 million, and 8% for the full year, or $67 million.
    • Consumer loan balances, excluding NB&T acquired loans, grew at an annualized rate of 7% for the quarter and full year, or $13 million and $50 million, respectively.
  • Asset quality negatively impacted earnings.
    • Net charge-offs for the quarter were elevated as a result of the full charge-off of the one large commercial relationship noted above.
    • Nonperforming assets decreased $6.2 million during the quarter driven mainly by the charge-off noted above.
    • Originated criticized loans increased due primarily to two large commercial relationships being downgraded, which was partially offset by the charge-off noted above.
    • Continued to evaluate exposure to the oil and gas industry during the quarter.
    • Allowance for loan losses decreased to 1.19% of originated loans at December 31, 2015.
  • Period-end and quarterly average deposit balances remained relatively flat for the fourth quarter.
    • Non-interest-bearing balances grew $6.7 million, or 1%, compared to the linked quarter, and comprised 28% of total deposits at December 31, 2015, versus 26% a year ago.
    • Cost of interest-bearing deposit balances was flat compared to the linked quarter and 10 basis points less than the fourth quarter of 2014.

Net Interest Income:

Net interest income for the fourth quarter of 2015 was $25.9 million, up 1% compared to the linked quarter and 29% higher than the fourth quarter of 2014, while the net interest margin for these periods was 3.56%, 3.55% and 3.49%, respectively.  Net interest margin, excluding net accretion income, improved 3 basis points compared to the linked quarter.  The accretion income, net of amortization expense, from the acquisitions was $1.2 million for the fourth quarter of 2015 and added 16 basis points to net interest margin in the fourth quarter of 2015, compared to 18 basis points for the linked quarter and 20 basis points for the fourth quarter of 2014.  Net interest income for the full year of 2015 was $97.6 million, up 40% compared to 2014, due largely to loan growth, from both acquisitions and organic growth.  Net interest margin for these periods was 3.53% and 3.45%, respectively.  On a full year basis, net accretion income from the acquisitions added 17 basis points for 2015 and 13 basis points for 2014.

Provision for Loan Losses:

For the fourth quarter of 2015, provision for loan losses was $7.2 million, which included the previously mentioned charge-off associated with the one large commercial loan relationship.  The loan growth experienced during the quarter, coupled with the trends in criticized loans, accounted for the additional increase in the provision during the quarter, compared to the third quarter of 2015.  Provision for loan losses was $128,000 for the fourth quarter of 2014 and $339,000 for the full year of 2014, due primarily to net recoveries realized during those periods.

Non-interest Income:

Total non-interest income grew slightly compared to the linked quarter, was up 19% compared to the prior year fourth quarter and increased 18% for the full year.  The growth for the quarter compared to the linked quarter was primarily from the commercial loan swap program.  The growth in total non-interest income compared to the prior year fourth quarter and the full year of 2014 was due to growth in all categories, most notably electronic banking income, trust and investment income, and deposit account service charges, with growth of 31%, 23% and 17% for the quarter, respectively, and 35%, 25% and 18% for the full year, respectively.  The growth in 2015 was due largely to the NB&T Financial Group, Inc. ("NB&T") acquisition.

Non-interest Expenses:

Non-interest expenses, adjusted for non-core charges, were relatively flat compared to the linked quarter.  For the fourth quarter and full year, non-interest expenses, adjusted for non-core charges, were up 19% and 32%, respectively, compared to 2014, with the increase due largely to the operating costs of the NB&T acquisition, which closed March 6, 2015.  Non-core charges included in non-interest expenses for the fourth quarter and full year 2015 consisted of acquisition-related costs of $0.8 million and $10.7 million, respectively; pension settlement charges of $5,000 and $459,000, respectively; and other items totaling $407,000 and $592,000, respectively.  Included in other items are severance charges and search firm fees, and in the first half of the year, legal settlement charges that were incurred.  The efficiency ratio for the fourth quarter of 2015 was 67.94%, compared to 65.81% for the linked quarter and 76.55% for the fourth quarter of 2014.  The increase in the efficiency ratio for the quarter was the result of an increase in non-core charges.

Loans:

Period-end loan balances, excluding the loans acquired from NB&T, increased $40.4 million compared to the September 30, 2015 balances.  The growth was driven equally by growth in commercial and consumer loan balances.  Commercial loans, excluding loans acquired from NB&T, grew $27.0 million, or 12% annualized, with commercial real estate loan growth of $31.4 million more than offsetting a decrease in commercial and industrial loans for the quarter.  Non-mortgage consumer loans grew $12.6 million, or 23% annualized, during the quarter, while mortgage consumer loans were relatively flat.  The average net loan balances, inclusive of loans acquired from NB&T, for the quarter increased $28.1 million, or 1%, compared to the linked quarter, and $585.6 million, or 43%, for the year.

Asset Quality:

Peoples experienced some deterioration in asset quality during the quarter.  Net charge-offs increased during the quarter as Peoples recorded net charge-offs of $13.6 million, resulting in an annualized net charge-off rate of 2.63%.  The net charge-offs for the quarter were primarily the result of the one commercial loan relationship, which operates in the coal industry.  Nonperforming assets decreased by $6.2 million, or 24%, during the quarter.  The decrease was primarily due to the charge-off noted above related to one commercial loan relationship, which was partially offset by a large commercial real estate loan being placed on non-accrual status during the quarter.  Criticized assets, which are those classified as watch, substandard or doubtful, increased during the quarter largely due to two large commercial loan relationships being downgraded during the quarter, which was partially offset by the charge-off noted above.  Peoples continues to monitor its exposure to the oil and gas industry and has approximately $40 million of loan commitments, and approximately $30 million of loan balances outstanding at December 31, 2015, with borrowers operating in that industry.  At quarter-end, 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 1.19%, down from 1.72% reported for September 30, 2015 and 1.48% reported for December 31, 2014.  The increase in the ratio during the third quarter of 2015 was due to the build-up of reserves on the one commercial loan relationship noted above that was fully charged-off in the fourth quarter of 2015.

Deposits:

Period-end deposits increased $5.1 million during the quarter, with the growth in non-interest-bearing deposits more than offsetting the slight decline in interest-bearing deposit balances.  The increase in non-interest-bearing deposits was mainly due to growth of $24.8 million in individual demand accounts, which more than offset the decline of $21.3 million in commercial non-interest-bearing checking accounts.  The decline in commercial non-interest-bearing checking accounts was due to a customer temporarily maintaining a higher than normal balance on September 30, 2015.  Other non-interest-bearing deposit balances increased $3.2 million.  The $1.6 million decline in interest-bearing deposit balances was mainly due to a decline in certificates of deposit, which was partially offset by increases in savings and money market account deposit balances.  Average deposits for the quarter compared to the linked quarter decreased $10.2 million, as average interest-bearing deposits decreased $32.3 million, which was partially offset by an increase in average non-interest-bearing deposits of $22.1 million.  The decrease in interest-bearing deposits was due to a decrease in governmental deposits and certificates of deposit.

Peoples Bancorp Inc. is a diversified financial services holding company with $3.3 billion in total assets, 81 locations, including 74 full-service bank branches, and 81 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance and trust solutions through its subsidiaries - The Peoples Banking and Trust Company 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 fourth quarter and full year 2015 results of operations today at 11:00 a.m., Eastern Standard 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" measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-GAAP 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 measures used in this news release:

    • Core non-interest expenses are non-GAAP since they exclude the impact of acquisition-related costs, pension settlement charges, severance charges, search firm fees and legal settlement charges.
    • Efficiency ratio is calculated as non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income.  This measure is non-GAAP since it excludes intangible amortization and all gains and/or losses included in earnings, and uses fully tax-equivalent net interest income.
    • Tangible assets and tangible equity measures are non-GAAP since they exclude the impact of 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 non-interest income minus non-interest expense.  This measure is non-GAAP since it excludes (recovery of) provision for loan losses and all gains and/or losses included in earnings.

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", "could", "may", "feel", "expect", "believe", "plan", and similar expressions.

These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations.  Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially.  These factors include, but are not limited to: (1) the success, impact, and timing of the implementation of Peoples' business strategies, including the successful integration of recently completed acquisitions and the expansion of consumer lending activity; (2) Peoples' ability to integrate the NB&T acquisition and any future acquisitions may be unsuccessful, or may be more difficult, time-consuming or costly than expected; (3) Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders; (4) local, regional, national and international economic conditions and the impact they may have on Peoples, its customers and its counterparties, and Peoples' assessment of the impact, which may be different than anticipated; (5) competitive pressures among financial institutions or from non-financial institutions may increase significantly, including product and pricing pressures, third-party relationships and revenues, and Peoples' ability to attract, develop and retain qualified professionals; (6) changes in the interest rate environment due to economic conditions and/or the fiscal policies of the U.S. government and Board of Governors of the Federal Reserve System ("Federal Reserve Board"), which may adversely impact interest rates, interest margins and interest rate sensitivity; (7) changes in prepayment speeds, loan originations, levels of non-performing assets, delinquent loans and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (8) adverse changes in the economic conditions and/or activities, including, but not limited to, continued economic uncertainty in the U.S., the European Union, Asia, and other areas, which could decrease sales volumes and increase loan delinquencies and defaults; (9) legislative or regulatory changes or actions, promulgated and to be promulgated thereunder by the state of Ohio, the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, 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 under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations; (10) deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses; (11) changes in accounting standards, policies, estimates or procedures which may adversely affect Peoples' reported financial condition or results of operations; (12) Peoples' assumptions and estimates used in applying critical accounting policies, which may prove unreliable, inaccurate or not predictive of actual results; (13) 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; (14) Peoples' ability to receive dividends from its subsidiaries; (15) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity; (16) the impact of new minimum capital thresholds established as a part of the implementation of Basel III; (17) 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; (18) 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; (19) 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; (20) the overall adequacy of Peoples' risk management program; (21) the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international military or terrorist activities or conflicts; and (22) 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, 2014.

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 December 31, 2015 consolidated financial statements as part of its Annual Report on Form 10-K to be filed with the SEC.  Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

 

 

PER COMMON SHARE DATA AND SELECTED RATIOS

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

2015

2015

2014

2015

2014

PER COMMON SHARE:

Earnings per share:

   Basic

$

0.14

$

0.23

$

0.29

$

0.62

$

1.36

   Diluted

0.14

0.22

0.28

0.61

1.35

Cash dividends declared per share

0.15

0.15

0.15

0.60

0.60

Book value per share

22.81

23.08

22.92

22.81

22.92

Tangible book value per share (a)

14.68

14.86

15.57

14.68

15.57

Closing stock price at end of period

$

18.84

$

20.79

$

25.93

$

18.84

$

25.93

SELECTED RATIOS:

Return on average equity (b)

2.42

%

3.89

%

5.03

%

2.69

%

6.16

%

Return on average assets  (b)

0.32

%

0.51

%

0.66

%

0.35

%

0.74

%

Efficiency ratio (c)

67.94

%

65.81

%

76.55

%

75.50

%

75.37

%

Pre-provision net revenue to average assets (b)(d)

1.31

%

1.40

%

0.99

%

0.96

%

1.10

%

Net interest margin (b)(e)

3.56

%

3.55

%

3.49

%

3.53

%

3.45

%

Dividend payout ratio (f)

106.58

%

66.74

%

53.22

%

96.35

%

43.10

%

 

(a)   

This amount represents a non-GAAP financial measure since it excludes the balance sheet impact of 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)   

Non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income.  This amount represents a non-GAAP financial measure since it excludes intangible amortization, and net gains or losses on security transactions, debt extinguishment, loans held-for-sale and other real estate owned, and other assets, and uses the fully tax-equivalent net interest income.  Additional information regarding the calculation of this ratio is included at the end of this news release.

(d)  

This ratio represents a non-GAAP financial measure since it excludes the recovery of or provision for loan losses and net gains or losses on security transactions, debt extinguishment, loans held-for-sale and other real estate owned, and other assets.  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.

(e)   

Information presented on a fully tax-equivalent basis.

(f)   

Dividends declared on common shares as a percentage of net income.

 

 

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(in $000's)

2015

2015

2014

2015

2014

Interest income

$

28,430

$

28,178

$

22,868

$

108,333

$

80,200

Interest expense

2,566

2,642

2,744

10,721

10,694

Net interest income

25,864

25,536

20,124

97,612

69,506

Provision for loan losses

7,238

5,837

128

14,097

339

Net interest income after provision for loan losses

18,626

19,699

19,996

83,515

69,167

Net gain on securities transactions

56

62

238

729

398

(Loss) Gain on debt extinguishment

(520)

67

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

(398)

(50)

(95)

(529)

(68)

Net loss on other assets

(100)

(1)

(51)

(739)

(430)

Non-interest income:

Insurance income

2,913

3,275

2,876

13,783

13,604

Deposit account service charges

2,780

2,922

2,386

10,845

9,173

Trust and investment income

2,489

2,497

2,029

9,577

7,685

Electronic banking income

2,425

2,241

1,846

8,958

6,642

Mortgage banking income

390

212

365

1,317

1,237

Other non-interest income

1,104

759

676

2,961

1,712

  Total non-interest income

12,101

11,906

10,178

47,441

40,053

Non-interest expense:

Salaries and employee benefits costs

13,723

13,572

12,893

59,216

46,593

Net occupancy and equipment

2,934

2,840

2,017

11,207

7,839

Professional fees

1,753

1,287

2,024

7,295

5,649

Electronic banking expense

1,448

1,408

1,213

5,300

4,529

Amortization of intangible assets

1,133

1,127

516

4,077

1,428

Data processing and software

1,001

910

626

3,671

2,424

Marketing expense

663

459

759

2,838

2,299

Communication expense

564

628

472

2,286

1,642

FDIC insurance

568

562

382

2,084

1,260

Franchise taxes

416

502

177

1,968

1,392

Foreclosed real estate and other loan expenses

245

159

280

1,276

789

Other non-interest expense

2,829

2,658

2,622

13,863

9,165

  Total non-interest expense

27,277

26,112

23,981

115,081

85,009

  Income before income taxes

3,008

5,504

6,285

14,816

24,178

Income tax expense

425

1,370

2,040

3,875

7,494

    Net income

$

2,583

$

4,134

$

4,245

$

10,941

$

16,684

PER COMMON SHARE DATA:

Earnings per share – Basic

$

0.14

$

0.23

$

0.29

$

0.62

$

1.36

Earnings per share – Diluted

$

0.14

$

0.22

$

0.28

$

0.61

$

1.35

Cash dividends declared per share

$

0.15

$

0.15

$

0.15

$

0.60

$

0.60

Weighted-average shares outstanding – Basic

18,142,997

18,127,131

14,660,314

17,555,140

12,183,352

Weighted-average shares outstanding – Diluted

18,278,272

18,271,979

14,809,289

17,687,795

12,306,224

Actual shares outstanding (end of period)

18,404,864

18,400,809

14,836,727

18,404,864

14,836,727

 

 

CONSOLIDATED BALANCE SHEETS

December 31,

(in $000's)

2015

2014

Assets

Cash and cash equivalents:

  Cash and due from banks

$

53,663

$

42,230

  Interest-bearing deposits in other banks

17,452

19,224

    Total cash and cash equivalents

71,115

61,454

Available-for-sale investment securities, at fair value (amortized cost of

  $780,304 at December 31, 2015 and $632,967 at December 31, 2014)

784,701

636,880

Held-to-maturity investment securities, at amortized cost (fair value of

  $45,853 at December 31, 2015 and $48,442 at December 31, 2014)

45,728

48,468

Other investment securities, at cost

38,401

28,311

    Total investment securities

868,830

713,659

Loans, net of deferred fees and costs

2,072,440

1,620,898

Allowance for loan losses

(16,779)

(17,881)

    Net loans

2,055,661

1,603,017

Loans held-for-sale

1,953

4,374

Bank premises and equipment, net of accumulated depreciation

53,487

40,335

Goodwill

132,631

98,562

Other intangible assets

16,986

10,596

Other assets

58,307

35,772

    Total assets

$

3,258,970

$

2,567,769

Liabilities

Deposits:

Non-interest-bearing deposits

$

717,939

$

493,162

Interest-bearing deposits

1,818,005

1,439,912

    Total deposits

2,535,944

1,933,074

Short-term borrowings

160,386

88,277

Long-term borrowings

113,670

179,083

Accrued expenses and other liabilities

29,181

27,217

    Total liabilities

2,839,181

2,227,651

Stockholders' Equity

Preferred stock, no par value (50,000 shares authorized, no shares issued

  at December 31, 2015 and December 31, 2014)

Common stock, no par value, 24,000,000 shares authorized, 18,931,200 shares issued at December 31, 2015 and 15,599,643 shares issued at December 31, 2014, including shares in treasury

343,948

265,742

Retained earnings

90,790

90,391

Accumulated comprehensive loss, net of deferred income taxes

(359)

(1,301)

Treasury stock, at cost, 586,686 shares at December 31, 2015 and 590,246 shares at December 31, 2014

(14,590)

(14,714)

    Total stockholders' equity

419,789

340,118

    Total liabilities and stockholders' equity

$

3,258,970

$

2,567,769

 

 

SELECTED FINANCIAL INFORMATION

December 31,

September 30,

June 30,

March 31,

December 31,

(in $000's, end of period)

2015

2015

2015

2015

2014

Loan Portfolio

Commercial real estate, construction

$

75,899

$

81,076

$

61,388

$

54,035

$

38,952

Commercial real estate, other

736,276

710,630

742,532

741,409

556,135

Commercial and industrial

351,719

357,456

327,093

325,910

280,031

Residential real estate

565,555

571,132

565,768

574,375

479,443

Home equity lines of credit

106,429

105,767

103,991

101,713

80,695

Consumer

235,114

222,867

207,998

190,581

182,709

Deposit account overdrafts

1,448

1,317

3,263

3,146

2,933

    Total loans

$

2,072,440

$

2,050,245

$

2,012,033

$

1,991,169

$

1,620,898

Total acquired loans (a)

$

657,801

$

694,436

$

726,540

$

770,204

$

408,884

    Total originated loans

$

1,414,639

$

1,355,809

$

1,285,493

$

1,220,965

$

1,212,014

Deposit Balances

Non-interest-bearing deposits

$

717,939

711,226

681,357

695,131

493,162

Interest-bearing deposits:

  Interest-bearing demand accounts

$

250,023

$

232,354

$

234,025

$

228,373

$

173,659

  Retail certificates of deposit

448,992

461,398

480,687

494,896

432,563

  Money market deposit accounts

394,119

393,472

395,788

402,257

337,387

  Governmental deposit accounts

276,639

293,889

304,221

316,104

161,305

  Savings accounts

414,375

404,676

410,371

406,276

295,307

  Brokered certificates of deposits

33,857

33,841

38,123

38,104

39,691

    Total interest-bearing deposits

1,818,005

1,819,630

1,863,215

1,886,010

1,439,912

    Total deposits

$

2,535,944

$

2,530,856

$

2,544,572

$

2,581,141

$

1,933,074

Asset Quality

Nonperforming assets (NPAs):

  Loans 90+ days past due and accruing

$

5,969

$

3,760

$

3,165

$

3,700

$

2,799

  Nonaccrual loans

13,531

21,144

20,823

8,362

8,406

    Total nonperforming loans (NPLs)

19,500

24,904

23,988

12,062

11,205

  Other real estate owned (OREO)

733

1,566

1,322

1,548

946

Total NPAs

$

20,233

$

26,470

$

25,310

$

13,610

$

12,151

Allowance for loan losses as a percent of NPLs (b)(c)

86.05

%

93.68

%

76.05

%

149.96

%

159.58

%

NPLs as a percent of total loans (b)(c)

0.94

%

1.21

%

1.19

%

0.60

%

0.69

%

NPAs as a percent of total assets (b)(c)

0.62

%

0.82

%

0.79

%

0.42

%

0.47

%

NPAs as a percent of total loans and OREO (b)(c)

0.98

%

1.29

%

1.25

%

0.68

%

0.75

%

Allowance for loan losses as a percent of originated

  loans, net of deferred fees and costs (b)

1.19

%

1.72

%

1.42

%

1.48

%

1.48

%

Capital Information (d)

Common Equity Tier 1 capital ratio

13.37

%

13.46

%

14.05

%

13.73

%

N/A

Tier 1 risk-based capital ratio

13.68

%

13.77

%

14.37

%

14.05

%

14.32

%

Total risk-based capital ratio (Tier 1 and Tier 2)

14.55

%

14.97

%

15.38

%

15.02

%

15.48

%

Leverage ratio

9.52

%

9.57

%

9.50

%

10.98

%

9.92

%

Common Equity Tier 1 capital

$

288,417

$

287,020

$

285,680

$

281,249

N/A

Tier 1 capital

295,151

293,705

292,316

287,835

241,707

Total capital (Tier 1 and Tier 2)

313,974

319,277

312,773

307,795

261,371

Total risk-weighted assets

$

2,157,410

$

2,132,453

$

2,033,700

$

2,048,651

$

1,687,968

Tangible equity to tangible assets (e)

8.69

%

8.88

%

8.73

%

8.61

%

9.39

%

 

(a)  

Includes all loans acquired in 2012 and thereafter.

(b)  

Data presented as of the end of the period indicated.

(c)  

Nonperforming loans include loans 90 days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and other real estate owned.

(d)  

December 31, 2015 data based on preliminary analysis and subject to revision.

(e)  

These ratios represent non-GAAP financial measures since they exclude the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets.  Additional information regarding the calculation of these ratios is included at the end of this news release.

 

PROVISION FOR LOAN LOSSES INFORMATION

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(in $000's)

2015

2015

2014

2015

2014

Provision for Loan Losses

Provision for checking account overdrafts

$

138

$

202

$

128

$

612

$

339

Provision for other loan losses

7,100

5,635

13,485

  Total provision for loan losses

$

7,238

$

5,837

$

128

$

14,097

$

339

Net Charge-Offs (Recoveries)

Gross charge-offs

$

14,003

$

1,140

$

920

$

16,698

$

2,715

Recoveries

364

390

1,117

1,562

3,192

  Net charge-offs (recoveries)

$

13,639

$

750

$

(197)

$

15,136

$

(477)

Net Charge-Offs (Recoveries) by Type

Commercial real estate, construction

$

$

$

$

$

Commercial real estate, other

46

113

(870)

138

(1,857)

Commercial and industrial

13,145

83

141

13,478

122

Residential real estate

(16)

208

101

313

309

Home equity lines of credit

(3)

8

61

6

92

Consumer

295

136

226

598

494

Deposit account overdrafts

172

202

144

603

363

  Total net charge-offs (recoveries)

$

13,639

$

750

$

(197)

$

15,136

$

(477)

As a percent of average gross loans (annualized)

2.63

%

0.15

%

(0.05)%

0.78

%

(0.03)%

 

 

SUPPLEMENTAL INFORMATION

December 31,

September 30,

June 30,

March 31,

December 31,

(in $000's, end of period)

2015

2015

2015

2015

2014

Trust assets under management

$

1,275,253

$

1,261,112

$

1,303,792

$

1,319,423

$

1,022,189

Brokerage assets under management

664,153

621,242

641,412

566,635

590,089

Mortgage loans serviced for others

$

390,398

$

387,200

$

392,625

$

386,261

$

352,779

Employees (full-time equivalent)

817

821

831

847

699

 

 

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME

Three Months Ended

December 31, 2015

September 30, 2015

December 31, 2014

(in $000's)

Balance

Income/

Expense

Yield/ Cost

Balance

Income/

Expense

Yield/ Cost

Balance

Income/

Expense

Yield/ Cost

Assets

Short-term investments

$

12,840

$

8

0.25

%

$

34,093

$

21

0.24

%

$

30,770

$

20

0.26

%

Other long-term investments

1,096

2

0.72

%

1,261

3

0.94

%

1,453

4

1.09

%

Investment securities (a)(b)

880,938

5,911

2.68

%

856,063

5,761

2.69

%

719,833

4,961

2.76

%

Gross loans (a)

2,060,268

23,024

4.41

%

2,027,322

22,918

4.46

%

1,585,728

18,235

4.55

%

Allowance for loan losses

(22,867)

(17,982)

(17,495)

Total earning assets

2,932,275

28,945

3.91

%

2,900,757

28,703

3.92

%

2,320,289

23,220

3.96

%

Intangible assets

150,717

151,206

107,002

Other assets

157,612

157,730

111,035

Total assets

$

3,240,604

$

3,209,693

$

2,538,326

Liabilities and Equity

Interest-bearing deposits:

Savings accounts

$

409,827

$

55

0.05

%

$

410,131

$

56

0.05

%

$

284,221

$

38

0.05

%

Government deposit accounts

284,079

147

0.21

%

301,178

161

0.21

%

173,845

113

0.26

%

Interest-bearing demand accounts

239,627

43

0.07

%

235,145

47

0.08

%

170,006

36

0.08

%

Money market deposit accounts

393,219

158

0.16

%

395,547

158

0.16

%

337,506

136

0.16

%

Brokered certificates of deposits

33,849

318

3.73

%

34,883

328

3.73

%

39,681

370

3.70

%

Retail certificates of deposit

456,516

769

0.67

%

472,516

789

0.66

%

431,534

865

0.80

%

Total interest-bearing deposits

1,817,117

1,490

0.33

%

1,849,400

1,539

0.33

%

1,436,793

1,558

0.43

%

Short-term borrowings

141,081

74

0.21

%

98,996

42

0.17

%

76,930

33

0.17

%

Long-term borrowings

114,148

1,002

3.50

%

119,477

1,061

3.54

%

175,045

1,154

2.63

%

Total borrowed funds

255,229

1,076

1.68

%

218,473

1,103

2.01

%

251,975

1,187

1.88

%

Total interest-bearing liabilities

2,072,346

2,566

0.49

%

2,067,873

2,642

0.51

%

1,688,768

2,745

0.65

%

Non-interest-bearing deposits

716,339

694,277

493,901

Other liabilities

29,218

26,433

21,052

Total liabilities

2,817,903

2,788,583

2,203,721

Stockholders' equity

422,701

421,110

334,605

Total liabilities and equity

$

3,240,604

$

3,209,693

$

2,538,326

Net interest income/spread (a)

$

26,379

3.42

%

$

26,061

3.41

%

$

20,475

3.32

%

Net interest margin (a)

3.56

%

3.55

%

3.49

%

(a) Information presented on a fully tax-equivalent basis.

(b) Average balances are based on carrying value.

 

 

 

Year Ended

December 31, 2015

December 31, 2014

(in $000's)

Balance

Income/

Expense

Yield/ Cost

Balance

Income/

Expense

Yield/ Cost

Assets

Short-term investments

$

50,858

$

123

0.24

%

$

15,394

$

1

0.01

%

Other long-term investments

1,261

12

0.95

%

1,913

8

0.42

%

Investment securities (a)(b)

833,757

22,838

2.74

%

689,816

19,809

2.87

%

Gross loans (a)

1,952,241

87,338

4.47

%

1,364,808

61,718

4.52

%

Allowance for loan losses

(19,174)

(17,362)

Total earning assets

2,818,943

110,311

3.91

%

2,054,569

81,536

3.97

%

Intangible assets

144,013

87,821

Other assets

148,897

98,144

Total assets

$

3,111,853

$

2,240,534

Liabilities and Equity

Interest-bearing deposits:

Savings accounts

$

388,802

$

209

0.05

%

$

247,419

$

135

0.05

%

Government deposit accounts

276,367

597

0.22

%

165,622

470

0.28

%

Interest-bearing demand accounts

222,868

178

0.08

%

148,687

124

0.08

%

Money market deposit accounts

384,258

614

0.16

%

293,214

472

0.16

%

Brokered certificates of deposits

36,303

1,352

3.72

%

42,598

1,568

3.68

%

Retail certificates of deposit

465,861

3,256

0.70

%

383,574

3,338

0.87

%

Total interest-bearing deposits

1,774,459

6,206

0.35

%

1,281,114

6,107

0.48

%

Short-term borrowings

100,437

182

0.18

%

96,040

146

0.15

%

Long-term borrowings

135,248

4,333

3.20

%

138,171

4,442

3.21

%

Total borrowed funds

235,685

4,515

1.92

%

234,211

4,588

1.96

%

Total interest-bearing liabilities

2,010,144

10,721

0.53

%

1,515,325

10,695

0.71

%

Non-interest-bearing deposits

663,395

433,798

Other liabilities

31,018

20,722

Total liabilities

2,704,557

1,969,845

Stockholders' equity

407,296

270,689

Total liabilities and equity

$

3,111,853

$

2,240,534

Net interest income/spread (a)

$

99,590

3.38

%

$

70,841

3.26

%

Net interest margin (a)

3.53

%

3.45

%

(a) Information presented on a fully tax-equivalent basis.

(b) Average balances are based on carrying value.

 

 

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

Year Ended

December 31,

September 30,

December 31,

December 31,

(in $000's)

2015

2015

2014

2015

2014

Core non-interest expenses:

Total non-interest expense

$

27,277

$

26,112

$

23,981

$

115,081

$

85,009

Less: acquisition-related costs

838

109

1,869

10,722

4,754

Less: pension settlement charges

5

83

17

459

1,400

Less: other non-core charges

407

298

592

298

Core non-interest expenses

$

26,027

$

25,920

$

21,797

$

103,308

$

78,557

 

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(in $000's)

2015

2015

2014

2015

2014

Efficiency ratio:

Total non-interest expense

$

27,277

$

26,112

$

23,981

$

115,081

$

85,009

Less: Amortization of intangible assets

1,133

1,127

516

4,077

1,428

Adjusted non-interest expense

26,144

24,985

23,465

111,004

83,581

Total non-interest income

12,101

11,906

10,178

47,441

40,053

Net interest income

25,864

25,536

20,124

97,612

69,506

Add: Fully tax-equivalent adjustment

515

525

351

1,978

1,335

Net interest income on a fully taxable-equivalent basis

26,379

26,061

20,475

99,590

70,841

Adjusted revenue

$

38,480

$

37,967

$

30,653

$

147,031

$

110,894

Efficiency ratio

67.94

%

65.81

%

76.55

%

75.50

%

75.37

%

 

At or For the Three Months Ended

December 31,

September 30,

June 30,

March 31,

December 31,

(in $000's)

2015

2015

2015

2015

2014

Tangible Equity:

Total stockholders' equity, as reported

$

419,789

$

424,760

$

418,164

$

419,218

$

340,118

Less: goodwill and other intangible assets

149,617

151,339

151,169

152,291

109,158

Tangible equity

$

270,172

$

273,421

$

266,995

$

266,927

$

230,960

Tangible Assets:

Total assets, as reported

$

3,258,970

$

3,228,830

$

3,210,425

$

3,253,835

$

2,567,769

Less: goodwill and other intangible assets

149,617

151,339

151,169

152,291

109,158

Tangible assets

$

3,109,353

$

3,077,491

$

3,059,256

$

3,101,544

$

2,458,611

Tangible Book Value per Common Share:

Tangible equity

$

270,172

$

273,421

$

266,995

$

266,927

$

230,960

Common shares outstanding

18,404,864

18,400,809

18,391,575

18,374,256

14,836,727

Tangible book value per common share

$

14.68

$

14.86

$

14.52

$

14.53

$

15.57

Tangible Equity to Tangible Assets Ratio:

Tangible equity

$

270,172

$

273,421

$

266,995

$

266,927

$

230,960

Tangible assets

$

3,109,353

$

3,077,491

$

3,059,256

$

3,101,544

$

2,458,611

Tangible equity to tangible assets

8.69

%

8.88

%

8.73

%

8.61

%

9.39

%

 

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(in $000's)

2015

2015

2014

2015

2014

Pre-Provision Net Revenue:

Income before income taxes

$

3,008

$

5,504

$

6,285

$

14,816

$

24,178

Add: provision for loan losses

7,238

5,837

128

14,097

339

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

398

50

95

530

95

Add: net loss on securities transactions

30

Add: net loss on other assets

100

1

51

739

430

Less: recovery of loan losses

Less: net gain on debt extinguishment

67

Less: net gain on loans held-for-sale and OREO

27

Less: net gain on securities transactions

56

62

238

729

428

Pre-provision net revenue

$

10,688

$

11,330

$

6,321

$

29,973

$

24,550

Pre-provision net revenue

$

10,688

$

11,330

$

6,321

$

29,973

$

24,550

Total average assets

3,240,604

3,209,693

2,538,326

3,111,853

2,240,534

Pre-provision net revenue to total average assets (annualized)

1.31

%

1.40

%

0.99

%

0.96

%

1.10

%

 

 

SOURCE Peoples Bancorp Inc.



RELATED LINKS

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