MARIETTA, Ohio, Jan. 29, 2016 /PRNewswire/ -- Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for the quarter and year ended December 31, 2015. Net income totaled $2.6 million for the fourth quarter of 2015, representing earnings per diluted common share of $0.14. In comparison, earnings per diluted common share were $0.22 and $0.28 for the third quarter of 2015 and fourth quarter of 2014, respectively. For the year, net income was $10.9 million in 2015 versus $16.7 million in 2014, representing earnings per diluted common share of $0.61 and $1.35, respectively.
"We continue to see results from the execution of our strategy to reduce expenses, which were overshadowed again for the quarter by another large provision for loan losses. The large provision for loan losses was the result of the one commercial loan relationship that had been evaluated throughout the year as the borrower's business continued to deteriorate, but is behind us now as our recorded investment in the loan is zero. The amount charged-off related to the relationship was in line with the amount previously reported on December 1, 2015," said Chuck Sulerzyski, President and Chief Executive Officer. "With respect to loans, we achieved our stated loan growth for the year of 7%, which given the large charge-off experienced during the quarter, and the slow start to 2015, was encouraging as we move into 2016."
Income Statement Highlights:
-- Total revenue grew 25% compared to the fourth quarter of 2014, 1% compared to the linked quarter and 32% for the year. -- Net interest income was the main contributor to the growth compared to the prior year periods. -- Net interest income increased $5.7 million, or 28%, compared to the fourth quarter of 2014, $0.3 million, or 1%, compared to the linked quarter, and $28.1 million, or 40%, compared to the full year of 2014, due largely to loan growth, both organic and from acquisitions, and accretion income from acquisitions. -- Net interest margin expanded 7 basis points compared to the fourth quarter of 2014, 1 basis point compared to the linked quarter, and 8 basis points compared to the full year of 2014, due largely to the reduced funding rate. -- Non-interest income grew 19% compared to the fourth quarter of 2014, 2% compared to the linked quarter, and 18% compared to the full year of 2014. -- Provision for loan losses was $7.2 million for the quarter and $14.1 million for the year, due primarily to the charge-off for one large commercial loan relationship. -- Core non-interest expenses were $26.0 million, which was consistent with the linked quarter's core non-interest expenses. -- Non-interest expenses for the fourth quarter of 2015 were $27.3 million and were impacted by the following non-core charges: -- Acquisition-related charges were $0.8 million for the quarter and $10.7 million for the full year. -- Pension settlement charges of $5,000 were incurred during the quarter, totaling $459,000 for the full year. -- Other non-core charges totaled $407,000 for the quarter and $592,000 for the full year.
Balance Sheet Highlights:
-- Period-end total loan balances, excluding NB&T acquired loans, reflected annualized growth of 10% for the quarter, and 7% for the year. -- Commercial loan balances, excluding NB&T acquired loans, grew at an annualized rate of 12% for the quarter, or $27 million, and 8% for the full year, or $67 million. -- Consumer loan balances, excluding NB&T acquired loans, grew at an annualized rate of 7% for the quarter and full year, or $13 million and $50 million, respectively. -- Asset quality negatively impacted earnings. -- Net charge-offs for the quarter were elevated as a result of the full charge-off of the one large commercial relationship noted above. -- Nonperforming assets decreased $6.2 million during the quarter driven mainly by the charge-off noted above. -- Originated criticized loans increased due primarily to two large commercial relationships being downgraded, which was partially offset by the charge-off noted above. -- Continued to evaluate exposure to the oil and gas industry during the quarter. -- Allowance for loan losses decreased to 1.19% of originated loans at December 31, 2015. -- Period-end and quarterly average deposit balances remained relatively flat for the fourth quarter. -- Non-interest-bearing balances grew $6.7 million, or 1%, compared to the linked quarter, and comprised 28% of total deposits at December 31, 2015, versus 26% a year ago. -- Cost of interest-bearing deposit balances was flat compared to the linked quarter and 10 basis points less than the fourth quarter of 2014.
Net Interest Income:
Net interest income for the fourth quarter of 2015 was $25.9 million, up 1% compared to the linked quarter and 29% higher than the fourth quarter of 2014, while the net interest margin for these periods was 3.56%, 3.55% and 3.49%, respectively. Net interest margin, excluding net accretion income, improved 3 basis points compared to the linked quarter. The accretion income, net of amortization expense, from the acquisitions was $1.2 million for the fourth quarter of 2015 and added 16 basis points to net interest margin in the fourth quarter of 2015, compared to 18 basis points for the linked quarter and 20 basis points for the fourth quarter of 2014. Net interest income for the full year of 2015 was $97.6 million, up 40% compared to 2014, due largely to loan growth, from both acquisitions and organic growth. Net interest margin for these periods was 3.53% and 3.45%, respectively. On a full year basis, net accretion income from the acquisitions added 17 basis points for 2015 and 13 basis points for 2014.
Provision for Loan Losses:
For the fourth quarter of 2015, provision for loan losses was $7.2 million, which included the previously mentioned charge-off associated with the one large commercial loan relationship. The loan growth experienced during the quarter, coupled with the trends in criticized loans, accounted for the additional increase in the provision during the quarter, compared to the third quarter of 2015. Provision for loan losses was $128,000 for the fourth quarter of 2014 and $339,000 for the full year of 2014, due primarily to net recoveries realized during those periods.
Non-interest Income:
Total non-interest income grew slightly compared to the linked quarter, was up 19% compared to the prior year fourth quarter and increased 18% for the full year. The growth for the quarter compared to the linked quarter was primarily from the commercial loan swap program. The growth in total non-interest income compared to the prior year fourth quarter and the full year of 2014 was due to growth in all categories, most notably electronic banking income, trust and investment income, and deposit account service charges, with growth of 31%, 23% and 17% for the quarter, respectively, and 35%, 25% and 18% for the full year, respectively. The growth in 2015 was due largely to the NB&T Financial Group, Inc. ("NB&T") acquisition.
Non-interest Expenses:
Non-interest expenses, adjusted for non-core charges, were relatively flat compared to the linked quarter. For the fourth quarter and full year, non-interest expenses, adjusted for non-core charges, were up 19% and 32%, respectively, compared to 2014, with the increase due largely to the operating costs of the NB&T acquisition, which closed March 6, 2015. Non-core charges included in non-interest expenses for the fourth quarter and full year 2015 consisted of acquisition-related costs of $0.8 million and $10.7 million, respectively; pension settlement charges of $5,000 and $459,000, respectively; and other items totaling $407,000 and $592,000, respectively. Included in other items are severance charges and search firm fees, and in the first half of the year, legal settlement charges that were incurred. The efficiency ratio for the fourth quarter of 2015 was 67.94%, compared to 65.81% for the linked quarter and 76.55% for the fourth quarter of 2014. The increase in the efficiency ratio for the quarter was the result of an increase in non-core charges.
Loans:
Period-end loan balances, excluding the loans acquired from NB&T, increased $40.4 million compared to the September 30, 2015 balances. The growth was driven equally by growth in commercial and consumer loan balances. Commercial loans, excluding loans acquired from NB&T, grew $27.0 million, or 12% annualized, with commercial real estate loan growth of $31.4 million more than offsetting a decrease in commercial and industrial loans for the quarter. Non-mortgage consumer loans grew $12.6 million, or 23% annualized, during the quarter, while mortgage consumer loans were relatively flat. The average net loan balances, inclusive of loans acquired from NB&T, for the quarter increased $28.1 million, or 1%, compared to the linked quarter, and $585.6 million, or 43%, for the year.
Asset Quality:
Peoples experienced some deterioration in asset quality during the quarter. Net charge-offs increased during the quarter as Peoples recorded net charge-offs of $13.6 million, resulting in an annualized net charge-off rate of 2.63%. The net charge-offs for the quarter were primarily the result of the one commercial loan relationship, which operates in the coal industry. Nonperforming assets decreased by $6.2 million, or 24%, during the quarter. The decrease was primarily due to the charge-off noted above related to one commercial loan relationship, which was partially offset by a large commercial real estate loan being placed on non-accrual status during the quarter. Criticized assets, which are those classified as watch, substandard or doubtful, increased during the quarter largely due to two large commercial loan relationships being downgraded during the quarter, which was partially offset by the charge-off noted above. Peoples continues to monitor its exposure to the oil and gas industry and has approximately $40 million of loan commitments, and approximately $30 million of loan balances outstanding at December 31, 2015, with borrowers operating in that industry. At quarter-end, the ratio of the allowance for loan losses as a percent of originated loans (which does not include acquired loan balances), net of deferred fees and costs, was 1.19%, down from 1.72% reported for September 30, 2015 and 1.48% reported for December 31, 2014. The increase in the ratio during the third quarter of 2015 was due to the build-up of reserves on the one commercial loan relationship noted above that was fully charged-off in the fourth quarter of 2015.
Deposits:
Period-end deposits increased $5.1 million during the quarter, with the growth in non-interest-bearing deposits more than offsetting the slight decline in interest-bearing deposit balances. The increase in non-interest-bearing deposits was mainly due to growth of $24.8 million in individual demand accounts, which more than offset the decline of $21.3 million in commercial non-interest-bearing checking accounts. The decline in commercial non-interest-bearing checking accounts was due to a customer temporarily maintaining a higher than normal balance on September 30, 2015. Other non-interest-bearing deposit balances increased $3.2 million. The $1.6 million decline in interest-bearing deposit balances was mainly due to a decline in certificates of deposit, which was partially offset by increases in savings and money market account deposit balances. Average deposits for the quarter compared to the linked quarter decreased $10.2 million, as average interest-bearing deposits decreased $32.3 million, which was partially offset by an increase in average non-interest-bearing deposits of $22.1 million. The decrease in interest-bearing deposits was due to a decrease in governmental deposits and certificates of deposit.
Peoples Bancorp Inc. is a diversified financial services holding company with $3.3 billion in total assets, 81 locations, including 74 full-service bank branches, and 81 ATMs in Ohio, West Virginia and Kentucky. Peoples makes available a complete line of banking, investment, insurance and trust solutions through its subsidiaries - The Peoples Banking and Trust Company and Peoples Insurance Agency, LLC. Peoples' common shares are traded on the NASDAQ Global Select Market® under the symbol "PEBO", and Peoples is a member of the Russell 3000 index of U.S. publicly-traded companies. Learn more about Peoples at www.peoplesbancorp.com.
Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss fourth quarter and full year 2015 results of operations today at 11:00 a.m., Eastern Standard Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285. A simultaneous webcast of the conference call audio will be available online via the "Investor Relations" section of Peoples' website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the "Investor Relations" section for one year.
Use of Non-GAAP Financial Measures
This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management uses these "non-GAAP" measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the non-GAAP measures used in this news release:
-- Core non-interest expenses are non-GAAP since they exclude the impact of acquisition-related costs, pension settlement charges, severance charges, search firm fees and legal settlement charges. -- Efficiency ratio is calculated as non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This measure is non-GAAP since it excludes intangible amortization and all gains and/or losses included in earnings, and uses fully tax-equivalent net interest income. -- Tangible assets and tangible equity measures are non-GAAP since they exclude the impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets and the related amortization from earnings. -- Pre-provision net revenue is defined as net interest income plus non-interest income minus non-interest expense. This measure is non-GAAP since it excludes (recovery of) provision for loan losses and all gains and/or losses included in earnings.A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included at the end of this news release under the caption of "Non-GAAP Financial Measures".
Safe Harbor Statement:
Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate", "could", "may", "feel", "expect", "believe", "plan", and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to: (1) the success, impact, and timing of the implementation of Peoples' business strategies, including the successful integration of recently completed acquisitions and the expansion of consumer lending activity; (2) Peoples' ability to integrate the NB&T acquisition and any future acquisitions may be unsuccessful, or may be more difficult, time-consuming or costly than expected; (3) Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders; (4) local, regional, national and international economic conditions and the impact they may have on Peoples, its customers and its counterparties, and Peoples' assessment of the impact, which may be different than anticipated; (5) competitive pressures among financial institutions or from non-financial institutions may increase significantly, including product and pricing pressures, third-party relationships and revenues, and Peoples' ability to attract, develop and retain qualified professionals; (6) changes in the interest rate environment due to economic conditions and/or the fiscal policies of the U.S. government and Board of Governors of the Federal Reserve System ("Federal Reserve Board"), which may adversely impact interest rates, interest margins and interest rate sensitivity; (7) changes in prepayment speeds, loan originations, levels of non-performing assets, delinquent loans and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (8) adverse changes in the economic conditions and/or activities, including, but not limited to, continued economic uncertainty in the U.S., the European Union, Asia, and other areas, which could decrease sales volumes and increase loan delinquencies and defaults; (9) legislative or regulatory changes or actions, promulgated and to be promulgated thereunder by the state of Ohio, the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses, including in particular the rules and regulations promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations; (10) deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses; (11) changes in accounting standards, policies, estimates or procedures which may adversely affect Peoples' reported financial condition or results of operations; (12) Peoples' assumptions and estimates used in applying critical accounting policies, which may prove unreliable, inaccurate or not predictive of actual results; (13) adverse changes in the conditions and trends in the financial markets, including political developments, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities; (14) Peoples' ability to receive dividends from its subsidiaries; (15) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity; (16) the impact of new minimum capital thresholds established as a part of the implementation of Basel III; (17) the impact of larger or similar sized financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity; (18) the costs and effects of regulatory and legal developments, including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; (19) Peoples' ability to secure confidential information through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, may prove inadequate, which could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss; (20) the overall adequacy of Peoples' risk management program; (21) the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international military or terrorist activities or conflicts; and (22) other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission ("SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website.
As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its December 31, 2015 consolidated financial statements as part of its Annual Report on Form 10-K to be filed with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.
PER COMMON SHARE DATA AND SELECTED RATIOS Three Months Ended Year Ended ------------------ December 31, September 30, December 31, December 31, ------------ 2015 2015 2014 2015 2014 ---- ---- ---- ---- ---- PER COMMON SHARE: ----------------- Earnings per share: Basic $0.14 $0.23 $0.29 $0.62 $1.36 Diluted 0.14 0.22 0.28 0.61 1.35 Cash dividends declared per share 0.15 0.15 0.15 0.60 0.60 Book value per share 22.81 23.08 22.92 22.81 22.92 Tangible book value per share (a) 14.68 14.86 15.57 14.68 15.57 Closing stock price at end of period $18.84 $20.79 $25.93 $18.84 $25.93 SELECTED RATIOS: ---------------- Return on average equity (b) 2.42% 3.89% 5.03% 2.69% 6.16% Return on average assets (b) 0.32% 0.51% 0.66% 0.35% 0.74% Efficiency ratio (c) 67.94% 65.81% 76.55% 75.50% 75.37% Pre-provision net revenue to average assets (b)(d) 1.31% 1.40% 0.99% 0.96% 1.10% Net interest margin (b)(e) 3.56% 3.55% 3.49% 3.53% 3.45% Dividend payout ratio (f) 106.58% 66.74% 53.22% 96.35% 43.10%
(a) This amount represents a non-GAAP financial measure since it excludes the balance sheet impact of intangible assets acquired through acquisitions on stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release. (b) Ratios are presented on an annualized basis. (c) Non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non- interest income. This amount represents a non-GAAP financial measure since it excludes intangible amortization, and net gains or losses on security transactions, debt extinguishment, loans held- for-sale and other real estate owned, and other assets, and uses the fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release. (d) This ratio represents a non-GAAP financial measure since it excludes the recovery of or provision for loan losses and net gains or losses on security transactions, debt extinguishment, loans held-for- sale and other real estate owned, and other assets. This measure is a key metric used by federal bank regulatory agencies in their evaluation of capital adequacy for financial institutions. Additional information regarding the calculation of this ratio is included at the end of this news release. (e) Information presented on a fully tax- equivalent basis. (f) Dividends declared on common shares as a percentage of net income.
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Year Ended ------------------ December 31, September 30, December 31, December 31, ------------ (in $000's) 2015 2015 2014 2015 2014 ---------- ---- ---- ---- ---- ---- Interest income $28,430 $28,178 $22,868 $108,333 $80,200 Interest expense 2,566 2,642 2,744 10,721 10,694 ---------------- ----- ----- ----- ------ ------ Net interest income 25,864 25,536 20,124 97,612 69,506 Provision for loan losses 7,238 5,837 128 14,097 339 ------------------------- ----- ----- --- ------ --- Net interest income after provision for loan losses 18,626 19,699 19,996 83,515 69,167 --------------------------------------------------- ------ ------ ------ ------ ------ Net gain on securities transactions 56 62 238 729 398 (Loss) Gain on debt extinguishment - - - (520) 67 Net loss on loans held-for-sale and other real estate owned (398) (50) (95) (529) (68) Net loss on other assets (100) (1) (51) (739) (430) Non-interest income: Insurance income 2,913 3,275 2,876 13,783 13,604 Deposit account service charges 2,780 2,922 2,386 10,845 9,173 Trust and investment income 2,489 2,497 2,029 9,577 7,685 Electronic banking income 2,425 2,241 1,846 8,958 6,642 Mortgage banking income 390 212 365 1,317 1,237 Other non-interest income 1,104 759 676 2,961 1,712 ------------------------- ----- --- --- ----- ----- Total non-interest income 12,101 11,906 10,178 47,441 40,053 ------------------------- ------ ------ ------ ------ ------ Non-interest expense: Salaries and employee benefits costs 13,723 13,572 12,893 59,216 46,593 Net occupancy and equipment 2,934 2,840 2,017 11,207 7,839 Professional fees 1,753 1,287 2,024 7,295 5,649 Electronic banking expense 1,448 1,408 1,213 5,300 4,529 Amortization of intangible assets 1,133 1,127 516 4,077 1,428 Data processing and software 1,001 910 626 3,671 2,424 Marketing expense 663 459 759 2,838 2,299 Communication expense 564 628 472 2,286 1,642 FDIC insurance 568 562 382 2,084 1,260 Franchise taxes 416 502 177 1,968 1,392 Foreclosed real estate and other loan expenses 245 159 280 1,276 789 Other non-interest expense 2,829 2,658 2,622 13,863 9,165 -------------------------- ----- ----- ----- ------ ----- Total non-interest expense 27,277 26,112 23,981 115,081 85,009 -------------------------- ------ ------ ------ ------- ------ Income before income taxes 3,008 5,504 6,285 14,816 24,178 -------------------------- ----- ----- ----- ------ ------ Income tax expense 425 1,370 2,040 3,875 7,494 ------------------ --- ----- ----- ----- ----- Net income $2,583 $4,134 $4,245 $10,941 $16,684 ---------- ------ ------ ------ ------- ------- PER COMMON SHARE DATA: ---------------------- Earnings per share - Basic $0.14 $0.23 $0.29 $0.62 $1.36 Earnings per share - Diluted $0.14 $0.22 $0.28 $0.61 $1.35 Cash dividends declared per share $0.15 $0.15 $0.15 $0.60 $0.60 Weighted-average shares outstanding - Basic 18,142,997 18,127,131 14,660,314 17,555,140 12,183,352 Weighted-average shares outstanding - Diluted 18,278,272 18,271,979 14,809,289 17,687,795 12,306,224 Actual shares outstanding (end of period) 18,404,864 18,400,809 14,836,727 18,404,864 14,836,727
CONSOLIDATED BALANCE SHEETS December 31, ------------ (in $000's) 2015 2014 ---------- ---- ---- Assets Cash and cash equivalents: Cash and due from banks $53,663 $42,230 Interest-bearing deposits in other banks 17,452 19,224 ---------------------------------------- ------ ------ Total cash and cash equivalents 71,115 61,454 Available-for-sale investment securities, at fair value (amortized cost of $780,304 at December 31, 2015 and $632,967 at December 31, 2014) 784,701 636,880 Held-to-maturity investment securities, at amortized cost (fair value of $45,853 at December 31, 2015 and $48,442 at December 31, 2014) 45,728 48,468 Other investment securities, at cost 38,401 28,311 ------------------------------------ ------ ------ Total investment securities 868,830 713,659 Loans, net of deferred fees and costs 2,072,440 1,620,898 Allowance for loan losses (16,779) (17,881) ------------------------- ------- ------- Net loans 2,055,661 1,603,017 Loans held-for-sale 1,953 4,374 Bank premises and equipment, net of accumulated depreciation 53,487 40,335 Goodwill 132,631 98,562 Other intangible assets 16,986 10,596 Other assets 58,307 35,772 ------ ------ Total assets $3,258,970 $2,567,769 ------------ ---------- ---------- Liabilities Deposits: Non-interest-bearing deposits $717,939 $493,162 Interest-bearing deposits 1,818,005 1,439,912 ------------------------- --------- --------- Total deposits 2,535,944 1,933,074 Short-term borrowings 160,386 88,277 Long-term borrowings 113,670 179,083 Accrued expenses and other liabilities 29,181 27,217 -------------------------------------- ------ ------ Total liabilities 2,839,181 2,227,651 Stockholders' Equity Preferred stock, no par value (50,000 shares authorized, no shares issued at December 31, 2015 and December 31, 2014) - - Common stock, no par value, 24,000,000 shares authorized, 18,931,200 shares issued at December 31, 2015 and 15,599,643 shares issued at December 31, 2014, including shares in treasury 343,948 265,742 Retained earnings 90,790 90,391 Accumulated comprehensive loss, net of deferred income taxes (359) (1,301) Treasury stock, at cost, 586,686 shares at December 31, 2015 and 590,246 shares at December 31, 2014 (14,590) (14,714) ---------------------------------------------------------------------------------------------------- ------- ------- Total stockholders' equity 419,789 340,118 Total liabilities and stockholders' equity $3,258,970 $2,567,769 ------------------------------------------ ---------- ----------
SELECTED FINANCIAL INFORMATION December 31, September 30, June 30, March 31, December 31, (in $000's, end of period) 2015 2015 2015 2015 2014 ------------------------- ---- ---- ---- ---- ---- Loan Portfolio -------------- Commercial real estate, construction $75,899 $81,076 $61,388 $54,035 $38,952 Commercial real estate, other 736,276 710,630 742,532 741,409 556,135 Commercial and industrial 351,719 357,456 327,093 325,910 280,031 Residential real estate 565,555 571,132 565,768 574,375 479,443 Home equity lines of credit 106,429 105,767 103,991 101,713 80,695 Consumer 235,114 222,867 207,998 190,581 182,709 Deposit account overdrafts 1,448 1,317 3,263 3,146 2,933 -------------------------- ----- ----- ----- ----- ----- Total loans $2,072,440 $2,050,245 $2,012,033 $1,991,169 $1,620,898 ----------- ---------- ---------- ---------- ---------- ---------- Total acquired loans (a) $657,801 $694,436 $726,540 $770,204 $408,884 ----------------------- -------- -------- -------- -------- -------- Total originated loans $1,414,639 $1,355,809 $1,285,493 $1,220,965 $1,212,014 ---------------------- ---------- ---------- ---------- ---------- ---------- Deposit Balances ---------------- Non-interest-bearing deposits $717,939 711,226 681,357 695,131 493,162 Interest-bearing deposits: Interest-bearing demand accounts $250,023 $232,354 $234,025 $228,373 $173,659 Retail certificates of deposit 448,992 461,398 480,687 494,896 432,563 Money market deposit accounts 394,119 393,472 395,788 402,257 337,387 Governmental deposit accounts 276,639 293,889 304,221 316,104 161,305 Savings accounts 414,375 404,676 410,371 406,276 295,307 Brokered certificates of deposits 33,857 33,841 38,123 38,104 39,691 --------------------------------- ------ ------ ------ ------ ------ Total interest-bearing deposits 1,818,005 1,819,630 1,863,215 1,886,010 1,439,912 --------- --------- --------- Total deposits $2,535,944 $2,530,856 $2,544,572 $2,581,141 $1,933,074 -------------- ---------- ---------- ---------- ---------- ---------- Asset Quality ------------- Nonperforming assets (NPAs): Loans 90+ days past due and accruing $5,969 $3,760 $3,165 $3,700 $2,799 Nonaccrual loans 13,531 21,144 20,823 8,362 8,406 ---------------- ------ ------ ------ ----- ----- Total nonperforming loans (NPLs) 19,500 24,904 23,988 12,062 11,205 Other real estate owned (OREO) 733 1,566 1,322 1,548 946 ----------------------------- --- ----- ----- ----- --- Total NPAs $20,233 $26,470 $25,310 $13,610 $12,151 ---------- ------- ------- ------- ------- ------- Allowance for loan losses as a percent of NPLs (b)(c) 86.05% 93.68% 76.05% 149.96% 159.58% NPLs as a percent of total loans (b)(c) 0.94% 1.21% 1.19% 0.60% 0.69% NPAs as a percent of total assets (b)(c) 0.62% 0.82% 0.79% 0.42% 0.47% NPAs as a percent of total loans and OREO (b)(c) 0.98% 1.29% 1.25% 0.68% 0.75% Allowance for loan losses as a percent of originated loans, net of deferred fees and costs (b) 1.19% 1.72% 1.42% 1.48% 1.48% Capital Information (d) ---------------------- Common Equity Tier 1 capital ratio 13.37% 13.46% 14.05% 13.73% N/A Tier 1 risk-based capital ratio 13.68% 13.77% 14.37% 14.05% 14.32% Total risk-based capital ratio (Tier 1 and Tier 2) 14.55% 14.97% 15.38% 15.02% 15.48% Leverage ratio 9.52% 9.57% 9.50% 10.98% 9.92% Common Equity Tier 1 capital $288,417 $287,020 $285,680 $281,249 N/A Tier 1 capital 295,151 293,705 292,316 287,835 241,707 Total capital (Tier 1 and Tier 2) 313,974 319,277 312,773 307,795 261,371 Total risk-weighted assets $2,157,410 $2,132,453 $2,033,700 $2,048,651 $1,687,968 Tangible equity to tangible assets (e) 8.69% 8.88% 8.73% 8.61% 9.39%
(a) Includes all loans acquired in 2012 and thereafter. (b) Data presented as of the end of the period indicated. (c) Nonperforming loans include loans 90 days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and other real estate owned. (d) December 31, 2015 data based on preliminary analysis and subject to revision. (e) These ratios represent non-GAAP financial measures since they exclude the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets. Additional information regarding the calculation of these ratios is included at the end of this news release.
PROVISION FOR LOAN LOSSES INFORMATION Three Months Ended Year Ended ------------------ December 31, September 30, December 31, December 31, ------------ (in $000's) 2015 2015 2014 2015 2014 ---------- ---- ---- ---- ---- ---- Provision for Loan Losses Provision for checking account overdrafts $138 $202 $128 $612 $339 Provision for other loan losses 7,100 5,635 - 13,485 - ------------------------------- ----- ----- --- ------ --- Total provision for loan losses $7,238 $5,837 $128 $14,097 $339 Net Charge-Offs (Recoveries) Gross charge-offs $14,003 $1,140 $920 $16,698 $2,715 Recoveries 364 390 1,117 1,562 3,192 ---------- --- --- ----- ----- ----- Net charge-offs (recoveries) $13,639 $750 $(197) $15,136 $(477) Net Charge-Offs (Recoveries) by Type Commercial real estate, construction $ - $ - $ - $ - $ - Commercial real estate, other 46 113 (870) 138 (1,857) Commercial and industrial 13,145 83 141 13,478 122 Residential real estate (16) 208 101 313 309 Home equity lines of credit (3) 8 61 6 92 Consumer 295 136 226 598 494 Deposit account overdrafts 172 202 144 603 363 -------------------------- --- --- --- --- --- Total net charge-offs (recoveries) $13,639 $750 $(197) $15,136 $(477) As a percent of average gross loans (annualized) 2.63% 0.15% (0.05)% 0.78% (0.03)%
SUPPLEMENTAL INFORMATION December 31, September 30, June 30, March 31, December 31, (in $000's, end of period) 2015 2015 2015 2015 2014 ------------------------- ---- ---- ---- ---- ---- Trust assets under management $1,275,253 $1,261,112 $1,303,792 $1,319,423 $1,022,189 Brokerage assets under management 664,153 621,242 641,412 566,635 590,089 Mortgage loans serviced for others $390,398 $387,200 $392,625 $386,261 $352,779 Employees (full-time equivalent) 817 821 831 847 699
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME Three Months Ended ------------------ December 31, 2015 September 30, 2015 December 31, 2014 ----------------- ------------------ ----------------- (in $000's) Balance Income/ Yield/ Cost Balance Income/ Yield/ Balance Income/ Yield/ Cost Cost Expense Expense Expense --- --- --- --- --- Assets Short-term investments $12,840 $8 0.25% $34,093 $21 0.24% $30,770 $20 0.26% Other long-term investments 1,096 2 0.72% 1,261 3 0.94% 1,453 4 1.09% Investment securities (a)(b) 880,938 5,911 2.68% 856,063 5,761 2.69% 719,833 4,961 2.76% Gross loans (a) 2,060,268 23,024 4.41% 2,027,322 22,918 4.46% 1,585,728 18,235 4.55% Allowance for loan losses (22,867) (17,982) (17,495) ------------------------- ------- ------- ------- Total earning assets 2,932,275 28,945 3.91% 2,900,757 28,703 3.92% 2,320,289 23,220 3.96% Intangible assets 150,717 151,206 107,002 Other assets 157,612 157,730 111,035 ------------ ------- ------- ------- Total assets $3,240,604 $3,209,693 $2,538,326 Liabilities and Equity Interest-bearing deposits: Savings accounts $409,827 $55 0.05% $410,131 $56 0.05% $284,221 $38 0.05% Government deposit accounts 284,079 147 0.21% 301,178 161 0.21% 173,845 113 0.26% Interest-bearing demand accounts 239,627 43 0.07% 235,145 47 0.08% 170,006 36 0.08% Money market deposit accounts 393,219 158 0.16% 395,547 158 0.16% 337,506 136 0.16% Brokered certificates of deposits 33,849 318 3.73% 34,883 328 3.73% 39,681 370 3.70% Retail certificates of deposit 456,516 769 0.67% 472,516 789 0.66% 431,534 865 0.80% ------------------------------ ------- --- ---- ------- --- ---- ------- --- ---- Total interest-bearing deposits 1,817,117 1,490 0.33% 1,849,400 1,539 0.33% 1,436,793 1,558 0.43% Short-term borrowings 141,081 74 0.21% 98,996 42 0.17% 76,930 33 0.17% Long-term borrowings 114,148 1,002 3.50% 119,477 1,061 3.54% 175,045 1,154 2.63% -------------------- ------- ----- ---- ------- ----- ---- ------- ----- ---- Total borrowed funds 255,229 1,076 1.68% 218,473 1,103 2.01% 251,975 1,187 1.88% -------------------- ------- ----- ---- ------- ----- ---- ------- ----- ---- Total interest-bearing liabilities 2,072,346 2,566 0.49% 2,067,873 2,642 0.51% 1,688,768 2,745 0.65% Non-interest-bearing deposits 716,339 694,277 493,901 Other liabilities 29,218 26,433 21,052 ----------------- ------ ------ ------ Total liabilities 2,817,903 2,788,583 2,203,721 Stockholders' equity 422,701 421,110 334,605 -------------------- ------- ------- ------- Total liabilities and equity $3,240,604 $3,209,693 $2,538,326 Net interest income/spread (a) $26,379 3.42% $26,061 3.41% $20,475 3.32% Net interest margin (a) 3.56% 3.55% 3.49% (a) Information presented on a fully tax-equivalent basis. (b) Average balances are based on carrying value.
Year Ended ---------- December 31, 2015 December 31, 2014 ----------------- ----------------- (in $000's) Balance Income/ Yield/ Cost Balance Income/ Yield/ Cost Expense Expense --- --- --- --- Assets Short-term investments $50,858 $123 0.24% $15,394 $1 0.01% Other long-term investments 1,261 12 0.95% 1,913 8 0.42% Investment securities (a)(b) 833,757 22,838 2.74% 689,816 19,809 2.87% Gross loans (a) 1,952,241 87,338 4.47% 1,364,808 61,718 4.52% Allowance for loan losses (19,174) (17,362) ------------------------- ------- ------- Total earning assets 2,818,943 110,311 3.91% 2,054,569 81,536 3.97% Intangible assets 144,013 87,821 Other assets 148,897 98,144 ------------ ------- ------ Total assets $3,111,853 $2,240,534 Liabilities and Equity Interest-bearing deposits: Savings accounts $388,802 $209 0.05% $247,419 $135 0.05% Government deposit accounts 276,367 597 0.22% 165,622 470 0.28% Interest-bearing demand accounts 222,868 178 0.08% 148,687 124 0.08% Money market deposit accounts 384,258 614 0.16% 293,214 472 0.16% Brokered certificates of deposits 36,303 1,352 3.72% 42,598 1,568 3.68% Retail certificates of deposit 465,861 3,256 0.70% 383,574 3,338 0.87% ------------------------------ ------- ----- ---- ------- ----- ---- Total interest-bearing deposits 1,774,459 6,206 0.35% 1,281,114 6,107 0.48% Short-term borrowings 100,437 182 0.18% 96,040 146 0.15% Long-term borrowings 135,248 4,333 3.20% 138,171 4,442 3.21% -------------------- ------- ----- ---- ------- ----- ---- Total borrowed funds 235,685 4,515 1.92% 234,211 4,588 1.96% -------------------- ------- ----- ---- ---- Total interest-bearing liabilities 2,010,144 10,721 0.53% 1,515,325 10,695 0.71% Non-interest-bearing deposits 663,395 433,798 Other liabilities 31,018 20,722 ----------------- ------ ------ Total liabilities 2,704,557 1,969,845 Stockholders' equity 407,296 270,689 -------------------- ------- ------- Total liabilities and equity $3,111,853 $2,240,534 Net interest income/spread (a) $99,590 3.38% $70,841 3.26% Net interest margin (a) 3.53% 3.45% (a) Information presented on a fully tax-equivalent basis. (b) Average balances are based on carrying value.
NON-GAAP FINANCIAL MEASURES
The following non-GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:
Three Months Ended Year Ended ------------------ December 31, September 30, December 31, December 31, ------------ (in $000's) 2015 2015 2014 2015 2014 ---------- ---- ---- ---- ---- ---- Core non-interest expenses: Total non-interest expense $27,277 $26,112 $23,981 $115,081 $85,009 Less: acquisition-related costs 838 109 1,869 10,722 4,754 Less: pension settlement charges 5 83 17 459 1,400 Less: other non-core charges 407 - 298 592 298 Core non-interest expenses $26,027 $25,920 $21,797 $103,308 $78,557
Three Months Ended Year Ended ------------------ December 31, September 30, December 31, December 31, ------------ (in $000's) 2015 2015 2014 2015 2014 ---------- ---- ---- ---- ---- ---- Efficiency ratio: Total non-interest expense $27,277 $26,112 $23,981 $115,081 $85,009 Less: Amortization of intangible assets 1,133 1,127 516 4,077 1,428 Adjusted non-interest expense 26,144 24,985 23,465 111,004 83,581 Total non-interest income 12,101 11,906 10,178 47,441 40,053 Net interest income 25,864 25,536 20,124 97,612 69,506 Add: Fully tax-equivalent adjustment 515 525 351 1,978 1,335 --- --- ----- ----- Net interest income on a fully taxable-equivalent basis 26,379 26,061 20,475 99,590 70,841 Adjusted revenue $38,480 $37,967 $30,653 $147,031 $110,894 Efficiency ratio 67.94% 65.81% 76.55% 75.50% 75.37%
At or For the Three Months Ended -------------------------------- December 31, September 30, June 30, March 31, December 31, (in $000's) 2015 2015 2015 2015 2014 ---------- ---- ---- ---- ---- ---- Tangible Equity: Total stockholders' equity, as reported $419,789 $424,760 $418,164 $419,218 $340,118 Less: goodwill and other intangible assets 149,617 151,339 151,169 152,291 109,158 ------------------------------------------ ------- ------- ------- ------- ------- Tangible equity $270,172 $273,421 $266,995 $266,927 $230,960 Tangible Assets: Total assets, as reported $3,258,970 $3,228,830 $3,210,425 $3,253,835 $2,567,769 Less: goodwill and other intangible assets 149,617 151,339 151,169 152,291 109,158 ------------------------------------------ ------- ------- ------- ------- ------- Tangible assets $3,109,353 $3,077,491 $3,059,256 $3,101,544 $2,458,611 Tangible Book Value per Common Share: Tangible equity $270,172 $273,421 $266,995 $266,927 $230,960 -------- -------- -------- -------- -------- Common shares outstanding 18,404,864 18,400,809 18,391,575 18,374,256 14,836,727 Tangible book value per common share $14.68 $14.86 $14.52 $14.53 $15.57 Tangible Equity to Tangible Assets Ratio: Tangible equity $270,172 $273,421 $266,995 $266,927 $230,960 -------- -------- -------- -------- -------- Tangible assets $3,109,353 $3,077,491 $3,059,256 $3,101,544 $2,458,611 Tangible equity to tangible assets 8.69% 8.88% 8.73% 8.61% 9.39%
Three Months Ended Year Ended ------------------ December 31, September 30, December 31, December 31, ------------ (in $000's) 2015 2015 2014 2015 2014 ---------- ---- ---- ---- ---- ---- Pre-Provision Net Revenue: Income before income taxes $3,008 $5,504 $6,285 $14,816 $24,178 Add: provision for loan losses 7,238 5,837 128 14,097 339 Add: net loss on loans held-for-sale and OREO 398 50 95 530 95 Add: net loss on securities transactions - - - - 30 Add: net loss on other assets 100 1 51 739 430 Less: recovery of loan losses - - - - - Less: net gain on debt extinguishment - - - - 67 Less: net gain on loans held-for-sale and OREO - - - - 27 Less: net gain on securities transactions 56 62 238 729 428 Pre-provision net revenue $10,688 $11,330 $6,321 $29,973 $24,550 Pre-provision net revenue $10,688 $11,330 $6,321 $29,973 $24,550 Total average assets 3,240,604 3,209,693 2,538,326 3,111,853 2,240,534 Pre-provision net revenue to total average assets (annualized) 1.31% 1.40% 0.99% 0.96% 1.10%
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SOURCE Peoples Bancorp Inc.