PEOPLES BANCORP INC. Item 2.02 Results of Operations and Financial Condition
OnJanuary 21, 2020 , management ofPeoples Bancorp Inc. ("Peoples") conducted a facilitated conference call at approximately11:00 a.m., Eastern Standard Time , to discuss results of operations for the quarter and twelve months endedDecember 31, 2019 . A replay of the conference call audio will be available on Peoples' website, www.peoplesbancorp.com, in the "Investor Relations" section for one year. A copy of the transcript of the conference call is included as Exhibit 99.1 to this Current Report on Form 8-K. The information contained in this Item 2.02 and Exhibit 99.1 included with this Current Report on Form 8-K, is being furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in such filing. During the conference call, management referred to non-Generally Accepted Accounting Principles ("US GAAP") financial measures that are used by management to provide information useful to investors in understanding Peoples' operating performance and trends, and to facilitate comparisons with the performance of Peoples' peers. The following tables show the differences between the non-US GAAP financial measures referred to during the conference call and the most directly comparable US GAAP-based financial measures. -------------------------------------------------------------------------------- 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 Year Ended December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018 Core non-interest expense: Total non-interest expense$ 33,521 $
32,993
Less: acquisition-related expenses 65 199 382 7,287 7,262 Less: pension settlement charges - - 91 - 267 Less: severance expenses 270 - - 270 - Core non-interest expense$ 33,186 $
32,794$ 30,483 $ 129,693 $ 118,448 Three Months Ended Year Ended December 31, September 30, December 31, December 31, (Dollars in thousands) 2019 2019 2018 2019 2018 Efficiency ratio: Total non-interest expense$ 33,521 $ 32,993
888 953 861 3,359 3,338
Adjusted total non-interest expense 32,633 32,040 30,095 133,891 122,639
Total non-interest income 17,163 16,393 14,177 64,274 56,754
Less: net gain (loss) on investment
securities 94 97 - 164 (146)
Less: net loss on asset disposals
and other transactions (229) (78) (15) (782) (334)
Total non-interest income, excluding
net gains and losses 17,298 16,374 14,192 64,892 57,234
Net interest income 35,121 35,754 34,121 140,838 129,612
Add: fully tax-equivalent adjustment
(a) 287 314 212 1,068 881
Net interest income on a fully
tax-equivalent basis 35,408 36,068 34,333 141,906 130,493
Adjusted revenue $ 52,706 $ 52,442 $ 48,525 $ 206,798 $ 187,727
Efficiency ratio 61.92 % 61.10 % 62.02 % 64.74 % 65.33 %
Efficiency ratio adjusted for non-core items:
Core non-interest expense $ 33,186 $ 32,794
888 953 861 3,359 3,338
Adjusted core non-interest expense 32,298 31,841 29,622 126,334 115,110
Adjusted revenue $ 52,706 $ 52,442 $ 48,525 $ 206,798 $ 187,727
Efficiency ratio adjusted for
non-core items 61.28 % 60.72 % 61.04 % 61.09 % 61.32 %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.
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NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
At or For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands, except per
share data) 2019 2019 2019 2019 2018
Tangible equity:
Total stockholders' equity $ 594,393 $ 588,533 $ 579,022 $ 535,121 $ 520,140
Less: goodwill and other
intangible assets 177,834 179,126 176,763 161,242 162,085
Tangible equity $ 416,559 $ 409,407 $ 402,259 $ 373,879 $ 358,055
Tangible assets:
Total assets $ 4,357,208 $ 4,396,148 $ 4,276,376 $ 4,017,119 $ 3,991,454
Less: goodwill and other
intangible assets 177,834 179,126 176,763 161,242 162,085
Tangible assets $ 4,179,374 $ 4,217,022 $ 4,099,613 $ 3,855,877 $ 3,829,369
Tangible book value per common
share:
Tangible equity $ 416,559 $ 409,407
20,700,630 20,696,041 19,681,692 19,565,029
Tangible book value per common
share $ 20.12 $ 19.78 Tangible equity to tangible assets ratio: Tangible equity$ 416,559 $ 409,407 $ 402,259 $ 373,879 $ 358,055 Tangible assets$ 4,179,374 $ 4,217,022 $ 4,099,613 $ 3,855,877 $ 3,829,369
Tangible equity to tangible
assets 9.97 % 9.71 % 9.81 % 9.70 % 9.35 %
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018
Pre-provision net revenue:
Income before income taxes $ 17,627 $ 18,149
1,136 1,005 975 2,504 5,448
Add: net loss on OREO 44 5 30 98 21
Add: net loss on investment
securities - - - - 146
Add: net loss on other assets 188 73 - 692 224
Add: net loss on other
transactions - - - - 76
Less: net gain on investment
securities 94 97 - 164 -
Less: net gain on other assets 3 - 15 8 -
Pre-provision net revenue $ 18,898 $ 19,135 $ 17,357 $ 68,480 $ 60,869
Total average assets 4,350,769 4,311,389 3,990,331 4,222,540 3,871,832
Pre-provision net revenue to total
average assets (annualized) 1.72 % 1.76 % 1.73 % 1.62 % 1.57 %
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NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018
Annualized net income adjusted for non-core items: Net income
$ 14,860 $
14,868
Add: net loss on investment securities - - - - 146 Less: tax effect of loss on investment securities (a) - - - - 31 Less: net gain on investment securities 94 97 - 164 - Add: tax effect of net gain on investment securities (a) 20 20 - 34 - Add: net loss on asset disposals and other transactions 229 78 15 782 334 Less: tax effect of net loss on asset disposals and other transactions (a) 48 16 3 164 70 Add: acquisition-related expenses 65 199 382 7,287 7,262 Less: tax effect of acquisition-related expenses (a) 14 42 80 1,530 1,525 Add: severance expenses 270 - - 270 - Less: tax effect of severance expenses (a) 57 - - 57 - Add: pension settlement charges - - 91 - 267 Less: tax effect of pension settlement charges (a) - - 19 - 56 Less: release of deferred tax asset valuation allowance - - - - 805 Less: impact of Tax Cuts and Jobs Act on remeasurement of deferred tax assets and deferred tax liabilities - - 705 - 705 Net income adjusted for non-core items$ 15,231 $ 15,010 $ 13,578 $ 60,153 $ 51,072 Days in the period 92 92 92 365 365 Days in the year 365 365 365 365 365 Annualized net income$ 58,955 $
58,987
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