PEOPLES BANCORP INC. 
By 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)
