<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File
June 30, 1995 Number 0-16772
PEOPLES BANCORP INC.
Incorporated - Ohio I.R.S. Identification
No. 31-0987416
138 Putnam Street
P. O. Box 738
Marietta, Ohio 45750
Telephone: (614) 373-3155
Indicate by check mark whether the registrant (1) has filed all
reports required by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 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
----------- -----------
Indicate the number of shares outstanding of each of the
issuer's class of Common Stock, as of August 1, 1995: 2,873,876.
Page 1 of 13 Pages
Exhibit Index Appears on Page 11
</PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1
The following Condensed Consolidated Balance Sheets,
Consolidated Income Statements, and Consolidated Statements of
Cash Flow of Peoples Bancorp Inc. (the "Company") and
subsidiaries, reflect all adjustments (which include only normal
recurring accruals) necessary to present fairly such information
for the periods and dates indicated. Since the following
condensed unaudited financial statements have been prepared in
accordance with instructions to Form 10-Q, they do not contain
all information and footnotes necessary for a fair presentation
of financial position in conformity with generally accepted
accounting principles. Operating results for the six months
ended June 30, 1995 are not necessarily indicative of the
results that may be expected for the year ending December 31,
1995. Changes in accounting adopted during 1995 can be found in
footnotes accompanying the financial statements in the Form 10-Q
filed for the period ended March 31, 1995. Complete audited
consolidated financial statements with footnotes thereto are
included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1994.
</PAGE>
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
June 30, 1995 Dec. 31, 1994
ASSETS ------------- -------------
Cash and cash equivalents:
Cash and due from banks $16,412,000 $19,551,000
Interest-bearing deposits in
other banks 266,000 650,000
Federal funds sold 18,400,000 4,500,000
----------- -----------
Total cash and cash equivalents 35,078,000 24,701,000
Securities:
Available-for-sale, at estimated
fair value (amortized cost
of $104,592,000 and $91,783,000
at June 30, 1995 and
December 31, 1994, respectively) 107,025,000 90,172,000
Held-to-maturity, at amortized cost
(fair value of $10,206,000 and
estimated $9,089,000 at June 30,
1995 and December 31, 1994,
respectively) 10,018,000 9,247,000
----------- -----------
Total securities 117,043,000 99,419,000
Loans, net of unearned interest 366,201,000 361,353,000
Reserve for possible loan losses (6,681,000) (6,783,000)
----------- -----------
Net loans 359,520,000 354,570,000
Bank premises and equipment, net 10,703,000 10,807,000
Other assets 8,150,000 8,509,000
------------ ------------
Total assets $530,494,000 $498,006,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $46,079,000 $48,121,000
Interest bearing 391,324,000 355,698,000
----------- -----------
Total deposits 437,403,000 403,819,000
Short-term borrowings:
Federal funds purchased and
securities sold under
repurchase agreements 10,423,000 9,267,000
Federal Home Loan Bank term advances 4,716,000 10,500,000
----------- -----------
Total short-term borrowings 15,139,000 19,767,000
Long-term borrowings 22,450,000 23,787,000
Accrued expenses and other liabilities 5,567,000 4,998,000
----------- -----------
Total liabilities 480,559,000 452,371,000
STOCKHOLDERS' EQUITY
Common stock, no par value,
6,000,000 shares authorized.
3,023,998 shares issued and
2,881,456 shares outstanding as of
June 30, 1995; and 3,020,908 shares
issued and 2,899,938 shares
outstanding as of December 31, 1994 24,397,000 24,326,000
Net unrealized holding gain (loss)
on available-for-sale securities,
net of deferred taxes 1,606,000 (1,030,000)
Retained earnings 26,173,000 24,078,000
----------- -----------
52,176,000 47,374,000
Treasury stock, at cost,
142,542 shares as of June 30, 1995
and 120,970 shares as of
December 31, 1994 (2,241,000) (1,739,000)
----------- -----------
Total stockholders' equity 49,935,000 45,635,000
------------ ------------
Total liabilities and
stockholders' equity $530,494,000 $498,006,000
============ ============
</PAGE>
<PAGE>
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
------------------------ -------------------------
Interest income $10,780,000 $8,645,000 $20,879,000 $17,142,000
Interest expense 5,228,000 3,654,000 9,844,000 7,274,000
----------- ----------- ----------- -----------
Net interest income 5,552,000 4,991,000 11,035,000 9,868,000
Provision for loan losses 310,000 248,000 595,000 440,000
Net interest income
after provision for ----------- ----------- ----------- -----------
loan losses 5,242,000 4,743,000 10,440,000 9,428,000
Other income 1,028,000 951,000 2,034,000 1,980,000
Gain on sale
of securities --- 45,000 --- 126,000
Other expenses 4,082,000 3,871,000 8,149,000 7,782,000
----------- ----------- ----------- -----------
Income before
income taxes 2,188,000 1,868,000 4,325,000 3,752,000
Federal income taxes 654,000 556,000 1,305,000 1,134,000
----------- ----------- ----------- -----------
Net income $1,534,000 $1,312,000 $3,020,000 $2,618,000
=========== =========== =========== ===========
Net income per share $0.53 $0.45 $1.04 $0.90
========== ========== ========== ==========
Weighted average shares
outstanding (primary) 2,897,662 2,907,719 2,902,297 2,908,582
========== ========== ========== ==========
Cash dividends declared $462,000 $406,000 $925,000 $812,000
========== ========== ========== =========
Cash dividend per share $0.16 $0.14 $0.32 $0.28
========== ========== ========== =========
</PAGE>
<PAGE>
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
1995 1994
----------- ------------
Cash flows from operating activities:
Net income $3,020,000 $2,618,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 595,000 440,000
Gain on sale of investment securities --- (126,000)
Depreciation and amortization 862,000 850,000
Decrease in interest receivable 216,000 76,000
Increase (decrease) in interest payable 372,000 (15,000)
Deferred income taxes (50,000) ---
Deferral of net loan origination (fees) costs (29,000) 46,000
Other, net (327,000) (152,000)
----------- -----------
Net cash provided by operating activities 4,659,000 3,737,000
=========== ===========
Cash flows from investing activities:
Purchases of available-for-sale securities (20,807,000) (14,101,000)
Purchases of held-to-maturity securities (1,230,000) (1,241,000)
Proceeds from sales of
available-for-sale securities --- 8,274,000
Proceeds from maturities of
available-for-sale securities 6,537,000 11,203,000
Proceeds from maturities of
held-to-maturity securities 485,000 252,000
Net decrease (increase) in credit
card receivables (69,000) (194,000)
Net increase in loans (5,035,000) (15,975,000)
Expenditures for premises and equipment (552,000) (198,000)
Proceeds from sales of other real estate owned 30,000 103,000
------------ -----------
Net cash used in investing activities (20,641,000) (11,877,000)
============ ===========
Cash flows from financing activities:
Net (decrease) increase in non-interest
bearing deposits (2,042,000) 40,000
Net increase in interest-bearing deposits 35,626,000 2,703,000
Net decrease in short-term borrowings (4,628,000) (955,000)
Proceeds from long-term borrowings --- 7,500,000
Payments on long-term borrowings (1,337,000) (2,534,000)
Cash dividends paid (829,000) (812,000)
Purchase of treasury stock (502,000) (214,000)
Proceeds from issuance of common stock 71,000 ---
----------- ----------
Net cash provided by financing activities 26,359,000 5,728,000
=========== ==========
Net increase (decrease) in cash and
cash equivalents 10,377,000 (2,412,000)
Cash and cash equivalents at beginning of year 24,701,000 28,323,000
----------- -----------
Cash and cash equivalents at end of period $35,078,000 $25,911,000
=========== ===========
</PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
SELECTED FINANCIAL DATA
The following data should be read in conjunction with the
unaudited consolidated financial statements and the management
discussion and analysis that follows.
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
------------------ ------------------
SIGNIFICANT RATIOS
Net income to:
Average assets* 1.17% 1.11% 1.18% 1.11%
Average shareholders' equity* 12.63% 11.71% 12.70% 11.90%
Net interest margin* 4.03% 4.20% 4.13% 4.20%
Average shareholders' equity
to average assets 9.29% 9.50% 9.27% 9.37%
Loans net of unearned interest
to deposits (end of period) 83.72% 86.89% 83.72% 86.89%
Reserve for loan losses to
loans net of unearned
interest (end of period) 1.82% 2.01% 1.82% 2.01%
Capital ratios:
Tier 1 capital ratio 13.24% 13.18% 13.24% 13.18%
Risk-based capital ratio 14.49% 14.43% 14.49% 14.43%
Leverage ratio 8.92% 9.09% 8.92% 9.09%
Cash dividends to net income 30.12% 30.95% 30.63% 31.02%
PER SHARE DATA
Book value per share $17.33 $15.39 $17.33 $15.39
Net income per share $0.53 $0.45 $1.04 $0.90
Cash dividends per share $0.16 $0.14 $0.32 $0.28
* Net income to average assets, net income to average
shareholders' equity, and net interest margin are presented on
an annualized basis.
</PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
The following should be read in conjunction with the attached
condensed consolidated financial statements and with the
Company's audited consolidated financial statements and notes
thereto for the year ended December 31, 1994.
RESULTS OF OPERATIONS
Peoples Bancorp's growth in earnings continued for the quarter
ended June 30, 1995. Net income for the second quarter of 1995
reached $1,534,000, a 16.9% increase from $1,312,000 in the
second quarter of 1994. As a result of the increased income,
quarterly earnings per share increased from $0.45 in 1994 to
$0.53 in 1995, or 17.8%. For the six months ended June 30,
1995, net income totaled $3,020,000, or $1.04 per share, up from
net income of $2,618,000 and earnings per share of $0.90 for the
same period last year.
The increase in net income can be attributed primarily to
increased net interest income. Second quarter net interest
income totaled $5,552,000 in 1995 compared to $4,991,000 in
1994, an 11.2% rise. Although net interest income increased,
net interest margin dropped to 4.03%, as interest rate pressures
remain a challenge to the financial services industry. The
Company continues to expand efforts to grow higher-yielding
assets such as loans, but aggressive pricing of the Company's
interest-bearing deposits during the first half of 1995 caused
modest narrowing of net interest margin. Management will
continue to monitor net interest margin and the effects it has
on the performance of the Company.
Due to the volatility and uncertainty of the interest rate
environment, the Company continues to focus on asset growth and
areas other than net interest income as methods for increasing
net income. Non-interest income totaled $1,028,000 for the
second quarter of 1995, an increase of $77,000 or 8.1% from the
same period last year. Several areas continue to enhance
income, as both trust revenue and cost recovery-based service
charges on deposit accounts provide the foundation for the
Company's non-interest income. In addition to deposit products
generating fee income for the Company, an agreement with an
unaffiliated annuities and life insurance company has also
generated non-interest income through the receipt of lease
payments. The Company expects this non-traditional source of
income to produce growth in revenue streams through the
remainder of 1995 and beyond.
The second quarter provision for loan loss totaled $310,000,
compared to $248,000 for the same period in 1994. Nonperforming
assets totaled just 0.29% of total assets at June 30, 1995, a
modest decrease from 0.35% at March 31, 1995, demonstrating the
high quality of the Company's loan portfolio at June 30, 1995.
In the second quarter of 1995, loan chargeoffs totaled $527,000
and recoveries were $146,000, which resulted in net chargeoffs
in the second quarter of $381,000, or 0.10% of average loans.
Management feels the quality of the Company's loan portfolio is
important and considers the net chargeoff ratio to be
acceptable. Included in 1994's recoveries were several
charged-off loans which were previously treated as
uncollectible, thereby not providing an accurate comparison of
chargeoff ratios. Management will continue to monitor the loan
portfolio to maintain appropriate reserves for all potential
loan losses.
Maintaining acceptable levels of non-interest expense is
important to the success of the Company. For the quarter ended
June 30, 1995, total non-interest expense was $4,082,000, a 5.5%
increase from last year's second quarter, but only a 0.4%
increase from first quarter 1995. The largest component of
non-interest expense remains employee wages and benefits, which
totaled $2,098,000 in the second quarter, an increase of 1.5%
compared to 1994's second quarter. The Company has focused on
controlling salaries and benefit expense while raising the level
of assets managed by its employees, particularly through the
increased use of enhanced technology.
Depreciation expense for the second quarter of 1995 totaled
$568,000 compared to $532,000 last year, reflecting the
scheduled depreciation of assets acquired during 1993
construction and rehabilitation of the downtown Marietta banking
facility and significant investment in technology. Management
will continue to focus on opportunities for operational
efficiencies while maintaining the highest quality service to
customers.
Income tax expense for the second quarter of 1995 totaled
$654,000, compared to $556,000 for the same period last year.
This increase can be attributed to higher pre-tax income and the
Company's decrease in tax-exempt income from $392,000 in second
quarter 1994 to $323,000 this year, a 17.6% decline.
Several ratios confirm the continued strong performance of the
Company. Return on average assets for the second quarter of
1995 totaled 1.17%, a rise of six basis points from the prior
year's same period. Return on average stockholders' equity
increased from 11.71% in second quarter 1994 to 12.63% in 1995.
The net unrealized holding gain on available-for-sale
securities, net of deferred taxes, was $1,606,000 at June 30,
1995, up significantly from $189,000 at March 31, 1995. Since
December 31, 1994, the net unrealized holding gain or loss on
available-for-sale securities has increased $2,636,000,
reflecting a solid increase in the fair value of these
securities.
On July 20, 1995, the Board of Directors of the Company
authorized the additional purchase of up to 10,000 shares for
the Company's treasury at prices not to exceed $23.50. In the
second quarter, the Company purchased 19,925 treasury shares for
a reduction in equity of $465,000. From January 1 to August 1,
1995, 30,855 treasury shares had been purchased for $719,000,
continuing a commitment to improve shareholder value. On July
1, 1995, the Company paid a quarterly dividend of $0.16 per
share, an increase of 14.3% compared to 1994's second quarter
per share dividend of $0.14. Total cash dividends declared in
the second quarter were $462,000, up 13.8% from last year's
second quarter amount of $406,000. For the six months ended
June 30, 1995, per share dividends totaled $0.32, an increase of
14.3% over last year. Total cash dividends declared were
$925,000 for the first half of 1995 compared to $812,000 last
year, 13.9% rise.
In recent news affecting the financial services industry, the
Federal Deposit Insurance Corporation (FDIC) on August 8, 1995
adopted a rule for reducing by 80% the premiums banks pay on
deposit insurance. Although not scheduled to recapitalize until
2007 at 1.25% of the industry's insured deposits, it has been
determined the Bank Insurance Fund (BIF) reached the designated
reserve ratio during the first half of 1995. The date of full
recapitalization will be determined by the FDIC later this year.
Although no final rulings have been made, the Company is aware
of this situation. If there are any refunds of excess FDIC
premiums paid or reduction in future premiums, the Company's
financial data will reflect any adjustments as appropriate.
The performance of the Company in 1995's second quarter has
slightly exceeded expectations. The interest rate environment
will play an important role in the future earnings of the entire
financial services industry and pressures on net interest income
and margin are expected to intensify throughout 1995.
Aggressive pricing of funding products, such as certificates of
deposits, in the first half of 1995 reflected the changing
interest rate environment and more competitive market for
customer deposits. Pressures on net interest margin constantly
challenge the entire banking industry, and management realizes
that successful management of the effect of these increased
interest rates will be vital to the overall performance of the
Company in 1995 and beyond. An asset/liability management team
meets on a periodic basis to review net interest income and
actively manages the risk associated with fluctuating interest
rates.
Enhanced non-interest income and controlled non-interest
expense are vital contributions to the success of the Company.
Second quarter results support the methods of maximizing the
performance and efficiency of the Company. Peoples Bancorp has
enhanced profits through larger dollar volume obtained by the
expansion of interest bearing deposits and the ensuing asset
growth. Although net interest margin has narrowed in 1995,
growth through increased volume activity in the first six months
has provided the Company increased earnings, and thus remains an
integral part of management's operating plan. When compared to
peer groups of financial institutions, management continues to
concentrate on return on equity and earnings per share as a
means to measure and direct the performance of the Company.
While past results are not an indication of future earnings,
management feels the Company is positioned to maintain
performance through the remainder of 1995 and into next year.
FINANCIAL CONDITION
Total assets increased from $516,962,000 at March 31, 1995 to
$530,494,000 at the end of the second quarter, a growth rate of
2.6%. Cash and cash equivalents reached $35,078,000 by June 30,
1995, a quarterly increase of $2,757,000. Management feels the
liquidity needs of the Company are satisfied by the increased
balance of cash and cash equivalents, readily available access
to non-traditional funding sources, and the portion of the
investment and loan portfolios that mature within one year.
These sources of liquid funds should enable the Company to meet
cash obligations and off-balance sheet commitments as they come
due.
The most significant area of asset growth in 1995 continues to
be investment securities, which have grown 8.4% since March 31,
1995 to $117,043,000. Total securities have increased 17.7%
since December 31, 1994. Securities classified as
held-to-maturity totaled $10,018,000 at June 30, down slightly
from March 31, 1995's balance of $10,229,000. Securities growth
occurred primarily in the available-for-sale classification,
which totaled $107,025,000 at June 30, 1995, a quarterly
increase of $9,232,000. Some of this increase can be attributed
to the recovery of market value of the available-for-sale
portfolio, which had a net unrealized gain of $2,433,000 at June
30, 1995, an increase of $2,146,000 since March 31, 1995. This
change in position is a result of a more favorable interest rate
environment as well as actions by the Company taken during the
fourth quarter of 1994, when Peoples Bancorp repositioned the
investment portfolio to take advantage of other investment
opportunities.
Continuing a trend that occurred throughout 1994 and early
1995, total loan balances grew to meet the expanding needs of
the markets served by the Company. Total loans net of unearned
interest at June 30, 1995 were $366,201,000, up from the prior
quarter-end balance of $365,304,000. The Company continues its
commitment to reinvest in the communities and markets it serves.
Recently a subsidiary of the Company, The First National Bank
of Southeastern Ohio, was awarded the highest rating possible of
"Outstanding" from federal regulators for successful efforts to
support community needs and comply with the Community
Reinvestment Act.
The Company consistently monitors the well-diversified loan
portfolio to maintain and emphasize high underwriting standards.
Non-performing assets as a percentage of total assets were
0.29% at June 30, 1995, a modest improvement from the prior
quarter's ratio of 0.35%, and continuing improvement from 0.42%
at December 31, 1994. Non-accrual loans decreased from $581,000
at March 31, 1995 to $382,000 at the end of the second quarter,
while loans 90 days or more past due totaled $1,024,000 at June
30, 1995, a quarterly decrease of $110,000.
On January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" (SFAS No. 114), which established new
reporting criteria for all creditors when accounting for the
impairment of certain loans. SFAS No. 114 requires that certain
impaired loans be measured based on the present value of
expected future cash flows, discounted at the effective interest
rate of the loan, or, as a practical expedient, the loan may be
valued at the fair value of the collateral if the loan is
collateral dependent. SFAS No. 114 does not apply to large
groups of smaller-balance homogeneous loans, such as mortgage
and consumer loans, which are evaluated collectively for
impairment. Because the majority of the Company's loan
portfolio is comprised of these types of homogeneous loans,
adoption of SFAS No. 114 was not material to the Company's
financial statements. The Company will continue to monitor the
status of any impaired loans, as well as performing loans, in
order to determine the appropriate reserve for potential loan
loss. Management considers the allowance for loan loss of 1.82%
of total loans at June 30, 1995 to be adequate.
In May 1995, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 122,
"Accounting for Mortgage Servicing Rights" (SFAS No. 122). SFAS
No. 122 amends SFAS No. 65 and requires financial institutions
to recognize as separate assets rights to service mortgage loans
for others, whether those rights were acquired through purchase
or through the origination and subsequent sale of loans with
servicing rights retained. SFAS No. 122 is to be applied
prospectively for years beginning after December 15, 1995, with
earlier application encouraged. Historically the Company has
experienced minimal secondary market action, therefore
management anticipates this adoption will be immaterial to the
Company's financial statements.
Asset growth during the second quarter as well as the first
half of 1995 was funded primarily through the expanded deposit
base of the Company. In the second quarter, total deposits grew
$9,507,000 or 2.2% to $437,403,000. The majority of growth was
generated from interest bearing deposit products, where balances
increased 2.5% to $391,324,000. In the second quarter, total
certificates of deposits and Individual Retirement Accounts
(IRA's) increased 2.6% to over $230 million (including $10
million in brokered certificates of deposit). The Company
experienced a change in the mix of its deposit base, as many
customers found the higher interest rates offered for
certificates of deposits to be attractive. In the first six
months of 1995, customers have moved some funds from
non-interest bearing and lower interest bearing products (such
as savings) to higher interest bearing deposits. As a result,
balances in non-interest deposits totaled $46,079,000 at June
30, 1995, a 4.2% decrease since December 31, 1994.
Throughout 1995, the Company's loan to deposit ratio has
modestly declined, due mostly to the expansion of the deposit
base during the first six months. At June 30, 1995, loan to
deposit ratio was 83.72%, down slightly from March 31's ratio of
85.37%, compared to 89.48% at December 31, 1994. Management
feels an acceptable loan to deposit ratio can be maintained
because loan demand continued to be strong in the first six
months of 1995.
In addition to traditional deposits, the Company continues to
access borrowings from the Federal Home Loan Bank (FHLB). This
allows the Company to obtain reliable funds at fixed and indexed
rates for longer periods of time than other traditional deposit
products, creating the opportunity to match longer term fixed
rate mortgages and other extended-maturity asset commitments
against a similar funding source. Principal paydowns on long
term advances from the FHLB during the second quarter resulted
in total long term FHLB borrowings of $20,760,000, a 2.4%
decrease from March 31, 1995. In addition to long term FHLB
advances, the Company currently holds $4,716,000 in short-term
advances from the FHLB. Management plans to maintain access to
FHLB borrowings as an appropriate funding source.
The Company's Asset/Liability Management (ALM) Committee meets
periodically to address liquidity issues, including the
management of the investment securities portfolio. The group
also monitors net interest income, sets pricing guidelines, and
manages interest rate risk for the Company. Through active
balance sheet management, the Company maintains sufficient
liquidity to satisfy depositor requirements and the various
credit needs of its customers.
The Company's capital continues to provide a strong base for
profitable growth. Stockholders' equity reached $49,935,000 at
June 30, 1995, a 4.8% increase from March 31, 1995, and a 9.4%
increase from year-end 1994. The primary reason for the
increase in stockholders' equity during the first half of 1995
was the adjustment for net unrealized holding gain on
available-for-sale securities, net of deferred taxes, which had
increased from a net unrealized holding loss (adjustment to
equity) of $1,030,000 at December 31, 1994, to a net unrealized
holding gain of $1,606,000 at the end of 1995's second quarter,
an increase of $2,636,000. Since the majority of securities in
the Company's portfolio are classified as available-for-sale,
both the investment and equity sections of the Company's balance
sheet are more sensitive to the changing fair values of
investments, as experienced in the first half of 1995.
Management feels the status of the investment markets do not
substantially affect the Company's equity, as it continues to
provide a strong base for expansion of operations as well as
potential for growth in both new and existing markets.
The Company has complied with the standards of capital adequacy
mandated by the banking industry. Bank regulators have
established "risk-based" capital requirements designed to
measure capital adequacy. Risk-based capital ratios reflect the
relative risks of various assets banks hold in their portfolios.
A weight category of either 0% (lowest risk assets), 20%, 50%,
or 100% (highest risk assets) is assigned to each asset on the
balance sheet. The Company's risk-based capital ratio of 14.49%
at the end of the second quarter represents a modest increase
from the prior quarter's ratio of 14.38%, and well above the
minimum standard of 8%. The Company's Tier 1 capital ratio of
13.24% also exceeded the regulatory minimum of 4%, and surpassed
first quarter 1995's ratio of 13.13%. The Leverage ratio at
June 30, 1995 was 8.92%, a modest decrease from March 31, 1995's
ratio of 9.00%, but still well above the minimum standard of 3%.
These ratios provide quantitative data demonstrating the
strength and future opportunities for use of the Company's
capital base. Management evaluates risk-based capital ratios
and the capital position of the Company as part of its strategic
decision process.
</PAGE>
<PAGE>
PART II
ITEM 1: Legal Proceedings.
None.
ITEM 2: Changes in Securities.
None.
ITEM 3: Defaults upon Senior Securities.
None.
ITEM 4: Submission of Matters to a Vote of Security Holders.
None.
ITEM 5: Other Information.
None.
ITEM 6: Exhibits and Reports on Form 8-K.
a) Exhibits.
11. Computation of Earnings Per Share.
27. Financial Data Schedule (electronic filing only).
b) Reports on Form 8-K.
None.
</PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunder duly authorized.
PEOPLES BANCORP INC.
Date: August 11, 1995 By: /s/ ROBERT E. EVANS
Robert E. Evans
President and Chief Executive Officer
Date: August 11, 1995 By: /s/ JOHN W. CONLON
John W. Conlon
Chief Financial Officer
</PAGE>
EXHIBIT 11
PEOPLES BANCORP INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Three Months Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
PRIMARY EARNINGS PER SHARE
EARNINGS:
Net income $1,534,000 $1,312,000 $3,020,000 $2,618,000
COMMON SHARES OUTSTANDING:
Weighted average common
shares outstanding 2,887,201 2,898,371 2,891,727 2,900,818
Add: Adjustment for
outstanding stock
options 10,461 9,348 10,570 7,764
---------- ---------- ---------- ----------
Subtotal 2,897,662 2,907,719 2,902,297 2,908,582
PRIMARY EARNINGS PER SHARE $0.53 $0.45 $1.04 $0.90
===== ===== ===== =====
FULLY DILUTED EARNINGS PER SHARE
EARNINGS:
Net income $1,534,000 $1,312,000 $3,020,000 $2,618,000
COMMON SHARES OUTSTANDING:
Weighted average common
shares outstanding 2,887,201 2,898,371 2,891,727 2,900,818
Add: Adjustment for
outstanding stock
options 10,461 10,383 10,570 10,338
---------- ---------- ---------- ----------
Subtotal 2,897,662 2,908,754 2,902,297 2,911,156
FULLY DILUTED EARNINGS
PER SHARE $0.53 $0.45 $1.04 $0.90
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the Form
10-Q filed as of June 30, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 16,412
<INT-BEARING-DEPOSITS> 266
<FED-FUNDS-SOLD> 18,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 107,025
<INVESTMENTS-CARRYING> 10,018
<INVESTMENTS-MARKET> 10,026
<LOANS> 366,201
<ALLOWANCE> 6,681
<TOTAL-ASSETS> 530,494
<DEPOSITS> 437,403
<SHORT-TERM> 15,139
<LIABILITIES-OTHER> 5,567
<LONG-TERM> 22,450
<COMMON> 24,397
0
0
<OTHER-SE> 25,538
<TOTAL-LIABILITIES-AND-EQUITY> 530,494
<INTEREST-LOAN> 16,751
<INTEREST-INVEST> 3,733
<INTEREST-OTHER> 3,395
<INTEREST-TOTAL> 20,879
<INTEREST-DEPOSIT> 8,809
<INTEREST-EXPENSE> 9,844
<INTEREST-INCOME-NET> 11,035
<LOAN-LOSSES> 595
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 8,149
<INCOME-PRETAX> 4,325
<INCOME-PRE-EXTRAORDINARY> 3,020
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,020
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 1.04
<YIELD-ACTUAL> 4.61
<LOANS-NON> 382
<LOANS-PAST> 1,024
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,698
<ALLOWANCE-OPEN> 6,783
<CHARGE-OFFS> 916
<RECOVERIES> 219
<ALLOWANCE-CLOSE> 6,681
<ALLOWANCE-DOMESTIC> 6,681
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
