<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
-------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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.)
119 Maple Street, Carrollton, Georgia 30117
-----------------------------------------------------
(Address of principal executive offices)
(770) 838-9608
---------------------------
(Issuer's telephone number)
516 Bankhead Highway, Carrollton, Georgia 30117
-------------------------------------------------------------------------------
(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
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 1, 2000: 800,000; $.01 par value.
Transitional Small Business Disclosure Format Yes No X
----- -----
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
- --------------------------------------------------------------------------------
INDEX
-----
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet - March 31, 2000......................3
Consolidated Statements of Income and Comprehensive
Income (Loss) - Three Months Ended March 31, 2000 and 1999...4
Consolidated Statements of Cash Flows - Three
Months Ended March 31, 2000 and 1999.........................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.......13
Item 6 - Exhibits and Reports on Form 8-K..........................13
Signatures.........................................................14
2
<PAGE>
PART I - FINANCIAL INFORMATION
FINANCIAL STATEMENTS
PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(Unaudited)
<TABLE>
<S> <C>
Assets
------
Cash and due from banks $ 1,623,998
Interest-bearing deposits in banks 199,383
Federal funds sold 2,245,143
Securities available-for-sale, at fair value 11,408,194
Loans 35,987,375
Less allowance for loan losses 437,679
---------------------
Loans, net 35,549,696
---------------------
Premises and equipment 3,877,595
Other assets 689,101
---------------------
Total assets $ 55,593,110
=====================
Liabilities and Stockholders' Equity
------------------------------------
Deposits
Noninterest-bearing demand $ 3,076,833
Interest-bearing demand 14,553,073
Savings 286,685
Time 26,912,378
---------------------
Total deposits 44,828,969
Other borrowings 2,500,000
Other liabilities 355,943
---------------------
Total liabilities 47,684,912
---------------------
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 117,436
Accumulated other comprehensive loss (187,825)
---------------------
Total stockholders' equity 7,908,198
---------------------
Total liabilities and stockholders' equity $ 55,593,110
=====================
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
-------------------- --------------------
<S> <C> <C>
Interest income
Loans $ 819,876 $ 473,292
Taxable securities 176,176 151,633
Federal funds sold 30,096 32,127
Deposits in banks 2,299 2,354
-------------------- --------------------
Total interest income 1,028,447 659,406
-------------------- --------------------
Interest expense on deposits
Deposits 494,429 318,152
Other borrowings 40,913 -
-------------------- --------------------
Total interest expense 535,342 318,152
-------------------- --------------------
Net interest income 493,105 341,254
Provision for loan losses 62,000 30,000
-------------------- --------------------
Net interest income after provision for loan losses 431,105 311,254
-------------------- --------------------
Other income
Service charges on deposit accounts 19,937 15,676
Other operating income 24,540 39,882
-------------------- --------------------
Total other income 44,477 55,558
-------------------- --------------------
Other expenses
Salaries and other employee benefits 250,536 163,914
Occupancy and equipment expenses, net 72,496 (47,651)
Other operating expenses 142,949 127,028
-------------------- --------------------
Total other expenses 465,981 243,291
-------------------- --------------------
Income before income taxes 9,601 123,521
Income tax expense 1,869 11,370
-------------------- --------------------
Net income 7,732 112,151
Other comprehensive loss, net of tax
Unrealized losses on securities available-for-sale
arising during period, net of tax (50,594) (37,819)
-------------------- --------------------
Comprehensive income (loss) $ (42,862) $ 74,332
==================== ====================
Basic earnings per common share $ 0.01 $ 0.14
==================== ====================
Diluted earnings per common share $ 0.01 $ 0.14
==================== ====================
Cash dividends per share of common stock $ - $ -
==================== ====================
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---------------------- ------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 7,732 $ 112,151
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 35,461 9,456
Provision for loan losses 62,000 30,000
Increase in interest receivable (47,284) (13,028)
Increase (decrease) in interest payable 13,256 (7,476)
Other operating activities (105,168) (9,491)
---------------------- ------------------------
Net cash provided by (used in) operating activities (34,003) 121,612
---------------------- ------------------------
INVESTING ACTIVITIES
(Increase) decrease in interest-bearing deposits in banks (99) 99,000
Purchases of securities available-for-sale (156,505) (1,717,419)
Proceeds from maturities of securities available-for-sale 368,493 1,005,945
Net increase in Federal funds sold (221,739) (1,260,442)
Net increase in loans (5,839,081) (1,257,846)
Purchase of premises and equipment (114,564) (34,402)
---------------------- ------------------------
Net cash used in investing activities (5,963,495) (3,165,164)
---------------------- ------------------------
FINANCING ACTIVITIES
Net increase in deposits 6,065,450 4,350,543
---------------------- ------------------------
Net cash provided by financing activities 6,065,450 4,350,543
---------------------- ------------------------
Net increase in cash and due from banks 67,952 1,306,991
Cash and due from banks at beginning of period 1,556,046 1,038,570
---------------------- ------------------------
Cash and due from banks at end of period $ 1,623,998 $ 2,345,561
====================== ========================
CASH FLOW INFORMATION
Cash paid during period for:
Interest $ 522,086 $ 325,628
Income taxes 65,303 $ 45,922
NONCASH TRANSACTION
Net unrealized losses on securities available-for-sale $ 75,539 $ 53,586
</TABLE>
See Notes to 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 for Peoples Bancorp, Inc. (the
"Company") 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 three month period ended March 31,
2000 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 years 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>
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.
Liquidity and Capital Resources
As of March 31, 2000, the liquidity ratio of the Bank, as determined
under guidelines established by regulatory authorities, was
satisfactory.
7
<PAGE>
At March 31, 2000, 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 15.50 % 11.93 % 4.00 %
Risk-based capital ratios:
Core capital 21.30 16.43 4.00
Total capital 22.45 17.60 8.00
</TABLE>
As the Company continues to grow, the capital ratios will decrease to
levels closer to, but still in excess of regulatory minimum requirements.
Financial Condition
Following is a summary of the Company's balance sheets for the periods
indicated:
<TABLE>
<CAPTION>
Increase (Decrease)
March 31, December 31, --------------------------------
2000 1999 Amount Percent
-------------- ---------------- -------------- --------------
(Dollars in Thousands)
------------------------------------------------------
<S> <C> <C> <C> <C>
Cash and due from banks $ 1,624 $ 1,556 $ 68 4.37 %
Interest-bearing deposits in banks 199 199 - -
Securities 11,408 11,696 (288) (2.46)
Federal funds sold 2,245 2,023 222 10.97
Loans 35,550 29,773 5,777 19.40
Premises and equipment 3,878 3,799 79 2.08
Other assets 689 570 119 20.88
-------------- ---------------- --------------
$ 55,593 $ 49,616 $ 5,977 12.05
============== ================ ==============
Deposits $ 44,829 $ 38,764 $ 6,065 15.65 %
Other borrowings 2,500 2,500 - -
Other liabilities 356 401 (45) (11.22)
Stockholders' equity 7,908 7,951 (43) (0.54)
-------------- ---------------- --------------
$ 55,593 $ 49,616 $ 5,977 12.05
============== ================ ==============
</TABLE>
8
<PAGE>
As indicated in the above table, the Company's total assets grew at a rate of
12.05%. Deposit growth of 15.65% was primarily invested in loans. The Company's
loan to deposit ratio has increased from 77.78% at December 31, 1999 to 80.28%
at March 31, 2000 as loan demand has maintained the pace of deposit growth
during the first quarter. The increase in deposit growth is significantly
attributable to the Company moving into its new banking facilities in downtown
Carrollton in the last quarter of 1999 and the opening of its Douglasville
branch in the first quarter of 2000.
Results of Operations For The Three Months Ended March 31, 2000 and 1999
Following is a summary of the Company's operations for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
2000 1999 Increase (Decrease)
--------------- ------------ ----------------------------
(Dollars in Thousands) Amount Percent
------------------------------- ----------------------------
<S> <C> <C> <C> <C>
Interest income $ 1,028 $ 659 $ 369 55.97 %
Interest expense 535 318 217 68.27
--------------- ------------ -----------
Net interest income 493 341 152 44.50
Provision for loan losses 62 30 32 106.67
Other income 45 56 (11) (19.94)
Other expense 466 244 222 91.46
--------------- ------------ -----------
Pretax income 10 123 (113) (92.08)
Income taxes 2 11 (9) 83.56
--------------- ------------ -----------
Net income 8 112 (104) (92.95)
=============== ============ ===========
</TABLE>
As indicated in the above table, the Company's net interest income has increased
by $152,000 during the first quarter of 2000 as compared to the same period in
1999. The Company's net interest margin increased to 4.18% during the first
quarter of 2000 as compared to 4.17% for the first quarter of 1999 and 4.16% for
the entire year of 1999. The increase in net interest income and net interest
margin is due primarily to the increased volume of average loans.
The provision for loan losses increased by $32,000 during the first quarter of
2000 as compared to the same period in 1999. The amounts provided are due
primarily to loan growth and inherent risk in the loan portfolio. The Company's
reserve for loan losses amounted to 1.22% at March 31, 2000 as compared to 1.25%
at December 31, 1999. 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.
9
<PAGE>
Information with respect to nonaccrual, past due and restructured loans at March
31, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
March 31,
---------------------------------
2000 1999
--------------- ---------------
(Dollars in Thousands)
---------------------------------
<S> <C> <C>
Nonaccrual loans $ 127 $ 20
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 2 1
Interest income that was recorded on nonaccrual and restructured loans - -
</TABLE>
It is the policy of the Company 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.
10
<PAGE>
Information regarding certain loans and allowance for loan loss data through
March 31, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
2000 1999
--------------- ---------------
(Dollars in Thousands)
---------------------------------
<S> <C> <C>
Average amount of loans outstanding $ 33,059 $ 18,863
=============== ===============
Balance of allowance for loan losses at beginning of period $ 377 $ 215
=============== ===============
Loans charged off
Commercial and financial $ - $ -
Real estate mortgage - -
Instalment 2 -
--------------- ---------------
2 -
--------------- ---------------
Loans recovered
Commercial and financial - -
Real estate mortgage - -
Instalment 1 -
--------------- ---------------
1 -
--------------- ---------------
Net charge-offs 1 -
--------------- ---------------
Additions to allowance charged to operating expense during period 62 30
--------------- ---------------
Balance of allowance for loan losses at end of period $ 438 $ 245
=============== ===============
Ratio of net loans charged off during the period to
average loans outstanding -% -%
=============== ===============
</TABLE>
Other income has decreased during the first quarter of 2000 as compared to the
same period in 1999 by $11,000 due primarily to increased service charges of
$4,000 and being offset by decreased mortgage loan origination fees of $17,000.
Other expenses increased during the first quarter of 2000 as compared to the
same period in 1999 by $222,000 due primarily to increased salaries and employee
benefits of $86,000 and increased occupancy and equipment expenses of $121,000.
Salaries and employee benefits have increased due to an increase in the number
of full time equivalent employees to 21 at March 31, 2000 from 11 at March 31,
1999 and to normal salary increases. The increase in the number of employees has
been necessary in order to staff the Douglasville branch as well as to serve the
overall growth of the Company. Occupancy and equipment expenses have increased
due substantially in part to a decrease in sublease rental income of $61,000.
The sellers of the Company's new main office facilities occupied the building
during the first quarter of 1999 and paid the Company $62,000 in nonrecurring
rental income. Increased depreciation costs of $26,000 coupled with increased
other maintenance costs of $34,000 associated with the new main office
facilities and new branch accounted for the remainder of the increase in
occupancy and equipment costs.
11
<PAGE>
The Company's income tax provision of $2,000 for the first quarter of 2000 is
lower than the Federal statutory rate due to income before income taxes being
substantially lower as compared to the same period in 1999. The Company recorded
its initial income tax provision of $11,000 for the first quarter of 1999 due to
the complete utilization of the net operating loss carryover during the period.
Overall, net income has decreased by $104,000 during the first quarter of 2000
as compared to the same period in 1999 due to increased net interest income of
$152,000 being offset by increased operating costs of $222,000 and increased
provisions for loan losses of $32,000.
12
<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.
13
<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: May 12, 2000 BY: /s/ Timothy I. Warren
------------ ---------------------
Timothy I. Warren. President and C.E.O.
(Principal Executive Officer)
DATE: May 12, 2000 BY: /s/ Elaine B. Lovvorn
------------ ---------------------
Elaine B. Lovvorn, Secretary and Treasurer
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,623,998
<INT-BEARING-DEPOSITS> 199,383
<FED-FUNDS-SOLD> 2,245,143
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 11,408,194
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 35,987,375
<ALLOWANCE> 437,679
<TOTAL-ASSETS> 55,593,110
<DEPOSITS> 44,828,969
<SHORT-TERM> 2,500,000
<LIABILITIES-OTHER> 355,943
<LONG-TERM> 0
0
0
<COMMON> 8,000
<OTHER-SE> 7,900,198
<TOTAL-LIABILITIES-AND-EQUITY> 55,593,110
<INTEREST-LOAN> 819,876
<INTEREST-INVEST> 176,176
<INTEREST-OTHER> 32,395
<INTEREST-TOTAL> 1,028,447
<INTEREST-DEPOSIT> 494,429
<INTEREST-EXPENSE> 535,342
<INTEREST-INCOME-NET> 493,105
<LOAN-LOSSES> 62,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 465,981
<INCOME-PRETAX> 9,601
<INCOME-PRE-EXTRAORDINARY> 7,732
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,732
<EPS-BASIC> .01
<EPS-DILUTED> .01
<YIELD-ACTUAL> 4.18
<LOANS-NON> 127,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 377,000
<CHARGE-OFFS> 2,000
<RECOVERIES> 1,000
<ALLOWANCE-CLOSE> 438,000
<ALLOWANCE-DOMESTIC> 438,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
