MARIETTA, Ohio, Jan. 26 /PRNewswire-FirstCall/ -- Peoples Bancorp Inc. ("Peoples") (Nasdaq: PEBO) today announced net income available to common shareholders of $0.7 million for the fourth quarter of 2009, representing diluted earnings per common share of $0.07, compared to a net loss available to common shareholders of $4.6 million and $3.1 million, representing a diluted loss per common share of $0.44 and $0.33, for the third quarter of 2009 and fourth quarter of 2008, respectively. For the 2009 year, net income available to common shareholders totaled $2.3 million, or $0.22 per diluted common share, in 2009 versus $7.5 million, or $0.72, in 2008.
Summary points regarding fourth quarter and 2009 results:
-- Nonperforming assets declined $3 million, or 6%, to 2.03% of total assets at year-end 2009, from 2.16% at September 30, 2009. Fourth quarter 2009 net charge-offs also were lower than recent quarters, totaling $5.7 million. Allowance for loan losses continued to build during the fourth quarter, increasing $1.1 million and resulting in fourth quarter 2009 provision for loan losses of $6.8 million, or 0.63% of average loans. For 2009, net charge-offs were $21.4 million and allowance for loan losses increased $4.3 million, resulting in provision for loan losses of $25.7 million. -- Peoples recognized non-cash pre-tax other-than-temporary impairment charges of $1.8 million ($1.2 million or $0.11 per common share after-tax) in the fourth quarter of 2009 and $7.7 million ($5.0 million or $0.48 per diluted share) for the year 2009. These impairment losses related to Peoples' investments in collateralized debt obligation securities and individual bank-issued trust preferred securities. -- Total Risk-Based Capital ratio was 16.80% at year-end, up from 16.39% at September 30, 2009, and substantially higher than the regulatory minimum amount needed to be considered "well-capitalized". Tangible common equity increased to 7.22% of tangible assets from 6.21% at December 31, 2008. -- Net interest income and margin remained strong throughout 2009, due to proactive balance sheet management that lowered funding costs and mitigated the impact of historically low market rates on asset yields. -- Non-interest income was consistent with prior periods, totaling $7.8 million for the fourth quarter of 2009 and $32.1 million for the year, as stronger mortgage banking income and debit card revenue offset lower insurance and bank owned life insurance income. -- Non-interest expenses were contained during the fourth quarter of 2009, with a modest linked quarter increase attributed to the third quarter reversal of incentive plan accruals based primarily on full year corporate results of operations, which decreased third quarter salary and employee benefit costs by $451,000, coupled with $119,000 of additional employee medical benefit plan costs in the fourth quarter. In 2009, non-interest expense increases were mostly isolated to $3.1 million additional FDIC insurance expense and higher costs associated with problem loans, such as legal and other professional fees. -- Retail deposit balances were up at December 31, 2009, from both the prior quarter-end and year-end, largely a result of higher non-interest-bearing deposits, which grew $11 million, or 23% annualized, in the fourth quarter and $18.0 million, or 10%, for the entire year. -- Gross loan balances continued to be impacted by charge-offs and payoffs on commercial real estate loans during the fourth quarter of 2009, as well as existing residential real estate loans being refinanced and sold to the secondary market as customers responded to attractive long-term, fixed rates.
"The year 2009 was a challenging year for our bottom-line earnings as we worked through asset quality issues caused by the economic downturn that started in 2008," said Mark F. Bradley, President and Chief Executive Officer. "As we continued our focus on reducing problem loans, we found it necessary to build our allowance for loan losses due to recent charge-off levels. We also took steps to preserve capital and maintain adequate liquidity. Key successes in 2009 included effective cost control, stable net interest margin, increased revenue and good core deposit growth."
Fourth quarter 2009 net interest income was consistent with the prior quarter at $15.4 million, while net interest margin expanded 5 basis points to 3.50%. Interest income was challenged by lower reinvestment rates for investment securities in the fourth quarter, coupled with the full quarter's impact of third quarter 2009 commercial loan payoffs. However, Peoples repaid approximately $48 million of high-cost wholesale funding in the fourth quarter, using excess cash reserves at the Federal Reserve, which lowered interest expense and overall cost of funds. This action also was a key driver of the improvement in net interest margin during the fourth quarter of 2009. Year-over-year, fourth quarter net interest income was up 5% and net interest margin expanded 6 basis points, as reductions in funding costs outpaced the decline in interest income from loan payoffs and additional nonaccrual loans. For the year 2009, net interest income was $61.8 million, up 6% over the prior year, while net interest margin remained relatively unchanged.
"We achieved our strategic goal of replacing higher-cost wholesale funding with lower-cost core deposits throughout 2009," said Edward G. Sloane, Chief Financial Officer and Treasurer. "Due to this success, we managed to reduce overall funding costs in 2009, which more than offset the impact of lower asset yields. As we start 2010, we have the balance sheet prepared for the eventual increase in interest rates. Until that occurs, our ability to retain and grow low-cost deposits and lower funding costs further will be key to maintaining net interest income levels given the current pressure on asset yields."
In the fourth quarter 2009, non-interest income was $7.8 million, matching both the prior quarter and fourth quarter 2008 amounts. Trust and investment income grew during the fourth quarter of 2009 due to higher managed asset values. During 2009, total managed assets grew 11%, largely reflecting the general recovery within the global financial markets. Secondary market loan production remained steady, resulting in higher mortgage banking income. Fourth quarter electronic banking income, primarily debit card revenue, benefited from continued growth in the volume of transactions completed using debit cards. Insurance income declined in the fourth quarter, due mostly to lower property and casualty insurance commissions. In 2009, non-interest income totaled $32.1 million, equaling the prior year.
Non-interest expense totaled $14.6 million for the fourth quarter of 2009, versus $14.1 million for the linked quarter. This increase was due mostly to the third quarter reversal of accruals associated with Peoples' annual incentive award plan. Peoples also incurred higher employee medical benefit plan costs and external legal and valuation expenses associated with problem loans in the fourth quarter. Year-over-year growth in total non-interest expense for both the fourth quarter and full year 2009 was mostly isolated to additional FDIC insurance expense, higher employee medical benefit costs and workout costs for problem loans.
"During the second half of 2009, we intensified our cost control efforts and we will be working to build on that progress in 2010," said Sloane. "A key to achieving our 2010 operating goals will be reductions in various operating expenses and improvement in overall operating efficiency. We continue to evaluate opportunities to expand our customer base and grow the company in a disciplined manner considering the value of capital in the current operating environment."
In the fourth quarter of 2009, Peoples recorded a $1.8 million other-than-temporary impairment loss related to two collateralized debt obligation ("CDO") investment securities, consisting mostly of bank-issued trust preferred securities. Management concluded these investments were total losses based upon its evaluation of the credit quality of the underlying issuers during the fourth quarter and estimation of cash flows to be received from the securities. After the fourth quarter 2009 impairment charge, the carrying value of Peoples' remaining investment in CDO securities is $1.0 million.
"The impairment losses recognized in 2009 significantly reduced the level of high risk securities within our investment portfolio," said Sloane. "At year-end, our analysis indicated that the remaining loss exposure was limited to our $1 million CDO investment, which we consider manageable as we move into 2010."
Peoples' loan balances decreased $16.0 million in the fourth quarter of 2009, to $1.05 billion, reflecting lower commercial real estate and consumer loan balances. During the fourth quarter, a single $3.4 million nonaccrual commercial real estate loan was paid off, while an unrelated $5.0 million commercial real estate loan was transferred to other real estate owned. Both of these loans had been identified as impaired and placed on nonaccrual status in 2008. Also during the fourth quarter, several large commercial construction loans, with total outstanding balances of approximately $40 million, were converted to term commercial mortgage loans. Throughout 2009, total loan balances fell $52.0 million, primarily reflecting charge-offs and pay downs of commercial loans, plus lower demand due to the economic downturn. Loan balances also have been impacted by existing residential real estate loans being refinanced and sold to the secondary market due to customer demand for long-term, fixed-rate loans. As a result, Peoples' serviced loan portfolio has increased 26% since year-end 2008, to $227.8 million at December 31, 2009.
Total nonperforming assets were down $2.7 million to $40.7 million, or 2.03% of total assets, at December 31, 2009, from $43.4 million, or 2.16%, at September 30, 2009. In 2009, total nonperforming assets were reduced by $1.1 million, or 3%.
"We have been diligent in our efforts to identify and resolve nonperforming assets during 2009," commented Sloane. "The workout process has been slower than we would like in 2009 due to the weakened commercial real estate market and recessionary economy. However, the modest reduction in nonperforming assets at year-end 2009 represents good progress towards our goal of improving overall asset quality."
Fourth quarter 2009 net loan charge-offs were $5.7 million, or 2.14% of average loans on an annualized basis, compared to $7.1 million, or 2.57%, and $9.7 million, or 3.45%, for the third quarter of 2009 and fourth quarter of 2008, respectively. Approximately $4.3 million of the fourth quarter 2009 charge-offs reflect write-downs associated with the workouts of two existing impaired commercial real estate loans. Peoples' allowance for loan losses increased $1.1 million in the fourth quarter of 2009, to $27.3 million, or 2.59% of total loans, from $26.2 million, or 2.46%, at September 30, 2009. This increase was primarily attributable to the impact of charge-offs remaining at an elevated level during 2009. To maintain the adequacy of the allowance for loan losses, Peoples recorded a fourth quarter 2009 provision for loan losses of $6.8 million versus $10.2 million last quarter and $13.4 million in the fourth quarter of 2008.
In 2009, net loan charge-offs were $21.4 million, or 1.96% of average loans, versus $20.4 million, or 1.83%, in 2008. The combination of elevated charge-off levels and increases in specific reserves for impaired loans during 2009 necessitated building the allowance for loan losses by $4.3 million in 2009. Provision for loan losses totaled $25.7 million for 2009 compared to $27.6 million for 2008.
Retail deposit balances grew $18.3 million during the fourth quarter of 2009, with an $11.0 million, or 23% annualized, increase in non-interest-bearing balances comprising the majority of the growth. Interest-bearing retail deposits increased during the fourth quarter, reflecting higher money market balances due to Peoples offering a highly competitive rate. At December 31, 2009, total retail deposits were up $28.3 million since year-end 2008. Non-interest-bearing deposits increased $18.0 million, or 10%, in 2009, while interest-bearing retail deposits grew $10.3 million. The growth in lower-cost and non-interest-bearing deposits during 2009 was a major contributor to the 20% reduction in borrowed funds, which totaled $345.6 million at year-end 2009.
At December 31, 2009, Peoples' Tier 1 Common, Total Tier 1 and Total Risk-Based Capital ratios were 10.58%, 15.49% and 16.80%, compared to the well capitalized minimum ratios of 4%, 6% and 10%, respectively. Since year-end 2008, tangible common equity has increased due mostly to improvement in fair value of Peoples' available-for-sale investment portfolio. As a result, the ratio of tangible common equity to tangible assets was 7.22% at both December 31, 2009 and September 30, 2009, versus 6.21% at year-end 2008.
"Overall, we are encouraged by 2009 fourth quarter results and a decrease in nonperforming assets, although the continuation of tough economic conditions resulted in additional losses on loans and investments," summarized Bradley. "Our main priorities for 2010 will include protecting our already strong capital position, maintaining a diverse revenue stream and improving operating efficiency."
Peoples Bancorp Inc. is a diversified financial products and services company with $2.0 billion in assets, 47 locations and 39 ATMs in Ohio, West Virginia and Kentucky. Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units - Peoples Bank, National Association; Peoples Financial Advisors (a division of 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 US 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 2009 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 (800) 860-2442. 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.
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", "may", "feel", "expect", "believe", "plan", and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available 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) continued deterioration in the credit quality of Peoples' loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be less favorable than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions, which may increase significantly; (3) changes in the interest rate environment, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) general economic conditions and weakening in the economy, specifically the real estate market, either nationally or in the states in which Peoples does business, which may be less favorable than expected; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions, which may adversely affect the business of Peoples and its subsidiaries; (8) adverse changes in the conditions and trends in the financial markets, which may adversely affect the fair value of securities within Peoples' investment portfolio; (9) Peoples' ability to receive dividends from its subsidiaries; (10) the impact of larger or similar financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples; (11) changes in accounting standards, policies, estimates or procedures, which may impact Peoples' reported financial condition or results of operations; (12) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity; (13) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (14) the costs and effects of regulatory and legal developments, including the outcome of regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; and (15) 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, 2008, as updated by the disclosure under the heading "ITEM 1A. RISK FACTORS" of Peoples' Quarterly Report on Form 10-Q for the quarter ended September 30, 2009.
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 filing date of its December 31, 2009 consolidated financial statements on Form 10-K 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 which is contained in release.
PER COMMON SHARE DATA AND SELECTED RATIOS
Three Months Ended ------------------ December September 31, 30, December 31, 2009 2009 2008 ---- ---- ---- PER COMMON SHARE: ----------------- Earnings per share: Basic $0.07 $(0.44) $(0.30) Diluted $0.07 $(0.44) $(0.30) Cash dividends declared per share $0.10 $0.10 $0.23 Book value per share $19.80 $19.85 $18.06 Tangible book value per share (a) $13.48 $13.50 $11.63 Closing stock price at end of period $9.68 $13.05 $19.13 SELECTED RATIOS: ---------------- Return on average equity (b) 1.98% -6.70% -6.24% Return on average common equity (b) 1.36% -8.97% -6.24% Return on average assets (b) 0.24% -0.79% -0.63% Efficiency ratio (c) 60.55% 58.28% 57.26% Net interest margin (b)(d) 3.50% 3.45% 3.44% Dividend payout ratio (e) 149% n/a n/a
Year Ended December 31, ------------ 2009 2008 ---- ---- PER COMMON SHARE: ----------------- Earnings per share: Basic $0.22 $0.72 Diluted $0.22 $0.72 Cash dividends declared per share $0.66 $0.91 Book value per share $19.80 $18.06 Tangible book value per share (a) $13.48 $11.63 Closing stock price at end of period $9.68 $19.13 SELECTED RATIOS: ---------------- Return on average equity (b) 1.80% 3.67% Return on average common equity (b) 1.17% 3.67% Return on average assets (b) 0.21% 0.39% Efficiency ratio (c) 60.14% 56.30% Net interest margin (b)(d) 3.48% 3.51% Dividend payout ratio (e) 298% 127%
(a) This ratio represents a non-GAAP 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 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 (less securities and asset disposal gains/losses). (d) Information presented on a fully tax-equivalent basis. (e) Dividends declared on common shares as a percentage of net income available to common shareholders.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended ------------------ December September 31, 30, December 31, (in $000's) 2009 2009 2008 ----------- ---- ---- ---- Interest income $24,554 $25,472 $26,317 Interest expense 9,137 10,003 11,600 ---------------- ----- ------ ------ Net interest income 15,417 15,469 14,717 Provision for loan losses 6,756 10,168 13,442 ------------------------- ----- ------ ------ Net interest income after provision for loan losses 8,661 5,301 1,275 -------------------------- ----- ----- ----- Gross impairment losses on investment securities (1,011) (6,395) (4,000) Less: Non-credit losses included in other comprehensive income 766 (465) - -------------------- --- ---- --- Net other-than-temporary impairment losses (1,777) (5,930) (4,000) Net gain on securities transactions 582 276 1,534 Net loss on asset disposals - (41) (8) Other gains - - 775 Non-interest income: Deposit account service charges 2,672 2,703 2,706 Insurance income 2,012 2,228 2,201 Trust and investment income 1,238 1,189 1,224 Electronic banking income 1,025 986 957 Mortgage banking income 335 276 181 Bank owned life insurance 244 254 362 Other non-interest income 256 150 193 ------------------------- --- --- --- Total non-interest income 7,782 7,786 7,824 ------------------------- ----- ----- ----- Non-interest expense: Salaries and employee benefits costs 7,356 7,015 7,020 Net occupancy and equipment 1,390 1,398 1,371 Professional fees 859 742 618 Data processing and software 713 603 559 FDIC insurance 660 687 219 Electronic banking expense 620 618 611 Franchise taxes 308 466 361 Amortization of intangible assets 296 307 378 Marketing 250 279 283 Other non-interest expense 2,120 1,972 2,086 -------------------------- ----- ----- ----- Total non-interest expense 14,572 14,087 13,506 -------------------------- ------ ------ ------ Income (loss) before income taxes 676 (6,695) (6,106) --------------------------- --- ------ ------ Income tax (benefit) expense (538) (2,630) (3,009) ---------------------------- ---- ------ ------ Net income (loss) $1,214 $(4,065) $(3,097) ----------------- ------ ------- ------- Preferred dividends 512 512 - ------------------- --- --- --- Net income (loss) available to common shareholders $702 $(4,577) $(3,097) --------------------------- ---- ------- ------- PER COMMON SHARE DATA: ---------------------- Earnings per share: Basic $0.07 $(0.44) $(0.30) Diluted $0.07 $(0.44) $(0.30) Cash dividends declared per share $0.10 $0.10 $0.23 Weighted-average shares outstanding: Basic 10,376,956 10,372,946 10,333,888 Diluted 10,387,400 10,390,275 10,359,491 Actual shares outstanding (end of period) 10,374,637 10,371,357 10,333,884
Year Ended December 31, ------------ (in $000's) 2009 2008 ----------- ---- ---- Interest income $102,105 $106,227 Interest expense 40,262 47,748 ---------------- ------ ------ Net interest income 61,843 58,479 Provision for loan losses 25,721 27,640 ------------------------- ------ ------ Net interest income after provision for loan losses 36,122 30,839 -------------------------- ------ ------ Gross impairment losses on investment securities (7,406) (4,260) Less: Non-credit losses included in other comprehensive income 301 - -------------------- --- --- Net other-than-temporary impairment losses (7,707) (4,260) Net gain on securities transactions 1,446 1,668 Net loss on asset disposals (103) (19) Other gains - 775 Non-interest income: Deposit account service charges 10,390 10,137 Insurance income 9,390 9,902 Trust and investment income 4,722 5,139 Electronic banking income 3,954 3,882 Mortgage banking income 1,719 681 Bank owned life insurance 1,051 1,582 Other non-interest income 824 774 ------------------------- --- --- Total non-interest income 32,050 32,097 ------------------------- ------ ------ Non-interest expense: Salaries and employee benefits costs 29,394 28,521 Net occupancy and equipment 5,756 5,540 Professional fees 3,042 2,212 Data processing and software 2,417 2,181 FDIC insurance 3,442 361 Electronic banking expense 2,401 2,289 Franchise taxes 1,601 1,609 Amortization of intangible assets 1,252 1,586 Marketing 1,061 1,293 Other non-interest expense 8,316 7,893 -------------------------- ----- ----- Total non-interest expense 58,682 53,485 -------------------------- ------ ------ Income (loss) before income taxes 3,126 7,615 --------------------------- ----- ----- Income tax (benefit) expense (1,064) 160 ---------------------------- ------ --- Net income (loss) $4,190 $7,455 ----------------- ------ ------ Preferred dividends 1,876 - - ------------------- ----- --- Net income (loss) available to common shareholders $2,314 $7,455 --------------------------- ------ ------ PER COMMON SHARE DATA: ---------------------- Earnings per share: Basic $0.22 $0.72 Diluted $0.22 $0.72 Cash dividends declared per share $0.66 $0.91 Weighted-average shares outstanding: Basic 10,363,975 10,315,263 Diluted 10,374,792 10,348,579 Actual shares outstanding (end of period) 10,374,637 10,333,884
CONSOLIDATED BALANCE SHEETS December December 31, 31, (in $000's) 2009 2008 ----------- ---- ---- Assets Cash and cash equivalents: Cash and due from banks $29,969 $34,389 Interest-bearing deposits in other banks 11,804 1,209 ---------------------------------------- ------ ----- Total cash and cash equivalents 41,773 35,598 Available-for-sale investment securities, at fair value (amortized cost of $706,444 at December 31, 2009 and $696,855 at December 31, 2008) 726,547 684,757 Held-to-maturity investment securities, at amortized cost (fair value of $963 at December 31, 2009 and $0 at December 31, 2008) 963 - Other investment securities, at cost 24,356 23,996 ------------------------------------ ------ ------ Total investment securities 751,866 708,753 Loans, net of deferred fees and costs 1,052,058 1,104,032 Allowance for loan losses (27,257) (22,931) ------------------------- ------- ------- Net loans 1,024,801 1,081,101 Loans held for sale 1,874 791 Bank premises and equipment, net of accumulated depreciation 24,844 25,111 Bank owned life insurance 52,924 51,873 Goodwill 62,520 62,520 Other intangible assets 3,079 3,886 Other assets 38,146 32,705 ------------ ------ ------ Total assets $2,001,827 $2,002,338 ------------ ---------- ---------- Liabilities Deposits: Non-interest-bearing deposits $198,000 $180,040 Interest-bearing deposits 1,197,886 1,186,328 ------------------------- --------- --------- Total deposits 1,395,886 1,366,368 Short-term borrowings 76,921 98,852 Long-term borrowings 246,113 308,297 Junior subordinated notes held by subsidiary trust 22,530 22,495 Accrued expenses and other liabilities 16,409 19,700 -------------------------------------- ------ ------ Total liabilities 1,757,859 1,815,712 Stockholders' Equity Preferred stock, no par value (50,000 shares authorized, 39,000 shares issued at December 31, 2009, and no shares issued at December 31, 2008) 38,543 - Common stock, no par value (24,000,000 shares authorized, 11,031,892 shares issued at December 31, 2009, and 10,975,364 shares issued at December 31, 2008), including shares in treasury 166,227 164,716 Retained earnings 46,229 50,512 Accumulated comprehensive income (loss), net of deferred income taxes 9,487 (12,288) Treasury stock, at cost (657,255 shares at December 31, 2009, and 641,480 shares at December 31, 2008) (16,518) (16,314) ------------------------------------------ ------- ------- Total stockholders' equity 243,968 186,626 -------------------------- ------- ------- Total liabilities and stockholders' equity $2,001,827 $2,002,338 ------------------------------------------ ---------- ----------
SELECTED FINANCIAL INFORMATION
December September 31, 30, June 30, (in $000's, end of period) 2009 2009 2009 -------------------------- ---- ---- ---- Loan Portfolio -------------- Commercial, mortgage $503,034 $478,518 $504,826 Commercial, other 159,915 160,677 173,136 Real estate, construction 32,427 67,143 54,446 Real estate, mortgage 215,735 216,571 216,280 Home equity lines of credit 49,183 48,991 48,301 Consumer 90,144 94,374 95,161 Deposit account overdrafts 1,620 1,765 2,016 -------------------------- ----- ----- ----- Total loans 1,052,058 1,068,039 1,094,166 ----------- --------- --------- --------- Deposit Balances ---------------- Interest-bearing deposits: Retail certificates of deposit $537,549 $561,619 $596,713 Interest-bearing demand accounts 229,232 206,514 206,866 Money market deposit accounts 263,257 245,621 228,963 Savings accounts 122,465 131,398 129,614 ---------------- ------- ------- ------- Total retail interest-bearing deposits 1,152,503 1,145,152 1,162,156 Brokered certificates of deposits 45,383 61,412 45,862 --------------------------------- ------ ------ ------ Total interest-bearing deposits 1,197,886 1,206,564 1,208,018 Non-interest-bearing deposits 198,000 187,011 199,572 ----------------------------- ------- ------- ------- Total deposits 1,395,886 1,393,575 1,407,590 -------------- --------- --------- --------- Asset Quality ------------- Nonperforming assets: Loans 90+ days past due and accruing $411 $993 $242 Nonaccrual loans 33,972 41,136 40,460 ---------------- ------ ------ ------ Total nonperforming loans 34,383 42,129 40,702 Other real estate owned 6,313 1,238 163 ----------------------- ----- ----- --- Total nonperforming assets $40,696 $43,367 $40,865 -------------------------- ------- ------- ------- Allowance for loan losses as a percent of nonperforming loans 79.3% 62.3% 56.9% Nonperforming loans as a percent of total loans 3.27% 3.94% 3.72% Nonperforming assets as a percent of total assets 2.03% 2.16% 2.00% Nonperforming assets as a percent of total loans and 3.85% 4.06% 3.73% other real estate owned Allowance for loan losses as a percent of total loans 2.59% 2.46% 2.12% Capital Information(a) ---------------------- Tier 1 risk-based capital ratio 15.49% 15.06% 14.88% Tier 1 common ratio 10.58% 10.30% 10.30% Total risk-based capital ratio (Tier 1 and Tier 2) 16.80% 16.39% 16.22% Leverage ratio 10.06% 9.82% 9.95% Tier 1 capital $192,822 $193,013 $198,041 Tier 1 common capital $131,747 $131,973 $137,035 Total capital (Tier 1 and Tier 2) $209,144 $209,986 $215,826 Total risk-weighted assets $1,244,705 $1,281,318 $1,330,979 Tangible equity to tangible assets (b) 9.21% 9.21% 8.74% Tangible common equity to tangible assets (b) 7.22% 7.22% 6.78%
December March 31, 31, (in $000's, end of period) 2009 2008 -------------------------- ---- ---- Loan Portfolio -------------- Commercial, mortgage $498,395 $478,298 Commercial, other 174,660 178,834 Real estate, construction 62,887 77,917 Real estate, mortgage 224,843 231,778 Home equity lines of credit 47,454 47,635 Consumer 90,741 87,902 Deposit account overdrafts 1,930 1,668 -------------------------- ----- ----- Total loans 1,100,910 1,104,032 ----------- --------- --------- Deposit Balances ---------------- Interest-bearing deposits: Retail certificates of deposit $637,125 $626,195 Interest-bearing demand accounts 214,922 187,100 Money market deposit accounts 227,840 213,498 Savings accounts 125,985 115,419 ---------------- ------- ------- Total retail interest-bearing deposits 1,205,872 1,142,212 Brokered certificates of deposits 24,965 44,116 --------------------------------- ------ ------ Total interest-bearing deposits 1,230,837 1,186,328 Non-interest-bearing deposits 190,754 180,040 ----------------------------- ------- ------- Total deposits 1,421,591 1,366,368 -------------- --------- --------- Asset Quality ------------- Nonperforming assets: Loans 90+ days past due and accruing $41 $- Nonaccrual loans 38,535 41,320 ---------------- ------ ------ Total nonperforming loans 38,576 41,320 Other real estate owned 265 525 ----------------------- --- --- Total nonperforming assets $38,841 $41,845 -------------------------- ------- ------- Allowance for loan losses as a percent of nonperforming loans 62.4% 55.5% Nonperforming loans as a percent of total loans 3.50% 3.74% Nonperforming assets as a percent of total assets 1.89% 2.09% Nonperforming assets as a percent of total loans and 3.53% 3.79% other real estate owned Allowance for loan losses as a percent of total loans 2.19% 2.08% Capital Information(a) ---------------------- Tier 1 risk-based capital ratio 14.81% 11.88% Tier 1 common ratio 10.23% 10.17% Total risk-based capital ratio (Tier 1 and Tier 2) 16.10% 13.19% Leverage ratio 9.97% 8.18% Tier 1 capital $197,258 $156,254 Tier 1 common capital $136,285 $133,760 Total capital (Tier 1 and Tier 2) $214,373 $173,470 Total risk-weighted assets $1,331,758 $1,315,657 Tangible equity to tangible assets (b) 8.24% 6.21% Tangible common equity to tangible assets (b) 6.31% 6.21%
(a) December 31, 2009 data based on preliminary analysis and subject to revision. (b) These ratios represent non-GAAP 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 release.
PROVISION FOR LOAN LOSSES INFORMATION
Three Months Ended ------------------ December September 31, 30, December 31, (in $000's) 2009 2009 2008 ----------- ---- ---- ---- Provision for Loan Losses Provision for checking account overdrafts $234 $268 $507 Provision for other loan losses 6,522 9,900 12,935 ------------------------------- ----- ----- ------ Total provision for loan losses $6,756 $10,168 $13,442 Net Charge-Offs Gross charge-offs $6,159 $7,479 $10,101 Recoveries 411 409 433 ---------- --- --- --- Net charge-offs $5,748 $7,070 $9,668 Net Charge-Offs (Recoveries) by Type Commercial, mortgage $4,900 $5,887 $7,230 Commercial, other 213 521 $1,259 Real estate, mortgage 250 208 $619 Real estate, construction - - (50) Home equity lines of credit (29) 21 29 Consumer 179 172 192 Deposit account overdrafts 235 261 389 -------------------------- --- --- --- Total net charge-offs $5,748 $7,070 $9,668 Net charge-offs as a percent of loans (annualized) 2.14% 2.57% 3.45%
Year Ended December 31, ------------ (in $000's) 2009 2008 ----------- ---- ---- Provision for Loan Losses Provision for checking account overdrafts $799 $1,125 Provision for other loan losses 24,922 26,515 ------------------------------- ------ ------ Total provision for loan losses $25,721 $27,640 Net Charge-Offs Gross charge-offs $23,922 $21,969 Recoveries 2,527 1,542 ---------- ----- ----- Net charge-offs $21,395 $20,427 Net Charge-Offs (Recoveries) by Type Commercial, mortgage $17,640 $15,860 Commercial, other 726 1,684 Real estate, mortgage 1,287 1403 Real estate, construction - (156) Home equity lines of credit 27 118 Consumer 797 553 Deposit account overdrafts 918 965 -------------------------- --- --- Total net charge-offs $21,395 $20,427 Net charge-offs as a percent of loans (annualized) 1.96% 1.83%
SUPPLEMENTAL INFORMATION
December September 31, 30, June 30, (in $000's, end of period) 2009 2009 2009 -------------------------- ---- ---- ---- Trust assets under management $750,993 $738,535 $692,823 Brokerage assets under management $216,479 $210,743 $183,968 Mortgage loans serviced for others $227,792 $220,605 $213,271 Employees (full-time equivalent) 537 544 548
March 31, December 31, (in $000's, end of period) 2009 2008 -------------------------- ---- ---- Trust assets under management $664,784 $685,705 Brokerage assets under management $169,268 $184,301 Mortgage loans serviced for others $199,613 $181,440 Employees (full-time equivalent) 547 546
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
Three Months Ended ------------------ December 31, 2009 ----------------- Income/ Yield/ (in $000's) Balance Expense Cost ----------- ------- -------- ------- Assets Short-term investments $15,316 $9 0.24% Investment securities (a)(b) 748,286 9,222 4.93% Gross loans (a) 1,066,410 15,702 5.85% Allowance for loan losses (27,337) ------------------ ------- Total earning assets 1,802,675 24,933 5.51% Intangible assets 65,674 Other assets 130,467 ------------ ------- Total assets $1,998,816 Liabilities and Equity Interest-bearing deposits: Savings accounts $127,131 $178 0.56% Interest-bearing demand accounts 215,484 774 1.42% Money market deposit accounts 261,738 766 1.16% Brokered certificates of deposits 49,596 499 3.99% Retail certificates of deposit 546,860 3,855 2.80% ------------------- ------- ----- ---- Total interest- bearing deposits 1,200,809 6,072 2.01% Short-term borrowings 64,863 95 0.57% Long-term borrowings 275,719 2,972 4.24% -------------------- ------- ----- ---- Total borrowed funds 340,582 3,067 3.54% -------------------- ------- ----- ---- Total interest- bearing liabilities 1,541,391 9,139 2.35% Non-interest- bearing deposits 197,102 Other liabilities 16,683 ----------------- ------ Total liabilities 1,755,176 Preferred equity 38,531 Common equity 205,109 ------------- ------- Stockholders' equity 243,640 -------------------- ------- Total liabilities and equity $1,998,816 Net interest income/ spread (a) $15,794 3.16% Net interest margin (a) 3.50%
Three Months Ended ------------------ September 30, 2009 ------------------ Income/ Yield/ (in $000's) Balance Expense Cost ----------- ------- -------- ------- Assets Short-term investments $34,490 $22 0.25% Investment securities (a)(b) 736,653 9,765 5.30% Gross loans (a) 1,092,059 16,077 5.85% Allowance for loan losses (24,479) ------------------ ------- Total earning assets 1,838,723 25,864 5.60% Intangible assets 65,969 Other assets 129,745 ------------ ------- Total assets $2,034,437 Liabilities and Equity Interest-bearing deposits: Savings accounts $130,290 $176 0.54% Interest-bearing demand accounts 210,855 823 1.55% Money market deposit accounts 234,513 689 1.17% Brokered certificates of deposits 56,232 567 4.00% Retail certificates of deposit 580,281 4,235 2.90% ------------------- ------- ----- ---- Total interest- bearing deposits 1,212,171 6,490 2.12% Short-term borrowings 55,700 110 0.77% Long-term borrowings 309,879 3,403 4.32% -------------------- ------- ----- ---- Total borrowed funds 365,579 3,513 3.78% -------------------- ------- ----- ---- Total interest- bearing liabilities 1,577,750 10,003 2.51% Non-interest- bearing deposits 197,900 Other liabilities 17,952 ----------------- ------ Total liabilities 1,793,602 Preferred equity 38,506 Common equity 202,329 ------------- ------- Stockholders' equity 240,835 -------------------- ------- Total liabilities and equity $2,034,437 Net interest income/ spread (a) $15,861 3.09% Net interest margin (a) 3.45%
Three Months Ended ------------------ December 31, 2008 ----------------- Income/ Yield/ (in $000's) Balance Expense Cost ----------- ------- -------- ------- Assets Short-term investments $1,455 $4 0.96% Investment securities (a)(b) 660,467 9,213 5.58% Gross loans (a) 1,116,024 17,487 6.25% Allowance for loan losses (20,650) ------------------ ------- Total earning assets 1,757,296 26,704 6.06% Intangible assets 66,589 Other assets 131,286 ------------ ------- Total assets $1,955,171 Liabilities and Equity Interest-bearing deposits: Savings accounts $116,807 $167 0.57% Interest-bearing demand accounts 194,767 806 1.65% Money market deposit accounts 177,795 755 1.69% Brokered certificates of deposits 39,947 347 3.46% Retail certificates of deposit 610,009 5,531 3.61% ------------------- ------- ----- ---- Total interest- bearing deposits 1,139,325 7,606 2.66% Short-term borrowings 100,266 377 1.47% Long-term borrowings 320,880 3,617 4.41% -------------------- ------- ----- ---- Total borrowed funds 421,146 3,994 3.73% -------------------- ------- ----- ---- Total interest- bearing liabilities 1,560,471 11,600 2.95% Non-interest- bearing deposits 183,993 Other liabilities 13,387 ----------------- ------ Total liabilities 1,757,851 Preferred equity - Common equity 197,320 ------------- ------- Stockholders' equity 197,320 -------------------- ------- Total liabilities and equity $1,955,171 Net interest income/ spread (a) $15,104 3.11% Net interest margin (a) 3.44%
(a) Information presented on a fully tax-equivalent basis. (b) Average balances are based on carrying value.
Year Ended ---------- December 31, 2009 ----------------- Income/ Yield/ (in $000's) Balance Expense Cost ----------- ------- -------- ------- Assets Short-term investments $28,496 $70 0.25% Investment securities (a)(b) 728,299 38,847 5.33% Gross loans (a) 1,093,057 64,793 5.93% Allowance for loan losses (25,081) ------------------ ------- Total earning assets 1,824,771 103,710 5.68% Intangible assets 66,010 Other assets 133,530 ------------ ------- Total assets $2,024,311 Liabilities and Equity Interest-bearing deposits: Savings accounts $126,226 $645 0.51% Interest-bearing demand accounts 207,117 3,127 1.51% Money market deposit accounts 235,690 2,735 1.16% Brokered certificates of deposits 41,548 1,675 4.03% Retail certificates of deposit 595,655 17,941 3.01% ------------------- ------- ------ ---- Total interest- bearing deposits 1,206,236 26,123 2.17% Short-term borrowings 59,923 483 0.81% Long-term borrowings 312,580 13,656 4.37% -------------------- ------- ------ ---- Total borrowed funds 372,503 14,139 3.80% -------------------- ------- ------ ---- Total interest- bearing liabilities 1,578,739 40,262 2.55% Non-interest- bearing deposits 195,688 Other liabilities 17,036 ----------------- ------ Total liabilities 1,791,463 Preferred equity 35,438 Common equity 197,410 ------------- ------- Stockholders' equity 232,848 -------------------- ------- Total liabilities and equity $2,024,311 Net interest income/ spread (a) $63,448 3.13% Net interest margin (a) 3.48%
Year Ended ---------- December 31, 2008 ----------------- Income/ Yield/ (in $000's) Balance Expense Cost ----------- ------- -------- ------- Assets Short-term investments $2,871 $65 2.28% Investment securities (a)(b) 615,311 33,395 5.43% Gross loans (a) 1,113,247 74,373 6.69% Allowance for loan losses (17,428) ------------------ ------- Total earning assets 1,714,001 107,833 6.29% Intangible assets 67,203 Other assets 128,798 ------------ ------- Total assets $1,910,002 Liabilities and Equity Interest-bearing deposits: Savings accounts $114,651 $583 0.51% Interest-bearing demand accounts 199,639 3,578 1.79% Money market deposit accounts 168,075 3,482 2.07% Brokered certificates of deposits 39,151 1,843 4.71% Retail certificates of deposit 561,143 21,824 3.89% ------------------- ------- ------ ---- Total interest- bearing deposits 1,082,659 31,310 2.89% Short-term borrowings 142,670 3,383 2.37% Long-term borrowings 286,905 13,055 4.55% -------------------- ------- ------ ---- Total borrowed funds 429,575 16,438 3.78% -------------------- ------- ------ ---- Total interest- bearing liabilities 1,512,234 47,748 3.15% Non-interest- bearing deposits 180,973 Other liabilities 13,892 ----------------- ------ Total liabilities 1,707,099 Preferred equity - Common equity 202,903 ------------- ------- Stockholders' equity 202,903 -------------------- ------- Total liabilities and equity $1,910,002 Net interest income/ spread (a) $60,085 3.14% Net interest margin (a)