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 January 29, 2016 - 8:30 AM EST
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Peoples Bancorp Inc. Announces 4th Quarter And Full Year 2015 Earnings

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

%

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/peoples-bancorp-inc-announces-4th-quarter-and-full-year-2015-earnings-300212096.html

SOURCE Peoples Bancorp Inc.


Source: PR Newswire (January 29, 2016 - 8:30 AM EST)

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