{"id":479008,"date":"2021-04-20T09:38:55","date_gmt":"2021-04-20T13:38:55","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/c-o-r-r-e-c-t-i-o-n-peoples-bancorp-inc\/"},"modified":"2021-04-20T09:38:55","modified_gmt":"2021-04-20T13:38:55","slug":"c-o-r-r-e-c-t-i-o-n-peoples-bancorp-inc","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/c-o-r-r-e-c-t-i-o-n-peoples-bancorp-inc\/","title":{"rendered":"\/C O R R E C T I O N — Peoples Bancorp Inc.\/"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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Please be advised that this version of Peoples Bancorp Inc.’s First Quarter 2021 Earnings Release replaces the prior version issued at 6:00 a.m. EDT<\/span> on April 20, 2021<\/span>. The prior version released included inaccuracies in certain reported amounts throughout the document, which have been corrected in this version.<\/p>\n

Peoples Bancorp Inc. Announces First Quarter 2021 Results<\/h3>\n

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\n MARIETTA, Ohio<\/span>, April 20, 2021<\/span> \/PRNewswire\/ —\u00a0Peoples Bancorp Inc. (“Peoples”) (Nasdaq: PEBO) today announced results for the three months ended March\u00a031, 2021.\u00a0 Peoples reported net income of $15.5 million<\/span> for the first quarter of 2021, representing earnings per diluted common share of $0.79<\/span>.\u00a0 In comparison, Peoples recognized earnings per diluted common share of $1.05<\/span> for the fourth quarter of 2020 and a loss per diluted common share of $0.04<\/span> for the first quarter of 2020.\u00a0 <\/p>\n

Non-core items, and the related tax effect of each, contained in net income (loss) included gains and losses on investment securities and asset disposals and other transactions, acquisition-related expenses, pension settlement charges, severance expenses, COVID-19-related expenses and a contribution to Peoples Bank Foundation, Inc.\u00a0 Non-core items negatively impacted earnings per diluted common share by $0.11<\/span> for the first quarter of 2021, $0.07<\/span> for the fourth quarter of 2020, and $0.02<\/span> for the first quarter of 2020.\u00a0 <\/p>\n

“The year is off to a great start,” said Chuck Sulerzyski<\/span>, President and Chief Executive Officer.\u00a0 “We believe the economy is improving, which is reflected in our results for the quarter.\u00a0 We also announced two acquisitions at the end of the quarter that aligns with our strategy to deploy capital in a prudent manner.\u00a0 North Star Leasing joined Peoples as of April 1, 2021<\/span> and will meaningfully add to our net interest income and margin.\u00a0 When completed, the Premier Financial Bancorp deal is expected to provide a natural extension of our existing markets, as well as entry into attractive markets within Virginia<\/span>, Maryland<\/span> and Washington, D.C.<\/span>“<\/p>\n

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\n Acquisition Announcements:
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\n <\/b>On March 29, 2021<\/span>, Peoples and Premier Financial Bancorp, Inc. (“Premier”), jointly announced the signing of a definitive agreement and plan of merger (the “Merger Agreement”) pursuant to which Peoples will acquire, in an all-stock merger, Premier, a bank holding company headquartered in Huntington, West Virginia<\/span>, and the parent company of Premier Bank, Inc. (“Premier Bank”) and Citizens Deposit Bank & Trust, Inc. (“Citizens”).\u00a0 Under the terms of the Merger Agreement, Premier will merge with and into Peoples (the “Merger”), and Premier Bank and Citizens will subsequently merge with and into Peoples’ wholly owned subsidiary, Peoples Bank, in a transaction valued at approximately $292.3 million<\/span>. The merger is expected to close during the third quarter of 2021, subject to the satisfaction of customary closing conditions, including regulatory approvals and the approval of the shareholders of Peoples and Premier.\u00a0 At that time, the financial services offices of Premier Bank and Citizens will become branches of Peoples Bank.<\/p>\n

Peoples Bank entered into an Asset Purchase Agreement, dated March 24, 2021<\/span> (the “Asset Purchase Agreement”), with NS Leasing, LLC, which is headquartered in Burlington, Vermont<\/span>, and does business as “North Star Leasing” (“NSL”). Peoples Bank acquired assets comprising NSL’s equipment finance business and assumed from NSL certain specified liabilities for total consideration of approximately $116.6 million<\/span>, plus a potential earnout payment to NSL of up to $3.1 million<\/span>. Peoples Bank acquired approximately $84 million<\/span> in leases and satisfied, on behalf of NSL, certain third-party debt in the amount of approximately $69.1 million<\/span>. NSL originates, underwrites and services equipment leases to businesses throughout the United States<\/span>. The transaction closed after the end of business on March 31, 2021<\/span> and Peoples Bank began operating the acquired business as a division of Peoples Bank on April 1<\/span>, 2021.\u00a0 Consideration totaling $116.6 million<\/span> related to the purchase price was reflected in other assets as of March 31, 2021<\/span>.<\/p>\n

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\n COVID-19:
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\n <\/b>The income statement and balance sheet results as of and for the three months ended March 31, 2021<\/span> continued to be affected by ongoing developments related to COVID-19, the reactions of government authorities, individuals and businesses, and the impact on the economy, specifically in Peoples’ market area.\u00a0 Many of the limitations imposed by state and local governments were largely removed during the first quarter of 2021; however, the impact caused by the previous closures continued to significantly impact the economy during the first quarter of 2021.\u00a0 The Board of Governors of the Federal Reserve System (“Federal Reserve Board”) maintained the Federal Funds interest rate effective target range at 0.00% to 0.25% during the first quarter of 2021.\u00a0 Additionally, the London Interbank Offered Rate (“LIBOR”) and the prime rate both remained historically low throughout the first quarter of 2021, which impacted results for the quarter.<\/p>\n

The federal government’s passage of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act resulted in the creation of the Paycheck Protection Program (“PPP”) targeted to provide small businesses with financial support to cover payroll and certain other specific types of expenses for a specified period of time. Loans made under the PPP are fully guaranteed by the SBA and, therefore, carry no related allowance for credit losses.\u00a0 These loans earn 1% interest, and participating banks receive an origination fee of between 1% and 5%, based on the size of the PPP loan. An extension of this economic relief occurred with the enactment of the Consolidated Appropriations Act, 2021 in December 2020.\u00a0 As of March\u00a031, 2021, Peoples had $349.9 million<\/span> aggregate principal amount in PPP loans outstanding, which were included in commercial and industrial loan balances, compared to $366.9 million<\/span> at December\u00a031, 2020.\u00a0 During the first quarter of 2021, Peoples received forgiveness payments from the SBA of $155.7 million<\/span> on previously originated PPP loans and originated new PPP loans in the aggregate principal amount of $130.8 million<\/span>.\u00a0 Peoples recognized interest income on deferred loan fees\/costs of $4.7 million<\/span> and $3.7 million<\/span> during each of the first quarter of 2021 and fourth quarter of 2020, along with $869,000<\/span> and $1.1 million<\/span> of interest earned on PPP loans during the first quarter of 2021 and fourth quarter of 2020, respectively.\u00a0 At March\u00a031, 2021, Peoples had $9.3 million<\/span> in net deferred loan fees\/costs to recognize over the remaining terms of the PPP loans.\u00a0 <\/p>\n

Interest income continued to be negatively impacted by the reduction in interest rates by the Federal Reserve Board in 2020 and maintaining such reduction during the first quarter of 2021.\u00a0 Additionally, variable rate commercial loans that are subject to changes in the LIBOR and the prime rate were adjusted downward in 2020 and remained low in the first quarter of 2021, which caused interest income and net interest margin to remain at low levels.\u00a0 The impact of increased prepayment speeds within Peoples’ investment securities portfolio on interest income was partially reduced during the first quarter of 2021 due to efforts to reposition the portfolio.\u00a0 These factors, which served to reduce interest income, were offset partially by the PPP loan activity in the first quarter of 2021, coupled with the impact of the premium finance acquisition in the third quarter of 2020.<\/p>\n

Individuals, families and certain businesses benefited from the Consolidated Appropriations Act, 2021, with many receiving an economic stimulus payment directly from the federal government early in the first quarter of 2021.\u00a0 Congress passed legislation in March 2021<\/span> establishing a third stimulus package, which began disbursement to individuals and families during the latter half of the month.\u00a0 Unemployment benefits continued in the form of a federal subsidy of $300<\/span> per week for individuals who had been displaced due to business closures or layoffs during the first quarter of 2021.\u00a0 The various stimulus payments provided by the government have led to an overall increase in deposit balances and decreased line of credit utilization. <\/p>\n

Peoples incurred non-core non-interest expenses as a result of COVID-19.\u00a0 COVID-19-related expenses recognized during the first quarter of 2021 were $292,000<\/span>, and were primarily related to the purchase of a computer software application used in assisting clients with the PPP application and forgiveness process, providing Peoples’ employees meals in support of local businesses, assisting employees with childcare and elder care needs, as well as taking extra precautions in cleaning facilities.\u00a0 COVID-19-related expenses recognized in the fourth quarter of 2020 of $125,000<\/span> were primarily in the form of a donation to a local hospital and assisting employees with childcare and elder care needs, as well as the taking extra precautions in cleaning facilities.<\/p>\n

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\n Peoples Premium Finance:
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\n <\/b>Effective July 1, 2020<\/span>, Peoples closed on the business combination under which Peoples Bank acquired the operations and assets of Triumph Premium Finance (“TPF”), a division of TBK Bank, SSB.\u00a0 Based in Kansas City, Missouri<\/span>, the division operating as Peoples Premium Finance provides insurance premium financing loans for commercial customers to purchase property and casualty insurance products through Peoples Premium Finance’s growing network of independent insurance agency partners nationwide. Peoples Bank acquired $84.4 million<\/span> in loans at the acquisition date, after fair value adjustments.\u00a0 Peoples also recorded $4.3 million<\/span> of other intangible assets and $5.5 million<\/span> of goodwill related to the acquisition. As of March\u00a031, 2021, Peoples Premium Finance loans had grown to $110.6 million<\/span>.\u00a0 <\/p>\n

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\n Statement of Operations Highlights:<\/u>
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