<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
450 FIFTH STREET, N.W.
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 1997
-------------------------------
OR
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the transition period from to
----------- ----------
COMMISSION FILE NUMBER 0-22641
-----------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Trenton Savings Bank, FSB 401(k) Profit Sharing Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its prinicpal executive office:
Peoples Bancorp, Inc.
134 Franklin Corner Road
Lawrenceville, New Jersey 08608
<PAGE>
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(K) PLAN
Financial Statements and Schedules
December 31, 1997 and 1996
(With Independent Auditors' Report Thereon)
<PAGE>
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(K) PLAN
Financial Statements and Schedules
Index
<TABLE>
<CAPTION>
Independent Auditors' Report
<S> <C>
Statements of Net Assets Available for Benefits December 31,
1997 and 1996
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1997 and 1996
Notes to Financial Statements December 31, 1997 and 1996
Schedule
--------------
Item 27(a) Schedule of Assets Held for Investment Purposes
December 31, 1997 1
Item 27(d) Schedule of Reportable Transactions Year ended
December 31, 1997 2
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Compensation Committee of
the Board of Directors
Trenton Savings Bank:
We have audited the accompanying statements of net assets available for benefits
of the Trenton Savings Bank Employee's Thrift/401(k) Plan as of December 31,
1997 and 1996, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Trenton
Savings Bank Employee's Thrift/401(k) Plan as of December 31, 1997 and 1996, and
the changes in net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The 1997 supplemental schedules of
assets held for investment purposes and reportable transactions are presented
for the purpose of additional analysis and are not a required part of the 1997
basic financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in
the statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the changes in net assets
available for benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
July 3, 1998
<PAGE>
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(k) PLAN
Statements of Net Assets Available
for Benefits
December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Assets:
Investment funds at current value (note 5):
Core Equity Fund $ 616,414 413,323
Emerging Growth Equity Fund 182,522 148,524
Value Equity Fund 113,748 59,298
International Equity Fund 19,305 14,101
Short-Term Investment Fund 310,433 117,969
Intermediate-Term Bond Fund 193,718 176,808
Actively Managed Bond Fund 226,520 224,132
Employer Stock Fund 1,909,986 695,191
----------- -----------
Total investment funds 3,572,646 1,849,346
Cash and cash equivalents 615 2,456
Loans receivable (note 6) 148,545 119,829
----------- -----------
Net assets available for benefits $ 3,721,806 1,971,631
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(k) PLAN
Statement of Changes in Net Assets
Available for Benefits (with Fund Information)
Year ended December 31, 1997
<TABLE>
<CAPTION>
1997
------------------------------------------------------------------------------------
Participant Directed
----------------------------------------------------------------
Emerging Inter-
Cash and Core Growth Value national
Cash Equity Equity Equity Equity
Equivalents Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Employee contributions $ - 66,418 29,691 14,330 3,734
Employer contributions - 58,684 25,154 12,488 3,093
---------- ---------- ---------- ---------- --------
Total contributions - 125,102 54,845 26,818 6,827
---------- ---------- ---------- ---------- --------
Investment income:
Dividends and interest - - - - -
Net investment gain - 112,213 13,444 21,873 47
---------- ---------- ---------- ---------- --------
Net investment income - 112,213 13,444 21,873 47
---------- ---------- ---------- ---------- --------
Interest on loans - 2,675 1,452 296 35
Loan repayments - 11,416 6,560 1,896 127
---------- ---------- ---------- ---------- --------
Total additions - 251,406 76,301 50,883 7,036
---------- ---------- ---------- ---------- --------
Deductions from net assets:
Loans - (26,001) (16,528) (1,589) -
Distributions (1,841) (31,793) (18,206) (5,443) (1,832)
---------- ---------- ---------- ---------- --------
Total deductions (1,841) (57,794) (34,734) (7,032) (1,832)
---------- ---------- ---------- ---------- --------
Transfers among funds - 9,479 (7,569) 10,599 -
---------- ---------- ---------- ---------- --------
Net increase (decrease) in
net assets available for
benefits (1,841) 203,091 33,998 54,450 5,204
Net assets available for benefits
at beginning of year 2,456 413,323 148,524 59,298 14,101
---------- ---------- ---------- ---------- --------
Net assets available for benefits
at end of year $ 615 616,414 182,522 113,748 19,305
========= ========= ========= ========= =======
</TABLE>
See accompanying notes to financial statements
<TABLE>
<CAPTION>
1997
------------------------------------------------------------------------------------
Participant Directed
---------------------------------------------------------------------
Inter-
Short- mediate- Actively
Term Term Managed
Investment Bond Bond Employer Loan
Fund Fund Fund Stock Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Employee contributions 18,710 21,448 21,144 47,762 - 223,237
Employer contributions 15,839 17,082 16,205 45,724 - 194,269
--------- -------- -------- ---------- -------- ----------
Total contributions 34,549 38,530 37,349 93,486 - 417,506
--------- -------- -------- ---------- -------- ----------
Investment income:
Dividends and interest - - - 14,931 - 14,931
Net investment gain 10,004 12,163 22,105 1,250,047 - 1,441,896
--------- -------- -------- ---------- -------- ----------
Net investment income 10,004 12,163 22,105 1,264,978 - 1,456,827
--------- -------- -------- ---------- -------- ----------
Interest on loans 1,089 300 1,187 4,235 - 11,269
Loan repayments 5,568 3,044 4,846 10,294 (43,751) -
--------- -------- -------- ---------- -------- ----------
Total additions 51,210 54,037 65,487 1,372,993 (43,751) 1,885,602
--------- -------- -------- ---------- -------- ----------
Deductions from net assets:
Loans (17,192) (5,216) (6,488) (10,059) 83,073 -
Distributions (21,405) (16,467) (15,022) (12,812) (10,606) (135,427)
--------- -------- -------- ---------- -------- ----------
Total deductions (38,597) (21,683) (21,510) (22,871) 72,467 (135,427)
--------- -------- -------- ---------- -------- ----------
Transfers among funds 179,851 (15,444) (41,589) (135,327) - -
--------- -------- -------- ---------- -------- ----------
Net increase (decrease) in
net assets available for
benefits 192,464 16,910 2,388 1,214,795 28,716 1,750,175
Net assets available for benefits
at beginning of year 117,969 176,808 224,132 695,191 119,829 1,971,631
--------- -------- -------- ---------- -------- ----------
Net assets available for benefits
at end of year 310,433 193,718 226,520 1,909,986 148,545 3,721,806
========= ======== ======== ========== ======== ==========
</TABLE>
<PAGE>
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(k) PLAN
Statement of Changes in Net Assets
Available for Benefits (with Fund Information), Continued
Year Ended December 31, 1996
<TABLE>
<CAPTION>
1996
--------------------------------------------------------------------------------------------
Participant Directed
------------------------------------------------------------------------------
Emerging Inter- Short-
Cash and Core Growth Value national Term
Cash Equity Equity Equity Equity Investment
Equivalents Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Employee contributio $ - 48,617 23,358 7,470 2,087 13,107
Employer contributions - 37,812 19,136 5,433 2,346 10,307
---------- ---------- ---------- -------- -------- ----------
Total contributions - 86,429 42,494 12,903 4,433 23,414
---------- ---------- ---------- -------- -------- ----------
Investment income:
Dividends and interest - - - - - -
Net investment gain - 70,005 27,559 10,722 2,521 4,860
---------- ---------- ---------- -------- -------- ----------
Net investment income - 70,005 27,559 10,722 2,521 4,860
---------- ---------- ---------- -------- -------- ----------
Interest on loans - 2,720 1,770 268 - 293
Loan repayments - 12,925 10,098 1,683 - 1,834
---------- ---------- ---------- -------- -------- ----------
Total additions - 172,079 81,921 25,576 6,954 30,401
---------- ---------- ---------- -------- -------- ----------
Deductions from net assets:
Loans - (32,354) (21,361) (3,107) (2,072) (3,814)
Distributions (10,298) (12,926) (11,181) (1,269) - (1,289)
---------- ---------- ---------- -------- -------- ----------
Total deductions (10,298) (45,280) (32,542) (4,376) (2,072) (5,103)
---------- ---------- ---------- -------- -------- ----------
Transfers among funds - (46,682) 3,474 5,007 7,915 (9,994)
---------- ---------- ---------- -------- -------- ----------
Net increase (decrease) in
net assets available for
benefits (10,298) 80,117 52,853 26,207 12,797 15,304
Net assets available for benefits
at beginning of year 12,754 333,206 95,671 33,091 1,304 102,665
---------- ---------- ---------- -------- -------- ----------
Net assets available for benefits
at end of year $2,456 413,323 148,524 59,298 14,101 117,969
========= ========= ========= ======= ======= =========
</TABLE>
See accompanying notes to financial statements
<TABLE>
<CAPTION>
1996
----------------------------------------------------------
Participant Directed
---------------------------------------------
Inter-
mediate- Actively
Term Managed
Bond Bond Employer Loan
Fund Fund Stock Fund Fund Total
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Employee contributio 16,796 19,806 31,259 - 162,500
Employer contributions 14,532 17,126 29,727 - 136,419
--------- --------- --------- --------- -----------
Total contributions 31,328 36,932 60,986 - 298,919
--------- --------- --------- --------- -----------
Investment income:
Dividends and interest - - 14,348 - 14,348
Net investment gain (loss) 6,395 5,687 131,895 - 259,644
--------- --------- --------- --------- -----------
Net investment income 6,395 5,687 146,243 - 273,992
--------- --------- --------- --------- -----------
Interest on loans 463 1,617 1,299 - 8,430
Loan repayments 3,392 7,792 23,515 (61,239) -
--------- --------- --------- --------- -----------
Total additions 41,578 52,028 232,043 (61,239) 581,341
--------- --------- --------- --------- -----------
Deductions from net assets:
Loans (15,267) (18,414) - 96,389 -
Distributions (35,318) (70,551) (23,637) (8,465) (174,934)
--------- --------- --------- --------- -----------
Total deductions (50,585) (88,965) (23,637) 87,924 (174,934)
--------- --------- --------- --------- -----------
Transfers among funds 48 26,222 14,010 - -
--------- --------- --------- --------- -----------
Net increase (decrease) in
net assets available for
benefits (8,959) (10,715) 222,416 26,685 406,407
Net assets available for benefits
at beginning of year 185,767 234,847 472,775 93,144 1,565,224
--------- --------- --------- --------- -----------
Net assets available for benefits
at end of year 176,808 224,132 695,191 119,829 1,971,631
========= ========= ========= ========= ===========
</TABLE>
<PAGE>
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(K) PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The accompanying financial statements of the Trenton Savings Bank Employee's
Thrift/401(k) Plan (the Plan) are prepared on the accrual basis of
accounting.
On October 1, 1996, Trenton Savings Bank and subsidiaries (the Bank) acquired
Burlington County Bank. Effective the date of merger, Burlington County
Bank's employees became eligible to participate in the Plan. Effective August
1, 1996, employees of TSBusiness Finance Corporation (a subsidiary of Trenton
Savings Bank) became eligible to participate in the Plan.
Effective January 1, 1998, in conjunction with the acquisition of Manchester
Trust Bank, the Manchester Plan was merged with the Plan and Manchester Trust
Bank's employees became eligible to participate in the plan.
MANAGEMENT OF TRUST FUNDS
All assets of the Plan other than the stock fund are managed by RSI
Retirement Trust (RSI). The Employer Stock fund is managed by Marine Midland
Bank.
INVESTMENTS
Investment funds are stated at current value. The current value of
investments is based on current market quotations.
The assets of the Plan are primarily financial instruments which are monetary
in nature. As a result, interest rates have a more significant impact on the
Plan's performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or in the same
magnitude as the prices of goods and services as measured by the consumer
price index. Investments in funds are subject to risk conditions of the
individual fund objectives, the stock market, interest rates, economic
conditions and world affairs.
Under the terms of the Plan, the following eight investment funds are
currently maintained as follows:
CORE EQUITY FUND - This fund offers potential long-term capital
appreciation, with income as a secondary goal. It invests in a broadly
diversified group of high-quality, medium to large companies that appear
attractively valued and exhibit substantial earnings growth.
EMERGING GROWTH EQUITY FUND - This fund's assets are invested primarily
in stocks of smaller companies with higher-than-average potential for
earnings growth.
<PAGE>
2
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(K) PLAN
Notes to Financial Statements, continued
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONT.
VALUE EQUITY FUND - This growth and income fund seeks capital
appreciation over the longer term. It invests in stocks of a broadly
diversified group of companies that are selling at low market valuations
based on price/earnings ratios and whose shares offer prospects for
significant earnings and dividend growth.
INTERNATIONAL EQUITY FUND - This fund seeks capital appreciation by
investing primarily in stocks of small, medium and large capitalization
companies headquartered in foreign countries to take advantage of
opportunities outside the U.S. capital markets.
SHORT-TERM INVESTMENT FUND - This fund invests in high-quality money
market instruments with a maximum average maturity of one year. It
offers substantial liquidity and little risk of principal loss.
INTERMEDIATE-TERM BOND FUND - This fund invests in high-quality, fixed
income vehicles that mature within 10 years or have expected average
lives of 10 years or less. At least 65% of its assets are invested in
securities issued or backed by the United States Government.
ACTIVELY MANAGED BOND FUND - The maturity structure of this fund is
expected to vary substantially, based on the perceived relative
attractiveness of different areas of the fixed income market. At least
65% of its assets are invested in securities used or backed by the United
States Government.
EMPLOYER STOCK FUND - This fund enables participants to purchase shares
of the Bank's holding company, Peoples Bancorp, Inc. common stock.
USE OF ESTIMATES
A number of estimates and assumptions have been made with respect to the
determination of the fair values of assets and related investment income to
prepare these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those estimates.
<PAGE>
3
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(K) PLAN
Notes to Financial Statements, Continued
(2) DESCRIPTION OF PLAN
The following brief description of the Plan is provided for general
information purposes only. Participants should refer to the plan agreement
for more complete information.
The Plan is a defined contribution plan which covers all employees of the
Bank who are employed on a full-time basis, provided such employee has
attained the age of 21, has completed a period of service of one year, as
defined, and is classified as a salaried employee or as an hourly-paid
employee regularly scheduled to complete at least 870 hours of service in a
plan year, as defined, with the Bank. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
Members may direct contributions made by or for them to be applied to all or
any investment funds in 1% increments. A member is 100% vested at all times
for his salary deferred contributions and related earnings and losses. The
employer's contributions made to a member's account are vested 20% after one
year of service; 40% after two years of service; 60% after three years of
service; 80% after four years of service; and 100% after five years of
service.
The Bank has agreed to match the employees' contributions to the trust in an
amount equal to 90% of a certain percentage of each member's salary deferred
contributions as established by the Bank from time to time, up to a maximum
of 5.4%. Member contributions are limited to the lesser of 11% of the
member's compensation, as defined, or such amount permissible under the
Internal Revenue Code (the Code). All contributions are paid to the
investment manager by the Bank.
After a member's separation from service with the Bank for any reason
(retirement, termination, etc.), the vested portion of his account shall be
distributed as a cash lump-sum payment. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's vested
account. If the Plan were terminated, however, all members of the Plan would
automatically become 100% vested in their fund balances.
Although the Bank has not expressed an intent to terminate the Plan, it may
do so at any time by action of its Board of Directors.
<PAGE>
4
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(K) PLAN
Notes to Financial Statements, Continued
(3) FORFEITURES
Forfeitures arising from the termination of members who were not fully vested
shall be used by the Bank to reduce its contributions.
(4) FEDERAL INCOME TAXES
The Internal Revenue Service (IRS) issued its latest determination letter on
May 6, 1996 which stated that the Plan and its underlying trust qualify under
the applicable provisions of the Code and, therefore, are exempt from Federal
income taxes. In the opinion of the Plan's trustees, the Plan and its
underlying trust have operated within the terms of the Plan and remain
qualified under the applicable provisions of the Code.
(5) INVESTMENTS
The following is a summary of individual investments that represent 5% or
more of net assets available for benefits at December 31, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Core Equity Fund $ 616,414 413,323
Emerging Growth Equity Fund 182,522 148,524
Short-Term Investment Fund 310,433 117,969
Intermediate-Term Bond Fund 193,718 176,808
Actively Managed Bond Fund 226,520 224,132
Employer Stock Fund 1,909,986 695,191
</TABLE>
(6) LOANS RECEIVABLE
Participants may borrow from their fund accounts at a minimum of $1,000 up to
a maximum equal to the lesser of $50,000, reduced by the highest outstanding
loan balance during the preceding twelve months or 50% of the net value of
their account balance. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates. Principal and interest is paid ratably through bi-weekly
payroll deductions.
(7) MANAGEMENT FEES
Costs of management services rendered on behalf of the Plan were paid by the
Bank for the years ended December 31, 1997 and 1996.
<PAGE>
Schedule 1
----------
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(k) PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
Current
Description Cost value
----------- ---- -------
<S> <C> <C>
RSI Core Equity Fund $ 395,986 $ 616,414
RSI Emerging Growth Equity Fund 138,689 182,522
RSI Value Equity Fund 80,742 113,748
RSI International Equity Fund 18,853 19,305
RSI Short-Term Investment Fund 290,628 310,433
RSI Intermediate-Term Bond Fund 161,942 193,718
RSI Actively Managed Bond Fund 180,485 226,520
Employer Stock Fund 539,258 1,909,986
Cash and cash equivalents 615 615
Loans receivable 148,545 148,545
----------- ------------
$ 1,955,743 $ 3,721,806
=========== ============
</TABLE>
<PAGE>
Schedule 2
TRENTON SAVINGS BANK
EMPLOYEE'S THRIFT/401(k) PLAN
Item 27(d)--Schedule of Reportable Transactions
Year ended December 31, 1997
Purchases and Sales
-------------------
<TABLE>
<CAPTION>
Number Net Purchase
of Units Cost Proceeds Gain (Loss) Price
<S> <C> <C> <C> <C> <C>
Core Equity Fund Various $ 60,832 92,041 31,209 182,920
Actively Managed Bond Fund Various 87,837 96,214 8,377 ------
Employer Stock Fund Various 88,991 205,293 116,302 155,024
Marine Midland Short-
Term Investment Fund Various ------ ------- ------- 181,509
RSI Short-Term Investment
Fund Various ------ ------- ------- 233,677
======= ====== ======= ======= =======
</TABLE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRENTON SAVINGS BANK, FSB
401(k) PROFIT SHARING PLAN
Marine Midland Bank, as Trustee
Date: By: /s/ Joseph M. Rizzuto
--------------------------------
Title: Vice President
