U.S. Markets open in 4 hrs 14 mins

Peoples Bancorp Inc. Reports Record Quarterly Net Income

MARIETTA, Ohio, April 23, 2019 /PRNewswire/ -- Peoples Bancorp Inc. ("Peoples") (PEBO) today announced results for the quarter ended March 31, 2019.  Net income totaled $14.4 million for the first quarter of 2019, representing earnings per diluted common share of $0.73.  Earnings per diluted common share were positively impacted by $0.07 per share for the recovery on a previously charged-off commercial loan and by $0.03 per share for income related to the sale of restricted Class B Visa stock, partially offset by the negative impact of $0.01 per share for acquisition-related costs during the first quarter of 2019.  In comparison, earnings per diluted common share were $0.71 for the fourth quarter of 2018 and $0.64 for the first quarter of 2018.

On April 12, 2019, Peoples completed the previously-announced merger with First Prestonsburg Bancshares Inc. ("First Prestonsburg").  First Prestonsburg merged into Peoples, and First Prestonsburg's wholly-owned subsidiary, First Commonwealth Bank of Prestonsburg, Inc. ("First Commonwealth"), which operated nine full-service bank branches in eastern and central Kentucky, merged into Peoples Bank.  Consideration of $43.7 million was paid in the merger, of which $11.3 million was in the form of a special cash dividend paid to shareholders prior to the merger with the remainder being paid in stock totaling 1,005,478 Peoples common shares.

"We are pleased to announce another quarter of solid net income and continued improvements in several key financial metrics, as evidenced by increases in our return on average assets and net interest margin, coupled with growth in our tangible book value per share," said Chuck Sulerzyski, President and Chief Executive Officer.  "Asset quality improved, with criticized loans declining $24.4 million, or 21%, during the quarter.  On April 12, 2019, we welcomed the shareholders, customers, employees and communities of First Prestonsburg to the Peoples team and are eager and excited to bring our products and services to the region.  We are committed to maintaining our focus on building strong, reliable results for our shareholders."

Statement of Operations Highlights:

  • Net interest income declined $0.2 million, or 1%, compared to the linked quarter and increased $4.6 million, or 16%, compared to the first quarter of 2018.
  • Peoples recorded a recovery of loan losses of $0.3 million during the first quarter of 2019, compared to a provision for loan losses of $1.0 million and $2.0 million for the linked quarter and first quarter of 2018, respectively.
  • Total non-interest income, excluding net gains and losses, grew $1.4 million, or 10%, compared to the linked quarter, and increased $0.7 million, or 5%, compared to the first quarter of 2018.
  • Total non-interest expense increased $0.9 million, or 3%, compared to the linked quarter and grew $3.6 million, or 13%, compared to the first quarter of 2018.

Balance Sheet Highlights:

  • Period-end total loan balances increased $8.8 million, or 1% annualized, compared to the linked quarter.
  • Asset quality metrics remained strong during the quarter.
  • Period-end total deposit balances grew $181.9 million, or 6%, compared to December 31, 2018, and increased $324.2 million, or 12%, compared to March 31, 2018.

Net Interest Income:

Net interest income was $33.9 million for the first quarter of 2019, a decrease of 1% compared to the linked quarter.  Net interest margin was 3.80% for the first quarter of 2019, compared to 3.77% for the linked quarter.  The decline in net interest income compared to the linked quarter was partially due to fewer calendar days in the current quarter.  The net interest margin was up as a result of higher interest rates on loans due to the Federal Funds Target Rate increase during December 2018, coupled with lower overnight borrowings due to deposit growth in the first quarter of 2019 compared to the fourth quarter of 2018.  The linked quarter also benefited from proceeds of $305,000 received on an investment security that had been previously written down due to an other-than-temporary impairment, which added 3 basis points to the net interest margin.  Peoples recorded no similar proceeds during the current quarter.

Accretion income, net of amortization expense, from acquisitions was $722,000 for the first quarter of 2019 and $506,000 for the fourth quarter of 2018, which added 8 basis points and 6 basis points, respectively, to net interest margin.  The increase in accretion income compared to the linked quarter was driven by a decline in the amortization of the fair value adjustment to acquired ASB time deposits, which will be fully amortized by the end of the second quarter of 2019.

Net interest income for the current quarter increased $4.6 million, or 16%, over the first quarter of 2018. Net interest margin increased 14 basis points compared to 3.66% for the first quarter of 2018.  The increase in net interest income compared to the first quarter of 2018 was largely due to higher interest income on loans, partially offset by an increase in interest expense on deposits.  The increase in interest income on loans was driven by a combination of loan growth, which included the impact of the ASB acquisition, and higher yields from interest rate increases.  Higher deposit costs were primarily the result of increased competition for deposits.  The first quarter of 2018 also benefited from proceeds of $341,000 received on an investment security that had been previously written down due to an other-than-temporary impairment, which added 4 basis points to the net interest margin.

Accretion income, net of amortization expense, from acquisitions was $722,000 for the first quarter of 2019 and $566,000 for the first quarter of 2018, which added 8 basis points and 7 basis points, respectively, to net interest margin.  The growth in accretion income compared to the first quarter of 2018 was largely due to the ASB acquisition.

(Recovery of) Provision for Loan Losses:

The recovery of loan losses was $0.3 million for the first quarter of 2019, compared to provisions for loan losses of $1.0 million for the linked quarter and $2.0 million for the first quarter of 2018.  Net recoveries for the first quarter of 2019 were $1.0 million, compared to net charge-offs of $661,000 for the linked quarter and $2.0 million for the first quarter of 2018.  Gross recoveries during the first quarter of 2019 were driven by a $1.8 million recovery recorded on a previously charged-off commercial loan.  Gross charge-offs were $1.0 million, or 0.15% of average loans, for the first quarter of 2019, compared to $947,000, or 0.14% of average loans, for the linked quarter, and $2.3 million, or 0.39% of average loans, for the first quarter of 2018.  The first quarter of 2018 included a charge-off of $827,000 on an acquired commercial loan relationship.

Net Gains and Losses:

Net losses during the first quarter of 2019 were $152,000, compared to net losses of $15,000 for the linked quarter, and net gains of $75,000 in the first quarter of 2018.  Losses during the current quarter included $118,000 of market value write-downs related to closed offices that were held for sale.

Total Non-interest Income, Excluding Net Gains and Losses:

Total non-interest income, excluding net gains and losses, grew $1.4 million, or 10%, for the first quarter of 2019, compared to the linked quarter.  The increase compared to the linked quarter was driven by an increase of $1.2 million in insurance income, mainly due to annual performance-based insurance commissions that are primarily received in the first quarter each year, and are a core component of insurance income.  Additionally, realized and unrealized gains on equity investment securities increased $810,000 compared to the linked quarter, primarily due to $787,000 of income related to the sale of restricted Class B Visa stock during the current quarter.  These increases were partially offset by seasonal declines in deposit account service charges and mortgage banking income, compared to the linked quarter.

Compared to the first quarter of 2018, non-interest income, excluding net gains and losses, grew $687,000, or 5%.  Year-over-year, mortgage banking income more than doubled, due to increased origination activity as the result of the mortgage operation acquired from ASB.  Realized and unrealized gains on equity investment securities increased $349,000 compared to the first quarter of 2018, driven by $787,000 of income related to the sale of restricted Class B Visa stock during the current quarter.  The income on equity investment securities of $460,000 during the first quarter of 2018 was related to the changes in the fair value of the securities.  Income from deposit account service charges were up compared to a year ago primarily due to the ASB acquisition, coupled with changes in fee schedules.  Electronic banking was also positively impacted by the additional customers and accounts obtained in the ASB acquisition.  These increases were partially offset by lower Small Business Administration income, which declined $370,000 compared to the first quarter of 2018.

Total Non-interest Expense:

Total non-interest expense increased $904,000, or 3%, compared to the linked quarter, and grew $3.6 million, or 13%, compared to the first quarter of 2018.  The increase compared to the linked quarter was primarily due to salaries and employee benefit costs, coupled with increased net occupancy and equipment expense, and data processing and software expense.  The increase in salaries and employee benefit costs was driven by higher medical insurance costs due to medical claims, as well as expenses which occur primarily in the first quarter each year related to stock-based compensation and contributions to employee health benefit accounts.  Stock-based compensation during the first quarter of 2019 included $597,000 for annual stock grants, primarily related to employees who were retirement eligible.  Annual contributions to employee health benefit accounts resulted in an expense of $450,000.  These increases were partially offset by lower professional fees, and foreclosed real estate and other loan expenses.  The first quarter of 2019 included acquisition-related expenses of $253,000, compared to $382,000 for the linked quarter.  The fourth quarter of 2018 also included pension settlement charges of $91,000.  There were no pension settlement charges recorded during the first quarter of 2019.

The growth in non-interest expense compared to the first quarter of 2018 was led by higher salaries and employee benefit costs and the ongoing increased operating costs associated with the additional footprint and client accounts of ASB.  Base salaries and medical insurance were the main contributors to the increase in salaries and employee benefit costs, which were impacted by the ASB acquisition, as well as by higher medical claims and employees that have been added in the last twelve months for succession purposes and recent and future growth.  Acquisition-related expenses in the current quarter increased $104,000, compared to $149,000 for the year-ago quarter.

The efficiency ratio for the first quarter of 2019 was 62.7%, compared to 62.0% for the linked quarter, and 61.8% for the first quarter of 2018.  The efficiency ratio increased compared to the linked quarter and the first quarter of 2018, driven by a higher increase in non-interest expenses compared to revenue. The efficiency ratio, adjusted for non-core items, was 62.2% for the first quarter of 2019, compared to 61.0% for the linked quarter, and 61.4% for the first quarter of 2018.

Income Tax Expense:

Income tax expense was $3.4 million for the first quarter of 2019, compared to $2.5 million for the linked quarter and $2.4 million for the first quarter of 2018.  The increase in income tax expense compared to the linked quarter was due to higher pre-tax income, partially offset by the benefit recorded for the vesting of restricted stock during the current quarter.  Also contributing to the increase was the amount recorded in the fourth quarter of 2018 related to the final remeasurement of net deferred tax assets because of the Tax Cuts and Jobs Act, which resulted in a reduction of income tax expense of $705,000.  The increase in income tax expense compared to the first quarter of 2018 was due to higher pre-tax income, coupled with a lower benefit recorded for the vesting of restricted stock of $133,000 during the current quarter compared to a benefit of $290,000 in the year-ago quarter.

Loans:

Period-end total loan balances at March 31, 2019 increased $8.8 million, or 1% annualized, compared to December 31, 2018.  Originated loan growth was $18.6 million, or 1% annualized, compared to December 31, 2018.  Commercial loan balances increased $1.3 million, during the quarter.  Growth of $27.2 million, or 19% annualized, in commercial and industrial loans was mostly offset by large payoffs of commercial real estate loans during the first quarter of 2019.  Consumer loans continued to provide additional growth, driven by an increase in residential real estate loans of $12.0 million, or 8% annualized.  During the first quarter, Peoples purchased $19.0 million of 1-4 family first lien mortgages, which had the largest impact on residential real estate loan growth compared to December 31, 2018.  Quarterly average loan balances grew $16.0 million compared to the linked quarter, driven by commercial loan growth of $12.9 million and consumer indirect lending growth of $7.6 million.  The payoffs of commercial real estate loans occurred late in the quarter, resulting in less of an impact on average loan balance growth compared to the linked quarter.

Compared to March 31, 2018, total loan balances increased $335.3 million, or 14%.  The increase was primarily due to the ASB acquisition combined with originated loan growth of $185.6 million, or 9%.  Commercial loan balances were up $139.4 million, or 10%, residential real estate loans increased $108.9 million, or 22%, and consumer indirect loans were up $62.4 million, or 18%, in each case from balances as of March 31, 2018.  Quarterly average loan balances increased $359.3 million, or 15%, compared to the first quarter of 2018.  Commercial loan balances increased $153.4 million, or 11%.  Consumer indirect loans provided growth of $66.8 million, or 19%, compared to the year-ago quarter.

Asset Quality:

Asset quality is considered strong and a number of metrics improved at the end of the first quarter of 2019 compared to the linked quarter.  Criticized loans, which are those categorized as special mention, substandard or doubtful, decreased $24.4 million, or 21%, compared to December 31, 2018, and decreased $26.4 million, or 23%, compared to March 31, 2018.  As a percent of total loans, criticized loans were 3.28% at March 31, 2019, compared to 4.18% at December 31, 2018 and 4.84% at March 31, 2018.  The improvement in both comparisons was largely due to the upgrade of one commercial relationship during the first quarter of 2019.  Classified loans, which are those categorized as substandard or doubtful, increased $3.5 million, or 8%, compared to December 31, 2018, and were up $2.7 million, or 6%, from March 31, 2018.  As a percent of total loans, classified loans were 1.73% at March 31, 2019, compared to 1.61% at December 31, 2018 and 1.86% at March 31, 2018.  Compared to December 31, 2018, the increase in classified loans was primarily due to downgrades during the quarter, partially offset by paydowns of other classified loans.

Nonperforming assets were down $1.2 million, or 6%, compared to December 31, 2018, and were up $0.9 million, or 5%, compared to March 31, 2018.  The increase compared to March 31, 2018 was partially due to assets acquired from ASB.  Nonperforming assets as a percent of total loans and OREO were 0.67% at March 31, 2019, down from 0.71% at December 31, 2018 and 0.72% at March 31, 2018.  Annualized net recoveries were 0.15% of average gross loans for the first quarter of 2019, which reflected the recognition during the quarter of a $1.8 million recovery on a previously charged-off commercial loan.   Annualized net charge-offs were 0.10% of average gross loans for the linked quarter and 0.34% for the first quarter of 2018.  Gross charge-offs were $1.0 million, or 0.15% of average loans, for the first quarter of 2019, compared to $947,000, or 0.14% of average loans, for the linked quarter, and $2.3 million, or 0.39% of average loans, for the first quarter of 2018.  The first quarter of 2018 included a charge-off of $827,000 on an acquired commercial loan relationship.

At March 31, 2019, the allowance for loan losses increased to $20.9 million, compared to $20.2 million at December 31, 2018 and $18.8 million at March 31, 2018.  The increase in the allowance for loan losses compared to December 31, 2018 was the result of the specific reserve on a non-accrual loan, coupled with loan growth.  The increase in the allowance for loan losses compared to March 31, 2018 was driven by loan growth.  The ratio of the allowance for loan losses as a percent of total loans, net of deferred fees and costs, increased to 0.76% at March 31, 2019, compared to 0.74% at December 31, 2018 and declined from 0.78% at March 31, 2018.  The ratio includes all acquired loans, from both ASB and previous acquisitions since 2012, of $562.9 million and allowance for acquired loan losses of $533,000.  The decline in the ratio compared to March 31, 2018 was largely attributable to loan growth.

Deposits:

Period-end deposit balances increased $181.9 million, or 6%, compared to December 31, 2018, and were up $324.2 million, or 12% compared to March 31, 2018.  Compared to the end of the linked quarter, the growth was driven by an increase of $96.3 million in governmental deposits, which typically increase during the first quarter of each year, coupled with growth in money market deposit accounts of $23.8 million and non-interest-bearing deposits of $20.6 million, reflecting Peoples' focus on growing deposits.  The increase in period-end deposit balances compared to March 31, 2018 included $123.1 million of acquired deposits from ASB.  Compared to March 31, 2018, brokered certificates of deposit were up $133.0 million, retail certificates of deposit increased $68.3 million, non-interest-bearing deposits were up $57.7 million, and money market deposit accounts increased $39.4 million.

Average deposit balances during the first quarter of 2019 increased $43.1 million, or 1%, compared to the linked quarter, and $332.2 million, or 12%, from the first quarter of 2018.  Compared to the linked quarter, increases in brokered certificates of deposit of $36.3 million and interest-bearing demand accounts of $12.0 million were partially offset by a decline in non-interest-bearing deposits of $19.6 million.  Most of the increase in average deposits compared to the first quarter of 2018 was due to the ASB acquisition.

Total demand deposit accounts comprised 38% of total deposits at March 31, 2019, compared to 40% at December 31, 2018 and 41% at March 31, 2018.

Stockholders' Equity:

Peoples' capital position remained strong at March 31, 2019.  At March 31, 2019, the tier 1 risk-based capital ratio increased to 14.22%, compared to 13.87% at December 31, 2018, and 13.58% at March 31, 2018.  The common equity tier 1 risk-based capital ratio increased to 13.96% at March 31, 2019, compared to 13.61% at December 31, 2018, and 13.29% at March 31, 2018.  The total risk-based capital ratio increased to 14.97% at March 31, 2019, compared to 14.60% at December 31, 2018, and 14.33% at March 31, 2018.  Compared to December 31, 2018, the increases in the risk-based capital ratios were primarily due to higher earnings, which exceeded dividends declared and paid during the first quarter of 2019.

The book value per share grew to $27.19 at March 31, 2019, compared to $26.59 at December 31, 2018, and $24.87 at March 31, 2018.  The tangible book value per share, which excludes goodwill and other intangible assets, was $19.00 at March 31, 2019, compared to $18.30 at December 31, 2018, and $17.04 at March 31, 2018.  The ratio of total shareholders' equity to total assets was 13.32% at March 31, 2019, compared to 13.06% at December 31, 2018 and 12.57% at March 31, 2018.  The tangible equity to tangible assets ratio, which excludes goodwill and other intangible assets, was 9.70% at March 31, 2019, compared to 9.35% at December 31, 2018, and 8.97% at March 31, 2018.  The improvements compared to the linked quarter were driven by shareholders' equity, which increased at a faster rate than assets.

Total shareholders' equity at March 31, 2019 increased $15.0 million, or 3%, compared to December 31, 2018, which was mainly caused by net income of $14.4 million and a decrease in accumulated other comprehensive loss of $5.4 million, partially offset by dividends paid of $5.9 million.  Accumulated other comprehensive loss decreased as the result of a higher market value adjustment related to the available-for-sale investment securities portfolio, which was driven by overall declines in market interest rates during the quarter.

Peoples Bancorp Inc. is a diversified financial services holding company with $4.3 billion in total assets, 89 locations, including 80 full-service bank branches, and 86 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance and trust solutions through its subsidiaries -- Peoples Bank and Peoples Insurance Agency, LLC.  Peoples' common shares are traded on the Nasdaq Global Select Market® under the symbol "PEBO," and Peoples is a member of the Russell 3000 index of U.S. publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com.

Conference Call to Discuss Earnings:

Peoples will conduct a facilitated conference call to discuss first quarter 2019 results of operations on April 23, 2019 at 11:00 a.m., Eastern Daylight Time, with members of Peoples' executive management participating.  Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285.  A simultaneous webcast of the conference call audio will be available online via the "Investor Relations" section of Peoples' website, www.peoplesbancorp.com.  Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software.  A replay of the call will be available on Peoples' website in the "Investor Relations" section for one year.

Use of Non-US 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 ("US GAAP").  Management uses these "non-US GAAP" financial measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-US GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-US GAAP performance measures that may be presented by other companies. Below is a listing of the non-US GAAP financial measures used in this news release:

A reconciliation of these non-US 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-US GAAP Financial Measures."

Safe Harbor Statement:

Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate," "estimate," "may," "feel," "expect," "believe," "plan," "will," "would," "should," "could," "project," "goal," "target," "potential," "seek," "intend," 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 the business of First Prestonsburg following the merger, and the expansion of consumer lending activity;

(2)

Peoples' ability to integrate future acquisitions, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;

(3)

competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, changes to third-party relationships and revenues, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals;

(4)

changes in the interest rate environment due to economic conditions and/or the fiscal policies of the United States ("U.S.") government and the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which may adversely impact interest rates, interest margins, loan demand and interest rate sensitivity; 

(5)

uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, promulgated and to be promulgated by governmental and regulatory agencies in the state of Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses, including in particular the rules and regulations promulgated and to be promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Basel III regulatory capital reform;

(6)

the effects of easing restrictions on participants in the financial services industry;

(7)

local, regional, national and international economic conditions (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations) and the impact these conditions may have on Peoples, its customers and its counterparties, and Peoples' assessment of the impact, which may be different than anticipated;

(8)

the existence or exacerbation of general geopolitical instability and uncertainty;

(9)

changes in policy and other regulatory and legal developments, and uncertainty or speculation pending the enactment of such changes;

(10)

Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;

(11)

changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated;

(12)

adverse changes in economic conditions and/or activities, including, but not limited to, continued economic uncertainty in the U.S., the European Union (including the uncertainty surrounding the actions to be taken to implement the referendum by British voters to exit the European Union), Asia, and other areas, which could decrease sales volumes, add volatility to the global stock markets, and increase loan delinquencies and defaults;

(13)

deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses;

(14)

Peoples may have more credit risk and higher credit losses to the extent loans are concentrated by location or industry of the borrowers or collateral;

(15)

changes in accounting standards, policies, estimates or procedures, including the new current expected credit loss rule issued by the Financial Accounting Standard Board in June 2016, which will require banks to record, at the time of origination, credit losses expected throughout the life of the asset portfolio on loans and held-to-maturity securities, as opposed to the current practice of recording losses when it is probable that a loss event has occurred, which may adversely affect Peoples' reported financial condition or results of operations;

(16)

Peoples' assumptions and estimates used in applying critical accounting policies, which may prove unreliable, inaccurate or not predictive of actual results;

(17)

the discontinuation of the London Inter-Bank Offered Rate and other reference rates may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies;

(18)

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;

(19)

the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;

(20)

Peoples' ability to receive dividends from its subsidiaries;

(21)

Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;

(22)

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;

(23)

the costs and effects of new federal and state laws, and other regulatory and legal developments, including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations;

(24)

Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;

(25)

Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including its primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands;

(26)

operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and its subsidiaries are highly dependent;

(27)

changes in consumer spending, borrowing and saving habits, whether due to tax reform legislation, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;

(28)

the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cyber security, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business;

(29)

the impact on Peoples' businesses, personnel, facilities, or systems, related to fraud, theft, or violence;

(30)

the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters, pandemics, cyber attacks, civil unrest, military or terrorist activities or international conflicts;

(31)

Peoples' continued ability to grow deposits; and

(32)

other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

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 US GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its March 31, 2019 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC.  Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

 

 

PER COMMON SHARE DATA AND SELECTED RATIOS (Unaudited)



Three Months Ended


March 31,


December 31,


March 31,


2019


2018


2018







PER COMMON SHARE:






Earnings per common share:






   Basic

$

0.74



$

0.71



$

0.64


   Diluted

0.73



0.71



0.64


Cash dividends declared per common share

0.30



0.30



0.26


Book value per common share

27.19



26.59



24.87


Tangible book value per common share (a)

19.00



18.30



17.04


Closing stock price at end of period

$

30.97



$

30.10



$

35.45








SELECTED RATIOS:






Return on average stockholders' equity (b)

11.12

%


10.86

%


10.48

%

Return on average tangible equity (b)(c)

16.69

%


16.76

%


16.14

%

Return on average assets (b)

1.46

%


1.38

%


1.32

%

Return on average assets adjusted for non-core items (b)(d)

1.49

%


1.35

%


1.33

%

Efficiency ratio (e)

62.71

%


62.02

%


61.75

%

Efficiency ratio adjusted for non-core items (f)

62.21

%


61.04

%


61.42

%

Pre-provision net revenue to total average assets (b)(g)

1.79

%


1.73

%


1.81

%

Net interest margin (b)(h)

3.80

%


3.77

%


3.66

%

Dividend payout ratio (i)

40.84

%


42.23

%


40.64

%

 

(a)   

This amount represents a non-US GAAP financial measure since it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity.  Additional information regarding the calculation of this ratio is included at the end of this news release.

(b)  

Ratios are presented on an annualized basis.

(c)   

This percentage represents a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from earnings and it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity.  Additional information regarding the calculation of this ratio is included at the end of this news release.

(d)  

since it excludes the impact of the Tax Cuts and Jobs Act on the remeasurement of deferred tax assets and deferred tax liabilities, and the after-tax impact of all gains and/or losses, acquisition-related expenses, and pension settlement charges.

(e)   

Total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income (excluding all gains and losses).  This amount represents a non-US GAAP financial measure since it excludes amortization of other intangible assets, and all gains and/or losses included in earnings, and uses fully tax-equivalent net interest income.  Additional information regarding the calculation of this ratio is included at the end of this news release.

(f)   

The efficiency ratio adjusted for non-core items is defined as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income, excluding all gains and losses. This amount represents a non-US GAAP financial measure since it excludes the impact of all gains and/or losses, acquisition-related expenses, and pension settlement charges included in earnings, and uses fully tax-equivalent net interest income.

(g)  

Pre-provision net revenue is defined as net interest income plus total non-interest income (excluding all gains and losses) minus total non-interest expense.  This ratio represents a non-US GAAP financial measure since it excludes the provision for loan losses and all gains and/or losses included in earnings.  This measure is a key metric used by federal bank regulatory agencies in their evaluation of capital adequacy for financial institutions.  Additional information regarding the calculation of this ratio is included at the end of this news release.

(h)  

Information presented on a fully tax-equivalent basis.

(i)   

Ratios are calculated based on dividends declared during the period divided by net income for the period.

 

 

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



Three Months Ended


March 31,


December 31,


March 31,

(Dollars in thousands)

2019


2018


2018

Total interest income

$

40,576



$

40,638



$

33,226


Total interest expense

6,662



6,517



3,867


Net interest income

33,914



34,121



29,359


(Recovery of) provision for loan losses

(263)



975



1,983


Net interest income after provision for loan losses

34,177



33,146



27,376








Non-interest Income:






Insurance income

4,621



3,400



4,655


Trust and investment income

3,112



3,133



3,068


Electronic banking income

2,987



3,017



2,785


Deposit account service charges

2,341



2,618



2,120


Mortgage banking income

788



953



351


Bank owned life insurance income

485



495



468


Commercial loan swap fees

146



64



116


Net gain on investment securities

30





1


Net (loss) gain on asset disposals and other transactions

(182)



(15)



74


Other non-interest income

1,101



512



1,331


  Total non-interest income

15,429



14,177



14,969








Non-interest Expense:






Salaries and employee benefit costs

19,135



17,385



15,990


Net occupancy and equipment expense

2,978



2,753



2,866


Electronic banking expense

1,577



1,648



1,528


Data processing and software expense

1,545



1,330



1,322


Professional fees

1,276



1,727



1,718


Franchise tax expense

705



897



644


Amortization of other intangible assets

694



861



754


Marketing expense

594



525



325


FDIC insurance expense

371



373



366


Communication expense

278



316



344


Foreclosed real estate and other loan expenses

255



508



228


Other non-interest expense

2,452



2,633



2,136


  Total non-interest expense

31,860



30,956



28,221


  Income before income taxes

17,746



16,367



14,124


Income tax expense

3,377



2,470



2,383


    Net income

$

14,369



$

13,897



$

11,741








PER COMMON SHARE DATA:






Earnings per common share – basic

$

0.74



$

0.71



$

0.64


Earnings per common share – diluted

$

0.73



$

0.71



$

0.64


Cash dividends declared per common share

$

0.30



$

0.30



$

0.26








Weighted-average common shares outstanding – basic

19,366,008



19,337,403



18,126,089


Weighted-average common shares outstanding – diluted

19,508,868



19,483,452



18,256,035


Actual common shares outstanding (end of period)

19,681,692



19,565,029



18,279,036


 

 

CONSOLIDATED BALANCE SHEETS



March 31,


December 31,


2019


2018

(Dollars in thousands)

(Unaudited)







Assets




Cash and cash equivalents:




  Cash and due from banks

$

59,334



$

61,775


  Interest-bearing deposits in other banks

22,738



15,837


    Total cash and cash equivalents

82,072



77,612






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




  $806,641 at March 31, 2019 and $804,655 at December 31, 2018)

802,570



791,891


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




  $36,066 at March 31, 2019 and $36,963 at December 31, 2018)

35,606



36,961


Other investment securities

41,449



42,985


    Total investment securities

879,625



871,837






Loans, net of deferred fees and costs (a)

2,737,580



2,728,778


Allowance for loan losses

(20,939)



(20,195)


    Net loans

2,716,641



2,708,583






Loans held for sale

2,191



5,470


Bank premises and equipment, net of accumulated depreciation

55,890



56,542


Bank owned life insurance

69,419



68,934


Goodwill

151,245



151,245


Other intangible assets

9,997



10,840


Other assets

50,039



40,391


    Total assets

$

4,017,119



$

3,991,454






Liabilities




Deposits:




Non-interest-bearing

$

628,464



$

607,877


Interest-bearing

2,508,949



2,347,588


    Total deposits

3,137,413



2,955,465






Short-term borrowings

191,363



356,198


Long-term borrowings

105,995



109,644


Accrued expenses and other liabilities

47,227



50,007


    Total liabilities

$

3,481,998



$

3,471,314






Stockholders' Equity




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

   at March 31, 2019 and December 31, 2018




Common stock, no par value, 24,000,000 shares authorized, 20,130,076 shares

   issued at March 31, 2019 and 20,124,378 shares issued at

   December 31, 2018, including shares in treasury

385,427



386,814


Retained earnings

168,847



160,346


Accumulated other comprehensive loss, net of deferred income taxes

(7,497)



(12,933)


Treasury stock, at cost, 492,380 shares at March 31, 2019 and 601,289 shares

  at December 31, 2018

(11,656)



(14,087)


    Total stockholders' equity

$

535,121



$

520,140


    Total liabilities and stockholders' equity

$

4,017,119



$

3,991,454






(a)  Also referred throughout the document as "total loans".

 

 

SELECTED FINANCIAL INFORMATION (Unaudited)



March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2019

2018

2018

2018

2018

Loan Portfolio






Commercial real estate, construction

$

124,958


$

136,417


$

116,612


$

122,035


$

107,811


Commercial real estate, other

802,464


816,911


822,713


857,707


784,047


Commercial and industrial

592,907


565,744


551,779


512,208


489,058


Residential real estate

605,804


593,797


607,946


609,563


496,953


Home equity lines of credit

128,915


133,979


135,853


135,890


107,730


Consumer, indirect

410,283


407,303


396,862


373,582


347,860


Consumer, direct

71,731


74,044


75,313


74,646


68,326


Deposit account overdrafts

518


583


649


860


543


    Total loans

$

2,737,580


$

2,728,778


$

2,707,727


$

2,686,491


$

2,402,328


Total acquired loans (a)

$

562,941


$

572,748


$

600,243


$

621,774


$

413,248


    Total originated loans

$

2,174,639


$

2,156,030


$

2,107,484


$

2,064,717


$

1,989,080


Deposit Balances






Non-interest-bearing deposits (b)

$

628,464


$

607,877


$

617,447


$

585,861


$

570,804


Interest-bearing deposits:






  Interest-bearing demand accounts (b)

572,316


573,702


547,172


570,359


584,563


  Retail certificates of deposit

404,186


394,335


402,309


406,214


335,843


  Money market deposit accounts

403,642


379,878


391,377


389,893


364,232


  Governmental deposit accounts

363,636


267,319


344,320


305,255


341,920


  Savings accounts

477,824


468,500


473,240


480,615


461,440


  Brokered certificates of deposit

287,345


263,854


265,258


211,062


154,379


    Total interest-bearing deposits

$

2,508,949


$

2,347,588


$

2,423,676


$

2,363,398


$

2,242,377


    Total deposits

$

3,137,413


$

2,955,465


$

3,041,123


$

2,949,259


$

2,813,181


Total demand deposits

$

1,200,780


$

1,181,579


$

1,164,619


$

1,156,220


$

1,155,367


Asset Quality






Nonperforming assets (NPAs):






  Loans 90+ days past due and accruing

$

1,074


$

2,256


$

1,885


$

1,975


$

1,030


  Nonaccrual loans

17,089


17,098


16,235


16,069


16,202


    Total nonperforming loans (NPLs)

18,163


19,354


18,120


18,044


17,232


  Other real estate owned (OREO)

81


94


106


63


99


Total NPAs

$

18,244


$

19,448


$

18,226


$

18,107


$

17,331


Criticized loans (c)

$

89,812


$

114,188


$

118,703


$

120,809


$

116,243


Classified loans (d)

47,327


43,818


49,058


55,596


44,661


Allowance for loan losses as a percent of NPLs (e)(f)

115.28

%

104.35

%

109.71

%

106.77

%

109.08

%

NPLs as a percent of total loans (e)(f)

0.66

%

0.71

%

0.67

%

0.67

%

0.72

%

NPAs as a percent of total assets (e)(f)

0.45

%

0.49

%

0.46

%

0.46

%

0.48

%

NPAs as a percent of total loans and OREO (e)(f)

0.67

%

0.71

%

0.67

%

0.67

%

0.72

%

Criticized loans as a percent of total loans (e)

3.28

%

4.18

%

4.38

%

4.50

%

4.84

%

Classified loans as a percent of total loans (e)

1.73

%

1.61

%

1.81

%

2.07

%

1.86

%

Allowance for loan losses as a percent of total loans (e)

0.76

%

0.74

%

0.73

%

0.72

%

0.78

%

Capital Information (g)






Common equity tier 1 risk-based capital ratio (h)

13.96

%

13.61

%

13.29

%

13.03

%

13.29

%

Tier 1 risk-based capital ratio

14.22

%

13.87

%

13.55

%

13.29

%

13.58

%

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

14.97

%

14.60

%

14.27

%

13.99

%

14.33

%

Leverage ratio

10.31

%

9.99

%

9.69

%

9.73

%

9.85

%

Common equity tier 1 capital

$

389,393


$

378,855


$

367,537


$

358,987


$

334,735


Tier 1 capital

396,719


386,138


374,776


366,182


341,886


Total capital (tier 1 and tier 2)

417,657


406,333


394,655


385,448


360,684


Total risk-weighted assets

$

2,789,500


$

2,782,995


$

2,764,951


$

2,755,112


$

2,517,848


Total shareholders' equity to total assets

13.32

%

13.06

%

12.60

%

12.57

%

12.57

%

Tangible equity to tangible assets (i)

9.70

%

9.35

%

8.88

%

8.81

%

8.97

%

 

(a)  

Includes all loans acquired in 2012 and thereafter.

(b)  

The sum of amounts presented is considered total demand deposits.

(c)  

Includes loans categorized as a special mention, substandard, or doubtful.

(d)  

Includes loans categorized as substandard or doubtful.

(e)  

Data presented as of the end of the period indicated.

(f)  

Nonperforming loans include loans 90+ days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and OREO.

(g)  

March 31, 2019 data based on preliminary analysis and subject to revision.

(h)  

Peoples' capital conservation buffer was 6.97% at March 31, 2019, 6.60% at December 31, 2018, 6.27% at September 30, 2018, 5.99% at June 30, 2018, and 6.33% at March 31, 2018, compared to 2.50% for the fully phased-in capital conservation buffer required by January 1, 2019.

(i)  

This ratio represents a non-US GAAP financial measure since it excludes the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets.  Additional information regarding the calculation of this ratio is included at the end of this news release.

 

 

(RECOVERY OF) PROVISION FOR LOAN LOSSES INFORMATION (Unaudited)



Three Months Ended


March 31,


December 31,


March 31,

(Dollars in thousands)

2019


2018


2018

(Recovery of) Provision for Loan Losses






(Recovery of) Provision for loan losses

$

(360)



$

800



$

1,842


Provision for checking account overdrafts

97



175



141


  Total (recovery of) provision for loan losses

$

(263)



$

975



$

1,983








Net (Recoveries) Charge-Offs






Gross charge-offs

$

1,003



$

947



$

2,299


Recoveries

2,010



286



321


  Net (recoveries) charge-offs

$

(1,007)



$

661



$

1,978








Net (Recoveries) Charge-Offs by Type






Commercial real estate, other

$

103



$

(2)



$

827


Commercial and industrial

(1,721)



(8)



31


Residential real estate

78



(69)



119


Home equity lines of credit

8



38



30


Consumer, indirect

358



477



795


Consumer, direct

50



36



41


Deposit account overdrafts

117



189



135


  Total net (recoveries) charge-offs

$

(1,007)



$

661



$

1,978








As a percent of average gross loans (annualized)

(0.15)

%


0.10

%


0.34

%

 

 

SUPPLEMENTAL INFORMATION (Unaudited)



March 31,


December 31,


September 30


June 30


March 31

(Dollars in thousands)

2019


2018


2018


2018


2018











Trust assets under administration and management

$

1,471,422



$

1,384,113



$

1,489,810



$

1,454,009



$

1,447,636


Brokerage assets under administration and management

863,286



849,188



914,172



881,839



882,018


Mortgage loans serviced for others

464,575



461,256



458,999



451,391



412,154


Employees (full-time equivalent)

859



871



849



862



802


 

 

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)



Three Months Ended


March 31, 2019


December 31, 2018


March 31, 2018

(Dollars in thousands)

Balance

Income/

Expense

Yield/
Cost


Balance

Income/

Expense

Yield/
Cost


Balance

Income/

Expense

Yield/
Cost

Assets












Short-term investments

$

16,247


$

176


4.39

%


$

31,580


$

210


2.64

%


$

11,291


$

52


1.87

%

Investment securities (a)(b)

864,040


6,527


3.03

%


868,219


6,843


3.15

%


872,793


6,501


2.98

%

Loans (b)(c):












Commercial real estate, construction

131,683


1,732


5.26

%


127,177


1,626


5.00

%


118,589


1,333


4.50

%

Commercial real estate, other

806,181


10,596


5.26

%


819,040


10,610


5.07

%


765,076


9,124


4.77

%

Commercial and industrial

578,954


7,681


5.31

%


557,674


7,411


5.20

%


479,792


5,571


4.64

%

Residential real estate (d)

603,253


6,927


4.59

%


602,381


6,897


4.58

%


491,713


5,309


4.32

%

Home equity lines of credit

131,089


1,860


5.75

%


134,818


1,880


5.53

%


108,620


1,271


4.75

%

Consumer, indirect

409,975


4,088


4.04

%


402,366


4,127


4.07

%


343,128


3,130


3.70

%

Consumer, direct

73,457


1,189


6.56

%


75,164


1,246


6.58

%


68,422


1,162


6.89

%

Total loans

2,734,592


34,073


5.00

%


2,718,620


33,797


4.90

%


2,375,340


26,900


4.54

%

Allowance for loan losses

(20,406)





(20,079)





(18,683)




Net loans

2,714,186





2,698,541





2,356,657




Total earning assets

3,594,473


40,776


4.55

%


3,598,340


40,850


4.49

%


3,240,741


33,453


4.14

%













Intangible assets

161,673





162,790





144,190




Other assets

229,475





229,201





212,112




Total assets

$

3,985,621





$

3,990,331





$

3,597,043
















Liabilities and Equity












Interest-bearing deposits:












Savings accounts

$

472,656


$

91


0.08

%


$

468,069


$

87


0.07

%


$

452,882


$

64


0.06

%

Governmental deposit accounts

297,537


557


0.76

%


291,913


524


0.71

%


291,454


217


0.30

%

Interest-bearing demand accounts

569,472


247


0.18

%


557,487


170


0.12

%


567,252


221


0.16

%

Money market accounts

395,324


531


0.54

%


389,095


445


0.45

%


367,945


226


0.25

%

Retail certificates of deposit

396,977


1,417


1.45

%


398,935


1,463


1.45

%


338,226


765


0.92

%

Brokered certificates of deposit

314,163


2,001


2.58

%


277,891


1,684


2.40

%


156,645


720


1.86

%

Total interest-bearing deposits

2,446,129


4,844


0.80

%


2,383,390


4,373


0.73

%


2,174,404


2,213


0.41

%

Short-term borrowings

244,754


1,173


1.94

%


304,954


1,478


1.92

%


246,481


968


1.59

%

Long-term borrowings

108,234


645


2.41

%


109,974


666


2.41

%


126,101


686


2.20

%

Total borrowed funds

352,988


1,818


2.09

%


414,928


2,144


2.05

%


372,582


1,654


1.80

%

Total interest-bearing liabilities

2,799,117


6,662


0.96

%


2,798,318


6,517


0.92

%


2,546,986


3,867


0.61

%













Non-interest-bearing deposits

613,924





633,523





553,444




Other liabilities

48,384





50,600





42,381




Total liabilities

3,461,425





3,482,441





3,142,811




Stockholders' equity

524,196





507,890





454,232




Total liabilities and stockholders' equity

$

3,985,621





$

3,990,331





$

3,597,043
















Net interest income/spread (b)


$

34,114


3.59

%



$

34,333


3.57

%



$

29,586


3.53

%

Net interest margin (b)



3.80

%




3.77

%




3.66

%

 

(a)  

Average balances are based on carrying value.

(b)  

Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate.

(c)  

Average balances include nonaccrual and impaired loans.  Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status.  Loan fees included in interest income were immaterial for all periods presented.

(d)  

Loans held for sale are included in the average loan balance listed.  Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income.

 

 

NON-US GAAP FINANCIAL MEASURES (Unaudited)


The following non-US 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-US GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:



Three Months Ended


March 31,


December 31,


March 31,

(Dollars in thousands)

2019


2018


2018







Core Non-interest Expense:






Total non-interest expense

$

31,860



$

30,956



$

28,221


Less: acquisition-related expenses

253



382



149


Less: pension settlement charges



91




Core non-interest expense

$

31,607



$

30,483



$

28,072







Three Months Ended


March 31,


December 31,


March 31,

(Dollars in thousands)

2019


2018


2018







Efficiency Ratio:






Total non-interest expense

$

31,860



$

30,956



$

28,221


Less: amortization of intangible assets

694



861



754


Adjusted non-interest expense

$

31,166



$

30,095



$

27,467








Total non-interest income

$

15,429



$

14,177



$

14,969


Less: net gain on investment securities

30





1


Less: net (loss) gain on asset disposals and other transactions

(182)



(15)



74


Adjusted total non-interest income

$

15,581



$

14,192



$

14,894








Net interest income

$

33,914



$

34,121



$

29,359


Add: fully tax-equivalent adjustment (a)

200



212



227


Net interest income on a fully tax-equivalent basis

$

34,114



$

34,333



$

29,586








Adjusted revenue

$

49,695



$

48,525



$

44,480








Efficiency ratio

62.71

%


62.02

%


61.75

%







Efficiency Ratio Adjusted for Non-core Items:





Core non-interest expense

$

31,607



$

30,483



$

28,072


Less: amortization of intangible assets

694



861



754


Adjusted core non-interest expense

$

30,913



$

29,622



$

27,318








Adjusted revenue

$

49,695



$

48,525



$

44,480








Efficiency ratio adjusted for non-core items

62.21

%


61.04

%


61.42

%


(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.

 

 

NON-GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2017











Tangible Equity:










Total stockholders' equity

$

535,121



$

520,140



$

504,290



$

499,339



$

456,815


Less: goodwill and other intangible assets

161,242



162,085



163,401



163,953



143,820


Tangible equity

$

373,879



$

358,055



$

340,889



$

335,386



$

312,995












Tangible Assets:










Total assets

$

4,017,119



$

3,991,454



$

4,003,089



$

3,972,091



$

3,634,929


Less: goodwill and other intangible assets

161,242



162,085



163,401



163,953



143,820


Tangible assets

$

3,855,877



$

3,829,369



$

3,839,688



$

3,808,138



$

3,491,109












Tangible Book Value per Common Share:










Tangible equity

$

373,879



$

358,055



$

340,889



$

335,386



$

312,995


Common shares outstanding

19,681,692



19,565,029



19,550,014



19,528,952



18,365,035












Tangible book value per common share

$

19.00



$

18.30



$

17.44



$

17.17



$

17.04












Tangible Equity to Tangible Assets Ratio:





Tangible equity

$

373,879



$

358,055



$

340,889



$

335,386



$

312,995


Tangible assets

$

3,855,877



$

3,829,369



$

3,839,688



$

3,808,138



$

3,491,109












Tangible equity to tangible assets

9.70

%


9.35

%


8.88

%


8.81

%


8.97

%

 

 


Three Months Ended


March 31,


December 31,


March 31,

(Dollars in thousands)

2019


2018


2018







Pre-Provision Net Revenue:






Income before income taxes

$

17,746



$

16,367



$

14,124


Add: provision for loan losses



975



1,983


Add: net loss on OREO

25



30



5


Add: net loss on other assets

157






Less: recovery of loan losses

263






Less: net gain on investment securities

30





1


Less: net gain on other assets



15



79


Pre-provision net revenue

$

17,635



$

17,357



$

16,032


Total average assets

$

3,985,621



$

3,990,331



$

3,597,043








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

1.79

%


1.73

%


1.81

%

 

 

NON-GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)



Three Months Ended


March 31,


December 31,


March 31,

(Dollars in thousands)

2019


2018


2018







Annualized Net Income Adjusted for Non-core Items:

Net income

$

14,369



$

13,897



$

11,741


Less: net gain on investment securities, net of tax (a)

24





1


Add: net loss on asset disposals and other transactions, net of tax (a)

144



12




Less: net gain on asset disposals and other transactions, net of tax (a)





58


Add: acquisition-related expenses, net of tax (a)

200



302



118


Add: pension settlement charges, net of tax (a)



72




Less: impact of Tax Cuts and Jobs Act on deferred tax liability



705




Net income adjusted for non-core items

$

14,689



$

13,578



$

11,800








Days in the quarter

90



92



90


Days in the year

365



365



365


Annualized net income

$

58,274



$

55,135



$

47,616


Annualized net income adjusted for non-core items

$

59,572



$

53,869



$

47,856


Return on Average Assets:






Annualized net income

$

58,274



$

55,135



$

47,616


Total average assets

$

3,985,621



$

3,990,331



$

3,597,043


Return on average assets

1.46

%


1.38

%


1.32

%

Return on Average Assets Adjusted for Non-core Items:

Annualized net income adjusted for non-core items

$

59,572



$

53,869



$

47,856


Total average assets

$

3,985,621



$

3,990,331



$

3,597,043


Return on average assets adjusted for non-core items

1.49

%


1.35

%


1.33

%


(a)  Tax effect is calculated using a 21% statutory federal corporate income tax rate.

 

 

NON-GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)



Three Months Ended


March 31,


December 31,


March 31,

(Dollars in thousands)

2019


2018


2018







Annualized Net Income Excluding Amortization of Other Intangible Assets:

Net income

$

14,369



$

13,897



$

11,741


Add: amortization of other intangible assets

694



861



754


Less: tax effect (a) of amortization of other intangible assets

146



181



158


Net income excluding amortization of other intangible assets

$

14,917



$

14,577



$

12,337








Days in the period

90



92



90


Days in the year

365



365



365


Annualized net income

$

58,274



$

55,135



$

47,616


Annualized net income excluding amortization of other intangible assets

$

60,497



$

57,833



$

50,033








Average Tangible Equity:

Total average stockholders' equity

$

524,196



$

507,890



$

454,232


Less: average goodwill and other intangible assets

161,673



162,790



144,190


Average tangible equity

$

362,523



$

345,100



$

310,042








Return on Average Stockholders' Equity Ratio:


Annualized net income

$

58,274



$

55,135



$

47,616


Average stockholders' equity

$

524,196



$

507,890



$

454,232








Return on average stockholders' equity

11.12

%


10.86

%


10.48

%



Return on Average Tangible Equity Ratio:


Annualized net income excluding amortization of other intangible assets

$

60,497



$

57,833



$

50,033


Average tangible equity

$

362,523



$

345,100



$

310,042








Return on average tangible equity

16.69

%


16.76

%


16.14

%


(a)  Tax effect is calculated using a 21% statutory federal corporate income tax rate.

 

 

Cision

View original content:http://www.prnewswire.com/news-releases/peoples-bancorp-inc-reports-record-quarterly-net-income-300836322.html