MARIETTA - Peoples Bancorp Inc. announced results for the quarter ended Sept. 30. Net income totaled $2.5 million for the third quarter of 2013, representing earnings per diluted share of 23 cents. In comparison, net income was $4.9 million or 46 cents per diluted share for the second quarter of 2013 and $4.8 million or 45 cents per diluted share for the third quarter of 2012. Third quarter 2013 earnings were reduced by $2.2 million (or 21 cents per diluted share) for a federal income tax liability associated with Peoples' surrender of bank owned life insurance ('BOLI") contracts during the quarter. On a year-to-date basis, net income totaled $12.5 million, or $1.16 per diluted share, through Sept. 30 vs. $16.5 million, or $1.56 per diluted share, for the same period a year ago.
"Our third quarter results were generally positive despite the lower earnings due to the additional income tax expense related to our BOLI transaction," said Chuck Sulerzyski, president and chief executive officer. "We experienced another quarter of solid loan growth driven by increased consumer lending. Overall revenue generation remained strong and growing, while operating costs were generally consistent with our target levels. We also benefited from additional recoveries of prior loan losses which boosted bottom line earnings."
Sulerzyski continued, "However, our most exciting news for the quarter was the acquisition of Ohio Commerce Bank in the greater Cleveland area. This recently completed transaction adds several new customer relationships with over $97 million of loans and $111 million in deposits. We believe the potential for meaningful long-term growth exists in this region given its level of economic activity and attractive customer demographics."
"For many years, our BOLI performed very well, generating favorable returns compared to many other investment options," said Edward Sloane, chief financial officer and treasurer. "However, the trend has been less favorable since 2008 due to adverse conditions in the financial markets, with minimal income being recognized for the past several quarters. We expected BOLI to continue underperforming for many years to come. Given this situation, we deemed it prudent to exit our BOLI investment, even with the one-time charge, considering the potential for improving long-term shareholder value. Essentially, we sold a $43 million non-earning asset and redeployed the proceeds into earning assets and expect to recover the one-time charge fairly quickly."