SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
------------------
(MARK ONE)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: O-13653
THE PEOPLES BANCTRUST COMPANY, INC.
-----------------------------------
(Exact name of registrant as specified on its charter)
Alabama 63-0896239
------------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
310 Broad Street, Selma, Alabama 36701
---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
(334) 875-1000
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter time 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
As of the close of business on August 7, 2000, 5,148,138 shares of the
registrant's Common Stock, par value $.10 per share, were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE PEOPLES BANCTRUST COMPANY, INC., SELMA, ALABAMA
CONDENSED CONSOLIDATED BALANCE SHEETS
In Thousands
June 30, 2000 December 31, 1999
------------- -----------------
(Unaudited)
ASSETS:
Cash and due from banks $ 23,179 $ 39,809
Federal funds sold and securities purchased
under agreement to resell 4,312 4,663
--------- ---------
Total cash and cash equivalents 27,491 44,472
Securities available-for-sale 116,893 119,559
Loans, net of unearned income 453,020 436,732
Allowance for loan losses (5,557) (5,333)
--------- ---------
Net loans 447,463 431,399
Bank premises and equipment, net 14,510 13,880
Intangible assets 8,603 8,997
Other real estate, net 1,022 876
Other assets 12,858 10,160
--------- ---------
Total assets $ 628,840 $ 629,343
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Noninterest-bearing deposits $ 67,396 $ 68,056
Interest-bearing deposits 429,252 421,285
--------- ---------
Total deposits 496,648 489,341
Federal funds purchased and securities sold
under agreements to repurchase 8,381 34,789
Other borrowed funds 58,176 42,104
Other liabilities 6,326 5,204
--------- ---------
Total liabilities 569,531 571,438
Common stock 515 515
Additional paid-in-capital 5,651 5,651
Accumulated other comprehensive loss, net of
tax (2,216) (1,647)
Retained earnings 55,359 53,386
--------- ---------
Total stockholders' equity 59,309 57,905
--------- ---------
Total liabilities and stockholders' equity $ 628,840 $ 629,343
========= =========
See Notes to the Unaudited Condensed Consolidated Financial Statements
2
<PAGE>
THE PEOPLES BANCTRUST COMPANY, INC., SELMA, ALABAMA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
In Thousands, except share and per share data
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
Income Statement 2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest and fees on loans $ 10,745 $ 8,693 $ 20,855 $ 16,877
Interest and dividends on investment securities 1,815 1,980 3,631 3,984
Other interest income 112 98 227 297
----------- ----------- ----------- -----------
Total interest income 12,672 10,771 24,713 21,158
Interest on deposits 4,962 3,899 9,517 7,851
Interest on borrowed funds 741 574 1,470 995
----------- ----------- ----------- -----------
Total interest expense 5,703 4,473 10,987 8,846
----------- ----------- ----------- -----------
Net interest income 6,969 6,298 13,726 12,312
Provision for loans losses 849 848 1,565 1,580
----------- ----------- ----------- -----------
Net interest income after provision for loan
losses 6,120 5,450 12,161 10,732
Net securities (losses) gains -- 122 (24) 162
Other noninterest income 1,646 1,913 3,458 3,470
Noninterest expense 5,505 5,375 11,199 10,724
----------- ----------- ----------- -----------
Income before provision for income taxes 2,261 2,110 4,396 3,640
Provision for income taxes 768 724 1,496 1,208
----------- ----------- ----------- -----------
Net income $ 1,493 $ 1,386 $ 2,900 $ 2,432
=========== =========== =========== ===========
Basic weighted average number of shares 5,148,138 5,148,138 5,148,138 5,148,138
Diluted weighted average number of shares 5,149,354 5,150,700 5,149,354 5,151,467
Basic net income per share $ 0.29 $ 0.27 $ 0.56 $ 0.47
Diluted net income per share $ 0.29 $ 0.27 $ 0.56 $ 0.47
Dividends per share $ 0.09 $ 0.085 $ 0.18 $ 0.17
</TABLE>
See Notes to the Unaudited Condensed Consolidated Financial Statements
3
<PAGE>
THE PEOPLES BANCTRUST COMPANY, INC., SELMA, ALABAMA
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
In Thousands In Thousands
(Unaudited) (Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
------------------------------- ------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 1,493 $ 1,386 $ 2,900 $ 2,432
Other Comprehensive income:
Unrealized gains (losses) on securities
available for sale during the period 138 (1,635) (886) (2,705)
Less: reclassification adjustment for net
gains (losses) included in net income -- 122 (24) 162
----------- --------------- ------------ -------------
Other comprehensive income (loss) 138 (1,757) (862) (2,867)
Income tax provision (benefit) related to items
of other comprehensive income (loss) 47 (562) (293) (918)
----------- --------------- ------------ -------------
Other comprehensive income (loss), net of tax 91 (1,195) (569) (1,949)
----------- --------------- ------------ -------------
Comprehensive income, net of tax $ 1,584 $ 191 $ 2,331 $ 483
=========== =============== ============ =============
</TABLE>
See Notes to the Unaudited Condensed Consolidated Financial Statements
4
<PAGE>
THE PEOPLES BANCTRUST COMPANY, INC., SELMA, ALABAMA
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
In Thousands
(Unaudited)
Six Months Ended June 30,
-------------------------
2000 1999
---- ----
Net cash provided by operating activities $ 3,330 $ 4,763
Cash flows from investing activities
Proceeds from sales of available-for-sale securities 6,354 21,703
Proceeds from maturity and call of available-for-sale
securities 1,450 14,650
Purchases of available-for-sale securities (6,066) (30,631)
Net increase in loans (16,447) (27,931)
Purchases of bank premises and equipment (1,809) (3,015)
Proceeds from sale of bank premises and equipment -- 354
Investment in other real estate and equipment -- (461)
Proceeds from sale of other real estate 230 230
Investment in low income housing projects (67) (66)
-------- --------
Net cash used in investing activities (16,355) (25,167)
-------- --------
Cash flows from financing activities
Increase in deposits 7,307 10,880
Net (decrease) increase in borrowed funds (10,336) 7,508
Dividends paid (927) (875)
-------- --------
Net cash (used) in provided by financing activities (3,956) 17,513
-------- --------
Net decrease in cash and cash equivalents (16,981) (2,891)
Cash and cash equivalents beginning of year 44,472 36,267
-------- --------
Cash and cash equivalents end of period $ 27,491 $ 33,376
======== ========
Cash paid for interest $ 10,867 $ 8,804
Cash paid for income taxes $ 1,300 $ 1,200
See Notes to the Unaudited Condensed Consolidated Financial Statements
THE PEOPLES BANCTRUST COMPANY, INC. AND SUBSIDIARY
Notes to the Unaudited Condensed Consolidated Financial Statements (Unaudited)
Accounting Policies:
The accompanying unaudited consolidated financial statements of The Peoples
BancTrust Company, Inc, (the "Company") and its subsidiary, The Peoples Bank and
Trust Company ("Peoples Bank"), have been prepared in accordance with generally
accepted accounting principles for interim information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included. The results of operations are not
necessarily indicative of the results of operations
5
<PAGE>
for the full year or any other interim periods. For further information refer to
the consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year-ended December 31, 1999.
Commitments and Contingencies:
The Company and its subsidiaries are from time to time defendants in legal
actions arising from normal business activities. Management does not anticipate
that the ultimate liability arising from litigation outstanding at June 30,
2000, will have a materially adverse effect on the Company's financial
statements.
Derivatives and Hedging Activities:
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133"). SFAS 133, effective for all fiscal quarters
of fiscal years beginning after June 15, 1999, establishes accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts, by requiring that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. It also establishes the
condition under which a derivative should be designated as hedging a specific
type of exposure and requires the company to establish at the inception of the
hedge the method and measurement approach used to assess its effectiveness.
SFAS 133 as amended by SFAS 137, is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. The Company does not believe the adoption
of SFAS 133 will have a significant impact on its financial statements and
disclosures, as it does not currently possess any derivative instruments.
6
<PAGE>
Earnings Per Share:
The following table reflects the reconciliation of the numerator and
denominator of the basic EPS computation to the diluted EPS computation for the
three months and six months ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>
(In thousands, except for per share data)
2000
----------------------------------------------------------------
Basic Diluted
Q-T-D Y-T-D Q-T-D Y-T-D
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net income $ 1,493 $ 2,900 $ 1,493 $ 2,900
Average shares outstanding 5,148 5,148 5,148 5,148
Effect of dilutive securities stock
options 1 1
--------- ---------
Diluted average shares outstanding 5,149 5,149
Earnings per share:
Net income $ 0.29 $ 0.56 $ 0.29 $ 0.56
1999
----------------------------------------------------------------
Basic Diluted
Q-T-D Y-T-D Q-T-D Y-T-D
----- ----- ----- -----
Net income $ 1,386 $ 2,432 $ 1,386 $ 2,432
Average shares outstanding 5,148 5,148 5,148 5,148
Effect of dilutive securities stock
options 3 3
--------- ---------
Diluted average shares outstanding 5,151 5,151
Earnings per share:
Net income $ 0.27 $ 0.47 $ 0.27 $ 0.47
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
GENERAL
The following analysis focuses on the financial condition and results of
operations of The Peoples BancTrust Company, Inc. (the "Company"), and should be
read in conjunction with the consolidated financial statements included in this
report.
Management's discussion and analysis includes certain forward-looking statements
addressing, among other things, the Company's prospects for earnings, asset
growth and net interest margin. Forward-looking statements are accompanied by,
and identified with, such terms as "anticipates," "believes," "expects,"
"intends," and similar phrases. Management's expectations for the Company's
future necessarily involve a number of assumptions and estimates. Factors that
could cause actual results to differ from the expectations expressed herein
include: substantial changes in interest rates and changes in the general
economy, as well as changes in the Company's strategies for credit-risk
management, interest-rate risk management and investment activities.
Accordingly, any forward-looking statements included herein do not purport to be
predictions of future events or circumstances and may not be realized.
FINANCIAL CONDITION
LOANS
Loans, net of unearned income, rose $16,288,000 to $453,020,000 at June 30,
2000, from $436,732,000 at December 31, 1999. Strong real estate loan demand was
the primary reason for this increase.
INVESTMENTS
Total investment securities were $116,893,000 at June 30, 2000 as compared to
$119,559,000 on December 31, 1999. This represents a decrease of $2,666,000.
This decrease is primarily the result of shifting funds out of the investment
portfolio so as to make them available for deployment in the higher yielding
loan portfolio.
At year-end 1999, and at June 30, 2000, the entire investment portfolio was
classified as "available-for-sale", resulting in the portfolio being
marked-to-market. At December 31, 1999, the portfolio had a net unrealized loss
(net of taxes) of $1,647,000 as compared to a net unrealized loss (net of taxes)
of $2,216,000 at June 30, 2000. This increase in the net unrealized loss (net of
taxes)was primarily the result of rising interest rates between December 31,
1999 and June 30, 2000, which caused reductions in the market value of fixed
rate bonds during this period.
SHORT-TERM INVESTMENTS
Short-term investments totaled $4,312,000 at June 30, 2000 as compared to
$4,663,000 at December 31, 1999, a decrease of $351,000. Short-term investments
are comprised of federal funds sold, and securities purchased under agreements
to resell.
ALLOWANCE FOR LOAN LOSSES
Management's estimate of the uncollectable loans within the Company's loan
portfolio is represented by the allowance for loan losses. The allowance for
loan losses is established through charges to earnings in the form of a
provision for loan losses. A loan is charged against the allowance for loan
losses when management determines that it is probable that the repayment of the
principal amount of a loan will not be made in accordance with the loan's terms.
Should a loan that has been charged off be recovered, either partially or
entirely, it is credited back to the allowance. Periodic reviews of the loan
portfolio, that include analysis of such factors as current and expected
economic conditions, historical loss experience and levels of non-accruing loans
and delinquencies, determine the appropriate level at which to maintain the
allowance for loan losses. Because the allowance is based on assumptions and
subjective judgements, it is not necessarily reflective of the charge-offs that
may ultimately occur.
8
<PAGE>
At June 30, 2000, the Company's allowance for loan losses had a balance of
$5,557,000 as compared to $5,333,000 at December 31, 1999. As a result, the
ratio of the allowance to total loans net of unearned income was 1.23% and 1.22%
at June 30, 2000 and December 31, 1999, respectively. Loans requiring special
attention because of potential weaknesses fell from $8,180,000 at December 31,
1999, to $7,987,000 at June 30, 2000. As a percentage of total loans net of
unearned interest, non-accruing loans decreased to 0.42% at June 30, 2000, as
compared to 0.65% at December 31, 1999. The coverage of the allowance to
non-accruing loans was 291% and 188% at June 30, 2000 and December 31, 1999,
respectively. The current level of allowance for loan losses exceeds the minimum
requirements set forth by regulatory authorities. It is management's belief
that, at its current level, the allowance for loan losses is sufficient to
absorb any potential losses currently existing in the Company's loan portfolio.
DEPOSITS
At June 30, 2000, total deposits had increased to $496,648,000, or $7,307,000,
from a December 31, 1999 total of $489,341,000. Noninterest-bearing deposits
decreased $660,000, while interest-bearing deposits increased $7,967,000 during
this period.
LIQUIDITY
Liquidity describes the Company's ability to meet its needs for cash. Those
needs primarily include lending, withdrawal demands of customers and the payment
of operating expenses. The liability base provides liquidity through deposit
growth, the rollover of maturing deposits and accessibility to external sources
of funds, ("Borrowed funds").
From time to time, the Company deploys short-term borrowed funds. At June 30,
2000, short-term borrowings in the form of federal funds purchased and
securities sold under agreement to repurchase totaled $8,381,000, as compared to
$34,789,000 at December 31, 1999. This significant reduction in the amount of
short-term borrowings is due to the Company having repaid monies borrowed to
fund several large, short-term loans issued to customers at year-end, as well as
the repayment of funds borrowed related to the Company's year 2000 contingency
plan guidelines.
Other borrowed funds increased to $58,176,000 at June 30, 2000 from $42,104,000
at December 31, 2000. The balance of other borrowed funds is comprised of
borrowings from the Federal Home Loan Bank of Atlanta. This increase is the
result of funding loan growth that occurred between December 31, 1999 and June
30, 2000.
STOCKHOLDERS' EQUITY
Total stockholders' equity at June 30, 2000 was $59,309,000 compared to
$57,905,000 at December 31, 1999. This increase of $1,404,000 is accounted for
as follows: $2,900,000 year-to-date earnings, $927,000 common stock dividends
and $569,000 additional net unrealized loss on available-for-sale securities.
9
<PAGE>
Risk-based capital regulations require all bank holding companies and banks to
achieve and maintain a minimum total capital to risk-weighted assets ratio of
8.00%, at least half of which must be in the form of Tier 1 capital (consisting
of stockholders' equity less goodwill). The following table indicates the
Company's Tier 1 capital ratio and total capital ratio at June 30, 2000 were
11.57% and 12.81%, respectively. The Company maintained, at June 30, 2000, a
leverage ratio of Tier 1 capital to total assets of 8.79% compared to the
minimum regulatory standard of 4.00% required of the strongest companies and
banks. In addition, the table indicates that the ratios of the Company's
subsidiary bank, The Peoples Bank & Trust Co. ("Peoples Bank"), also exceed the
minimum requirements of the regulation.
<TABLE>
<CAPTION>
Risk-Based Capital Ratios & Leverage Ratios
As of June 30, 2000
--------------------------------------------------------------------
RISK-BASED CAPITAL RATIOS Dollars in Thousands
---------------------------------------
The Company Peoples Bank
----------------------------- ---------------------------
<S> <C> <C> <C> <C>
Tier 1 Capital $ 52,923 11.57% $ 53,109 11.68%
Tier 1 Capital - Minimum Required 18,294 4.00% 18,193 4.00%
----------------------------- ---------------------------
Excess $ 34,629 7.57% $ 34,916 7.68%
Total Capital $ 58,566 12.81% $ 58,667 12.90%
Total Capital - Minimum Required 36,587 8.00% 36,386 8.00%
----------------------------- ---------------------------
Excess $ 21,979 4.81% $ 22,281 4.90%
Net risk-weighted assets $ 457,340 $ 454,822
LEVERAGE RATIOS
---------------------------------------
Total Tier 1 Capital $ 52,923 8.79% $ 53,109 8.83%
Minimum Leverage Requirement 24,080 4.00% 24,057 4.00%
----------------------------- ---------------------------
Excess $ 28,843 4.79% $ 29,052 4.83%
Average Total Assets,
Net of all intangibles $ 601,997 $ 601,426
</TABLE>
10
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000, COMPARED TO THREE MONTHS ENDED JUNE 30, 1999
The Company's profitability, like that of many financial institutions, is
dependent to a large extent upon its net interest income. Simply stated, net
interest income is the difference between interest income on interest-earning
assets, such as loans and investments, and interest expense on interest-bearing
liabilities, such as deposits and borrowings.
Interest income for the second quarter of 2000 (the "2000 quarter") totaled
$12,672,000 compared to $10,771,000 for the same quarter of 1999 (the "1999
quarter"). The increase of $1,901,000 is due to both a rise in the average
balance of the Company's loan portfolio and in the yield earned thereon.
The 2000 quarter saw a decrease of $165,000 in investment income when compared
to the 1999 quarter. Interest income on investments totaled $1,815,000 for the
2000 quarter as opposed to $1,980,000 for the same period in 1999. A reduction
in the average volume of investment securities is the primary reason for this
decline.
Interest income from business loans totaled $2,910,000 for the 2000 quarter.
This represents an increase of $826,000 when compared to $2,084,000 of interest
income for the 1999 quarter. Increases in both the average volume and yield
earned on these loans contributed to the increase in income between the two
quarters.
Personal loan interest income decreased to $2,727,000 for the 2000 quarter from
$2,918,000 for the 1999 quarter. A decrease in the average volume of personal
loans during the 2000 quarter, as compared to the 1999 quarter, is largely the
cause for this $191,000 reduction.
Interest income earned on real estate loans totaled $4,831,000 for the 2000
quarter as compared to $3,458,000 for the 1999 quarter. This increase of
$1,373,000 between the 1999 quarter and the 2000 quarter is primarily the result
of a significant increase in the average balance of real estate loans held.
Interest paid on deposits totaled $4,962,000 for the 2000 quarter, as compared
to $3,899,000 for the 1999 quarter. Both average cost and average volume of
interest bearing deposits were higher in the 2000 quarter than in the 1999
quarter, thus resulting in the $1,063,000 increase in interest paid.
Non-interest income for the 2000 quarter totaled $1,646,000. For the 1999
quarter, non-interest income totaled $2,035,000. This decrease is primarily due
to lower deposit service charge income during the 2000 quarter than during the
1999 quarter.
Non interest expense increased $130,000 from the 1999 quarter to $5,505,000 for
the 2000 quarter. Non-interest expense for the 1999 quarter totaled $5,375,000.
Higher personnel and premises costs were the primary reasons for this increase
in non interest expense between the 1999 and 2000 quarters.
Income before taxes for the 2000 quarter was $2,261,000, compared to $2,110,000
for the 1999 quarter. Consequently, the provision for income taxes increased as
well. For the 2000 quarter, the provision for income taxes totaled $768,000 as
compared to $724,000 for the 1999 quarter. The resulting 2000 quarter net income
was $1,493,000, compared to net income for the 1999 quarter of $1,386,000.
Earnings per share for the 2000 quarter was $.29, compared to $.27 for the 1999
quarter.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000
Interest income for the six months ended June 30, 2000 totaled $24,713,000, an
increase of $3,555,000 from $21,158,000 for the same period in 1999. The average
volume of interest earning assets rose to $552,562,000 at June 30, 2000,
representing an increase of $54,455,000 over the June 30, 1999 level of
$498,107,000. The increase in average volume, along with an increase in average
annual yield, resulted in the increase in interest income. The average annual
yield on interest earning assets at June 30, 2000 was 8.91%, whereas for the
same period in 1999 it was 8.38%.
11
<PAGE>
Interest income on the Company's investment securities portfolio for the six
months ended June 30, 2000 totaled $3,631,000, which translates to an average
annual yield of 6.23%. For the six months ended June 30, 1999, income from
investment securities totaled $3,984,000, resulting in a 5.85% average annual
yield. The investment securities portfolio had an average volume at June 30,
2000 of $117,184,000, that when compared to the average volume for the same
period in 1999 of $136,283,000, explains the reduction in interest income, given
the aforementioned increase in average annual yield.
Interest income on the Company's loans totaled $20,855,000 for the six-month
period ended June 30, 2000. For the same period in 1999, interest income on
loans totaled $16,877,000. Average loans for the six months ended June 30, 2000
was $435,378,000 yielding a 9.63% average annual return. For the same period in
1999, average loans totaled $361,824,000, earning an average annual yield of
9.33%. The $3,978,000 increase in loan interest income is the result of both
higher average loan volume and higher average annual loan yields.
Interest expense on interest-bearing deposits for the six months ended June 30,
2000 totaled $9,517,000, with an average cost for these deposits of 4.44%. For
the same period in 1999, interest expense on deposits totaled $7,851,000, with
an average cost of 3.97%. The average balances of interest-bearing deposits for
the six months ended June 30, 2000 and 1999 were $431,470,000 and $395,805,000,
respectively. Both the increase in average deposit cost and average deposit
balances, attributed to the $1,666,000 increase in interest expense on deposits.
The resulting net interest income of the Company for six months ended June 30,
2000 totaled $13,726,000. This represents an increase of $1,414,000 over net
interest income for the same period in 1999 of $12,312,000. Net interest margin
for the Company at June 30, 2000 was 4.92%, whereas for the same period in 1999
it was 4.97%.
Provision for loan losses for the six months ended June 30, 2000 totaled
$1,565,000, as compared to $1,580,000 for the same period in 1999. The Company
experienced relatively favorable loan charge off activity during the six months
ended June 30, 2000. Given this, the Company was able to charge a lower
provision for loan losses against earnings. Provision for loan losses are
charges made against net interest income, and applied to the allowance for loan
losses. See "Financial Condition--Allowance for Loan Losses" above.
During the six months ended June 30, 2000, non-interest income totaled
$3,434,000, as compared to $3,632,000 for the same period in 1999. This $198,000
decrease is the result of lower deposit service charges during the first six
months of 2000, than was present during the same period in 1999.
Non interest expense for the six months ended June 30, 2000 totaled $11,199,000
as compared to $10,724,000 for the same period of 1999. The $475,000 increase is
primarily accounted for in additional personnel and facilities expenses
associated with the Company's ongoing market expansion.
For the six months ended June 30, 2000, income before taxes totaled $4,396,000,
compared to $3,640,000 for the same period in 1999. The income tax provision for
six months ended June 30, 2000 totaled $1,496,000, whereas for the same period
in 1999 it totaled $1,208,000. The resulting net income for the six months ended
June 30, 2000 totaled $2,900,000, compared to $2,432,000 for the same period in
1999.
IMPACT OF NEW ACCOUNTING STANDARDS
See Notes to the Unaudited Condensed Consolidated Financial Statements.
12
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest sensitivity is one measure of the vulnerability of earnings to changes
in the general level of interest rates. Whenever interest-earning assets reprice
to market interest rates at a different pace than interest-bearing liabilities,
interest income performance will be affected favorably or unfavorably during
periods of changes in general interest rates. Management is unable to predict
future changes in market rates and their impact on the Company's profitability.
Management believes, however, that the Company's current rate sensitivity
position is well matched, indicating the assumption of minimal interest rate
risk. Management does not believe there to have been any material shift in the
relationship between the maturity characteristics of interest-earning assets,
and interest-bearing liabilities since December 31, 1999, and, consequently, no
material change in interest rate risk exposure.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 11, 2000, the Company held its Annual Meeting of Shareholders at which
the following matters were considered and voted on:
Proposal I - Election of Directors
NOMINEES FOR WITHHELD
-------- --- --------
John Crear 4,487,925 10,384
Clyde B. Cox, Jr. 4,487,425 10,884
Arnold B. Dopson 4,487,536 10,773
Harry W. Gamble, Jr. 4,487,425 10,884
Ted M. Henry 4,487,425 10,884
Elam P. Holley, Jr. 4,486,536 11,773
Edith Morthland Jones 4,488,425 9,884
Richard P. Morthland 4,486,427 11,882
Thomas E. Newton 4,488,425 9,884
Walter Owens 4,488,425 9,884
David Y. Pearce 4,488,425 9,884
C. Ernest Smith 4,488,385 9,924
Julius E. Talton, Jr. 4,487,425 10,884
Daniel P. Wilbanks 4,488,425 9,884
There were no abstentions and 1,000 broker non-votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule (SEC use only)
(b) Not applicable.
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<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, thereunto duly authorized.
The Peoples BancTrust Company, Inc.
Date: August 10, 2000 /s/ Richard P. Morththland
------------------------------------
Richard P. Morthland
Chairman and Chief Executive Officer
Date: August 10, 2000 /s/ Andrew C. Bearden, Jr.
------------------------------------
Andrew C. Bearden, Jr.
Executive Vice President and Chief
Financial Officer
Date: August 10, 2000 /s/ Thomas P. Wilbourne
------------------------------------
Thomas P. Wilbourne
Assistant Vice President and
Assistant Treasurer
(Principal Accounting Officer)
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