<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Mark One
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission File Number: 333-12293
Peoples Bancorp, Inc.
---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-2265412
- ------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
516 Bankhead Highway, Carrollton, Georgia 30117
---------------------------------------------------
(Address of principal executive offices)
(770) 838-9608
-----------------------------------
(Issuer's telephone number)
N/A
----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of November 1, 1999: 800,000; $.01 par value.
Transitional Small Business Disclosure Format (Check One) Yes No X
----- -----
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
- --------------------------------------------------------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet - September 30, 1999............................................................3
Consolidated Statements of Income and Comprehensive
Income (Loss) - Three Months Ended September 30, 1999 and 1998
and Nine Months Ended September 30, 1999 and 1998.........................................................4
Consolidated Statement of Cash Flows - Nine
Months Ended September 30, 1999 and 1998..................................................................5
Notes to Consolidated Financial Statements.................................................................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......................................................7
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders.................................................15
Item 6 - Exhibits and Reports on Form 8-K....................................................................15
Signatures...................................................................................................16
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
FINANCIAL STATEMENTS
PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
(Unaudited)
Assets
------
Cash and due from banks $ 789,364
Interest-bearing deposits in banks 199,000
Federal funds sold 1,983,540
Securities available-for-sale, at fair value 12,755,175
Loans 25,026,258
Less allowance for loan losses 311,464
----------------
Loans, net 24,714,794
----------------
Premises and equipment 3,534,040
Other assets 457,660
----------------
Total assets $ 44,433,573
================
Liabilities and Stockholders' Equity
------------------------------------
Deposits
Demand $ 2,353,104
Interest-bearing demand 13,342,221
Savings 218,815
Time 20,195,590
----------------
Total deposits 36,109,730
Other liabilities 376,310
----------------
Total liabilities 36,486,040
----------------
Commitments and contingent liabilities
Stockholders' equity
Preferred stock, par value $.01; 1,000,000 shares
authorized; none issued or outstanding -
Common stock, par value $.01; 10,000,000 shares
authorized; 800,000 shares issued and outstanding 8,000
Capital surplus 7,970,587
Retained earnings 77,100
Accumulated other comprehensive loss (108,154)
----------------
Total stockholders' equity 7,947,533
----------------
Total liabilities and stockholders' equity $ 44,433,573
================
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Interest income
Loans $ 575,062 $ 351,272 $ 1,538,325 $ 904,085
Taxable securities 177,627 163,573 498,569 440,869
Deposits in banks 1,200 1,980 4,754 5,940
Federal funds sold 41,873 55,265 119,738 160,503
-------------- -------------- -------------- --------------
Total interest income 795,762 572,090 2,161,386 1,511,397
-------------- -------------- -------------- --------------
Interest expense on deposits 384,735 266,052 1,051,989 651,751
-------------- -------------- -------------- --------------
Net interest income 411,027 306,038 1,109,397 859,646
Provision for loan losses 47,500 30,000 120,500 84,000
-------------- -------------- -------------- --------------
Net interest income after
provision for loan losses 363,527 276,038 988,897 775,646
-------------- -------------- -------------- --------------
Service charges on deposit accounts 18,032 11,623 48,588 30,263
Gain on sales of securities available-for-sale - 5,227 15,950 20,557
Other operating income 16,485 41,664 91,162 106,566
-------------- -------------- -------------- --------------
Total other income 34,517 58,514 155,700 157,386
-------------- -------------- -------------- --------------
Other expenses
Salaries and employee benefits 171,872 149,520 500,322 440,734
Occupancy and equipment expenses 37,084 17,257 19,717 49,558
Other operating expenses 114,125 140,556 339,515 337,992
-------------- -------------- -------------- --------------
Total other expenses 323,081 307,333 859,554 828,284
-------------- -------------- -------------- --------------
Income before income taxes 74,963 27,219 285,043 104,748
Income tax expense 26,363 - 62,595 -
-------------- -------------- -------------- --------------
Net income 48,600 27,219 222,448 104,748
-------------- -------------- -------------- --------------
Other comprehensive income (loss):
Unrealized gains (losses) on securities
available-for-sale arising during period, net of tax (22,227) 47,232 (149,407) 54,463
Less: reclassification adjustment
for gains included in net income, net of tax - (5,227) (10,527) (20,557)
-------------- -------------- -------------- --------------
Total other comprehensive income (loss) (22,227) 42,005 (159,934) 33,906
-------------- -------------- -------------- --------------
Comprehensive income $ 26,373 $ 69,224 $ 62,514 $ 138,654
============== ============== ============== ==============
Basic and diluted earnings per common share $ 0.06 $ 0.03 $ 0.28 $ 0.13
============== ============== ============== ==============
Weighted average shares outstanding (basic
and diluted) 800,000 800,000 800,000 800,000
============== ============== ============== ==============
Cash dividends per common share $ - $ - $ - $ -
============== ============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
--------------------- -----------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 222,448 $ 104,748
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 29,557 89,229
Provision for loan losses 120,500 84,000
Gain on sale of securities available-for-sale (15,950) (20,557)
Increase in interest receivable (62,135) (56,107)
Increase in interest payable 79,604 28,334
Other operating activities 32,985 32,220
--------------------- -----------------------
Net cash provided by operating activities 407,009 261,867
--------------------- -----------------------
INVESTING ACTIVITIES
Purchases of securities available-for-sale (5,111,107) (10,049,246)
Proceeds from sales of securities available-for-sale 1,200,872 3,519,336
Proceeds from maturities of securities available-for-sale 2,242,704 1,111,402
Net increase in interest-bearing deposits in banks (1,000) (198,000)
Net (increase) decrease in Federal funds sold (533,382) 2,868,612
Net increase in loans (6,988,455) (6,434,838)
Purchase of premises and equipment (1,184,436) (32,738)
--------------------- -----------------------
Net cash used in investing activities (10,374,804) (9,215,472)
--------------------- -----------------------
FINANCING ACTIVITIES
Net increase in deposits 9,718,589 8,866,017
--------------------- -----------------------
Net cash provided by financing activities 9,718,589 8,866,017
--------------------- -----------------------
Net decrease in cash and due from banks (249,206) (87,588)
Cash and due from banks, beginning of period 1,038,570 451,967
--------------------- -----------------------
Cash and due from banks, end of period $ 789,364 $ 364,379
===================== =======================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid (received) during period for:
Interest $ 972,385 $ 623,417
Income taxes 80,422 $ (3,056)
NONCASH TRANSACTION
Net unrealized (gains) losses on securities available-for-sale $ 241,819 $ (33,906)
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The consolidated financial information included herein is unaudited;
however, such information reflects all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of results for the interim period.
The results of operations for the nine month period ended September 30,
1999 are not necessarily indicative of the results to be expected for
the full year.
NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
effective date of this statement has been deferred by SFAS No. 137 until
fiscal year beginning after June 15, 2000. However, the statement
permits early adoption as of the beginning of any fiscal quarter after
its issuance. The Company expects to adopt this statement effective
January 1, 2001. SFAS No. 133 requires the Company to recognize all
derivatives as either assets or liabilities in the balance sheet at fair
value. For derivatives that are not designated as hedges, the gain or
loss must be recognized in earnings in the period of change. For
derivatives that are designated as hedges, changes in the fair value of
the hedged assets, liabilities, or firm commitments must be recognized
in earnings or recognized in other comprehensive income until the hedged
item is recognized in earnings, depending on the nature of the hedge.
The ineffective portion of a derivative's change in fair value must be
recognized in earnings immediately. Management has not yet determined
what effect the adoption of SFAS No. 133 will have on the Company's
earnings or financial position.
There are no other recent accounting pronouncements that have had, or
are expected to have, a material effect on the Company's financial
statements.
6
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the financial position and
operating results of the Company and its bank subsidiary, Peoples Bank
of West Georgia, during the periods included in the accompanying
consolidated financial statements.
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
Certain of the statements made herein under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" ("MD&A") are forward-looking statements for purposes of the
Securities Act of 1933, as amended (the "Securities Act") and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as
such may involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements
of the Company to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward looking statements include statements using the
words such as "may," "will," "anticipate," "should," "would," "believe,"
"contemplate," "expect," "estimate," "continue," "may," "intend," or
other similar words and expressions of the future. Our actual results
may differ significantly from the results we discuss in these forward-
looking statements.
These forward-looking statements involve risks and uncertainties and may
not be realized due to a variety of factors, including, without
limitation: the effects of future economic conditions; governmental
monetary and fiscal policies, as well as legislative and regulatory
changes; the risks of changes in interest rates on the level and
composition of deposits, loan demand, and the values of loan collateral,
securities, and other interest-sensitive assets and liabilities;
interest rate risks; the effects of competition from other commercial
banks, thrifts, mortgage banking firms, consumer finance companies,
credit unions, securities brokerage firms, insurance companies, money
market and other mutual funds and other financial institutions operating
in the Company's market area and elsewhere, including institutions
operating regionally, nationally, and internationally, together with
such competitors offering banking products and services by mail,
telephone, computer, and the Internet; the possible effects of the Year
2000 issues on the Company.
7
<PAGE>
Management's current assessment and estimates with respect to the
Company's Year 2000 compliance efforts and the impact of Year 2000
issues on the Company's business and operations have been included in
the MD&A. Various factors could cause actual plans and results to differ
materially from those contemplated by such assessments, estimates and
forward-looking statements, many of which are beyond the control of the
Company. Some of these factors include, but are not limited to
representations by the Company's vendors and counterparties,
technological advances, economic considerations, and consumer
perceptions. The Company's Year 2000 compliance program is an ongoing
process involving continual evaluation and may be subject to change in
response to new developments.
Liquidity and Capital Resources
As of September 30, 1999, the liquidity ratio of the Bank, as determined
under guidelines established by regulatory authorities, was
satisfactory.
As of September 30, 1999, the capital ratios of the Company and the Bank
were adequate based on regulatory minimum capital requirements. The
minimum capital requirements and the actual capital ratios for the
Company and the Bank are as follows:
<TABLE>
<CAPTION>
Actual
--------------------------------
Peoples Bank
Peoples of West Regulatory
Bancorp, Inc. Georgia Requirement
--------------- --------------- ---------------
<S> <C> <C> <C>
Leverage capital ratios 18.68 % 14.28 % 4.00 %
Risk-based capital ratios:
Core capital 29.22 22.65 4.00
Total capital 30.35 23.80 8.00
</TABLE>
As the Company continues to grow, the capital ratios will decrease
rapidly during the next twelve months to levels closer to, but still in
excess of, regulatory minimum requirements.
8
<PAGE>
Financial Condition
Following is a summary of the Company's balance sheets for the periods
indicated:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998 Increase (Decrease)
------------------ ---------------- ----------------------------------
(Dollars in Thousands) Amount Percent
--------------------------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Cash and due from banks $ 789 $ 1,039 $ (250) (24.06) %
Interest-bearing deposits in banks 199 198 1 0.51
Federal funds sold 1,984 1,450 534 36.83
Securities 12,755 11,313 1,442 12.75
Loans 24,715 17,847 6,868 38.48
Premises and equipment 3,534 2,379 1,155 48.55
Other assets 458 297 161 54.21
------------------ ---------------- ---------------
$ 44,434 $ 34,523 $ 9,911 28.71
================== ================ ===============
Deposits $ 36,110 $ 26,391 $ 9,719 36.83 %
Other liabilities 376 247 129 52.23
Stockholders' equity 7,948 7,885 63 0.80
------------------ ---------------- ---------------
$ 44,434 $ 34,523 $ 9,911 28.71
================== ================ ===============
</TABLE>
As indicated in the above table, the Company's total assets have grown at a rate
of 28.71%. Continued strong deposit growth of 36.83% was invested primarily in
loans. The Company's loan to deposit ratio has increased from 68.44% at December
31, 1998 to 69.31% at September 30, 1999. The Company's total equity was
increased by year-to-date earnings of $222,000 which has put the Company in a
cumulatively profitable position. The Company's total equity was decreased by
$160,000 due to unrealized losses on securities in its portfolio that have
maturities greater than one year.
9
<PAGE>
Results of Operations For The Three Months Ended September 30, 1999 and 1998 and
for the Nine Months Ended September 30, 1999 and 1998
Following is a summary of the Company's operations for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1999 1998 Increase (Decrease)
-------------- ---------------- --------------------------------
(Dollars in Thousands) Amount Percent
----------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
Interest income $ 796 $ 572 $ 224 39.16 %
Interest expense 385 266 119 44.74
Net interest income 411 306 105 34.31
Provision for loan losses 48 30 18 60.00
Other income 35 58 (23) (39.66)
Other expense 323 307 16 5.21
Income tax expense 26 - 26 -
Net income 49 27 22 81.48
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998 Increase (Decrease)
-------------- ---------------- --------------------------------
(Dollars in Thousands) Amount Percent
----------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
Interest income $ 2,161 $ 1,511 $ 650 43.02 %
Interest expense 1,052 651 401 61.60
Net interest income 1,109 860 249 28.95
Provision for loan losses 121 84 37 44.05
Other income 156 157 (1) (0.64)
Other expense 859 828 31 3.74
Income tax expense 63 - 63 -
Net income 222 105 117 111.43
</TABLE>
As indicated in the above table, the Company's net interest income has increased
by $105,000 and $249,000 for the third quarter and first nine months of 1999,
respectively, as compared to the same periods in 1998. The Company's net
interest margin decreased to 4.11% during the first nine months of 1999 as
compared to 4.35% for the previous year. The increase in net interest income is
due primarily to the increased volume of average interest-earning assets. The
decrease in the net interest margin is due to the significant growth in
interest-bearing deposits that has outpaced new loan demand.
10
<PAGE>
The provision for loan losses increased by $18,000 and by $37,000 for the third
quarter and first nine months of 1999, respectively, as compared to the same
periods in 1998. The overall increase is due primarily to the net loan growth.
The Company's allowance for loan losses as a percentage of total loans amounted
to 1.24% at September 30, 1999 as compared to 1.19% at December 31, 1998. The
allowance for loan losses is maintained at a level that is deemed appropriate by
management to adequately cover all known and inherent risks in the loan
portfolio. Management's evaluation of the loan portfolio includes a continuing
review of loan loss experience, current economic conditions which may affect the
borrower's ability to repay and the underlying collateral value.
Information with respect to nonaccrual, past due and restructured loans at
September 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
September 30,
---------------------------------
1999 1998
--------------- ---------------
(Dollars in Thousands)
---------------------------------
<S> <C> <C>
Nonaccrual loans $ 22 $ -
Loans contractually past due ninety days or more as to interest
or principal payments and still accruing - -
Restructured loans - -
Loans, now current about which there are serious doubts as to the
ability of the borrower to comply with loan repayment terms - -
Interest income that would have been recorded on nonaccrual
and restructured loans under original terms 1 -
Interest income that was recorded on nonaccrual and restructured loans - -
</TABLE>
It is the policy of the Bank to discontinue the accrual of interest income when,
in the opinion of management, collection of such interest becomes doubtful. This
status is accorded such interest when (1) there is a significant deterioration
in the financial condition of the borrower and full repayment of principal and
interest is not expected and (2) the principal or interest is more than ninety
days past due, unless the loan is both well-secured and in the process of
collection.
Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity or capital resources.
These classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms.
11
<PAGE>
Information regarding certain loans and allowance for loan loss data through
September 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------------
1999 1998
--------------- ---------------
(Dollars in Thousands)
---------------------------------
<S> <C> <C>
Average amount of loans outstanding $ 20,758 $ 11,639
=============== ===============
Balance of allowance for loan losses at beginning of period $ 215 $ 101
--------------- ---------------
--------------- ---------------
Loans charged off
Commercial and financial 18 -
Real estate mortgage - -
Instalment 7 5
--------------- ---------------
25 5
--------------- ---------------
Loans recovered
Commercial and financial - -
Real estate mortgage - -
Instalment 1 5
--------------- ---------------
1 5
--------------- ---------------
Net charge-offs 24 -
--------------- ---------------
Additions to allowance charged to operating expense during period 121 84
--------------- ---------------
Balance of allowance for loan losses at end of period $ 312 $ 185
=============== ===============
Ratio of net loans charged off during the period to
average loans outstanding .12% -%
=============== ===============
</TABLE>
Other income decreased by $23,000 and $1,000 during the third quarter and first
nine months of 1999, respectively, as compared to the same period in 1998 due to
increases in service charges being offset by decreases in other operating
income, primarily mortgage origination fees.
Other expenses increased during the third quarter and first nine months of 1999,
respectively, as compared to the same periods in 1998 by $16,000 and $31,000 due
to normal increased operating costs associated with the Bank's growth. These
increases were substantially offset by reduced net equipment and occupancy
expenses. The Company purchased in 1998 an existing 24,000 square foot building
in downtown Carrollton, Georgia for its future banking facilities. The sellers
of the building occupied the building during the first quarter of 1999 and paid
the Company $62,000 in rents which is netted against occupancy and equipment
expenses for the nine month period. The sellers have now vacated the premises.
The Company expects to generate rent of $3,000 to $5,000 during the remainder of
1999 from other tenants.
12
<PAGE>
The Company is now anticipating moving into its new facilities in November of
1999. The Company has also entered into a contractual agreement to sell its
current banking facilities to an independent third party for $332,000. This
agreement will have no significant effect on earnings.
The Company has also purchased branch banking facilities in Douglasville,
Georgia at a cost of $412,000. The branch is expected to open in the first
quarter of 2000. The Company also opened a limited banking facility in Villa
Rica, Georgia in July of 1999. This facility is currently being leased at a
monthly lease of $1,225.
The Company has recorded income tax provisions of $26,000 and $63,000 for the
third quarter and first nine months of 1999, respectively. The year to date
effective tax rate for 1999 is 22%. This rate is substantially lower than the
Federal statutory rate of 34% due to the utilization of net operating loss
carryovers. No income tax provisions were recorded through September 30, 1998
due to the utilization of net operating loss carryovers.
Capability of the Bank's Processing Software to Accommodate the Year 2000
- -------------------------------------------------------------------------
Project Summary: Senior management and all employees formed the Project Team for
- ---------------
Year 2000. The project manager is the chief operating officer, which reports to
the Executive Committee and Board. This team has been charged with the
responsibility of assessing the problem, overseeing corrective action, as well
as testing the Year 2000 readiness of all equipment, software, and applications
after upgrades have been made.
Readiness: The team distinguished between critical and non critical systems.
- ---------
Mission critical systems have priority attention. These systems are: core
processing system, both hardware and software; automated new accounts and loan
document preparation software; ATM processor; network server, and personal
computers. As of December 31, 1998, all personal computers and network server
located within the Bank have been tested and certified by an outside firm to be
Year 2000 ready. The Bank outsources the core processing (checks, deposits,
loans) with an outside firm, The InterCept Group, Thomson, Georgia. Testing
began in early 1998 and covered all future dates identified by the FFIEC as
being potential problem dates. Testing has been completed successfully.
The Bank relies on other outside vendors for many services such as electricity,
phone service, water, gas, bond accounting, accounts payable, and other forms.
The Bank can make no representations about third parties; however, the Bank is
making a coordinated effort to help vendors and customers to be aware of the
Year 2000 issue.
Contingency Plans: Due to the critical nature of our core processing system and
- -----------------
our automated platform for new accounts and loan document preparation, we have
developed contingency plans and also adopted the contingency plan of the outside
provider. Contingency plans have also been developed in the event of disruption
of service due to power outage, etc. These plans are in process of testing and
will be ongoing throughout the remainder of 1999. An independent review of the
plan has been completed and the Board is updated monthly on the contingency
testing and any other matter regarding Year 2000.
Costs: After the assessment phase, the Board of Directors approved a budget of
- -----
$35,000 to address the Year 2000 Issue, mainly new hardware. This budget is
subject to continuous review and amendment. Management does not expect the cost
of remediation to vary significantly from the present budget.
13
<PAGE>
Customer Awareness and Preparedness: The Bank took an early stance in
- -----------------------------------
communicating with our customers and the community in general about the Year
2000 Issues. We have sponsored a Y2K conference addressing present state of
compliance, impact on small business, and legal and insurance issues. Messages
and brochures have been sent to our customers. This will be a continued
concentration throughout 1999. The Bank's web site allows customers to attach to
the FFIEC's Y2K information regarding awareness and fraud prevention.
Credit Risk: Loan customers could also experience business interruptions which
- -----------
could affect their ability to repay debts owed to the Bank resulting in adverse
bank performance. Action has been taken by the Bank's senior credit officer to
evaluate the current commercial relationships and is continuing with the
assessment of each new commercial relationship.
The Company is not aware of any known trends, events or uncertainties, other
than the effect of events as described above, that will have or that are
reasonably likely to have a material effect on its liquidity, capital resources
or operations. The Company is also not aware of any current recommendations by
the regulatory authorities which, if they were implemented, would have such an
effect.
14
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
27. Financial Data Schedule. (For SEC use only.)
(b) Reports on Form 8-K.
None.
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PEOPLES BANCORP, INC.
(Registrant)
DATE: November 12, 1999 BY: /s/ Timothy I. Warren
------------------- --------------------------------------------
Timothy I. Warren. President and C.E.O.
(Principal Executive Officer)
DATE: November 12, 1999 BY: /s/ Elaine B. Lovvorn
------------------- --------------------------------------------
Elaine B. Lovvorn, Secretary and Treasurer
(Principal Financial and Accounting Officer)
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 789,364
<INT-BEARING-DEPOSITS> 199,000
<FED-FUNDS-SOLD> 1,983,540
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,755,175
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 25,026,258
<ALLOWANCE> 311,464
<TOTAL-ASSETS> 44,433,573
<DEPOSITS> 36,109,730
<SHORT-TERM> 0
<LIABILITIES-OTHER> 376,310
<LONG-TERM> 0
0
0
<COMMON> 8,000
<OTHER-SE> 7,939,533
<TOTAL-LIABILITIES-AND-EQUITY> 44,433,573
<INTEREST-LOAN> 1,538,325
<INTEREST-INVEST> 498,569
<INTEREST-OTHER> 124,492
<INTEREST-TOTAL> 2,161,386
<INTEREST-DEPOSIT> 1,051,989
<INTEREST-EXPENSE> 1,051,989
<INTEREST-INCOME-NET> 1,109,397
<LOAN-LOSSES> 120,500
<SECURITIES-GAINS> 15,950
<EXPENSE-OTHER> 859,554
<INCOME-PRETAX> 285,043
<INCOME-PRE-EXTRAORDINARY> 222,448
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 222,448
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
<YIELD-ACTUAL> 4.11
<LOANS-NON> 22,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 215,000
<CHARGE-OFFS> 25,000
<RECOVERIES> 1,000
<ALLOWANCE-CLOSE> 312,000
<ALLOWANCE-DOMESTIC> 312,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
