Peoples Bancorp announces net income
MARIETTA – Peoples Bancorp Inc. announced results for the quarter and year ended Dec. 31, 2012. Net income totaled $3.9 million for the fourth quarter of 2012, representing earnings per diluted common share of 36 cents. In comparison, earnings per diluted common share were 33 cents for the fourth quarter of 2011 and 45 cents for the third quarter of 2012. For the year, earnings per diluted common share were $1.92 in 2012 vs. $1.07 in 2011.
“We are pleased with the significant improvement in both earnings and overall shareholder value in 2012,” said Chuck Sulerzyski, president and chief executive officer. “Most notably, revenue growth outpaced the increase in operating expenses, reversing recent negative trends. We also made good progress towards restoring our asset quality metrics to pre-2008 levels, which led to sizable reserve releases during 2012. Modest loan growth occurred as increased production was augmented by our first banking acquisition since 2004. Our common shareholders saw the value of their investment increase, as Peoples’ stock price grew 38 percent during the year and the quarterly dividend was increased to 12 cents per share.”
Sulerzyski continued, “More exciting than our financial performance in 2012 is the strategic investments we are making for future growth. These include the expansion of our consumer lending activities, completion of acquisitions in each of our business lines, the refresh of our image with a new brand and the repayment of our high-cost trust preferred securities. Further, each employee is committed to working together and building success for our customers, shareholders and the communities we serve.”
As previously announced, Peoples repaid the entire $23 million outstanding principal amount of its junior subordinated debentures and related trust preferred securities on Dec. 19, 2012. This transaction resulted in Peoples incurring a pre-tax loss of $1 million for the redemption premium and unamortized issuance costs. Peoples funded the repayment with a term note from an unaffiliated financial institution at a significantly lower interest rate. As a result, Peoples will realize an annual interest expense savings of $1.1 million beginning in 2013.
Net interest income grew to $14.1 million for the fourth quarter of 2012, 6 percent higher than the linked quarter. This improvement was largely attributable to a full quarter’s impact of the Sistersville acquisition completed late in the third quarter of 2012. Net interest margin improved to 3.42 percent, compared to 3.30 percent for the linked quarter. Fourth quarter net interest income and margin also benefited from $330,000 of additional interest income for prepayment fees and interest recovered on nonaccrual loans. This one-time income added 7 basis points to the fourth quarter net interest margin.
Compared to last year, growth in earning assets produced slightly higher net interest income for the fourth quarter and full year of 2012. However, the sustained low interest rate environment caused asset yields to decline more than Peoples could reduce its funding costs. As a result, Peoples experienced slight net interest margin compression from the prior year periods.