Large
accelerated
filer
o
|
Accelerated
filer
x
|
Non-accelerated
filer
(Do
not check if a smaller reporting company)
o
|
Smaller
reporting company
o
|
o
|
various
interest-bearing and non-interest-bearing demand deposit
accounts
|
o
|
savings
accounts, money market accounts and certificates of
deposit
|
o
|
commercial,
consumer, and real estate mortgage loans (both commercial and
residential)
|
o
|
debit
cards
|
o
|
credit
cards through an affiliated marketing
agreement
|
o
|
corporate
and personal trust services
|
o
|
safe
deposit rental facilities
|
o
|
travelers
checks, money orders and cashier’s
checks
|
·
|
assess
civil money penalties;
|
·
|
issue
cease and desist or removal orders;
and
|
·
|
require
that a bank holding company divest subsidiaries (including its subsidiary
banks).
|
·
|
increasing
the deposit insurance limit for retirement accounts from $100,000
to
$250,000;
|
·
|
adjusting
the deposit insurance limits (currently $100,000 for most accounts)
every
five years based on an inflation index, with the first adjustment
to be
effective on January 1, 2011;
|
·
|
providing
pass-through deposit insurance for the deposits of employee benefit
plans
(but prohibiting undercapitalized depository institutions from accepting
employee benefit plan deposits);
|
·
|
allocating
an aggregate of $4.7 billion of one-time credits to offset the premiums
of
depository institutions based on their assessment based at the end
of
1996;
|
·
|
establishing
rules for awarding cash dividends to depository institutions, based
on
their relative contributions to the DIF and its predecessor funds,
when
the DIF reserve ratio reaches certain levels;
and
|
·
|
revising
the rules and procedures for risk-based premium
assessments.
|
·
|
limit
the extent to which a bank or its subsidiaries may engage in "covered
transactions" with any one affiliate to an amount equal to 10% of
that
bank's capital stock and surplus (i.e., tangible
capital);
|
·
|
limit
the extent to which a bank or its subsidiaries may engage in "covered
transactions" with all affiliates to 20% of that bank's capital stock
and
surplus; and
|
·
|
require
that all such transactions be on terms substantially the same, or
at least
as favorable to the bank or subsidiary, as those provided to a
non-affiliate.
|
·
|
"Tier
1," or core capital, includes common shareholders’ equity, minority
interests in certain equity accounts of consolidated subsidiaries
and a
limited amount of qualifying preferred stock and qualified trust
preferred
securities, less goodwill and certain other deductions including
intangible assets and net unrealized gains and losses after applicable
taxes on available-for-sale securities carried at fair
value.
|
·
|
"Tier
2," or supplementary capital, includes, among other things, certain
amounts of hybrid capital instruments, mandatory convertible debt,
subordinated debt, preferred stock not qualifying as Tier 1 capital,
loan
and lease loss allowance and net unrealized gains on certain
available-for-sale equity securities, all subject to limitations
established by the guidelines.
|
·
|
"Total
capital" is Tier 1 plus Tier 2
capital.
|
·
|
As
necessary monitor the integrity and effectiveness of Peoples Disclosure
Controls defined as processes which seek to achieve objectives of
(a)
reliability of financial reporting, (b) effectiveness and efficiency
of
the operations, and (c) compliance with applicable
laws.
|
·
|
Provide
a process of senior officer certifications on which the Chief Executive
Officer and Chief Financial Officer can rely in providing the
certifications required under Section 302 of the Sarbanes-Oxley Act
of
2002 to be filed with each Report.
|
·
|
Review
and approve for filing or release of Peoples’ (1) periodic and current
reports, proxy statements, information statements, registration statements
and any other information filed with the SEC, (2) press releases
containing financial information, earnings guidance, conference calls,
investment conference presentations, information about material
acquisitions or dispositions or other information material to Peoples’
security holders, and (3) correspondence and other communications
containing financial information disseminated to shareholders (broadly),
the investment public and employees (collectively, the “Disclosure
Statements”). Disclosure Statements, other than information filed with the
SEC and press releases containing financial information, that are
initiated or approved by the Chief Executive Officer or the Chief
Financial Officer may be presented to the Committee as soon as possible
after issuance for review and
ratification.
|
·
|
Review
and approve disclosure policies and other material connected to financial
information displayed on Peoples’ Web
site.
|
·
|
Discuss
with the Senior Officers as necessary all relevant information with
respect to the Committee’s proceedings, the preparation of the Disclosure
Statements and the Committee’s evaluation of the effectiveness of Peoples
Disclosure Controls.
|
·
|
Changes
in Interest Rates May Adversely Affect Peoples’
Profitability.
|
Peoples’
earnings
are dependent to a
significant degree on net interest income, which is the amount by
which
interest income exceeds interest expense. Interest rates are
highly sensitive to many factors that are beyond Peoples’ control,
including general economic conditions and policies of various governmental
and regulatory agencies and, in particular, the Federal Reserve
Board. Changes in monetary policy, including changes in
interest rates, could influence not only the interest Peoples receives
on
loans and securities and the amount of interest it pays on deposits
and
borrowings, but such changes could also affect (i) Peoples’ ability
to originate loans and obtain deposits, (ii) the fair value of
Peoples’ financial assets and liabilities, and (iii) the average
duration of Peoples’ mortgage-backed securities portfolio. If
the interest rates paid on deposits and other borrowings increase
at a
faster rate than the interest rates received on loans and other
investments, Peoples’ net interest income, and therefore earnings, could
be adversely affected. Earnings could also be adversely
affected if the interest rates received on loans and other investments
fall more quickly than the interest rates paid on deposits and other
borrowings.
|
Management uses various measures to monitor
interest
rate risk and believes it has implemented effective asset and liability
management strategies to reduce the potential effects of changes
in
interest rates on Peoples’ results of operations. Management
also periodically adjusts the mix of assets and liabilities to
manage
interest rate risk. However, any substantial, unexpected,
prolonged change in market interest rates could have a material
adverse
effect on Peoples’ financial condition and results of
operations. See the sections captioned “Interest Income and
Expense” and “Interest Rate Sensitivity and Liquidity” in Item 7 of
this Form 10-K for further discussion related to Peoples’ interest rate
risk.
|
·
|
Peoples’
Exposure to Credit Risk Could Adversely Affect Peoples’ Earnings and
Financial Condition.
|
There
are certain risks inherent in making loans. These risks include
interest rate changes over the time period in which loans may be repaid,
risks resulting from changes in the economy, risks inherent in dealing
with borrowers and, in the case of loans secured by collateral, risks
resulting from uncertainties about the future value of the
collateral.
Commercial
and commercial real estate loans comprise a significant portion
of
Peoples’ loan portfolio. Commercial loans generally are viewed
as having a higher credit risk than residential real estate or
consumer
loans because they usually involve larger loan balances to a single
borrower and are more susceptible to a risk of default during an
economic
downturn. Since Peoples’ loan portfolio contains a significant
number of commercial and commercial real estate loans, the deterioration
of one or a few of these loans could cause a significant increase
in
non-performing loans, and ultimately could have a material adverse
effect
on Peoples’ earnings and financial
condition.
|
·
|
Peoples’
Allowance For Loan Losses May Be Insufficient.
|
Peoples maintains an allowance for loan losses to provide for probable loan losses based on management’s quarterly analysis of the loan portfolio. There can be no assurance on the timing or amount of actual loan losses or that charge-offs in future periods will not exceed the allowance for loan losses. In addition, federal and state regulators periodically review Peoples’ allowance for loan losses as part of their examination process and may require management to increase the allowance or recognize further loan charge-offs based on judgments different than those of management. Any increase in the provision for loan losses would decrease Peoples’ pretax and net income. |
·
|
Adverse
Economic Conditions May Adversely Impact Peoples’ Results of
Operations.
|
Peoples’ success depends primarily on the general economic conditions in the specific local markets in which it operates. The local economies of Peoples’ market area historically have been less robust than the economy of the nation as a whole and typically are not subject to the same fluctuations as the national economy. Adverse economic conditions in Peoples’ market area, including the loss of certain significant employers, could reduce Peoples’ growth rate, affect borrowers' ability to repay their loans and generally affect Peoples’ financial condition and results of operations. Furthermore, a downturn in real estate values in Peoples’ market area could cause many loans to become inadequately collateralized. |
·
|
Adverse
Changes in the Financial Markets May Adversely Impact Peoples’ Results of
Operations.
|
Peoples generally invests in obligations of the U.S. Treasury, agencies and corporations of the U.S. government, including mortgage-backed securities, bank eligible obligations of any state or political subdivision in the U.S., and bank eligible corporate obligations, including private-label mortgage-backed securities. While most of these investments may have limited credit risk, all are subject to changes in market value due to changing interest rates and implied credit spreads. Additionally, certain investment securities represent beneficial interests in structured investments, which are collateralized by residential mortgages, debt obligations and other similar asset-backed assets. These structured investments are generally rated investment grade by credit rating agencies at the time of Peoples’ initial investment, although the credit ratings are subject to change due to deterioration in the credit quality of the underlying collateral. In recent months, these types of structured investments have been subject to significant market volatility due to the uncertainty of the credit ratings, deterioration in credit losses occurring within certain types of residential mortgages, changes in prepayments of the underlying collateral and the lack of transparency related to the investment structures and the collateral underlying the structured investment vehicles, which resulted in Peoples recognizing impairment charges on certain investment securities during 2007. Given recent market conditions and changing economic factors, Peoples may be required to recognize additional impairment charges on securities held in its investment portfolio in the future. |
·
|
Changes
in Accounting
Standards, Policies, Estimates or Procedures
May Impact
Peoples’ Reported
Financial Condition or Results of Operations.
|
The accounting standard setters, including the Financial Accounting Standards Board, the SEC and other regulatory bodies, periodically change the financial accounting and reporting standards that govern the preparation of Peoples’ Consolidated Financial Statements. These changes can be difficult to predict and can materially impact how Peoples records and reports its financial condition and results of operations. In some cases, Peoples could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements. In addition, the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant estimates that affect the financial statements. Due to the inherent nature of these estimates, no assurance can be given that Peoples will not be required to recognize significant, unexpected losses due to actual results varying materially from management’s estimates. Additional information regarding Peoples’ critical accounting policies and the sensitivity of estimates can be found in the section captioned “Critical Accounting Policies” in Item 7 of this Form 10-K. |
·
|
Peoples
May Be Named as a Defendant From Time to Time in a Variety of
Litigation
And Other Actions, Which Could Have a Material Adverse Effect
on Peoples’
Financial Condition And Results of Operation.
|
Peoples or one of its subsidiaries may be named as a defendant from time to time in a variety of litigation arising in the ordinary course of their respective businesses. Such litigation is normally covered by errors and omissions or other appropriate insurance. However, significant litigation could cause Peoples to devote substantial time and resources to defending its business or result in judgments or settlements that exceed insurance coverage, which could have a material adverse effect on Peoples’ financial condition and results of operation. Further, any claims asserted against Peoples, regardless of merit or eventual outcome, may harm Peoples’ reputation and result in loss of business. In addition, Peoples may not be able to obtain new or difference insurance coverages, or adequate replacement policies with acceptable terms. |
·
|
The
Financial Services Industry Is Very Competitive.
|
Peoples experiences significant competition in originating loans, principally from other commercial banks, savings associations and credit unions. Several of Peoples’ competitors have greater resources, larger branch systems and a wider array of banking services. This competition could reduce Peoples’ net income by decreasing the number and size of loans that it originates and the interest rates it may charge on these loans. For a more complete discussion of Peoples’ competitive environment, see “Competition” in Item 1 of this Form 10-K. If Peoples is unable to compete effectively, Peoples will lose market share and income from deposits, loans and other products may be reduced. |
·
|
Peoples’
Ability to Pay Dividends Is Limited.
|
Peoples is a separate and distinct legal entity from its subsidiaries. Peoples receives nearly all of its revenue from dividends from Peoples Bank, which are limited by federal banking laws and regulations. These dividends also serve as the primary source of funds to pay dividends on Peoples’ common shares and interest and principal on Peoples’ debt. The inability of Peoples Bank to pay sufficient dividends to Peoples could have a material, adverse effect on Peoples’ business. Further discussion of Peoples’ ability to pay dividends can be found under the caption “Supervision and Regulation-Limits on Dividends and Other Payments” in Item 1 of this Form 10-K and Note 13 of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K. |
·
|
Government
Regulation Significantly Affects Peoples’ Business.
|
The banking industry is heavily regulated under both federal and state law. Peoples is subject to regulation and supervision by the Federal Reserve Board, and Peoples Bank is subject to regulation and supervision by the OCC. and secondarily the FDIC. These regulations are primarily intended to protect depositors and the federal deposit insurance funds, not Peoples’ shareholders. Peoples’ non-bank subsidiaries are also subject to the supervision of the Federal Reserve Board, in addition to other regulatory and self-regulatory agencies including the SEC and state securities and insurance regulators. Regulations affecting banks and financial services businesses are undergoing continuous change, and management cannot predict the effect of those changes. Regulations and laws may be modified at any time, and new legislation may be enacted that affects Peoples and its subsidiaries. Any modifications or new laws could adversely affect Peoples’ business. Further information about government regulation of Peoples’ business can be found under the caption “Supervision and Regulation” in Item 1 of this Form 10-K. |
·
|
Material
Breaches in Security of Peoples’ Systems May Have a Significant Effect on
Peoples’ Business
|
Peoples collects, processes and stores sensitive consumer data by utilizing computer systems and telecommunications networks operated by both Peoples and third party service providers. Peoples has security and backup and recovery systems in place, as well as a business continuity plan, to ensure the computer systems will not be inoperable, to the extent possible. Peoples also has security to prevent unauthorized access to the computer systems and requires its third party service providers to maintain similar controls. However, management cannot be certain that these measures will be successful. A security breach of the computer systems and loss of confidential information, such as customer account numbers and related information, could result in a loss of customers’ confidence and, thus, loss of business. |
·
|
Peoples
and Its Subsidiaries Are Subject to Examinations And Challenges by
Tax
Authorities
|
In
the normal
course of business, Peoples and its subsidiaries are routinely subject
to
examinations and challenges from federal and state tax authorities
regarding positions taken regarding their respective tax
returns. State tax authorities have become increasingly
aggressive in challenging tax positions taken by financial institutions,
especially those positions relating to tax compliance and calculation
of
taxes subject to apportionment. Any challenge or examination by
a tax authority may result in adjustments to the timing or amount of
taxable net worth or taxable income or deductions or the allocation
of
income among tax jurisdictions.
Management
believes it has taken appropriate positions on all tax returns
filed, to
be filed or not filed and does not anticipate any examination would
have a
material impact on Peoples’ Consolidated Financial
Statements. However, the outcome of such examinations and
ultimate resolution of any resulting assessments are inherently
difficult
to predict. Thus, no assurance can be given that Peoples’ tax
liability for any tax year open to examination will not be different
than
what is reflected in Peoples’ current and historical Consolidated
Financial Statements. Further information can be found in the
“Critical Accounting Policies – Income Taxes” section of “Management’s
Discussion and Analysis of Results of Operation and Financial Condition”
included in this Form
10-K.
|
·
|
Anti-Takeover
Provisions May Delay Or Prevent an Acquisition Or Change in Control
by a
Third Party.
|
Provisions in the Ohio General Corporation Law and Peoples’ amended articles of incorporation and code of regulations, including a staggered board and a supermajority vote requirement for significant corporate changes, could discourage potential takeover attempts and make attempts by shareholders to remove Peoples’ board of directors and management more difficult. These provisions may also have the effect of delaying or preventing a transaction or change in control that might be in the best interests of Peoples’ shareholders. |
Name
|
Age
|
Position
|
Mark
F. Bradley
|
38
|
President
and Chief Executive Officer
|
Deborah
K. Hill
|
43
|
Executive
Vice President, Consumer and Business Financial
Services
|
Carol
A. Schneeberger
|
51
|
Chief
Financial Officer, Treasurer and
Executive
Vice President of Operations
|
David
T. Wesel
|
46
|
Executive
Vice President
|
Joseph
S. Yazombek
|
54
|
Executive
Vice President, Chief Lending
Officer
|
MARKET
FOR
REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY
SECURITIES.
|
High
Sales
|
Low
Sales
|
Dividends
Declared
|
||||||
2007
|
||||||||
Fourth
Quarter
|
$
|
28.26
|
$
|
21.45
|
$
|
0.22
|
||
Third
Quarter
|
28.15
|
21.40
|
0.22
|
|||||
Second
Quarter
|
28.11
|
25.03
|
0.22
|
|||||
First
Quarter
|
30.39
|
25.30
|
0.22
|
|||||
2006
|
||||||||
Fourth
Quarter
|
$
|
31.24
|
$
|
28.37
|
$
|
0.21
|
||
Third
Quarter
|
30.70
|
27.25
|
0.21
|
|||||
Second
Quarter
|
31.73
|
27.69
|
0.21
|
|||||
First
Quarter
|
30.00
|
27.05
|
0.20
|
|||||
Period
|
(a)
Total Number of Common
Shares
Purchased
|
(b)
Average Price
Paid per
Share
|
(c)
Total Number of Common
Shares Purchased as Part of Publicly Announced
Plans
or
Programs
(1)
|
(d)
Maximum Number of Common
Shares that May Yet Be Purchased Under
the
Plans or
Programs
(1)(2)
|
October
1 - 31, 2007
|
260
(3)
|
$26.43
(3)
|
–
|
46,000
|
November
1 - 30, 2007
|
68,492
(4)
|
$24.26
(4)
|
59,600
|
486,400
|
December
1 - 31, 2007
|
25,442
(5)
|
$24.42
(5)
|
25,000
|
461,400
|
Total
|
94,194
|
$24.31
|
84,600
|
461,400
|
(1)
|
Information
reflects the 2007 Stock Repurchase Program originally announced on
January
12, 2007, which authorized the
repurchase
of 425,000 common shares, with an aggregate purchase price of not
more
than $12.1 million, and the stock
repurchase
program announced on November 9, 2007, which authorized the repurchase
of
up to 500,000 common shares,
with
an aggregate purchase price of not more than $14 million, upon the
completion of the 2007 Stock Repurchase Program
and
expiring on December 31, 2008. The 2007 Stock Repurchase
Program was completed on November 23, 2007.
|
(2)
|
Information
reflects maximum number of common shares that may be purchased at
the end
of the period indicated.
|
(3)
|
Information
reflects solely common shares purchased in open market transactions
by
Peoples Bank under the Rabbi Trust
Agreement
establishing a rabbi trust (the “Rabbi Trust”) holding assets
to provide payment of the benefits under the
Peoples
Bancorp Inc. Deferred Compensation Plan for Directors of Peoples
Bancorp
Inc. and Subsidiaries.
|
(4)
|
Information
includes 1,686 common shares purchased at an average price of $24.39
by
Peoples Bank under the Rabbi Trust
Agreement
and 7,206 common shares acquired as a stock-for-stock exchange at
an
average price of $24.74 related to
stock-based
compensation awards granted under Peoples’ equity plans.
|
(5)
|
Information
includes 346 common shares purchased at an average price of $26.97
by
Peoples Bank under the Rabbi Trust
Agreement
and 96 common shares acquired for tax withholding at an average price
of
$24.19 related to stock-based
compensation
awards granted under Peoples’ equity plans.
|
|
COMPARISON
OF FIVE-YEAR TOTAL RETURN AMONG
|
|
PEOPLES
BANCORP INC., NASDAQ STOCKS (U.S. COMPANIES),
|
|
AND
NASDAQ BANK STOCKS
|
At
December
31,
|
||||||||||||||||||||||||
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
|||||||||||||||||||
Peoples
Bancorp
Inc.
|
$ | 100.00 | $ | 124.33 | $ | 118.66 | $ | 126.96 | $ | 135.90 | $ | 117.78 | ||||||||||||
NASDAQ
Stocks (U.S.
Companies)
|
$ | 100.00 | $ | 149.52 | $ | 162.72 | $ | 166.18 | $ | 182.57 | $ | 197.98 | ||||||||||||
NASDAQ
Bank
Stocks
|
$ | 100.00 | $ | 128.64 | $ | 147.22 | $ | 143.82 | $ | 161.41 | $ | 127.92 |
(
Dollars
in
thousands, except per share data)
|
2007
|
2006
|
2005
|
2004
|
2003
|
Operating
Data
|
|||||
For
the year
ended:
|
|||||
Total
interest
income
|
$ 113,419
|
$ 108,794
|
$ 95,775
|
$ 87,030
|
$ 91,655
|
Total
interest
expense
|
59,498
|
55,577
|
43,469
|
35,160
|
38,050
|
Net
interest
income
|
53,921
|
53,217
|
52,306
|
51,870
|
53,605
|
Provision
for loan
losses
|
3,959
|
3,622
|
2,028
|
2,546
|
3,601
|
Net
(loss) gain on investment
securities
|
(6,062)
|
265
|
539
|
(3,040)
|
(1,905)
|
Other
income exclusive of (loss)
gain on securities
|
31,426
|
30,860
|
28,628
|
25,248
|
19,443
|
Amortization
of other intangible
assets
|
1,934
|
2,261
|
2,669
|
2,219
|
1,493
|
Other
expense
|
49,518
|
49,036
|
48,673
|
44,979
|
44,410
|
Net
income
|
$ 18,314
|
$ 21,558
|
$ 20,499
|
$ 18,275
|
$ 16,254
|
Balance
Sheet
Data
|
|||||
Total
assets
|
$1,885,553
|
$1,875,255
|
$1,855,277
|
$1,809,086
|
$1,736,104
|
Investment
securities
|
565,463
|
548,733
|
589,313
|
602,364
|
641,464
|
Net
loans
|
1,105,223
|
1,117,885
|
1,057,156
|
1,008,298
|
900,423
|
Total
intangible
assets
|
68,029
|
68,852
|
69,280
|
71,118
|
48,705
|
Total
deposits
|
1,186,377
|
1,233,529
|
1,089,286
|
1,069,421
|
1,028,530
|
Short-term
borrowings
|
222,541
|
194,883
|
173,696
|
51,895
|
108,768
|
Long-term
borrowings
|
231,979
|
200,793
|
362,466
|
464,864
|
388,647
|
Junior
subordinated notes held by
subsidiary trusts
|
22,460
|
29,412
|
29,350
|
29,263
|
29,177
|
Total
stockholders’
equity
|
202,836
|
197,169
|
183,077
|
175,418
|
170,880
|
Tangible
assets
(1)
|
1,817,524
|
1,806,403
|
1,785,997
|
1,737,968
|
1,687,399
|
Tangible
equity
(2)
|
$ 134,807
|
$ 128,317
|
$ 113,797
|
$ 104,300
|
$ 122,175
|
Significant
Ratios
|
|||||
Return
on average
assets
|
0.98%
|
1.15%
|
1.12%
|
1.04%
|
0.95%
|
Return
on average stockholders’
equity
|
9.21
|
11.33
|
11.52
|
10.60
|
9.75
|
Net
interest
margin
|
3.32
|
3.29
|
3.32
|
3.39
|
3.52
|
Efficiency
ratio
(3)
|
57.07
|
57.51
|
59.05
|
57.18
|
51.06
|
Average
stockholders’ equity to
average assets
|
10.62
|
10.18
|
9.73
|
9.79
|
9.74
|
Average
loans to average
deposits
|
93.52
|
94.80
|
94.92
|
91.24
|
87.42
|
Allowance
for loan losses to total
loans
|
1.40
|
1.28
|
1.37
|
1.44
|
1.59
|
Total
risk-based capital
ratio
|
13.23
|
13.17
|
12.90
|
12.30
|
15.43
|
Dividend
payout
ratio
|
50.38%
|
41.09%
|
40.01%
|
41.66%
|
42.06%
|
Per
Share
Data
|
|||||
Earnings
per share –
Basic
|
$ 1.75
|
$ 2.03
|
$ 1.96
|
$ 1.74
|
$ 1.56
|
Earnings
per share –
Diluted
|
1.74
|
2.01
|
1.94
|
1.71
|
1.52
|
Cash
dividends
paid
|
0.88
|
0.83
|
0.78
|
0.72
|
0.65
|
Book
value at end of
period
|
19.70
|
18.51
|
17.40
|
16.81
|
16.11
|
Tangible
book
value at end of period
(4)
|
$ 13.09
|
$ 12.05
|
$ 10.82
|
$ 10.00
|
$ 11.76
|
Weighted-average
shares
outstanding:
|
|||||
Basic
|
10,462,933
|
10,606,570
|
10,444,854
|
10,529,332
|
10,433,708
|
Diluted
|
10,529,634
|
10,723,933
|
10,581,019
|
10,710,114
|
10,660,083
|
Common
shares outstanding at end
of period:
|
10,296,748
|
10,651,985
|
10,518,980
|
10,435,102
|
10,603,792
|
(1)
|
Total
assets less goodwill and other intangible assets.
|
(2)
|
Total
stockholders’ equity less goodwill and other intangible assets.
|
(3)
|
Non-interest
expense (less intangible amortization) as a percentage of fully
tax-equivalent net interest income plus non-interest income
(excludes
gains/losses on investment securities and asset disposals).
|
(4)
|
Tangible
book value per share reflects capital calculated for banking regulatory
requirements and excludes the balance sheet impact of
intangible
assets acquired through purchase accounting for acquisitions.
|
(1)
|
deterioration
in the credit quality of Peoples’ loan portfolio could occur due to a
number of factors, such as adverse changes in economic conditions
that
impair the ability of borrowers to repay their loans, the underlying
value
of the collateral could prove less valuable than otherwise assumed
and
assumed cash flows may be worse than expected, which may adversely
impact
the provision for loan losses;
|
(2)
|
competitive
pressures among financial institutions or from non-financial institutions,
which may increase significantly;
|
(3)
|
changes
in the interest rate environment, which may adversely impact interest
margins;
|
(4)
|
changes
in prepayment speeds, loan originations, sale volumes, and charge-offs,
which may be less favorable than expected and adversely impact
the amount
of interest income generated;
|
(5)
|
general
economic conditions, either national or in the states in which
Peoples and
its subsidiaries do business, which may be less favorable than
expected;
|
(6)
|
political
developments, wars or other hostilities, which may disrupt or increase
volatility in securities markets or other economic
conditions;
|
(7)
|
legislative
or regulatory changes or actions, which may adversely affect the
business
of Peoples and its subsidiaries;
|
(8)
|
adverse
changes in the conditions and trends in the financial markets,
which may
adversely affect the fair value of securities within Peoples’ investment
portfolio;
|
(9)
|
a
delayed or incomplete resolution of regulatory issues that could
arise;
|
(10)
|
ability
to receive dividends from
subsidiaries;
|
(11)
|
the
impact of reputational risk created by these developments on such
matters
as business generation and retention, funding and
liquidity;
|
(12)
|
the
costs and effects of regulatory and legal developments, including
the
outcome of regulatory or other governmental inquiries and legal
proceedings and results of regulatory examinations;
and
|
(13)
|
other
risk factors relating to the banking industry or Peoples as detailed
from
time to time in Peoples’ reports filed with the Securities and Exchange
Commission (“SEC”), including those risk factors included in the
disclosure under the heading “ITEM 1A. RISK FACTORS” of Part I of this
Form 10-K.
|
·
|
As
disclosed in a Current Report on Form 8-K filed on January 22,
2008,
management determined that certain investments in preferred stocks
issued
by the Federal National Mortgage Association and Federal Home Loan
Mortgage Corporation, three collateralized debt obligation investment
securities and common stock issued by an unrelated bank holding
company,
with an aggregate carrying value of $23.4 million, were deemed
to be
other-than-temporarily impaired at December 31, 2007. As
disclosed in Peoples’ Quarterly Report on Form 10-Q for the period ended
September 30, 2007, management also determined a collateralized
debt
obligation investment security with a carrying value of $1.1 million
was
other-than-temporarily impaired. As a result, Peoples recognized
other-than-temporary impairment charges totaling $6.2 million ($4.0
million, or $0.38 per diluted share, after-tax) in 2007 related
to these
investment securities.
|
·
|
As
described in “ITEM 3. LEGAL PROCEEDINGS” of this Form 10-K, in December
2007, Peoples resolved certain issues concerning its Ohio corporation
franchise tax liability and associated calculations for the fiscal
years
ended December 31, 2001 through 2007 (the “Ohio Franchise Tax
Settlement”). As a result, Peoples’ franchise tax expense was
reduced by $782,000 ($508,000, or $0.05 per diluted share, after-tax)
during the fourth quarter of 2007.
|
·
|
As
described in Note 9 of the
Notes to the Consolidated Financial Statements, on April 23, 2007,
Peoples
repaid the entire $7.2 million of variable rate junior subordinated
notes
issued to and held by its subsidiary, PEBO Capital Trust II, which
had a
then current rate of 9.10%. This redemption had minimal impact
on Peoples’ regulatory capital ratios and produced a modest improvement in
net interest income and margin, as the junior subordinated notes
were
replaced by lower cost
borrowings.
|
·
|
On
January 12, 2007, Peoples announced the authorization to repurchase
up to
425,000 of Peoples’ outstanding common shares in 2007 from time to time in
open market transactions (the “2007 Stock Repurchase
Program”). On November 9, 2007, Peoples announced the
authorization to repurchase up to 500,000 common shares upon the
completion of the 2007 Stock Repurchase Program and continuing
in 2008
until expiration on December 31, 2008. Peoples completed the
2007 Stock Repurchase Program on November 23, 2007. In 2007,
Peoples repurchased a total of 463,600 common shares between the
two
programs, at an average price of $26.21, which were held as treasury
shares and available for future issuances of common shares in connection
with equity awards granted from Peoples’ equity plans and other general
corporate purposes.
|
·
|
In
December 2006, Peoples sold approximately $11 million of tax-exempt
municipal securities resulting in a gain of $249,000, with no individual
sale generating a loss. The sale was part of tax planning
strategies designed to help Peoples manage its effective tax rate
and
overall tax burden by adjusting its mix of taxable and tax-exempt
income. The securities sold were selected because management
expected the issuers to call the securities in the near
future. The proceeds from the sale were used to reduce the
amount of short-term borrowings.
|
·
|
In
2006, Peoples Bank sold its banking offices located in Chesterhill,
Ohio
(the “Chesterhill Office”) and South Shore, Kentucky (the “South Shore
Office”) as part of Peoples’ strategy to optimize its branch network by
redirecting resources to markets that management believes has greater
growth potential. T
he sale of the South
Shore Office
included $4.6 million in deposits and approximately $600,000 of
loans,
while the sale of the Chesterhill Office involved $3.7 million
of
deposits. The sales of these offices resulted in an aggregate
pre-tax gain of $454,000
in 2006
. As
further discussed
in Note 15 of the Notes to the Consolidated Financial Statements
included
in Item 8 of this Form 10-K, concurrent with the sale of the Chesterhill
Office, Peoples Bank acquired a full-service banking office located
in
Carroll
,
Ohio
and its $5.4 million in
deposits. These transactions did not have a material impact on
Peoples’ financial statements taken as a
whole.
|
2007 | 2006 | 2005 | ||||||||||||||||||
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||
(
Dollars
in
thousands)
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
|||||||||||
Short-Term
Investments:
|
||||||||||||||||||||
Deposits
with other
banks
|
$ 2,435
|
$ 115
|
4.72%
|
$ 2,378
|
$ 100
|
4.21%
|
$ 2,260
|
$ 57
|
2.56%
|
|||||||||||
Federal
funds
sold
|
1,077
|
55
|
5.11%
|
1,595
|
80
|
5.02%
|
484
|
15
|
3.27%
|
|||||||||||
Total
short-term investments
|
3,512
|
170
|
4.84%
|
3,973
|
180
|
4.53%
|
2,744
|
72
|
2.68%
|
|||||||||||
Investment
Securities
(1):
|
||||||||||||||||||||
Taxable
|
503,094
|
25,646
|
5.10%
|
505,586
|
24,417
|
4.83%
|
533,983
|
23,676
|
4.43%
|
|||||||||||
Nontaxable
(2)
|
60,368
|
3,949
|
6.54%
|
67,454
|
4,411
|
6.54%
|
66,772
|
4,367
|
6.54%
|
|||||||||||
Total
investment securities
|
563,462
|
29,595
|
5.25%
|
573,040
|
28,828
|
5.03%
|
600,755
|
28,043
|
4.67%
|
|||||||||||
Loans
(3):
|
||||||||||||||||||||
Commercial
|
750,906
|
57,613
|
7.67%
|
726,702
|
54,181
|
7.46%
|
641,651
|
42,489
|
6.62%
|
|||||||||||
Real
estate
(4)
|
292,867
|
20,985
|
7.17%
|
311,772
|
21,467
|
6.89%
|
337,892
|
21,525
|
6.37%
|
|||||||||||
Consumer
|
79,035
|
6,552
|
8.29%
|
70,101
|
5,808
|
8.29%
|
60,486
|
5,294
|
8.75%
|
|||||||||||
Total
loans
|
1,122,808
|
85,150
|
7.58%
|
1,108,575
|
81,456
|
7.35%
|
1,040,029
|
69,308
|
6.66%
|
|||||||||||
Less:
Allowance for loan
loss
|
(14,775)
|
(15,216)
|
(14,930)
|
|||||||||||||||||
Net
loans
|
1,108,033
|
85,150
|
7.68%
|
1,093,359
|
81,456
|
7.45%
|
1,025,099
|
69,308
|
6.76%
|
|||||||||||
Total
earning assets
|
1,675,007
|
114,915
|
6.86%
|
1,670,372
|
110,464
|
6.61%
|
1,628,598
|
97,423
|
5.98%
|
|||||||||||
Intangible
assets
|
68,440
|
68,940
|
70,120
|
|||||||||||||||||
Other
assets
|
128,670
|
129,718
|
129,967
|
|||||||||||||||||
Total
assets
|
$
1,872,117
|
$
1,869,030
|
$
1,828,685
|
|||||||||||||||||
Deposits:
|
||||||||||||||||||||
Savings
|
$ 113,629
|
$ 725
|
0.64%
|
$ 122,682
|
$ 806
|
0.66%
|
$ 144,700
|
$ 1,039
|
0.72%
|
|||||||||||
Interest-bearing
transaction
|
179,827
|
3,841
|
2.14%
|
180,419
|
3,312
|
1.84%
|
184,172
|
2,753
|
1.49%
|
|||||||||||
Money
market
|
147,565
|
5,647
|
3.83%
|
122,053
|
4,404
|
3.61%
|
113,480
|
2,673
|
2.36%
|
|||||||||||
Brokered
time
|
65,461
|
3,364
|
5.14%
|
75,182
|
3,540
|
4.71%
|
44,114
|
1,486
|
3.37%
|
|||||||||||
Retail
time
|
521,506
|
23,398
|
4.49%
|
501,656
|
20,199
|
4.03%
|
450,476
|
14,599
|
3.24%
|
|||||||||||
Total
interest-bearing deposits
|
1,027,988
|
36,975
|
3.60%
|
1,001,992
|
32,261
|
3.22%
|
936,942
|
22,550
|
2.41%
|
|||||||||||
Borrowed
Funds:
|
||||||||||||||||||||
Short-term:
|
||||||||||||||||||||
FHLB
advances
|
197,915
|
10,065
|
5.09%
|
178,235
|
9,067
|
5.09%
|
107,184
|
3,652
|
3.41%
|
|||||||||||
Retail
repurchase
agreements
|
34,802
|
1,528
|
4.39%
|
31,481
|
1,306
|
4.15%
|
21,129
|
572
|
2.71%
|
|||||||||||
Wholesale
repurchase
agreements
|
4,425
|
242
|
5.47%
|
1,246
|
70
|
5.62%
|
–
|
–
|
–
|
|||||||||||
Total
short-term borrowings
|
237,142
|
11,835
|
4.93%
|
210,962
|
10,443
|
4.95%
|
128,313
|
4,224
|
3.29%
|
|||||||||||
Long-term:
|
||||||||||||||||||||
FHLB
advances
|
71,153
|
3,256
|
4.58%
|
127,981
|
5,545
|
4.33%
|
200,820
|
8,261
|
4.11%
|
|||||||||||
Wholesale
repurchase
agreements
|
124,191
|
5,257
|
4.23%
|
114,768
|
4,035
|
3.52%
|
166,058
|
5,260
|
3.17%
|
|||||||||||
Other
borrowings
|
24,571
|
2,175
|
8.73%
|
39,990
|
3,293
|
8.23%
|
43,666
|
3,174
|
7.27%
|
|||||||||||
Total
long-term borrowings
|
219,915
|
10,688
|
4.81%
|
282,739
|
12,873
|
4.55%
|
410,544
|
16,695
|
4.07%
|
|||||||||||
Total
borrowed funds
|
457,057
|
22,523
|
4.87%
|
493,701
|
23,316
|
4.72%
|
538,857
|
20,919
|
3.85%
|
|||||||||||
Total
interest-bearing
liabilities
|
1,485,045
|
59,498
|
3.99%
|
1,495,693
|
55,577
|
3.72%
|
1,475,799
|
43,469
|
2.94%
|
|||||||||||
Non-interest-bearing
deposits
|
172,571
|
167,440
|
158,693
|
|||||||||||||||||
Other
liabilities
|
15,707
|
15,604
|
16,253
|
|||||||||||||||||
Total
liabilities
|
1,673,323
|
1,678,737
|
1,650,745
|
|||||||||||||||||
Total
stockholders’ equity
|
198,794
|
190,293
|
177,940
|
|||||||||||||||||
Total
liabilities and
|
||||||||||||||||||||
stockholders’
equity
|
$
1,872,117
|
$
1,869,030
|
$
1,828,685
|
|||||||||||||||||
Interest
rate
spread
|
$
55,417
|
2.87%
|
$
54,887
|
2.89%
|
$
53,954
|
3.04%
|
||||||||||||||
Interest
income/earning
assets
|
6.86%
|
6.61%
|
5.98%
|
|||||||||||||||||
Interest
expense/earning
assets
|
3.54%
|
3.32%
|
2.66%
|
|||||||||||||||||
Net
interest
margin
|
3.32%
|
3.29%
|
3.32%
|
(1)
|
Average
balances are based on carrying
value.
|
(2)
|
Interest
income and yields are presented on a fully tax-equivalent basis using
a
35% Federal statutory tax rate.
|
(3)
|
Nonaccrual
and impaired loans are included in the average loan
balances. Related interest income earned on nonaccrual loans
prior to the loan being placed on nonaccrual is included in loan
interest
income. Loan fees included in interest income were immaterial
for all periods presented.
|
(4)
|
Loans
held for sale are included in the average loan balance
listed. Related interest income on loans originated for sale
prior to the loan being sold is included in loan interest
income.
|
2007
|
2006
|
2005
|
|||
(Dollars
in
thousands)
|
|||||
Net
interest income, as
reported
|
$ 53,921
|
$ 53,217
|
$ 52,306
|
||
Taxable
equivalent
adjustments
|
1,496
|
1,670
|
1,648
|
||
Fully
tax-equivalent net interest
income
|
$ 55,417
|
$ 54,887
|
$ 53,954
|
(1)
|
The
change in interest due to both rate and volume has been allocated
to
volume and rate changes in proportion to the relationship
of the dollar amounts of the change in
each.
|
(2)
|
Presented
on a fully tax-equivalent basis.
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Overdraft
fees
|
$ 6,818
|
$ 6,868
|
$ 6,595
|
||
Non-sufficient
funds
fees
|
1,965
|
2,107
|
1,895
|
||
Other
fees and
charges
|
1,107
|
1,240
|
1,311
|
||
Total
deposit account service charges
|
$ 9,890
|
$ 10,215
|
$ 9,801
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Property
and casualty
insurance
|
$ 7,997
|
$ 7,765
|
$ 7,397
|
||
Contingent
performance based
commissions
|
817
|
1,041
|
511
|
||
Life
and health
insurance
|
596
|
568
|
547
|
||
Credit
life and A&H
insurance
|
158
|
164
|
142
|
||
Total
insurance commissions
|
$ 9,568
|
$ 9,538
|
$ 8,597
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Fiduciary
|
$ 4,099
|
$ 3,508
|
$ 3,366
|
||
Brokerage
|
884
|
750
|
646
|
||
Total
trust and
investment income
|
$ 4,983
|
$ 4,258
|
$ 4,012
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Salaries
and
wages
|
$ 17,403
|
$ 17,013
|
$ 17,239
|
||
Sales-based
and incentive
compensation
|
3,985
|
3,373
|
3,139
|
||
Employee
benefits
|
3,965
|
3,761
|
3,813
|
||
Payroll
taxes and other
employment-related costs
|
2,199
|
2,031
|
2,400
|
||
Total
salaries and benefit costs
|
$ 27,552
|
$
26,178
|
$
26,591
|
||
Full-time
equivalent
employees:
|
|||||
Actual
at
December 31
|
559
|
547
|
531
|
||
Average
during
the year
|
554
|
539
|
534
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Depreciation
|
$ 2,061
|
$ 2,128
|
$ 2,264
|
||
Repairs
and maintenance
costs
|
1,142
|
1,056
|
1,035
|
||
Net
rent
expense
|
660
|
630
|
757
|
||
Property
taxes, utilities and
other costs
|
1,435
|
1,438
|
1,255
|
||
Total
|
$ 5,298
|
$ 5,252
|
$ 5,311
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Obligations
of U.S.
Treasury and government agencies
|
$ 197
|
$ 282
|
$ 526
|
||
Obligations
of U.S.
government-sponsored agencies
|
84,457
|
130,600
|
109,847
|
||
Obligations
of states and
political subdivisions
|
69,247
|
53,938
|
69,482
|
||
Mortgage-backed
securities
|
358,683
|
304,413
|
353,084
|
||
Other
securities
|
52,879
|
59,500
|
56,374
|
||
Total
investment securities, at fair value
|
$ 565,463
|
$ 548,733
|
$ 589,313
|
||
Total
amortized
cost
|
$ 559,211
|
$ 550,239
|
$ 591,002
|
||
Net
unrealized gain
(loss)
|
$ 6,252
|
$ (1,506)
|
$ (1,689)
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||
Year-end
loan
balances:
|
|||||||||
Commercial,
mortgage
|
$ 513,847
|
$ 469,934
|
$ 504,923
|
$ 450,270
|
$ 380,372
|
||||
Commercial,
other
|
171,937
|
191,847
|
136,331
|
126,473
|
131,697
|
||||
Real
estate,
mortgage
|
237,641
|
252,726
|
272,327
|
303,372
|
273,378
|
||||
Real
estate,
construction
|
71,794
|
99,311
|
50,745
|
35,423
|
21,056
|
||||
Home
equity
lines of credit
|
42,706
|
44,937
|
43,754
|
46,593
|
28,348
|
||||
Consumer
|
80,544
|
72,531
|
62,737
|
59,572
|
78,416
|
||||
Deposit
account
overdrafts
|
2,472
|
1,108
|
1,059
|
1,355
|
1,510
|
||||
Credit
card
|
–
|
–
|
–
|
–
|
221
|
||||
Total
loans
|
$ 1,120,941
|
$ 1,132,394
|
$ 1,071,876
|
$ 1,023,058
|
$ 914,998
|
||||
Average
total
loans
|
1,122,808
|
1,108,575
|
1,040,029
|
942,761
|
894,419
|
||||
Average
allowance for loan
losses
|
(14,775)
|
(15,216)
|
(14,930)
|
(14,974)
|
(14,093)
|
||||
Average
loans, net of allowance
|
$ 1,108,033
|
$ 1,093,359
|
$ 1,025,099
|
$ 927,787
|
$ 880,326
|
||||
Percent
of loans to total loans at
December 31:
|
|||||||||
Commercial,
mortgage
|
45.8%
|
41.5%
|
47.1%
|
44.0%
|
41.6%
|
||||
Commercial,
other
|
15.3%
|
16.9%
|
12.7%
|
12.4%
|
14.4%
|
||||
Real
estate,
mortgage
|
21.2%
|
22.3%
|
25.4%
|
29.7%
|
29.9%
|
||||
Real
estate,
construction
|
6.4%
|
8.8%
|
4.7%
|
3.5%
|
2.3%
|
||||
Home
equity
lines of credit
|
3.8%
|
4.0%
|
4.1%
|
4.6%
|
3.1%
|
||||
Consumer
|
7.3%
|
6.4%
|
5.9%
|
5.7%
|
8.5%
|
||||
Deposit
account
overdrafts
|
0.2%
|
0.1%
|
0.1%
|
0.1%
|
0.2%
|
||||
Credit
card
|
–
|
–
|
–
|
–
|
–
|
||||
Total
percentage
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
(Dollars
in
thousands)
Loan
Type
|
Due
in One Year or
Less
|
Due
in One to Five
Years
|
Due
After Five
Years
|
Total
|
|||
Commercial,
mortgage:
|
|||||||
Fixed
|
$ 15,891
|
$ 57,728
|
$ 22,407
|
$ 96,026
|
|||
Variable
|
44,610
|
33,758
|
339,453
|
417,821
|
|||
Total
|
$ 60,501
|
$ 91,486
|
$ 361,860
|
$ 513,847
|
|||
Commercial,
other:
|
|||||||
Fixed
|
$ 4,192
|
$ 42,600
|
$ 4,093
|
$ 50,885
|
|||
Variable
|
63,631
|
34,314
|
23,107
|
121,052
|
|||
Total
|
$ 67,823
|
$ 76,914
|
$ 27,200
|
$ 171,937
|
|||
Real
estate,
construction:
|
|||||||
Fixed
|
$ -
|
$ 3,684
|
$ 3,143
|
$ 6,827
|
|||
Variable
|
28,002
|
17,649
|
19,316
|
64,967
|
|||
Total
|
$ 28,002
|
$ 21,333
|
$ 22,459
|
$ 71,794
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||
Allowance
for loan
losses:
|
|||||||||
Allowance
for loan losses, January
1
|
$ 14,509
|
$ 14,720
|
$ 14,760
|
$ 14,575
|
$ 13,086
|
||||
Allowance
for loan losses
acquired
|
–
|
–
|
–
|
–
|
573
|
||||
Gross charge-offs:
|
|||||||||
Commercial
|
2,265
|
3,485
|
1,745
|
961
|
1,036
|
||||
Real
estate
|
606
|
361
|
827
|
677
|
449
|
||||
Consumer
|
981
|
631
|
656
|
886
|
1,113
|
||||
Overdrafts
|
849
|
1,007
|
965
|
1,130
|
967
|
||||
Credit
card
|
–
|
–
|
–
|
133
|
221
|
||||
Total
gross charge-offs
|
4,701
|
5,484
|
4,193
|
3,787
|
3,786
|
||||
Recoveries:
|
|||||||||
Commercial
|
950
|
578
|
1,155
|
487
|
352
|
||||
Real
estate
|
202
|
377
|
223
|
186
|
66
|
||||
Consumer
|
513
|
389
|
394
|
431
|
399
|
||||
Overdrafts
|
280
|
303
|
327
|
308
|
263
|
||||
Credit
card
|
6
|
4
|
26
|
14
|
21
|
||||
Total
recoveries
|
1,951
|
1,651
|
2,125
|
1,426
|
1,101
|
||||
Net
charge-offs
(recoveries):
|
|||||||||
Commercial
|
1,315
|
2,907
|
590
|
474
|
684
|
||||
Real
estate
|
404
|
(16)
|
604
|
491
|
383
|
||||
Consumer
|
468
|
242
|
262
|
455
|
714
|
||||
Overdrafts
|
569
|
704
|
638
|
822
|
704
|
||||
Credit
card
|
(6)
|
(4)
|
(26)
|
119
|
200
|
||||
Total
net charge-offs (recoveries)
|
2,750
|
3,833
|
2,068
|
2,361
|
2,685
|
||||
Provision
for loan losses,
December 31
|
3,959
|
3,622
|
2,028
|
2,546
|
3,601
|
||||
Allowance
for loan losses,
December 31
|
$ 15,718
|
$ 14,509
|
$ 14,720
|
$ 14,760
|
$ 14,575
|
||||
Allowance
for loan losses as a
percent of total loans
|
1.40%
|
1.28%
|
1.37%
|
1.44%
|
1.59%
|
||||
Ratio
of net charge-offs to
average loans:
|
|||||||||
Commercial
|
0.12%
|
0.27%
|
0.06%
|
0.05%
|
0.08%
|
||||
Real
estate
|
0.04%
|
–
|
0.06%
|
0.05%
|
0.04%
|
||||
Consumer
|
0.04%
|
0.02%
|
0.03%
|
0.05%
|
0.08%
|
||||
Overdrafts
|
0.05%
|
0.06%
|
0.06%
|
0.09%
|
0.08%
|
||||
Credit
card
|
–
|
–
|
–
|
0.01%
|
0.02%
|
||||
Total
ratio of net charge-offs to average loans
|
0.25%
|
0.35%
|
0.21%
|
0.25%
|
0.30%
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||
Commercial
|
$ 14,147
|
$ 12,661
|
$ 11,883
|
$ 11,751
|
$ 11,232
|
||||
Real
estate
|
419
|
957
|
1,400
|
1,175
|
1,234
|
||||
Consumer
|
868
|
596
|
1,149
|
1,394
|
1,594
|
||||
Overdrafts
|
284
|
295
|
288
|
327
|
283
|
||||
Credit
card
|
–
|
–
|
–
|
113
|
232
|
||||
Total
allowance for loan losses
|
$
15,718
|
$
14,509
|
$
14,720
|
$
14,760
|
$
14,575
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||
Loans
90+ days past
due
|
$ 378
|
$ 1
|
$ 251
|
$ 285
|
$ 188
|
||||
Renegotiated
loans
|
–
|
1,218
|
–
|
1,128
|
–
|
||||
Nonaccrual
loans
|
8,980
|
8,785
|
6,284
|
5,130
|
6,556
|
||||
Total
nonperforming loans
|
9,358
|
10,004
|
6,535
|
6,543
|
6,744
|
||||
Other
real estate
owned
|
343
|
–
|
308
|
1,163
|
392
|
||||
Total
nonperforming assets
|
$ 9,701
|
$ 10,004
|
$ 6,843
|
$ 7,706
|
$ 7,136
|
||||
Nonperforming
loans as a percent
of total loans
|
0.83%
|
0.88%
|
0.61%
|
0.64%
|
0.73%
|
||||
Nonperforming
assets as a percent
of total assets
|
0.51%
|
0.53%
|
0.37%
|
0.43%
|
0.41%
|
||||
Allowance
for loan losses as a
percent of
|
|||||||||
nonperforming
loans
|
168.0%
|
145.0%
|
225.2%
|
225.6%
|
216.1%
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||
Retail
certificates of
deposit
|
$ 499,684
|
$ 514,885
|
$ 465,148
|
$ 456,850
|
$ 451,923
|
||||
Interest-bearing
transaction
accounts
|
191,359
|
170,022
|
178,030
|
165,144
|
157,410
|
||||
Money
market deposit
accounts
|
153,299
|
134,387
|
110,372
|
107,394
|
104,019
|
||||
Savings
accounts
|
107,389
|
114,186
|
131,221
|
157,145
|
171,488
|
||||
Total
retail interest-bearing deposits
|
951,731
|
933,480
|
884,771
|
886,533
|
884,840
|
||||
Brokered
certificates of
deposits
|
59,589
|
129,128
|
41,786
|
29,909
|
9,981
|
||||
Total
interest-bearing deposits
|
1,011,320
|
1,062,608
|
926,557
|
916,442
|
894,821
|
||||
Non-interest-bearing
deposits
|
175,057
|
170,921
|
162,729
|
152,979
|
133,709
|
||||
Total
deposit balances
|
$
1,186,377
|
$
1,233,529
|
$
1,089,286
|
$
1,069,421
|
$
1,028,530
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||
3
months or
less
|
$ 54,557
|
$ 26,601
|
$ 25,884
|
$ 17,772
|
$ 10,316
|
||||
Over
3 to 6
months
|
28,732
|
47,738
|
25,628
|
17,923
|
18,964
|
||||
Over
6 to 12
months
|
20,829
|
59,084
|
34,207
|
14,163
|
40,701
|
||||
Over
12
months
|
40,206
|
89,049
|
82,174
|
76,267
|
49,765
|
||||
Total
|
$144,324
|
$222,472
|
$167,893
|
$126,125
|
$119,746
|
Immediate
Interest
Rate
|
Estimated
(Decrease)
Increase
|
Estimated
Decrease
in
Economic
|
||||||
200
|
$ (5,276)
|
(9.7)%
|
$ (19,186)
|
(7.6)%
|
||||
100
|
(2,264)
|
(4.2)%
|
(7,830)
|
(3.1)%
|
||||
(100)
|
1,152
|
2.1
%
|
(3,691)
|
(1.5)%
|
||||
(200)
|
$ 1,234
|
2.3
%
|
$ (15,915)
|
(6.3)%
|
Activity
or Obligation
|
Note
|
|
Off-balance
sheet credit-related financial instruments
|
12
|
|
Interest
rate contracts
|
12
|
|
Low-income
housing tax credit investments
|
12
|
|
Operating
lease obligations
|
5
|
|
Long-term
debt obligations
|
8
|
|
Junior
subordinated notes held by subsidiary trusts
|
9
|
(a)
|
information
required to be disclosed by Peoples in this Annual Report on Form
10-K and
other reports Peoples files or submits under the Exchange Act would
be
accumulated and communicated to Peoples’ management, including its
President and Chief Executive Officer and its Chief Financial Officer
and
Treasurer, as appropriate to allow timely decisions regarding required
disclosure;
|
(b)
|
information
required to be disclosed by Peoples in this Annual Report on Form
10-K and
other reports Peoples files or submits under the Exchange Act would
be
recorded, processed, summarized and reported within the timeframe
specified in the SEC’s rules and forms;
and
|
(c)
|
Peoples’
disclosure controls and procedures were effective as of the end
of the
fiscal year covered by this Annual Report on Form
10-K.
|
PEOPLES
BANCORP INC. AND
SUBSIDIARIES
|
|||
CONSOLIDATED
BALANCE
SHEETS
|
|||
(Dollars
in
thousands)
|
December
31,
|
||
Assets
|
2007
|
2006
|
|
Cash
and cash
equivalents:
|
|||
Cash
and due from banks
|
$ 43,275
|
$ 35,405
|
|
Interest-bearing
deposits in other banks
|
1,925
|
1,101
|
|
Federal
funds sold
|
-
|
3,300
|
|
Total
cash and cash equivalents
|
45,200
|
39,806
|
|
Available-for-sale
investment
securities, at estimated fair value (amortized
|
|||
cost
of $559,211
and $550,239 at December 31, 2007 and 2006,
respectively)
|
565,463
|
548,733
|
|
Loans,
net of deferred fees and
costs
|
1,120,941
|
1,132,394
|
|
Allowance
for loan
losses
|
(15,718)
|
(14,509)
|
|
Net
loans
|
1,105,223
|
1,117,885
|
|
Loans
held for
sale
|
1,994
|
1,041
|
|
Bank
premises and equipment,
net
|
24,803
|
23,455
|
|
Business
owned life
insurance
|
50,291
|
48,630
|
|
Goodwill
|
62,520
|
61,373
|
|
Other
intangible
assets
|
5,509
|
7,479
|
|
Other
assets
|
24,550
|
26,853
|
|
Total
assets
|
$
1,885,553
|
$
1,875,255
|
|
Liabilities
|
|||
Deposits:
|
|||
Non-interest-bearing
|
$ 175,057
|
$ 170,921
|
|
Interest-bearing
|
1,011,320
|
1,062,608
|
|
Total
deposits
|
1,186,377
|
1,233,529
|
|
Short-term
borrowings:
|
|||
Federal
funds purchased and securities sold under agreements to
repurchase
|
35,041
|
36,683
|
|
Federal
Home Loan Bank advances
|
187,500
|
158,200
|
|
Total
short-term borrowings
|
222,541
|
194,883
|
|
Long-term
borrowings
|
231,979
|
200,793
|
|
Junior
subordinated notes held by
subsidiary trusts
|
22,460
|
29,412
|
|
Accrued
expenses and other
liabilities
|
19,360
|
19,469
|
|
Total
liabilities
|
1,682,717
|
1,678,086
|
|
Stockholders’
Equity
|
|||
Common
stock, no par value,
24,000,000 shares authorized,
|
|||
10,925,954
shares issued and 10,889,242 shares issued at December 31,
2007
|
|||
and
2006, respectively, including shares in treasury
|
163,399
|
162,654
|
|
Retained
earnings
|
52,527
|
43,439
|
|
Accumulated
comprehensive income
(loss), net of deferred income taxes
|
3,014
|
(2,997)
|
|
Treasury
stock, at cost, 629,206
shares and 237,257 shares at December 31, 2007
|
|||
and
2006, respectively
|
(16,104)
|
(5,927)
|
|
Total
stockholders’ equity
|
202,836
|
197,169
|
|
Total
liabilities and stockholders’ equity
|
$
1,885,553
|
$
1,875,255
|
Year
ended December
31,
|
|||||
(Dollars
in thousands, except per
share data)
|
2007
|
2006
|
2005
|
||
Interest
Income:
|
|||||
Interest
and fees on
loans
|
$ 85,035
|
$ 81,329
|
$ 69,188
|
||
Interest
and dividends
on taxable investment securities
|
25,647
|
24,418
|
23,676
|
||
Interest
on tax-exempt
investment securities
|
2,567
|
2,867
|
2,839
|
||
Other
interest
income
|
170
|
180
|
72
|
||
Total
interest income
|
113,419
|
108,794
|
95,775
|
||
Interest
Expense:
|
|||||
Interest
on
deposits
|
36,975
|
32,261
|
22,550
|
||
Interest
on short-term
borrowings
|
11,835
|
10,443
|
4,224
|
||
Interest
on long-term
borrowings
|
8,513
|
10,271
|
14,217
|
||
Interest
on junior
subordinated notes held by subsidiary trusts
|
2,175
|
2,602
|
2,478
|
||
Total
interest expense
|
59,498
|
55,577
|
43,469
|
||
Net
interest income
|
53,921
|
53,217
|
52,306
|
||
Provision
for loan
losses
|
3,959
|
3,622
|
2,028
|
||
Net
interest income after provision for loan losses
|
49,962
|
49,595
|
50,278
|
||
Other
Income:
|
|||||
Deposit
account
service charges
|
9,890
|
10,215
|
9,801
|
||
Insurance
commissions
|
9,568
|
9,538
|
8,597
|
||
Trust
and investment
commissions
|
4,983
|
4,258
|
4,012
|
||
Electronic
banking
income
|
3,524
|
3,080
|
2,790
|
||
Business
owned life
insurance
|
1,661
|
1,637
|
1,740
|
||
Mortgage
banking
income
|
885
|
825
|
826
|
||
(Loss)
gain on
investment securities
|
(6,062)
|
265
|
539
|
||
Gain
on sale of
banking offices
|
–
|
454
|
–
|
||
Other income
|
915
|
853
|
862
|
||
Total
other income
|
25,364
|
31,125
|
29,167
|
||
Other
Expenses:
|
|||||
Salaries
and employee
benefits
|
27,552
|
26,178
|
26,591
|
||
Net
occupancy and
equipment
|
5,298
|
5,252
|
5,311
|
||
Professional
fees
|
2,246
|
2,465
|
2,276
|
||
Data
processing and
software
|
2,210
|
1,905
|
1,924
|
||
Amortization
of other
intangible assets
|
1,934
|
2,261
|
2,669
|
||
Bankcard
costs
|
1,617
|
1,284
|
1,188
|
||
Marketing
|
1,515
|
1,659
|
1,554
|
||
Franchise
tax
|
973
|
1,760
|
1,793
|
||
Other expense
|
8,107
|
8,533
|
8,036
|
||
Total
other expenses
|
51,452
|
51,297
|
51,342
|
||
Income
before income
taxes
|
23,874
|
29,423
|
28,103
|
||
Income
taxes:
|
|||||
Current
|
6,548
|
8,121
|
8,539
|
||
Deferred
|
(988)
|
(256)
|
(935)
|
||
Total
income
taxes
|
5,560
|
7,865
|
7,604
|
||
Net
income
|
$ 18,314
|
$ 21,558
|
$ 20,499
|
||
Earnings
per
share:
|
|||||
Basic
|
$ 1.75
|
$ 2.03
|
$ 1.96
|
||
Diluted
|
$ 1.74
|
$ 2.01
|
$ 1.94
|
||
Weighted-average
number of shares
outstanding:
|
|||||
Basic
|
10,462,933
|
10,606,570
|
10,444,854
|
||
Diluted
|
10,529,634
|
10,723,933
|
10,581,019
|
Common
Stock
|
Retained
|
Accumulated
Comprehensive
|
Treasury
|
|
|||||||
(Dollars
in thousands, except per
share data)
|
Shares
|
Amount
|
Earnings |
Income
(Loss)
|
Stock
|
Total
|
|||||
Balance,
December 31,
2004
|
10,850,641
|
$
162,284
|
$ 18,442
|
$ 4,958
|
$
(10,266)
|
$ 175,418
|
|||||
Net
income
|
20,499
|
20,499
|
|||||||||
Other
comprehensive loss, net of
tax
|
(6,074)
|
(6,074)
|
|||||||||
Total
comprehensive income
|
14,425
|
||||||||||
Cash
dividends declared of $0.78
per share
|
(8,201)
|
(8,201)
|
|||||||||
Stock
option
exercises (reissued 106,989 treasury
shares)
|
(1,003)
|
2,750
|
1,747
|
||||||||
Tax
benefit from exercise of stock
options
|
305
|
305
|
|||||||||
Purchase
of treasury stock, 65,325
shares
|
(1,754)
|
(1,754)
|
|||||||||
Common
stock issued under dividend
reinvestment plan
|
19,014
|
513
|
513
|
||||||||
Distribution
of treasury stock for
deferred
|
|||||||||||
compensation
plan (reissued 14,860 treasury shares)
|
284
|
284
|
|||||||||
Stock-based
compensation
expense
|
122
|
122
|
|||||||||
Issuance
of common stock related
to acquisitions:
|
|||||||||||
Putnam
Agency, Inc. (reissued 4,662 treasury shares)
|
3
|
116
|
119
|
||||||||
Barengo
Insurance Agency, Inc. (reissued
|
|||||||||||
3,678
treasury shares)
|
7
|
92
|
99
|
||||||||
Balance,
December 31,
2005
|
10,869,655
|
$ 162,231
|
$ 30,740
|
$ (1,116)
|
$ (8,778)
|
$ 183,077
|
|||||
Net
income
|
21,558
|
21,558
|
|||||||||
Other
comprehensive income, net of
tax
|
137
|
137
|
|||||||||
Total
comprehensive income
|
21,695
|
||||||||||
Cash
dividends declared of $0.83
per share
|
(8,859)
|
(8,859)
|
|||||||||
Stock
option exercises (reissued
137,286 treasury shares)
|
(878)
|
3,575
|
2,697
|
||||||||
Tax
benefit from exercise of stock
options
|
384
|
384
|
|||||||||
Purchase
of treasury stock, 42,594
shares
|
(1,214)
|
(1,214)
|
|||||||||
Common
stock issued under dividend
reinvestment plan
|
19,587
|
577
|
577
|
||||||||
Stock-based
compensation
expense
|
280
|
280
|
|||||||||
Issuance
of common stock related
to acquisitions:
|
|||||||||||
Putnam
Agency, Inc. (reissued 4,662 treasury shares)
|
19
|
121
|
140
|
||||||||
Barengo
Insurance Agency, Inc. (reissued
|
41
|
369
|
410
|
||||||||
14,064
treasury shares)
|
|||||||||||
Adjustment
to initally apply SFAS
158, net of tax
|
(2,018)
|
(2,018)
|
|||||||||
Balance,
December 31,
2006
|
10,889,242
|
$
162,654
|
$ 43,439
|
$ (2,997)
|
$ (5,927)
|
$ 197,169
|
|||||
Net
income
|
18,314
|
18,314
|
|||||||||
Other
comprehensive income, net of
tax
|
6,011
|
6,011
|
|||||||||
Total
comprehensive income
|
24,325
|
||||||||||
Cash
dividends declared of $0.88
per share
|
(9,226)
|
(9,226)
|
|||||||||
Stock
option exercises (reissued
57,988 treasury shares)
|
5,703
|
(626)
|
1,585
|
959
|
|||||||
Tax
benefit from exercise of stock
options
|
146
|
146
|
|||||||||
Purchase
of treasury stock,
471,327 shares
|
(12,350)
|
(12,350)
|
|||||||||
Common
stock issued under dividend
reinvestment plan
|
31,009
|
848
|
848
|
||||||||
Stock-based
compensation
expense
|
391
|
391
|
|||||||||
Issuance
of common stock related
to acquisitions:
|
|||||||||||
Putnam
Agency, Inc. (reissued 4,662 treasury shares)
|
(5)
|
129
|
124
|
||||||||
Barengo
Insurance Agency, Inc. (reissued
|
(9)
|
459
|
450
|
||||||||
16,728
treasury shares)
|
|||||||||||
Balance,
December 31,
2007
|
10,925,954
|
$
163,399
|
$ 52,527
|
$ 3,014
|
$ (16,104)
|
$ 202,836
|
Year
ended December
31,
|
|||||
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Cash
flows from operating
activities:
|
|||||
Net
income
|
$ 18,314
|
$ 21,558
|
$ 20,499
|
||
Adjustments
to reconcile net income to net cash provided:
|
|||||
Depreciation,
amortization, and accretion, net
|
7,188
|
8,653
|
9,672
|
||
Provision
for loan losses
|
3,959
|
3,622
|
2,028
|
||
Business
owned life insurance income
|
(1,661)
|
(1,637)
|
(1,740)
|
||
Net
loss (gain) on investment securities
|
6,062
|
(265)
|
(539)
|
||
Loans
originated for sale
|
(40,582)
|
(36,285)
|
(42,201)
|
||
Proceeds
from sales of loans
|
40,065
|
36,806
|
42,058
|
||
Net
gains on sales of loans
|
(750)
|
(720)
|
(757)
|
||
Deferred
income tax (benefit)
|
(988)
|
(256)
|
(935)
|
||
(Decrease)
increase in accrued expenses
|
(1,941)
|
2,129
|
654
|
||
Decrease
(increase) in interest receivable
|
610
|
(1,099)
|
(755)
|
||
Other,
net
|
605
|
(1,533)
|
3,940
|
||
Net
cash provided by operating activities
|
30,881
|
30,973
|
31,924
|
||
Cash
flows from investing
activities:
|
|||||
Purchases
of available-for-sale securities
|
(151,912)
|
(52,195)
|
(110,521)
|
||
Proceeds
from sales of available-for-sale securities
|
151
|
11,101
|
995
|
||
Proceeds
from maturities, calls and prepayments of
|
|||||
available-for-
sale securities
|
136,491
|
82,013
|
111,971
|
||
Proceeds
from sales of portfolio loans
|
-
|
-
|
11,415
|
||
Net
decrease (increase) in loans
|
9,260
|
(64,493)
|
(64,766)
|
||
Net
expenditures for premises and equipment
|
(3,027)
|
(2,711)
|
(3,642)
|
||
Proceeds
from sales of other real estate owned
|
107
|
670
|
3,490
|
||
Acquisitions,
net of cash received
|
(1,070)
|
(1,453)
|
(1,157)
|
||
Sale
of banking offices
|
-
|
(2,843)
|
-
|
||
Investment
in limited partnership and tax credit funds
|
(426)
|
(1,349)
|
(3,919)
|
||
Net
cash used in investing activities
|
(10,426)
|
(31,260)
|
(56,134)
|
||
Cash
flows from financing
activities:
|
|||||
Net
increase in non-interest-bearing deposits
|
4,136
|
7,734
|
9,750
|
||
Net
(decrease) increase in interest-bearing deposits
|
(51,453)
|
139,497
|
10,726
|
||
Net
increase in short-term borrowings
|
27,658
|
21,187
|
121,801
|
||
Proceeds
from long-term borrowings
|
115,000
|
30,000
|
-
|
||
Payments
on long-term borrowings
|
(83,814)
|
(191,672)
|
(102,398)
|
||
Cash
dividends paid
|
(8,373)
|
(8,164)
|
(7,463)
|
||
Purchase
of treasury stock
|
(12,350)
|
(1,214)
|
(1,754)
|
||
Proceeds
from issuance of common stock
|
989
|
2,719
|
1,747
|
||
Redemption
of trust preferred securities
|
(7,000)
|
(25)
|
-
|
||
Excess
tax benefit for share based payments
|
146
|
383
|
-
|
||
Net
cash (used in) provided by financing activities
|
(15,061)
|
445
|
32,409
|
||
Net
increase in cash and cash equivalents
|
5,394
|
158
|
8,199
|
||
Cash
and cash equivalents at
beginning of year
|
39,806
|
39,648
|
31,449
|
||
Cash
and cash equivalents at end of year
|
$ 45,200
|
$ 39,806
|
$ 39,648
|
||
Supplemental
cash flow
information:
|
|||||
Interest
paid
|
$ 60,037
|
$ 54,444
|
$ 42,475
|
||
Income
taxes paid
|
5,253
|
5,446
|
3,248
|
||
Value
of shares issued for acquisitions
|
574
|
550
|
218
|
(Dollars
in
thousands)
|
Amortized
|
Gross
Unrealized
|
Gross
Unrealized
|
Estimated
|
|||
2007
|
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||
Obligations
of U.S. Treasury
and
|
|||||||
government
agencies
|
$ 194
|
$ 4
|
$ (1)
|
$ 197
|
|||
Obligations
of U.S. government
sponsored agencies
|
83,556
|
917
|
(16)
|
84,457
|
|||
Obligations
of states and
political subdivisions
|
68,142
|
1,202
|
(97)
|
69,247
|
|||
Mortgage-backed
securities
|
357,863
|
2,482
|
(1,662)
|
358,683
|
|||
Other
securities
|
49,456
|
3,945
|
(522)
|
52,879
|
|||
Total
available-for-sale securities
|
$ 559,211
|
$ 8,550
|
$ (2,298)
|
$ 565,463
|
|||
2006
|
|||||||
Obligations
of U.S. Treasury
and
|
|||||||
government
agencies
|
$ 272
|
$ 10
|
$ -
|
$ 282
|
|||
Obligations
of U.S. government
sponsored agencies
|
131,603
|
358
|
(1,361)
|
130,600
|
|||
Obligations
of states and
political subdivisions
|
52,922
|
1,099
|
(83)
|
53,938
|
|||
Mortgage-backed
securities
|
309,715
|
229
|
(5,531)
|
304,413
|
|||
Other
securities
|
55,727
|
4,159
|
(386)
|
59,500
|
|||
Total
available-for-sale securities
|
$ 550,239
|
$ 5,855
|
$ (7,361)
|
$ 548,733
|
(Dollars
in
thousands)
2007
|
Obligations
of
U.S.
Treasury
and
government
agencies
|
Obligations
of U.S. government
sponsored agencies
|
Obligations
of states and
political subdivisions
|
Mortgage-backed
securities
|
Other
securities
|
Total
available-for-sale
securities
|
|||||
Less
than 12
months
|
|||||||||||
Estimated
fair
value
|
$ –
|
$ –
|
$ 7,886
|
$ 5,174
|
$ 1,546
|
$ 14,606
|
|||||
Unrealized
loss
|
–
|
–
|
87
|
18
|
4
|
109
|
|||||
12
months or
more
|
|||||||||||
Estimated
fair
value
|
$ 32
|
$ 5,554
|
$ 4,182
|
$ 123,889
|
$ 3,623
|
$ 137,280
|
|||||
Unrealized
loss
|
1
|
16
|
10
|
1,644
|
518
|
2,189
|
|||||
Total
Estimated fair
value
|
$ 32
|
$ 5,554
|
$ 12,068
|
$ 129,063
|
$ 5,169
|
$ 151,886
|
|||||
Total
Unrealized
loss
|
1
|
16
|
97
|
1,662
|
522
|
2,298
|
(Dollars
in
thousands)
2006
|
Obligations
of
U.S.
Treasury
and
government
agencies
|
Obligations
of U.S. government
sponsored agencies
|
Obligations
of states and
political subdivisions
|
Mortgage-backed
securities
|
Other
securities
|
Total
available-for-sale
securities
|
|||||
Less
than 12
months
|
|||||||||||
Estimated
fair
value
|
$ –
|
$ 18,971
|
$ 9,919
|
$ 13,141
|
$ –
|
$ 42,031
|
|||||
Unrealized
loss
|
–
|
525
|
72
|
169
|
–
|
766
|
|||||
12
months or
more
|
|||||||||||
Estimated
fair
value
|
$ –
|
$ 90,670
|
$ 918
|
$ 267,538
|
$ 3,929
|
$ 363,055
|
|||||
Unrealized
loss
|
–
|
836
|
11
|
5,362
|
386
|
6,595
|
|||||
Total
Estimated fair
value
|
$ –
|
$ 109,641
|
$ 10,837
|
$ 280,679
|
$ 3,929
|
$ 405,086
|
|||||
Total
Unrealized
loss
|
–
|
1,361
|
83
|
5,531
|
386
|
7,361
|
(Dollars
in
thousands)
|
Obligations
of
U.S.
Treasury
and
government
agencies
|
Obligations
of U.S. government
sponsored
agencies
|
Obligations
of states and
political
subdivisions
|
Mortgage-
backed
securities
|
Other
securities
|
Total
available-for-sale
securities
|
|||||
Within
one
year
|
|||||||||||
Amortized
cost
|
$ –
|
$ –
|
$ 790
|
$ 7
|
$ –
|
$ 797
|
|||||
Fair
value
|
–
|
–
|
793
|
7
|
–
|
800
|
|||||
Average
yield
|
–
|
–
|
6.37%
|
5.63%
|
–
|
6.36%
|
|||||
1
to 5
years
|
|||||||||||
Amortized
cost
|
$ –
|
$ 39,817
|
$ 16,480
|
$ 6,201
|
$ –
|
$ 62,498
|
|||||
Fair
value
|
–
|
40,214
|
16,757
|
6,256
|
–
|
63,227
|
|||||
Average
yield
|
–
|
5.36%
|
6.48%
|
5.11%
|
–
|
5.63%
|
|||||
5
to 10
years
|
|||||||||||
Amortized
cost
|
$ 100
|
$ 23,926
|
$ 30,718
|
$ 22,005
|
$ –
|
$ 76,749
|
|||||
Fair
value
|
101
|
24,254
|
31,505
|
22,126
|
–
|
77,986
|
|||||
Average
yield
|
7.52%
|
5.79%
|
6.18%
|
4.85%
|
–
|
5.68%
|
|||||
Over
10
years
|
|||||||||||
Amortized
cost
|
$ 94
|
$ 19,813
|
$ 20,154
|
$ 329,650
|
$ 49,456
|
$ 419,167
|
|||||
Fair
value
|
96
|
19,989
|
20,192
|
330,294
|
52,879
|
423,450
|
|||||
Average
yield
|
7.94%
|
6.93%
|
5.90%
|
5.02%
|
7.68%
|
5.47%
|
|||||
Total
amortized
cost
|
$ 194
|
$ 83,556
|
$ 68,142
|
$ 357,863
|
$ 49,456
|
$ 559,211
|
|||||
Total
fair
value
|
197
|
84,457
|
69,247
|
358,683
|
52,879
|
565,463
|
|||||
Total
average
yield
|
7.73%
|
5.86%
|
6.17%
|
5.01%
|
7.68%
|
5.52%
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Commercial,
mortgage
|
$ 513,847
|
$ 469,934
|
|
Commercial,
other
|
171,937
|
191,847
|
|
Real
estate,
construction
|
71,794
|
99,311
|
|
Real
estate,
mortgage
|
280,347
|
297,663
|
|
Consumer
|
80,544
|
72,531
|
|
Deposit
account
overdrafts
|
2,472
|
1,108
|
|
Total
loans
|
$1,120,941
|
$1,132,394
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Commercial,
mortgage
|
$ 7,794
|
$ 9,624
|
|
Commercial,
other
|
1,464
|
1,577
|
|
Real
estate,
mortgage
|
30,294
|
37,787
|
|
Consumer
|
423
|
911
|
|
Total
outstanding
balance
|
$ 39,975
|
$ 49,899
|
|
Net
carrying
amount
|
$ 38,615
|
$ 47,294
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Loans
90+ days past due and
accruing
|
$ 378
|
$ 1
|
|
Renegotiated
loans
|
–
|
1,218
|
|
Nonaccrual
loans
|
8,980
|
8,785
|
|
Total
nonperforming loans
|
$ 9,358
|
$10,004
|
(Dollars
in
thousands)
|
2007
|
2006
|
|||
Impaired
loans with an allocated
allowance for loan losses
|
$ 8,457
|
$ 4,872
|
|||
Impaired
loans with no allocated
allowance for loan losses
|
4,453
|
14,577
|
|||
Total
impaired loans
|
$12,910
|
$
19,449
|
|||
Allowance
for loan losses
allocated to impaired loans
|
$ 2,498
|
$ 1,457
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Average
investment in impaired
loans
|
$ 16,412
|
$ 18,374
|
$ 10,751
|
||
Interest
income recognized on
impaired loans
|
$ 826
|
$ 883
|
$ 668
|
(Dollars
in
thousands)
|
|
Balance,
January 1,
2007
|
$ 15,562
|
New
loans and
disbursements
|
9,285
|
Repayments
|
(10,641)
|
New
executive officer or
director
|
358
|
Other
changes
|
(58)
|
Balance,
December 31,
2007
|
$
14,506
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Balance,
beginning of
year
|
$ 14,509
|
$ 14,720
|
$ 14,760
|
||
Charge-offs
|
(4,701)
|
(5,484)
|
(4,193)
|
||
Recoveries
|
1,951
|
1,651
|
2,125
|
||
Net
charge-offs
|
(2,750)
|
(3,833)
|
(2,068)
|
||
Provision
for loan
losses
|
3,959
|
3,622
|
2,028
|
||
Balance,
end of year
|
$
15,718
|
$
14,509
|
$
14,720
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Land
|
$ 5,331
|
$ 4,785
|
|
Building
and
premises
|
30,073
|
27,849
|
|
Furniture,
fixtures and
equipment
|
16,601
|
16,119
|
|
Total
bank
premises and equipment
|
52,005
|
48,753
|
|
Accumulated
depreciation
|
(27,202)
|
(25,298)
|
|
Net
book
value
|
$
24,803
|
$
23,455
|
(Dollars
in
thousands)
|
|
2008
|
$ 690
|
2009
|
651
|
2010
|
607
|
2011
|
599
|
2012
|
594
|
Thereafter
|
2,009
|
Total
payments
|
$ 5,150
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Retail
certificates of
deposit
|
$ 499,684
|
$ 514,885
|
|
Interest-bearing
transaction
accounts
|
191,359
|
170,022
|
|
Money
market deposit
accounts
|
153,299
|
134,387
|
|
Savings
accounts
|
107,389
|
114,186
|
|
Total
retail interest-bearing deposits
|
951,731
|
933,480
|
|
Brokered
certificates of
deposits
|
59,589
|
129,128
|
|
Total
interest-bearing deposits
|
1,011,320
|
1,062,608
|
|
Non-interest-bearing
deposits
|
175,057
|
170,921
|
|
Total
deposit balances
|
$ 1,186,377
|
$ 1,233,529
|
(Dollars
in
thousands)
|
Retail
|
Brokered
|
Total
|
||
2008
|
$ 345,084
|
$ 54,612
|
$ 399,696
|
||
2009
|
95,279
|
4,977
|
100,256
|
||
2010
|
36,705
|
-
|
36,705
|
||
2011
|
4,077
|
-
|
4,077
|
||
2012
|
18,301
|
-
|
18,301
|
||
Thereafter
|
238
|
-
|
238
|
||
Total
maturities
|
$
499,684
|
$ 59,589
|
$559,273
|
(Dollars
in
thousands)
|
Federal
Funds
Purchased
|
Retail
Repurchase
Agreements
|
FHLB
Advances
|
National
Market
Repurchase
Agreements
|
|||
2007
|
|||||||
Ending
balance
|
$ –
|
$ 35,041
|
$ 187,500
|
$ –
|
|||
Average
balance
|
33
|
34,770
|
197,915
|
4,425
|
|||
Highest
month end
balance
|
–
|
36,515
|
264,400
|
7,000
|
|||
Interest
expense
|
2
|
1,526
|
10,065
|
242
|
|||
Weighted-average
interest
rate:
|
|||||||
End
of year
|
–
%
|
3.96%
|
2.50%
|
–
%
|
|||
During
the year
|
6.06%
|
4.39%
|
5.09%
|
5.47%
|
|||
2006
|
|||||||
Ending
balance
|
$ –
|
$ 31,683
|
$ 158,200
|
$ 5,000
|
|||
Average
balance
|
2
|
31,479
|
178,235
|
1,246
|
|||
Highest
month end
balance
|
–
|
36,768
|
259,700
|
5,000
|
|||
Interest
expense
|
–
|
1,306
|
9,067
|
70
|
|||
Weighted-average
interest
rate:
|
|||||||
End
of year
|
–
%
|
4.57%
|
5.18%
|
5.34%
|
|||
During
the year
|
–
%
|
4.15%
|
5.09%
|
5.62%
|
|||
2005
|
|||||||
Ending
balance
|
$ –
|
$ 35,896
|
$ 137,800
|
$ –
|
|||
Average
balance
|
–
|
21,129
|
107,184
|
–
|
|||
Highest
month end
balance
|
–
|
35,896
|
167,000
|
–
|
|||
Interest
expense
|
–
|
572
|
3,652
|
–
|
|||
Weighted-average
interest
rate:
|
|||||||
End
of year
|
–
%
|
3.57%
|
4.12%
|
–
%
|
|||
During
the year
|
–
%
|
2.71%
|
3.36%
|
–
%
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Callable
national market
repurchase agreements, bearing
|
|||
interest
at rates ranging from 3.60% to 4.81%
|
$ 95,000
|
$ 30,000
|
|
Non-callable
national market
repurchase agreements, bearing
|
|||
interest
at rates ranging from 3.60% to 4.97%
|
53,750
|
100,000
|
|
FHLB
convertible rate advances,
bearing interest at rates
|
|||
ranging
from 4.81% to 5.63%
|
24,500
|
32,000
|
|
FHLB
putable fixed rate advances,
bearing interest at a rate
|
|||
of
3.20%
|
10,000
|
–
|
|
FHLB
amortizing, fixed rate
advances, bearing interest at rates
|
|||
ranging
from 2.01% to 5.00%
|
13,729
|
32,793
|
|
FHLB
non-amortizing, fixed rate
advances, bearing interest at
|
|||
rates
ranging from 3.93% to 5.42%
|
35,000
|
6,000
|
|
Total
long-term
borrowings
|
$231,979
|
$ 200,793
|
(Dollars
in
thousands)
|
|
2008
|
$ 53,682
|
2009
|
74,342
|
2010
|
20,160
|
2011
|
37,625
|
2012
|
35,081
|
Thereafter
|
11,089
|
Total
long-term borrowings
|
$231,979
|
(Dollars
in
thousands)
|
2007
|
2006
|
||
Capital
Securities of PEBO Capital
Trust I, 8.62%, due May 1, 2029, net of unamortized issuance
costs
|
$ 22,460
|
$ 22,425
|
||
Capital
Securities of PEBO Capital
Trust II, 6-month LIBOR + 3.70%, due April 22, 2032, net of unamortized
issuance costs
|
–
|
6,987
|
||
Total
capital
securities
|
$ 22,460
|
$ 29,412
|
||
Total
capital securities
qualifying for Tier 1 capital
|
$ 22,460
|
$ 29,412
|
Pension
Benefits
|
Postretirement
Benefits
|
||||||
(Dollars
in
thousands)
|
2007
|
2006
|
2007
|
2006
|
|||
Change
in benefit
obligation:
|
|||||||
Obligation
at January
1
|
$
13,548
|
$
13,361
|
$ 560
|
$ 515
|
|||
Service
cost
|
847
|
869
|
–
|
–
|
|||
Interest
cost
|
757
|
756
|
26
|
25
|
|||
Plan
participants’
contributions
|
–
|
–
|
122
|
103
|
|||
Actuarial
(gain)
loss
|
(1,954)
|
(42)
|
(234)
|
82
|
|||
Benefit
payments
|
(1,331)
|
(1,396)
|
(194)
|
(165)
|
|||
Increase
due to plan
changes
|
–
|
–
|
(34)
|
–
|
|||
Obligation
at December
31
|
$
11,867
|
$
13,548
|
$ 246
|
$ 560
|
|||
Accumulated
benefit obligation at
December 31
|
$ 9,574
|
$
10,646
|
$ –
|
$ –
|
|||
Change
in plan
assets:
|
|||||||
Fair
value of plan assets at
January 1
|
$
15,050
|
$
13,606
|
$ –
|
$ –
|
|||
Actual
return on plan
assets
|
607
|
1,640
|
–
|
–
|
|||
Employer
contributions
|
–
|
1,200
|
72
|
62
|
|||
Plan
participants’
contributions
|
–
|
–
|
122
|
103
|
|||
Benefit
payments
|
(1,331)
|
(1,396)
|
(194)
|
(165)
|
|||
Fair
value of plan assets at
December 31
|
$
14,326
|
$
15,050
|
$ –
|
$ –
|
|||
Funded
status:
|
|||||||
Funded
status at December
31
|
$ 2,459
|
$ 1,502
|
$ (246)
|
$ (560)
|
|||
Unrecognized
prior-service
cost
|
–
|
–
|
(34)
|
–
|
|||
Unrecognized
net
loss
|
–
|
–
|
(64)
|
157
|
|||
Net
amount
recognized
|
$ 2,459
|
$ 1,502
|
$ (344)
|
$ (403)
|
|||
Amounts
recognized in Consolidated
Balance Sheets:
|
|||||||
Prepaid
benefit
costs
|
$ 2,459
|
$ 1,502
|
$ –
|
$ –
|
|||
Accrued
benefit
liability
|
–
|
–
|
(344)
|
(403)
|
|||
Net
amount
recognized
|
$ 2,459
|
$ 1,502
|
$ (344)
|
$ (403)
|
|||
Amounts
recognized in Other
Comprehensive Income (Loss)
|
|||||||
Unrecognized
prior-service
cost
|
$ 23
|
$ 24
|
$ –
|
$ –
|
|||
Unrecognized
net
loss
|
1,027
|
1,994
|
–
|
–
|
|||
Total
|
$ 1,050
|
$ 2,018
|
$ –
|
$ –
|
|||
Weighted-average
assumptions at
year-end
|
|||||||
Discount
rate
|
6.70%
|
6.00%
|
6.70%
|
6.00%
|
|||
Rate
of compensation
increase
|
3.50%
|
3.50%
|
n/a
|
n/a
|
Pension
Benefits
|
Postretirement
Benefits
|
||||||
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
2007
|
2006
|
2005
|
|
Service
cost
|
$ 847
|
$ 869
|
$ 867
|
$ –
|
$ –
|
$ –
|
|
Interest
cost
|
757
|
756
|
717
|
26
|
25
|
32
|
|
Expected
return on plan
assets
|
(1,191)
|
(1,164)
|
(1,127)
|
–
|
–
|
–
|
|
Amortization
of prior service
cost
|
2
|
2
|
2
|
–
|
–
|
11
|
|
Amortization
of net
loss
|
160
|
256
|
226
|
3
|
–
|
1
|
|
Settlements
|
–
|
–
|
679
|
–
|
–
|
–
|
|
Net
periodic benefit
cost
|
$ 575
|
$ 719
|
$ 1,364
|
$ 29
|
$ 25
|
$ 44
|
|
Weighted
average
assumptions:
|
|||||||
Discount
rate
|
6.00%
|
5.75%
|
6.00%
|
6.00%
|
5.75%
|
6.00%
|
|
Expected
return on plan
assets
|
8.50%
|
8.50%
|
8.50%
|
n/a
|
n/a
|
n/a
|
Target
|
2007
|
2006
|
|||
Equity
securities
|
60
– 75%
|
70%
|
68%
|
||
Debt
securities
|
24
– 39
|
26
|
28
|
||
Other
|
1
|
4
|
4
|
||
Total
|
100%
|
100%
|
100%
|
(Dollars
in
thousands)
|
Pension
Benefits
|
Post-
retirement
Benefits
|
||
2008
|
$ 735
|
$ 39
|
||
2009
|
1,004
|
39
|
||
2010
|
1,328
|
38
|
||
2011
|
1,110
|
37
|
||
2012
|
1,685
|
31
|
||
2013
to
2017
|
6,282
|
123
|
||
Total
|
$ 12,144
|
$ 307
|
2007
|
2006
|
2005
|
|||||||||
(Dollars in thousands) |
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||
Income
tax computed at statutory
federal tax rate
|
$ 8,356
|
35.0%
|
$
10,298
|
35.0%
|
$ 9,836
|
35.0%
|
|||||
Differences
in rate resulting
from:
|
|||||||||||
Tax-exempt
interest income
|
(831)
|
(3.5)
|
(940)
|
(3.2)
|
(958)
|
(3.4)
|
|||||
Investments
in tax credit funds
|
(640)
|
(2.7)
|
(613)
|
(2.1)
|
(803)
|
(2.8)
|
|||||
Business
owned life insurance
|
(581)
|
(2.4)
|
(573)
|
(2.0)
|
(609)
|
(2.2)
|
|||||
Change
in
valuation allowance
|
(635)
|
(2.6)
|
79
|
0.3
|
–
|
–
|
|||||
Other,
net
|
(109)
|
(0.5)
|
(386)
|
(1.3)
|
138
|
0.5
|
|||||
Total
income taxes
|
$ 5,560
|
23.3%
|
$ 7,865
|
26.7%
|
$ 7,604
|
27.1%
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Deferred
tax
assets:
|
|||
Allowance
for loan losses
|
$ 6,292
|
$ 5,990
|
|
Accrued
employee benefits
|
97
|
370
|
|
Deferred
loan fees and costs
|
(202)
|
51
|
|
Available-for-sale
securities
|
–
|
527
|
|
AMT
credit carryforward
|
1,656
|
2,367
|
|
Other
|
260
|
623
|
|
Valuation
allowance
|
(321)
|
(956)
|
|
Total
deferred tax assets
|
7,782
|
8,972
|
|
Deferred
tax
liabilities:
|
|||
Bank
premises and equipment
|
1,105
|
1,193
|
|
Deferred
income
|
1,108
|
895
|
|
Investments
|
(50)
|
2,197
|
|
Available-for-sale
securities
|
2,188
|
–
|
|
Other
|
3,651
|
3,702
|
|
Total
deferred tax liabilities
|
8,002
|
7,987
|
|
Net
deferred tax asset (liability)
|
$ (220)
|
$ 985
|
Contractual
Amount
|
|||
(Dollars
in
thousands)
|
2007
|
2006
|
|
Loan
commitments
|
$
176,835
|
$
176,431
|
|
Standby
letters of
credit
|
34,200
|
43,900
|
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Net
income
|
$ 18,314
|
$ 21,558
|
$ 20,499
|
||
Other
comprehensive income
(loss):
|
|||||
Available-for-sale
investment securities:
|
|||||
Gross
unrealized holding gain (loss) arising in the
period
|
1,697
|
475
|
(9,079)
|
||
Related
tax (expense) benefit
|
(594)
|
(166)
|
3,178
|
||
Less:
reclassification adjustment for net (loss) gain included in net
income
|
(6,062)
|
265
|
539
|
||
Related
tax benefit (expense)
|
2,122
|
(93)
|
(189)
|
||
Net
effect on other comprehensive income
|
5,043
|
137
|
(6,251)
|
||
Defined
benefit plans:
|
|||||
Net
gain arising during the period
|
1,327
|
–
|
–
|
||
Related
tax expense
|
(464)
|
–
|
–
|
||
Amortization
of unrecognized loss and service cost on pension
plan
|
162
|
–
|
–
|
||
Related
tax expense
|
(57)
|
–
|
–
|
||
Net
effect on other comprehensive income
|
968
|
–
|
–
|
||
Cash
flow hedge derivatives:
|
|||||
Gross
unrealized holding gain arising in the period
|
–
|
–
|
23
|
||
Related
tax expense
|
–
|
–
|
(8)
|
||
Less:
reclassification adjustment for net loss included in net
income
|
–
|
–
|
(250)
|
||
Related
tax benefit
|
–
|
–
|
88
|
||
Net
effect on other comprehensive income
|
–
|
–
|
177
|
||
Total
other comprehensive income
(loss), net of tax
|
6,011
|
137
|
(6,074)
|
||
Total
comprehensive
income
|
$24,325
|
$21,695
|
$14,425
|
Unrealized
|
Unrecognized
|
||||||
Unrealized
|
Gains
(Loss)
|
Net
Pension
and
|
Accumulated
|
||||
Gains
(Loss)
|
on
Cash
Flow
|
Postretirement
|
Comprehensive
|
||||
(Dollars in thousands) |
on
Securities
|
Hedge
Derivatives
|
Costs
|
Income
(Loss)
|
|||
Balance,
December 31,
2004
|
$ 5,135
|
$ (177)
|
$ –
|
$ 4,958
|
|||
Current
period change, net of
tax
|
(6,251)
|
177
|
–
|
(6,074)
|
|||
Balance,
December 31,
2005
|
$ (1,116)
|
$ –
|
$ –
|
$ (1,116)
|
|||
Current
period change, net of
tax
|
137
|
–
|
–
|
137
|
|||
Adjustment
for initial application
of FAS 158
|
–
|
–
|
(2,018)
|
(2,018)
|
|||
Balance,
December 31,
2006
|
$ (979)
|
$ –
|
$ (2,018)
|
$ (2,997)
|
|||
Current
period change, net of
tax
|
5,043
|
–
|
968
|
6,011
|
|||
Balance,
December 31,
2007
|
$ 4,064
|
$ –
|
$ (1,050)
|
$ 3,014
|
(Dollars
in
thousands)
|
2007
|
2006
|
|
Balance
at January
1
|
$ 61,373
|
$ 59,767
|
|
Goodwill
on branch
acquisition
|
–
|
110
|
|
Contingent
consideration
earned
|
1,147
|
1,496
|
|
Balance
at December
31
|
$
62,520
|
$
61,373
|
Number
of
Shares
|
Weighted-
Average
Exercise
Price
|
Weighted
Average
Remaining Contractual
Life
|
Aggregate
Intrinsic
Value
|
||||
Outstanding
at January
1
|
397,766
|
$ 21.88
|
|||||
Granted
|
–
|
–
|
|||||
Exercised
|
66,733
|
17.68
|
|||||
Forfeited
|
5,572
|
21.85
|
|||||
Outstanding
at December
31
|
325,461
|
22.74
|
5.0
years
|
$ 952,000
|
|||
Exercisable
at December
31
|
281,805
|
21.86
|
4.5
years
|
$ 952,000
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||
Range
of Exercise
Prices
|
Option
Shares
Outstanding
|
Weighted-
Average
Remaining Contractual
Life
|
Weighted
Average
Exercise
Price
|
Option
Shares
Exercisable
|
Weighted
Average Exercise
Price
|
||||||
$13.48
|
to
|
$16.10
|
80,219
|
1.8
years
|
$ 14.28
|
80,219
|
$ 14.28
|
||||
$16.10
|
to
|
$22.32
|
69,742
|
4.5
years
|
21.71
|
69,742
|
21.71
|
||||
$22.33
|
to
|
$27.38
|
78,687
|
5.6
years
|
25.22
|
78,687
|
25.22
|
||||
$27.38
|
to
|
$30.00
|
96,813
|
7.4
years
|
28.48
|
53,157
|
28.51
|
||||
Total
|
325,461
|
5.0
years
|
$ 22.74
|
281,805
|
$ 21.86
|
Number
of
Shares
|
Weighted-Average
Exercise
Price
|
Weighted-
Average Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value
|
||||
Outstanding
at January
1
|
–
|
$ –
|
|||||
Granted
|
31,047
|
27.99
|
|||||
Exercised
|
–
|
–
|
|||||
Forfeited
|
673
|
29.25
|
|||||
Outstanding
at December
31
|
30,374
|
$ 27.96
|
9.1
years
|
$ 4,000
|
|||
Exercisable
at December
31
|
535
|
$ 29.25
|
0.5
years
|
$ –
|
Exercise
Prices
|
Number
of
Shares
Outstanding
|
Weighted-
Average
Remaining
Contractural
Life
|
Number
of
Shares
Exercisable
|
||
$23.26
|
5,000
|
9.6
years
|
–
|
||
$23.80
|
1,000
|
9.9
years
|
–
|
||
$27.99
|
3,000
|
9.8
years
|
–
|
||
$29.25
|
21,374
|
8.9
years
|
535
|
||
Total
|
30,374
|
9.1
years
|
535
|
Weighted-
|
|||
Average
|
|||
Number
|
Grant
Date
|
||
of
Shares
|
Fair
Value
|
||
Outstanding
at January
1
|
–
|
$ –
|
|
Awarded
|
15,043
|
28.58
|
|
Released
|
5,703
|
28.70
|
|
Forfeited
|
192
|
29.25
|
|
Outstanding
at December
31
|
9,148
|
$ 28.49
|
2007
|
2006
|
||
Total
stock-based
compensation
|
$391,000
|
$ 280,000
|
|
Recognized
tax
benefit
|
(137,000)
|
(98,000)
|
|
Net
expense
recognized
|
$254,000
|
$ 182,000
|
(
Dollars
in
thousands, except per share data)
|
2005
|
Net
Income, as
reported
|
$ 20,499
|
Addback:
stock-based compensation
expense included
|
|
in
net income, net of tax
|
79
|
Deduct:
stock-based compensation
expense determined
|
|
under
fair value based method, net of tax
|
733
|
Pro
forma net
income
|
$ 19,845
|
Basic
Earnings Per Share – As
Reported
|
$ 1.96
|
Basic
Earnings Per Share – Pro
forma
|
1.90
|
Diluted
Earnings Per Share – As
Reported
|
$ 1.94
|
Diluted
Earnings Per Share – Pro
forma
|
1.88
|
2007
|
2006
|
2005
|
||||
Risk-free
interest rate
|
4.82%
|
4.56%
|
4.37%
|
|||
Dividend
yield
|
3.05%
|
2.65%
|
2.61%
|
|||
Volatility
factor of the market price of parent stock
|
25.5%
|
25.8%
|
26.0%
|
|||
Weighted-average
expected life
|
10.0
years
|
6.4
years
|
6.5
years
|
Condensed
Balance
Sheets
|
December
31,
|
||
(Dollars
in
thousands)
|
2007
|
2006
|
|
Assets:
|
|||
Cash
and due from other
banks
|
$ 2,111
|
$ 2,155
|
|
Interest-bearing
deposits in
subsidiary bank
|
12,437
|
11,809
|
|
Receivable
from subsidiary
bank
|
651
|
600
|
|
Available-for-sale
investment
securities, at estimated fair value (amortized
|
|||
cost
of
$1,386 and $1,291 at December 31, 2007 and 2006,
respectively)
|
4,744
|
4,790
|
|
Investments
in
subsidiaries:
|
|||
Bank
|
186,840
|
188,112
|
|
Non-bank
|
26,988
|
27,365
|
|
Other
assets
|
825
|
850
|
|
Total
assets
|
$234,596
|
$235,681
|
|
Liabilities:
|
|||
Accrued
expenses and other
liabilities
|
$ 7,012
|
$ 6,847
|
|
Dividends
payable
|
2,288
|
2,253
|
|
Junior
subordinated debentures
held by subsidiary trusts
|
22,460
|
29,412
|
|
Total
liabilities
|
31,760
|
38,512
|
|
Stockholders'
equity
|
202,836
|
197,169
|
|
Total
liabilities and stockholders' equity
|
$234,596
|
$235,681
|
Condensed
Statements of
Income
|
Year
ended December
31,
|
||||
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Income:
|
|||||
Dividends
from subsidiary
bank
|
$ 28,000
|
$ 21,750
|
$ 18,300
|
||
Dividends
from non-bank
subsidiary
|
1,000
|
2,300
|
-
|
||
Interest
|
392
|
598
|
270
|
||
Rental
income from
subsidiaries
|
-
|
-
|
32
|
||
Other
income
|
-
|
1
|
528
|
||
Total
income
|
29,392
|
24,649
|
19,130
|
||
Expenses:
|
|||||
Interest
expense on junior
subordinated notes held by subsidiary trusts
|
2,223
|
2,689
|
2,564
|
||
Intercompany
management
fees
|
938
|
875
|
744
|
||
Interest
|
-
|
691
|
696
|
||
Other
expense
|
1,374
|
1,488
|
1,070
|
||
Total
expenses
|
4,535
|
5,743
|
5,074
|
||
Income
before federal income taxes
and (excess dividends from) equity
|
|||||
in
undistributed earnings of subsidiaries
|
24,857
|
18,906
|
14,056
|
||
Applicable
income tax
benefit
|
(2,345)
|
(2,160)
|
(1,178)
|
||
(Excess
dividends from) equity in
undistributed earnings of subsidiaries
|
(8,888)
|
492
|
5,265
|
||
Net
income
|
$
18,314
|
$
21,558
|
$
20,499
|
Statements
of Cash
Flows
|
Year
ended December
31,
|
||||
(Dollars
in
thousands)
|
2007
|
2006
|
2005
|
||
Cash
flows from operating
activities:
|
|||||
Net
income
|
$ 18,314
|
$ 21,558
|
$ 20,499
|
||
Adjustment
to reconcile net income
to cash provided by operations:
|
|||||
Amortization
and
depreciation
|
2
|
12
|
33
|
||
Excess
dividends from
(equity in undistributed earnings of) subsidiaries
|
8,888
|
(492)
|
(5,265)
|
||
Other,
net
|
1,313
|
(610)
|
4,003
|
||
Net
cash provided by operating activities
|
28,517
|
20,468
|
19,270
|
||
Cash
flows from investing
activities:
|
|||||
Net
(purchases of) proceeds from
sales and maturity investment securities
|
(224)
|
100
|
907
|
||
Net
proceeds from sale of premises
and equipment
|
–
|
–
|
182
|
||
Acquisitions,
net of cash
received
|
(1,070)
|
(1,453)
|
(1,157)
|
||
Net
cash used in investing activities
|
(1,294)
|
(1,353)
|
(68)
|
||
Cash
flows from financing
activities:
|
|||||
Payments
on long-term
borrowings
|
–
|
(13,600)
|
(1,700)
|
||
Purchase
of treasury
stock
|
(12,350)
|
(1,214)
|
(1,754)
|
||
Change
in receivable from
subsidiary
|
(51)
|
(298)
|
328
|
||
Proceeds
from issuance of common
stock
|
989
|
2,719
|
1,747
|
||
Repurchase
of Trust Preferred
Securities
|
–
|
(25)
|
–
|
||
Redemption
of Trust Preferred
Securities
|
(7,000)
|
–
|
–
|
||
Cash
dividends
paid
|
(8,375)
|
(8,164)
|
(7,463)
|
||
Excess
tax benefit for share based
payments
|
148
|
–
|
–
|
||
Net
cash used in financing activities
|
(26,639)
|
(20,582)
|
(8,842)
|
||
Net
increase (decrease) in cash
|
584
|
(1,467)
|
10,360
|
||
Cash
and cash equivalents at the
beginning of the year
|
13,964
|
15,431
|
5,071
|
||
Cash
and cash
equivalents at the end of the year
|
$
14,548
|
$
13,964
|
$
15,431
|
||
Supplemental
cash flow
information:
|
|||||
Interest
paid
|
$ –
|
$ 732
|
$ 684
|
2007
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
(Dollars
in
thousands, except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||||||
Total
interest
income
|
$ | 28,360 | $ | 28,080 | $ | 28,241 | $ | 28,738 | ||||||||
Total
interest
expense
|
14,839 | 14,747 | 15,089 | 14,823 | ||||||||||||
Net
interest
income
|
13,521 | 13,333 | 13,152 | 13,915 | ||||||||||||
Provision
for loan
losses
|
623 | 847 | 967 | 1,522 | ||||||||||||
Net
gain (loss) on investment
securities
|
17 | 21 | (613 | ) | (5,487 | ) | ||||||||||
Other
income
|
8,114 | 7,954 | 7,736 | 7,622 | ||||||||||||
Intangible
asset
amortization
|
500 | 489 | 478 | 467 | ||||||||||||
Other
expenses
|
12,842 | 12,661 | 12,121 | 11,894 | ||||||||||||
Income
tax expense
(benefit)
|
2,041 | 1,962 | 1,594 | (37 | ) | |||||||||||
Net
income
|
$ | 5,646 | $ | 5,349 | $ | 5,115 | $ | 2,204 | ||||||||
Earnings
per
share:
|
||||||||||||||||
Basic
|
$ | 0.53 | $ | 0.51 | $ | 0.49 | $ | 0.21 | ||||||||
Diluted
|
$ | 0.53 | $ | 0.51 | $ | 0.49 | $ | 0.21 | ||||||||
Weighted-average
shares
outstanding:
|
||||||||||||||||
Basic
|
10,584,893 | 10,503,952 | 10,421,548 | 10,344,437 | ||||||||||||
Diluted
|
10,670,148 | 10,574,250 | 10,483,657 | 10,398,806 |
2006
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
(Dollars
in
thousands, except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||||||
Total
interest
income
|
$ | 25,748 | $ | 27,006 | $ | 27,649 | $ | 28,391 | ||||||||
Total
interest
expense
|
12,245 | 13,701 | 14,706 | 14,925 | ||||||||||||
Net
interest
income
|
13,503 | 13,305 | 12,943 | 13,466 | ||||||||||||
Provision
for loan
losses
|
268 | 573 | 929 | 1,852 | ||||||||||||
Net
gain on investment
securities
|
– | 4 | 2 | 259 | ||||||||||||
Gain
on sale of banking
offices
|
– | – | 232 | 222 | ||||||||||||
Other
income
|
8,114 | 7,605 | 7,316 | 7,371 | ||||||||||||
Intangible
asset
amortization
|
582 | 567 | 556 | 556 | ||||||||||||
Other
expenses
|
12,484 | 11,990 | 12,210 | 12,352 | ||||||||||||
Income
tax
expense
|
2,352 | 2,248 | 1,476 | 1,789 | ||||||||||||
Net
income
|
$ | 5,931 | $ | 5,536 | $ | 5,322 | $ | 4,769 | ||||||||
Earnings
per
share:
|
||||||||||||||||
Basic
|
$ | 0.56 | $ | 0.52 | $ | 0.50 | $ | 0.45 | ||||||||
Diluted
|
$ | 0.56 | $ | 0.52 | $ | 0.50 | $ | 0.44 | ||||||||
Weighted-average
shares
outstanding:
|
||||||||||||||||
Basic
|
10,530,444 | 10,591,926 | 10,638,824 | 10,663,272 | ||||||||||||
Diluted
|
10,655,233 | 10,714,030 | 10,748,996 | 10,768,851 |
(A)
|
the
date and nature of any amendment to a provision of its Code of Ethics
that
|
(i)
|
applies
to the principal executive officer, principal financial officer,
principal
accounting officer or controller of Peoples, or persons performing
similar
functions,
|
(ii)
|
relates
to any element of the code of ethics definition set forth in
Item 406(b) of SEC Regulation S-K,
and
|
(iii)
|
is
not a technical, administrative or other non-substantive amendment;
and
|
(B)
|
a
description (including the nature of the waiver, the name of the
person to
whom the waiver was granted and the date of the waiver) of any waiver,
including an implicit waiver, from a provision of the Code of Ethics
to
the principal executive officer, principal financial officer, principal
accounting officer or controller of Peoples, or persons performing
similar
functions, that relates to one or more of the elements of the code
of
ethics definition set forth in Item 406(b) of SEC
Regulation S-K.
|
(i)
|
the
Peoples Bancorp Inc. Amended and Restated 1993 Stock Option Plan
(the
“1993 Plan”);
|
(ii)
|
the
Peoples Bancorp Inc. 1995 Stock Option Plan (the “1995
Plan”);
|
(iii)
|
the
Peoples Bancorp Inc. 1998 Stock Option Plan (the “1998
Plan”);
|
(iv)
|
the
Peoples Bancorp Inc. 2002 Stock Option Plan (the “2002
Plan”);
|
(v)
|
the
Peoples Bancorp Inc. 2006 Equity Plan (the “2006 Plan”);
and
|
(vi)
|
the
Peoples Bancorp Inc. Deferred Compensation Plan for Directors of
Peoples
Bancorp Inc. and Subsidiaries (the “Deferred Compensation
Plan”).
|
Plan
Category
|
(a)
Number
of common shares to be issued upon exercise of outstanding options,
warrants and rights
|
(b)
Weighted-average
exercise price of outstanding options, warrants and rights
|
(c)
Number
of common shares remaining available for future issuance under equity
compensation plans (excluding common shares reflected in column
(a))
|
Equity
compensation plans approved by shareholders
|
431,634
(1)
|
$23.29
(2)
|
451,019
(3)
|
Equity
compensation plans not approved by shareholders
|
–
|
–
|
–
|
Total
|
431,634
|
$23.29
|
451,019
|
(1)
|
Includes
an aggregate of 363,125 common shares issuable upon exercise of options
granted under the 1993 Plan, the 1995 Plan, the 1998 Plan, the 2002
Plan
and options and rights granted under the 2006 Plan and 68,509 common
shares credited to participants’ accounts under the Deferred Compensation
Plan.
|
(2)
|
Represents
weighted-average exercise price of outstanding options under the
1993
Plan, the 1995 Plan, the 1998 Plan, the 2002 Plan and options and
rights
under the 2006 Plan.
|
(3)
|
Includes
436,759 common shares and 14,260 common shares remaining available
for
issuance under the 2006 Plan and the Deferred Compensation Plan,
respectively, at December 31, 2007. No common shares were
available for issuance under the 1993 Plan, the 1995 Plan, the 1998
Plan
and the 2002 Plan at December 31,
2006.
|
Page
|
|
Report
on Internal Control Over Financial Reporting
|
48
|
Report
of Independent Registered Public Accounting Firm (Ernst & Young LLP)
on Consolidated
|
|
Financial
Statements
|
50
|
Consolidated
Balance Sheets as of December 31, 2007 and 2006
|
51
|
Consolidated
Statements of Income for each of the three years ended December 31,
2007
|
52
|
Consolidated
Statements of Stockholders' Equity for each of the three years ended
December 31, 2007
|
53
|
Consolidated
Statements of Cash Flows for each of the three years ended December
31,
2007
|
54
|
Notes
to the Consolidated Financial Statements
|
55
|
Peoples
Bancorp Inc. (Parent Company Only Financial Information is included
in
Note 17 of
the
|
|
Notes
to the Consolidated Financial Statements)
|
79
|
Signatures
|
Title
|
Date
|
||
/s/
MARK F.
BRADLEY
|
President,
Chief Executive Officer
and
|
2/28/2008
|
||
Mark
F.
Bradley
|
Director
|
|||
/s/
CAROL A.
SCHNEEBERGER
|
Chief
Financial Officer and
Treasurer
|
2/28/2008
|
||
Carol
A.
Schneeberger
|
(Principal
Financial and
Accounting Officer)
|
|||
/s/
CARL L. BAKER,
JR.
|
Director
|
2/28/2008
|
||
Carl
L. Baker,
Jr.
|
||||
/s/
GEORGE W.
BROUGHTON
|
Director
|
2/27/2008
|
||
George
W.
Broughton
|
||||
/s/
FRANK L.
CHRISTY
|
Director
|
2/28/2008
|
||
Frank
L.
Christy
|
||||
/s/
WILFORD D.
DIMIT
|
Director
|
2/28/2008
|
||
Wilford
D.
Dimit
|
||||
/s/
RICHARD
FERGUSON
|
Director
|
2/27/2008
|
||
Richard
Ferguson
|
||||
/s/
DAVID L.
MEAD
|
Director
|
2/28/2008
|
||
David
L.
Mead
|
||||
/s/
ROBERT W.
PRICE
|
Director
|
2/28/2008
|
||
Robert
W.
Price
|
||||
/s/
THEODORE P.
SAUBER
|
Director
|
2/27/2008
|
||
Theodore
P.
Sauber
|
||||
/s/
PAUL T.
THEISEN
|
Vice
Chairman of the Board and
Leadership
|
2/28/2008
|
||
Paul
T.
Theisen
|
Director
|
|||
/s/
JOSEPH H.
WESEL
|
Chairman
of the Board and
Director
|
2/28/2008
|
||
Joseph
H.
Wesel
|
||||
/s/
THOMAS J.
WOLF
|
Director
|
2/27/2008
|
||
Thomas
J.
Wolf
|
EXHIBIT
INDEX
|
||||
PEOPLES
BANCORP INC. ANNUAL REPORT ON FORM 10-K
|
||||
FOR
FISCAL YEAR ENDED DECEMBER 31, 2007
|
4.2
|
Indenture,
dated as of April 20, 1999, between Peoples Bancorp Inc. and Wilmington
Trust Company, as Debenture Trustee, relating to Junior Subordinated
Deferrable Interest Debentures.
|
Incorporated
herein by reference to Exhibit 4.1 to the Registration Statement
on Form
S-4 (Registration No. 333-81251) filed on June 22, 1999 by
Peoples Bancorp Inc. and PEBO Capital Trust I (“Peoples’ 1999 Form
S-4”).
|
||
4.3
|
Amended
and Restated Declaration of Trust of PEBO Capital Trust I, dated and
effective as of April 20, 1999.
|
Incorporated
herein by reference to Exhibit 4.5 to Peoples’ 1999 Form
S-4.
|
||
4.4
|
Series
B Capital Securities Guarantee Agreement, dated as of September 23,
1999, between Peoples Bancorp Inc. and Wilmington Trust Company,
as
Guarantee Trustee, relating to Series B 8.62% Capital
Securities.
|
Incorporated
herein by reference to Exhibit 4 (i) to Peoples’ Annual Report on Form
10-K for the fiscal year ended December 31, 1999. (File No.
0-16772)
|
||
10.1(a)
|
Peoples
Bancorp Inc. Deferred Compensation Plan for Directors of Peoples
Bancorp
Inc. and Subsidiaries (Amended and Restated Effective January 2,
1998.)*
|
Incorporated
herein by reference to Exhibit 10(a) to Peoples’ Registration Statement on
Form S-8 filed December 31, 1997 (Registration No.
333-43629).
|
||
10.1(b)
|
Amendment
No. 1 to Peoples Bancorp Inc. Deferred Compensation Plan for Directors
of
Peoples Bancorp Inc. and Subsidiaries effective as of January 2,
1998.*
|
Incorporated
herein by reference to Exhibit 10(b) to Peoples’ Post-Effective Amendment
No. 1 to Form S-8 filed September 4, 1998 (Registration No.
333-43629).
|
||
10.1(c)
|
Rabbi
Trust Agreement, made January 6, 1998, between Peoples Bancorp Inc.
and
The Peoples Banking and Trust Company (predecessor to Peoples Bank,
National Association)
|
Filed
herewith.
|
||
10.2
|
Summary
of the Performance Compensation Program for Peoples Bancorp Inc.
effective
for calendar years beginning on or after January 1, 2002.*
|
Incorporated
herein by reference to Exhibit 10(c) to Peoples’ Annual Report on Form
10-K for the fiscal year ended December 31, 2003 (File No.
0-16772).
|
||
10.3
|
Amended
and Restated Peoples Bancorp Inc. 1993 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 4 to Peoples' Registration Statement
on
Form S-8 filed August 25, 1993 (Registration Statement No.
33-67878).
|
||
10.4
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options under Amended and Restated Peoples Bancorp Inc. 1993
Stock
Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(g) to Peoples' Annual Report on
Form
10-K for the fiscal year ended December 31, 1995 (File No. 0-16772)
(”Peoples’ 1995 Form 10-K”).
|
||
10.5
|
Form
of Stock Option Agreement, dated May 20, 1993, used in connection
with
grant of incentive stock options under Amended and Restated Peoples
Bancorp Inc. 1993 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(h) to Peoples' 1995 Form
10-K.
|
||
*Management
Compensation Plan
|
EXHIBIT
INDEX
|
||||
PEOPLES
BANCORP INC. ANNUAL REPORT ON FORM 10-K
|
||||
FOR
FISCAL YEAR ENDED DECEMBER 31, 2007
|
||||
10.6
|
Form
of Stock Option Agreement, dated November 10, 1994, used in connection
with grant of incentive stock options under Peoples Bancorp Inc.
Amended
and Restated 1993 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(i) to Peoples' 1995 Form
10-K.
|
|||
10.7
|
Peoples
Bancorp Inc. 1995 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 4 to Peoples' Registration Statement
on
Form S-8 filed May 24, 1995 (Registration Statement No.
33-59569).
|
|||
10.8
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options to non-employee directors of Peoples under Peoples
Bancorp
Inc. 1995 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(k) to Peoples' 1995 Form
10-K.
|
|||
10.9
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options to non-employee directors of Peoples' subsidiaries
under
Peoples Bancorp Inc. 1995 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(l) to Peoples' 1995 Form
10-K.
|
|||
10.10
|
Form
of Stock Option Agreement used in connection with grant of incentive
stock
options under Peoples Bancorp Inc. 1995 Stock Option
Plan.*
|
Incorporated
herein by reference to Exhibit 10(m) to Peoples' Annual Report on
Form
10-K for the fiscal year ended December 31, 1998 (File No. 0-16772)
(“Peoples’ 1998 Form 10-K”).
|
|||
10.11
|
Peoples
Bancorp Inc. 1998 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10 to Peoples' Registration Statement
on
Form S-8 filed September 4, 1998 (Registration Statement No.
333-62935).
|
|||
10.12
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options to non-employee directors of Peoples under Peoples
Bancorp
Inc. 1998 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(o) to Peoples' 1998 Form
10-K.
|
|||
10.13
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options to consultants/advisors of Peoples under Peoples Bancorp
Inc. 1998 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(p) to Peoples' 1998 Form
10-K.
|
|||
10.14
|
Form
of Stock Option Agreement used in connection with grant of incentive
stock
options under Peoples Bancorp Inc. 1998 Stock Option
Plan.*
|
Incorporated
herein by reference to Exhibit 10(o) to Peoples’ Annual Report on Form
10-K for the fiscal year ended December 31, 1999 (File No.
0-16772).
|
|||
10.15
|
Peoples
Bancorp Inc. 2002 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10 to Peoples' Registration Statement
on
Form S-8 filed April 15, 2002 (Registration Statement No.
333-86246).
|
|||
*Management
Compensation Plan
|
EXHIBIT
INDEX
|
||||
PEOPLES
BANCORP INC. ANNUAL REPORT ON FORM 10-K
|
||||
FOR
FISCAL YEAR ENDED DECEMBER 31, 2007
|
||||
10.16
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options to directors of Peoples under Peoples Bancorp Inc.
2002
Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(r) to Peoples’ Annual Report on Form
10-K for the fiscal year ended December 31, 2002 (File No.
0-16772)(“Peoples’ 2002 Form 10-K”).
|
||
10.17
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options to Peoples’ subsidiaries' directors under Peoples Bancorp
Inc. 2002 Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(s) to Peoples’ 2002 Form
10-K.
|
||
10.18
|
Form
of Stock Option Agreement used in connection with grant of non-qualified
stock options to employees of Peoples under Peoples Bancorp Inc.
2002
Stock Option Plan.*
|
Incorporated
herein by reference to Exhibit 10(t) to Peoples’ 2002 Form
10-K.
|
||
10.19
|
Form
of Stock Option Agreement used in connection with grant of incentive
stock
options under Peoples Bancorp Inc. 2002 Stock Option
Plan.*
|
Incorporated
herein by reference to Exhibit 10(u) to Peoples’ 2002 Form
10-K.
|
||
10.20
|
Form
of Change in Control Agreement, adopted August 11, 2004, applicable
to
Mark F. Bradley*
|
Incorporated
herein by reference to Exhibit 10(a) to Peoples’ Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2004 (File No.
0-16772)
(the “September 30, 2004 Form 10-Q”).
|
||
10.21
|
Form
of Change in Control Agreement, adopted August 11, 2004, applicable
to
Carol A. Schneeberger*
|
Incorporated
herein by reference to Exhibit 10(b) to Peoples’ Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2006
(the “June 30, 2006 Form
10-Q”)
(File No. 0-16772)
|
||
10.22
|
Change
in Control Agreement, adopted January 1, 2006, between Peoples Bancorp
Inc. and David T. Wesel*
|
Incorporated
herein by reference
to Exhibit 10
.2
to Peoples’
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2007
(the
“
September
30, 200
7
Form
10-Q”)
|
||
10.23
|
Change
in Control Agreement, adopted September 4, 2007, between Peoples
Bancorp
Inc. and Deborah K. Hill*
|
Incorporated
herein by reference
to Exhibit 10
.1
to Peoples’
September
30, 200
7
Form
10-Q.
|
||
10.24(a)
|
Change
in Control Agreement, adopted August 11, 2004, between Peoples Bancorp
Inc. and Larry E. Holdren*
|
Filed
herewith.
|
||
10.24(b)
|
First
Amendment to Change in Control Agreement, effective February 18,
2008,
between Peoples Bancorp Inc. and Larry E. Holdren*
|
Filed
herewith.
|
||
10.25
|
Change
in Control Agreement, adopted February 20, 2008, between Peoples
Bancorp
Inc. and Joseph S. Yazombek*
|
Filed
herewith.
|
||
*Management
Compensation Plan
|
EXHIBIT
INDEX
|
||||
PEOPLES
BANCORP INC. ANNUAL REPORT ON FORM 10-K
|
||||
FOR
FISCAL YEAR ENDED DECEMBER 31, 2007
|
||||
10.26
|
Summary
of Perquisites for Executive Officers of Peoples Bancorp
Inc.
|
Incorporated
herein by reference to Exhibit 10.24 to Peoples’ Annual Report on Form
10-K for the fiscal year ended December 31, 2006 (File No. 0-16772)
(“Peoples’ 2006 Form 10-K”).
|
||
10.27
|
Summary
of Base Salaries for Executive Officers of Peoples Bancorp
Inc.
|
Filed
herewith.
|
||
10.28
|
Summary
of Cash Compensation for Directors of Peoples Bancorp Inc. effective
May
1, 2006
|
Incorporated
herein by reference to Exhibit 10(b) to Peoples’ Quarterly Report on Form
10-Q for the quarterly period ended March 31, 2006 (File No.
0-16772).
|
||
10.29(a)
|
Peoples
Bancorp Inc. 2006 Equity Plan*
|
Incorporated
herein by reference to Exhibit 10(a) of Peoples' June 30, 2006 Form
10-Q.
|
||
10.29(b)
|
Certificate
regarding adoption of Amendment to Peoples Bancorp Inc. 2006 Equity
Plan
by Board of Directors of Peoples Bancorp Inc. on June 8,
2006*
|
Incorporated
herein by reference to Exhibit 10(b) of Peoples' June 30, 2006 Form
10-Q.
|
||
10.29(c)
|
Second
Amendment to the Peoples Bancorp Inc. 2006 Equity Plan adopted on
February
8, 2007*
|
Incorporated
herein by reference to Exhibit 10.27(c) to Peoples’ 2006 Form
10-K.
|
||
10.30
|
Form
of Peoples Bancorp Inc. 2006 Equity Plan Nonqualified Stock Option
Agreement used and to be used to evidence grant of nonqualified stock
option to director of Peoples Bancorp Inc.*
|
Incorporated
herein by reference to Exhibit 10(c) of Peoples' June 30, 2006 Form
10-Q.
|
||
10.31
|
Form
of Peoples Bancorp Inc. 2006 Equity Plan Restricted Stock Agreement
for
employees used and to be used to evidence awards of restricted stock
granted to employees of Peoples Bancorp Inc.*
|
Filed
with Peoples’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2006.
|
||
10.32
|
Form
of Peoples Bancorp Inc. 2006 Equity Plan Restricted Stock Agreement
for
directors used and to be used to evidence awards of restricted stock
granted to directors of Peoples Bancorp Inc.*
|
Filed
with Peoples’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2006.
|
||
10.33
|
Form
of Peoples Bancorp Inc. 2006 Equity Plan SAR Agreement for employees
used
and to be used to evidence awards of stock appreciation rights granted
to
employees of Peoples Bancorp Inc.
|
Filed
with Peoples’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2006.
|
||
10.34
|
Resignation
and Severance Agreement, entered into effective April 26, 2007, by
and
between Peoples Bancorp Inc. and Peoples Bank, National Association
and
Donald J. Landers, Jr.*
|
Incorporated
herein by reference to Exhibit 10.1 to Peoples’ Current Report on Form
8-K/A dated and filed May 3, 2007 (File No. 0-16772).
|
||
12
|
Statements
of Computation of Ratios.
|
Filed
herewith.
|
||
*Management
Compensation Plan
|
EXHIBIT
INDEX
|
||||
PEOPLES
BANCORP INC. ANNUAL REPORT ON FORM 10-K
|
||||
FOR
FISCAL YEAR ENDED DECEMBER 31, 2007
|
||||
21
|
Subsidiaries
of Peoples Bancorp Inc.
|
Filed
herewith.
|
||
23
|
Consent
of Independent Registered Public Accounting Firm - Ernst & Young
LLP.
|
Filed
herewith.
|
||
31(a)
|
Certification
Pursuant to Rule 13a-14(a)/15d-14(a) [President and Chief Executive
Officer]
|
Filed
herewith.
|
||
31(b)
|
Certification
Pursuant to Rule 13a-14(a)/15d-14(a) [Chief Financial Officer and
Treasurer]
|
Filed
herewith.
|
||
32
|
Section
1350 Certification
|
Filed
herewith.
|
1.1
|
“
Base
Annual
Compensation
" means the Executive’s average annualized compensation
paid by the Company which was includible in the Executive’s gross income
during the most recent five taxable years ending before the date
of the
Change of Control. The definition covers amounts includible in
compensation, prior to any deferred arrangements, and defined as
the
individual’s “base amount” under Section 280G of the
Code.
|
1.2
|
“
Cause
”
means
|
(a)
|
Gross
negligence or gross neglect of duties;
or
|
(b)
|
Commission
of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Company;
or
|
(c)
|
Fraud,
disloyalty, dishonesty or willful violation of any law or significant
Company policy committed in connection with the Executive's employment;
or
|
(d)
|
Issuance
of an order for removal of the Executive by the Company’s banks
regulators.
|
1.3
|
“
Change
in
Control
” shall mean:
|
(a)
|
Any
person or entity or group of affiliated persons or entities (other
than
the Company) becomes a beneficial owner, directly or indirectly,
of 25% or
more of the Company’s voting securities or all or substantially all of the
assets of the Company;
|
(b)
|
The
Company enters into a definitive agreement which contemplates the
merger,
consolidation or combination of the Company with an unaffiliated
entity in
which either or both of the following is to occur: (i) the
Board of Directors of the Company, as applicable, immediately prior
to
such merger, consolidation or combination will constitute less than
a
majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities
of the
surviving, new or combined entity will be beneficially owned by the
stock
holders of the Company immediately prior to such merger, consolidation
or
combination; provided, however, that if any definitive agreement
to merge,
consolidate or combine is terminated without consummation of the
transaction, then no Change in Control shall be deemed to have occurred
pursuant to this paragraph;
|
(c)
|
The
Company enters into a definitive agreement which contemplates the
transfer
of all or substantially all of the Company’s assets, other than to a
wholly-owned Subsidiary of the Company; provided, however, that if
any
definitive agreement to transfer assets is terminated without consummation
of the transfer, then no Change in Control shall be deemed to have
occurred pursuant to this paragraph;
or
|
(d)
|
A
majority of the members of the Board of Directors of the Company
shall be
persons who: (i) were not members of such Board on the date of this
Agreement (“current members”); and (ii) were not nominated by a vote of
such Board which included the affirmative vote of a majority of the
current members on such Board at the time of their nomination (“future
designees”) and (iii) were not nominated by a vote of such Board which
included the affirmative vote of a majority of the current members
and
future designees, taken as a group, on such Board at the time of
their
nomination.
|
1.4
|
“
Code
”
means
the
Internal Revenue Code of 1986, as
amended.
|
1.5
|
“
Disability
”
means
the
Executive’s suffering a sickness, accident or injury which has been
determined by the insurance carrier of any individual or group disability
insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally
and
permanently disabled. The Executive must submit proof to the
Plan Administrator of the insurance carrier’s or Social Security
Administration’s determination upon the request of the Plan
Administrator
.
|
1.6
|
“
Good
Reason
” means,
without the Executive’s express written consent, after written
notice
to the Board, and after a
thirty (30) day opportunity for the Board to cure, the continuing
occurrence of any of the following
events:
|
(a)
|
The
assignment to the Executive of any material duties or responsibilities
inconsistent with the Executive’s positions, or a change in the
Executive’s reporting responsibilities, titles, or offices, or any removal
of the Executive from or any failure to re-elect the Executive to
any of
such positions, except in connection with the termination of the
Executive’s employment for Cause, Disability, retirement, or as a result
of the Executive’s death;
|
(b)
|
A
reduction by the Company in the Executive’s base salary;
|
(c)
|
The
taking of any action by the Company which would adversely affect
the
Executive’s participation in or materially reduce the Executive’s benefits
under any benefit plans, or the failure by the Company to provide
the
Executive with the number of paid vacation days to which the Executive
is
then entitled on the basis of years of service with the Company in
accordance with the Company’s normal vacation policy in effect on the date
hereof;
|
(d)
|
Any
failure of the Company to obtain the assumption of, or the agreement
to
perform, this Agreement by any successor as contemplated in Section
3.9
hereof; or
|
(e)
|
The
Company directing the Executive to be reassigned to an office location
50
miles or more form the current office location of the Executive except
for
required travel on Company business to an extent substantially consistent
with the Executive’s present business travel obligations or, in the event
the Executive consents to any relocation, the failure by the Company
to
pay (or reimburse the Executive) for all reasonable moving expenses
incurred by the Executive relating to a change of the Executive’s
principal residence in connection with such relocation and to indemnify
the Executive against any loss realized on the sale of the Executive’s
principal residence in connection with any such change of residence.
|
1.7
|
“
Termination
Date
” shall mean the date on which the Executive’s employment with
the Company is terminated.
|
2.1
|
Change
in Control
Benefit
. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company,
the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason,
then
in any such events, the Company shall pay to the Executive a benefit
under
this Article.
|
2.1.1
|
Amount
of
Benefit
. The benefit under this Section 2.1 is:
two
(2)
times
the Executive’s Base Annual Compensation at the date of the Change
of Control.
|
2.1.2
|
Payment
of
Benefit
. The Company shall pay the benefit to the
Executive in a lump sum within thirty (30) days following the Termination
Date.
|
2.1.3
|
Insurance
Benefits
. During the period of time specified in Section
3.2 of this Agreement, the Executive shall receive, in addition to
the
benefit provided in Section 2.1.1 of this Agreement, life, medical
and
dental insurance substantially in the form and expense to the Executive
as
received by the Executive on the Termination Date. It is
understood and agreed that any rights and privileges of the Executive
provided by the Consolidated Omnibus Budget Reconciliation Act of
1986,
amending the Employee Retirement Income Security Act, the Internal
Revenue
Code and the Public Health Services Act, as amended, shall begin
at the
end of the period of time specified in Section 3.2 of this
Agreement.
|
2.2
|
Excess
Parachute
Payment
. Notwithstanding anything to the contrary in
this Agreement, if there are payments to the Executive which constitute
“parachute payments,” as defined in Section 280G of the Code, then the
payments made to the Executive shall be the greater of (x) one dollar
($1.00) less than the amount which would cause the payments to the
Executive (including payments to the Executive which are not included
in
this Agreement) to be subject to the excise tax imposed by Section
4999 of
the Code, and (y) any payments to the Executive contingent upon the
Company’s Change in Control (including payments to the Executive which are
not included in the Agreement) less any excise tax.
|
3.1
|
Confidential
Information
.
The
Executive recognizes and acknowledges that he will have access to
certain
information of the Company and that such information is confidential
and
constitutes valuable, special and unique property of the
Company. The Executive shall not at any time, either during or
subsequent to the term of this Agreement, disclose to others, use,
copy or
permit to be copied, except as directed by law or in pursuance of
the
Executive’s duties for or on behalf of the Company, its successors,
assigns or nominees, any Confidential Information of the Company
(regardless of whether developed by the Executive), without the prior
written consent of the Company.
The
term “Confidential Information” with respect to any person means any
secret or confidential information or know-how and shall include,
but
shall not be limited to, the plans, customers, costs, prices, uses,
and
applications of products and services, results of investigations,
studies
owned or used by such person, and all products, processes, compositions,
computer programs, and servicing, marketing or operational methods
and
techniques at any time used, developed, investigated, made or sold
by such
person, before or during the term of this Agreement, that are not
readily
available to the public or that
are
maintained as confidential by such person. The Executive shall
maintain in confidence any Confidential Information of third parties
received as a result of the Executive’s employment with the Company in
accordance with the Company’s obligations to such third parties and the
policies established by the
Company.
|
3.2
|
No
Competition
. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company,
the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason,
then
and for a period of one (1) year immediately following the Termination
Date, the Executive shall not directly or indirectly engage in the
business of banking, or any other business in which the Company directly
or indirectly engages during the term of the Agreement; provided,
however,
that this restriction shall apply only to the geographic market of
the
Company as delineated on the Termination Date in the Community
Reinvestment Act Statement of Peoples Bank, National
Association. The Executive shall be deemed to engage in a
business if he directly or indirectly, engages or invests in, owns,
manages, operates, controls or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner
connected with, or renders services or advice to, any business engaged
in
banking, provided, however, that the Executive may invest in the
securities of any enterprise (but without otherwise participating
in the
activities of such enterprise) if two conditions are met: (a) such
securities are listed on any national or regional securities (exchange
or
have been registered under Section 12(g) of the Securities Exchange
Act of
1934) and (b) the Executive does not beneficially own (as defined
Rule 1
3d-3 promulgated under the Securities Exchange Act of 1934) in excess
of
1% of the outstanding capital stock of such
enterprise.
|
3.3
|
Delivery
of Documents
Upon Termination
. The Executive shall deliver to the
Company or its designee at the termination of the Executive’s employment
all correspondence, memoranda, notes, records, drawings, sketches,
plans,
customer lists, product compositions, and other documents and all
copies
thereof, made, composed or received by the Executive, solely or jointly
with others, that are in the Executive’s possession, custody, or control
at termination and that are related in any manner to the past, present,
or
anticipated business or any member of the
Company.
|
3.4
|
Remedies
. The
Executive acknowledges that a remedy at law for any breach or attempted
breach of the Executive’s obligations under Sections 3.1, 3.2 and 3.3 may
be inadequate, agrees that the Company may be entitled to specific
performance and injunctive and other equitable remedies in case of
any
such breach or attempted breach and further agrees to waive any
requirement for the securing or posting of any bond in connection
with the
obtaining of any such injunctive or other equitable relief. The
Company shall have the right to offset against amounts to be paid
to the
Executive pursuant to the terms hereof any amounts from time to time
owing
by the Executive to the Company. The termination of the
Agreement shall not be deemed to be a waiver by the Company of any
breach
by the Executive of this Agreement or any other obligation owed the
Company, and notwithstanding such a termination the Executive shall
be
liable for all damages attributable to such a
breach.
|
3.5
|
Dispute
Resolution
. Subject to the Company’s right to seek
injunctive relief in court as provided in Section 3.4 of this Agreement,
any dispute, controversy or claim arising out of or in relation to
or
connection to this Agreement, including without limitation any dispute
as
to the construction, validity, interpretation, enforceability or
breach of
this Agreement, shall be settled by arbitration administered by the
American Arbitration Association under its National Rules for the
Resolution of Employment Disputes and judgment upon the award rendered
by
the arbitrator(s) may be entered in any court having jurisdiction
thereof.
|
3.6
|
Acknowledgement
of
Parties
. The Company and Executive understand and
acknowledge that this Agreement means that neither can pursue an
action
against the other in a court of law regarding any employment dispute,
except for claims involving workers’ compensation benefits or unemployment
benefits, and except as set forth elsewhere in this Agreement, in
the
event that either party notifies the other of its demand for arbitration
under this Agreement. The Company and Executive understand and
agree that this Section 3.5, concerning arbitration, shall not include
any
controversies or claims related to any agreements or provisions (including
provisions in this Agreement) respecting confidentiality, proprietary
information, non-competition, non-solicitation, trade secrets, or
breaches
of fiduciary obligations by the Executive, which shall not be subject
to
arbitration.
|
3.7
|
Right
to Consult
Counsel
. Executive has been advised of the Executive’s
right to consult with an attorney prior to entering into this
Agreement.
|
3.8
|
Successors
of the
Company
.
The
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all
of the business and/or assets of the Company, by agreement in form
and
substance satisfactory to the Executive, expressly to assume and
agree to
perform this Agreement in the same manner and to the same extent
that the
Company would be required to perform it if no such succession had
taken
place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the
Company
in the same amount and on the same terms as the Executive would be
entitled hereunder if the Executive terminated the Executive’s employment
for Good Reason, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be
deemed
the Date of Termination. As used in this Agreement, “Company”
as hereinbefore defined shall include any successor to its business
and/or
assets as aforesaid which executes and delivers the agreement provided
for
in this Section 3 or which otherwise becomes bound by all the terms
and
provisions of this Agreement by operation of
law.
|
3.9
|
Executive’s
Heirs,
etc
.
The
Executive may not assign the Executive’s rights or delegate the
Executive’s duties or obligations hereunder without the written consent of
the Company. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and
legatees. If the Executive should die while any amounts would
still be payable to the Executive hereunder as if he had continued
to
live, all such amounts, unless other provided herein, shall be paid
in
accordance with the terms of this Agreement to the Executive’s designee
or, if there be no such designee, to the
Executive’s
estate.
|
3.10
|
Notices
.
Any
notice or communication required or permitted under the terms of
this
Agreement shall be in writing and shall be delivered personally,
or sent
by registered or certified mail, return receipt requested, postage
prepaid, or sent by nationally recognized overnight carrier, postage
prepaid, or sent by facsimile transmission to the Company at the
Company’s
principal office and facsimile number in Marietta, Ohio, or to
the Executive at the address and facsimile number, if any, appearing
on the books and records of the Company. Such notice or
communication shall be deemed given (a) when delivered if personally
delivered; (b) five mailing days after having been placed in the
mail, if
delivered by registered or certified mail; (c) the business day after
having been placed with a nationally recognized overnight carrier,
if
delivered by nationally recognized overnight carrier, and (d) the
business
day after transmittal when transmitted with electronic confirmation
of
receipt, if transmitted by facsimile. Any party may change the
address or facsimile number to which notices or communications are
to be
sent to it by giving notice of such change in the manner herein provided
for giving notice. Until changed by notice, the following shall
be the address and facsimile number to which notices shall be
sent:
|
3.11
|
Amendment
or Waiver
.
No
provisions of this Agreement may be modified, waived or discharged
unless
such waiver, modification or discharge is agreed to in writing signed
by
the Executive and such officer as may be specifically designated
by the
Board (which shall not include the Executive). No waiver by
either party hereto at any time of any breach by the other party
hereto of
or compliance with, any condition or provision of this Agreement
to be
performed by such other party shall be deemed a waiver of similar
or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof
have been made by either party, which are not set forth expressly
in this
Agreement.
This
Agreement
constitutes the entire agreement between the Company and the Executive
as
to the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically
set
forth herein.
|
3.12
|
Invalid
Provisions
.
Should
any portion of this Agreement be adjudged or held to be invalid,
unenforceable or void, such holding shall not have the effect of
invalidating or voiding the remainder of this Agreement and the parties
hereby agree that the portion so held invalid, unenforceable or void
shall
if possible, be deemed amended or reduced in scope, or otherwise
be
stricken from this Agreement to the extent required for the purposes
of
validity and enforcement thereof. In this regard, the parties
hereto hereby
agree
that any judicial authority construing this Agreement shall be empowered
to sever any portion of the geographic area or any prohibited business
activity from the coverage of this Agreement, and to reduce the duration
of the non-compete period and to apply the provisions of this Agreement
to
the remaining portion of the geographic area or the remaining business
activities not to be severed by such judicial authority and to the
duration of the non-compete period as reduced by judicial
determination.
|
3.13
|
Survival
of the
Executive’s Obligations
. The Executive’s obligations
under this Agreement shall survive regardless of whether the Executive’s
employment by the Company is terminated, voluntarily or involuntarily,
by
the Company or the Executive, with or without
Cause.
|
3.14
|
Counterparts
.
This
Agreement may be executed in one or more counterparts, each of which
shall
be deemed to be an original but all of which together will constitute
one
and the same instrument.
|
3.15
|
Governing
Law
. This Agreement and any action or proceeding related
to it shall be governed by and construed under the laws of the State
of
Ohio.
|
3.16
|
Captions
and
Gender
. The use of Captions and Section headings herein
is for purposes of convenience only and shall not effect the
interpretation or substance of any provisions contained
herein. Similarly, the use of the masculine gender with respect
to pronouns in this Agreement is for purposes of convenience and
includes
either sex who may be a signatory.
|
2.1.1
|
Amount
of Benefit. The benefit under this Section 2.1 is equal to one (1)
times
the amount of the Executive’s Base Annual Compensation as of the date of
the Change in Control.
|
1.1
|
“
Base
Annual
Compensation
”
means the
Executive’s average annualized compensation paid by the Company which was
includible in the Executive’s gross income during the most recent five
taxable years ending before the date of the Change of
Control. The definition covers amounts includible in
compensation, prior to any deferred arrangements, and defined as
the
individual’s “base amount” under Section 280G of the
Code.
|
1.2
|
“
Cause
”
means
|
(a)
|
Gross
negligence or gross neglect of duties;
or
|
(b)
|
Commission
of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Company;
or
|
(c)
|
Fraud,
disloyalty, dishonesty or willful violation of any law or significant
Company policy committed in connection with the Executive's employment;
or
|
(d)
|
Issuance
of an order for removal of the Executive by the Company’s banks
regulators.
|
1.3
|
“
Change
in
Control
” shall mean:
|
(a)
|
Any
person or entity or group of affiliated persons or entities (other
than
the Company) becomes a beneficial owner, directly or indirectly,
of 25% or
more of the Company’s voting securities or all or substantially all of the
assets of the Company;
|
(b)
|
The
Company enters into a definitive agreement which contemplates the
merger,
consolidation or combination of the Company with an unaffiliated
entity in
which either or both of the following is to occur: (i) the
Board of Directors of the Company, as applicable, immediately prior
to
such merger, consolidation or combination will constitute less than
a
majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities
of the
surviving, new or combined entity will be beneficially owned by the
stock
holders of the Company immediately prior to such merger, consolidation
or
combination; provided, however, that if any definitive agreement
to merge,
consolidate or combine is terminated without consummation of the
transaction, then no Change in Control shall be deemed to have occurred
pursuant to this paragraph;
|
(c)
|
The
Company enters into a definitive agreement which contemplates the
transfer
of all or substantially all of the Company’s assets, other than to a
wholly-owned Subsidiary of the Company; provided, however, that if
any
definitive agreement to transfer assets is terminated without consummation
of the transfer, then no Change in Control shall be deemed to have
occurred pursuant to this paragraph;
or
|
(d)
|
A
majority of the members of the Board of Directors of the Company
shall be
persons who: (i) were not members of such Board on the date of this
Agreement (“current members”); and (ii) were not nominated by a vote of
such Board which included the affirmative vote of a majority of the
current members on such Board at the time of their nomination (“future
designees”) and (iii) were not nominated by a vote of such Board which
included the affirmative vote of a majority of the current members
and
future designees, taken as a group, on such Board at the time of
their
nomination.
|
1.4
|
“
Code
”
means
the
Internal Revenue Code of 1986, as
amended.
|
1.5
|
“
Disability
”
means
the
Executive’s suffering a sickness, accident or injury which has been
determined by the insurance carrier of any individual or group disability
insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally
and
permanently disabled. The Executive must submit proof to the
Plan Administrator of the insurance carrier’s or Social Security
Administration’s determination upon the request of the Plan
Administrator
.
|
1.6
|
“
Good
Reason
” means,
without the Executive’s express written consent, after written notice to
the Board, and after a thirty (30) day opportunity for the Board
to cure,
the continuing occurrence of any of the following
events:
|
(a)
|
The
assignment to the Executive of any material duties or responsibilities
inconsistent with the Executive’s positions, or a change in the
Executive’s reporting responsibilities, titles, or offices, or any removal
of the Executive from or any failure to re-elect the Executive to
any of
such positions, except in connection with the termination of the
Executive’s employment for Cause, Disability, retirement, or as a result
of the Executive’s death;
|
(b)
|
A
reduction by the Company in the Executive’s base salary;
|
(c)
|
The
taking of any action by the Company which would adversely affect
the
Executive’s participation in or materially reduce the Executive’s benefits
under any benefit plans, or the failure by the Company to provide
the
Executive with the number of paid vacation days to which the Executive
is
then entitled on the basis of years of service with the Company in
accordance with the Company’s normal vacation policy in effect on the date
hereof;
|
(d)
|
Any
failure of the Company to obtain the assumption of, or the agreement
to
perform, this Agreement by any successor as contemplated in Section
3.9
hereof; or
|
(e)
|
The
Company directing the Executive to be reassigned to an office location
50
miles or more form the current office location of the Executive except
for
required travel on Company business to an extent substantially consistent
with the Executive’s present business travel obligations or, in the event
the Executive consents to any relocation, the failure by the Company
to
pay (or reimburse the Executive) for all reasonable moving expenses
incurred by the Executive relating to a change of the Executive’s
principal residence in connection with such relocation and to indemnify
the Executive against any loss realized on the sale of the Executive’s
principal residence in connection with any such change of residence.
|
1.7
|
“
Termination
Date
” shall mean the date on which the Executive’s employment with
the Company is terminated.
|
2.1
|
Change
in Control
Benefit
. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company,
the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason,
then
in any such events, the Company shall pay to the Executive a benefit
under
this Article.
|
2.1.1
|
Amount
of
Benefit
. The benefit under this Section 2.1 is:
two
(2)
times
the Executive’s Base Annual Compensation at the date of the Change of
Control.
|
2.1.2
|
Payment
of
Benefit
. The Company shall pay the benefit to the
Executive in a lump sum within thirty (30) days following the Termination
Date.
|
2.1.3
|
Insurance
Benefits
. During the period of time specified in Section
3.2 of this Agreement, the Executive shall receive, in addition
to the
benefit provided in Section 2.1.1 of this Agreement, life, medical
and
dental insurance substantially in the form and expense to the Executive
as
received by the Executive on the Termination Date. It is
understood and agreed that any rights and privileges of the Executive
provided by the Consolidated Omnibus Budget Reconciliation Act
of 1986,
amending the Employee Retirement Income Security Act, the Internal
Revenue
Code and the Public Health Services Act, as amended, shall begin
at the
end of the period of time specified in Section 3.2 of this
Agreement.
|
2.2
|
Excess
Parachute
Payment
. Notwithstanding anything to the contrary in
this Agreement, if there are payments to the Executive which constitute
“parachute payments,” as defined in Section 280G of the Code, then the
payments made to the Executive shall be the greater of (x) one dollar
($1.00) less than the amount which would cause the payments to the
Executive (including payments to the Executive which are not included
in
this Agreement) to be subject to the excise tax imposed by Section
4999 of
the Code, and (y) any payments to the Executive contingent upon the
Company’s Change in Control (including payments to the Executive which are
not included in the Agreement) less any excise tax.
|
3.1
|
Confidential
Information
.
The
Executive recognizes and acknowledges that he will have access to
certain
information of the Company and that such information is confidential
and
constitutes valuable, special and unique property of the
Company. The Executive shall not at any time, either during or
subsequent to the term of this Agreement, disclose to others, use,
copy or
permit to be copied, except as directed by law or in pursuance of
the
Executive’s duties for or on behalf of the Company, its successors,
assigns or nominees, any Confidential Information of the Company
(regardless of whether developed by the Executive), without the prior
written consent of the Company.
The
term “Confidential Information” with respect to any person means any
secret or confidential information or know-how and shall include,
but
shall not be limited to, the plans, customers, costs, prices, uses,
and
applications of products and services, results of investigations,
studies
owned or used by such person, and all products, processes, compositions,
computer programs, and servicing, marketing or operational methods
and
techniques at any time used, developed, investigated, made or sold
by such
person, before or during the term of this Agreement, that are not
readily
available to the public or that are maintained as confidential by
such
person. The Executive shall maintain in confidence any
Confidential Information of third parties received as a result of
the
Executive’s employment with the Company in accordance with the Company’s
obligations to such third parties and the policies established by
the
Company.
|
3.2
|
No
Competition
. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company,
the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason,
then
and for a period of one (1) year immediately following the Termination
Date, the Executive shall not directly or indirectly engage in the
business of banking, or any other business in which the Company directly
or indirectly engages during the term of the Agreement; provided,
however,
that this restriction shall apply only to the geographic market of
the
Company as delineated on the Termination Date in the Community
Reinvestment Act Statement of Peoples Bank, National
Association. The Executive shall be deemed to engage in a
business if he directly or indirectly, engages or invests in, owns,
manages, operates, controls or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner
connected with, or renders services or advice to, any business engaged
in
banking, provided, however, that the Executive may invest in the
securities of any enterprise (but without otherwise participating
in the
activities of such enterprise) if two conditions are met: (a) such
securities are listed on any national or regional securities (exchange
or
have been registered under Section 12(g) of the Securities Exchange
Act of
1934) and (b) the Executive does not beneficially own (as defined
Rule 1
3d-3 promulgated under the Securities Exchange Act of 1934) in excess
of
1% of the outstanding capital stock of such
enterprise.
|
3.3
|
Delivery
of Documents
Upon Termination
. The Executive shall deliver to the
Company or its designee at the termination of the Executive’s employment
all correspondence, memoranda, notes, records, drawings, sketches,
plans,
customer lists, product compositions, and other documents and all
copies
thereof, made, composed or received by the Executive, solely or jointly
with others, that are in the Executive’s possession, custody, or control
at termination and that are related in any manner to the past, present,
or
anticipated business or any member of the
Company.
|
3.4
|
Remedies
. The
Executive acknowledges that a remedy at law for any breach or attempted
breach of the Executive’s obligations under Sections 3.1, 3.2 and 3.3 may
be inadequate, agrees that the Company may be entitled to specific
performance and injunctive and other equitable remedies in case of
any
such breach or attempted breach and further agrees to waive any
requirement for the securing or posting of any bond in connection
with the
obtaining of any such injunctive or other equitable relief. The
Company shall have the right to offset against amounts to be paid
to the
Executive pursuant to the terms hereof any amounts from time to time
owing
by the Executive to the Company. The termination of the
Agreement shall not be deemed to be a waiver by the Company of any
breach
by the Executive of this Agreement or any other obligation owed the
Company, and notwithstanding such a termination the Executive shall
be
liable for all damages attributable to such a
breach.
|
3.5
|
Dispute
Resolution
. Subject to the Company’s right to seek
injunctive relief in court as provided in Section 3.4 of this Agreement,
any dispute, controversy or claim arising out of or in relation to
or
connection to this Agreement, including without limitation any dispute
as
to the construction, validity, interpretation, enforceability or
breach of
this Agreement, shall be settled by arbitration administered by the
American Arbitration Association under its National Rules for the
Resolution of Employment Disputes and judgment upon the award rendered
by
the arbitrator(s) may be entered in any court having jurisdiction
thereof.
|
3.6
|
Acknowledgement
of
Parties
. The Company and Executive understand and
acknowledge that this Agreement means that neither can pursue an
action
against the other in a court of law regarding any employment dispute,
except for claims involving workers’ compensation benefits or unemployment
benefits, and except as set forth elsewhere in this Agreement, in
the
event that either party notifies the other of its demand for arbitration
under this Agreement. The Company and Executive understand and
agree that this Section 3.5, concerning arbitration, shall not include
any
controversies or claims related to any agreements or provisions (including
provisions in this Agreement) respecting confidentiality, proprietary
information, non-competition, non-solicitation, trade secrets, or
breaches
of fiduciary obligations by the Executive, which shall not be subject
to
arbitration.
|
3.7
|
Right
to Consult
Counsel
. Executive has been advised of the Executive’s
right to consult with an attorney prior to entering into this
Agreement.
|
3.8
|
Successors
of the
Company
.
The
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all
of the business and/or assets of the Company, by agreement in form
and
substance satisfactory to the Executive, expressly to assume and
agree to
perform this Agreement in the same manner and to the same extent
that the
Company would be required to perform it if no such succession had
taken
place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the
Company
in the same amount and on the same terms as the Executive would be
entitled hereunder if the Executive terminated the Executive’s employment
for Good Reason, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be
deemed
the Date of Termination. As used in this Agreement, “Company”
as hereinbefore defined shall include any successor to its business
and/or
assets as aforesaid which executes and delivers the agreement provided
for
in this Section 3 or which otherwise becomes bound by all the terms
and
provisions of this Agreement by operation of
law.
|
3.9
|
Executive’s
Heirs,
etc
.
The
Executive may not assign the Executive’s rights or delegate the
Executive’s duties or obligations hereunder without the written consent of
the Company. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and
legatees. If the Executive should die while any amounts would
still be payable to the Executive hereunder as if he had continued
to
live, all such amounts, unless other provided herein, shall be paid
in
accordance with the terms of this Agreement to the Executive’s designee
or, if there be no such designee, to the Executive’s
estate.
|
3.10
|
Notices
.
Any
notice or communication required or permitted under the terms of
this
Agreement shall be in writing and shall be delivered personally,
or sent
by registered or certified mail, return receipt requested, postage
prepaid, or sent by nationally recognized overnight carrier, postage
prepaid, or sent by facsimile transmission to the Company at the
Company’s
principal office and facsimile number in Marietta, Ohio, or to
the Executive at the address and facsimile number, if any, appearing
on the books and records of the Company. Such notice or
communication shall be deemed given (a) when delivered if personally
delivered; (b) five mailing days after having been placed in the
mail, if
delivered by registered or certified mail; (c) the business day after
having been placed with a nationally recognized overnight carrier,
if
delivered by nationally recognized overnight carrier, and (d) the
business
day after transmittal when transmitted with electronic confirmation
of
receipt, if transmitted by facsimile. Any party may change the
address or facsimile number to which notices or communications are
to be
sent to it by giving notice of such change in the manner herein provided
for giving notice. Until changed by notice, the following shall
be the address and facsimile number to which notices shall be
sent:
|
3.11
|
Amendment
or Waiver
.
No
provisions of this Agreement may be modified, waived or discharged
unless
such waiver, modification or discharge is agreed to in writing signed
by
the Executive and such officer as may be specifically designated
by the
Board (which shall not include the Executive). No waiver by
either party hereto at any time of any breach by the other party
hereto of
or compliance with, any condition or provision of this Agreement
to be
performed by such other party shall be deemed a waiver of similar
or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof
have been made by either party, which are not set forth expressly
in this
Agreement.
This
Agreement
constitutes the entire agreement between the Company and the Executive
as
to the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically
set
forth herein.
|
3.12
|
Invalid
Provisions
.
Should
any portion of this Agreement be adjudged or held to be invalid,
unenforceable or void, such holding shall not have the effect of
invalidating or voiding the remainder of this Agreement and the parties
hereby agree that the portion so held invalid, unenforceable or void
shall
if possible, be deemed amended or reduced in scope, or otherwise
be
stricken from this Agreement to the extent required for the purposes
of
validity and enforcement thereof. In this regard, the parties
hereto hereby agree that any judicial authority construing this Agreement
shall be empowered to sever any portion of the geographic area or
any
prohibited business activity from the coverage of this Agreement,
and to
reduce the duration of the non-compete period and to apply the provisions
of this Agreement to the remaining portion of the geographic area
or the
remaining business activities not to be severed by such judicial
authority
and to the duration of the non-compete period as reduced by judicial
determination.
|
3.13
|
Survival
of the
Executive’s Obligations
. The Executive’s obligations
under this Agreement shall survive regardless of whether the Executive’s
employment by the Company is terminated, voluntarily or involuntarily,
by
the Company or the Executive, with or without
Cause.
|
3.14
|
Counterparts
.
This
Agreement may be executed in one or more counterparts, each of which
shall
be deemed to be an original but all of which together will constitute
one
and the same instrument.
|
3.15
|
Governing
Law
. This Agreement and any action or proceeding related
to it shall be governed by and construed under the laws of the State
of
Ohio.
|
3.16
|
Captions
and
Gender
. The use of Captions and Section headings herein
is for purposes of convenience only and shall not effect the
interpretation or substance of any provisions contained
herein. Similarly, the use of the masculine gender with respect
to pronouns in this Agreement is for purposes of convenience and
includes
either sex who may be a signatory.
|
Name
|
Position/Title
|
Base
Salary
|
Mark
F. Bradley
|
President
and Chief Executive Officer
|
$
280,000
|
Carol
A. Schneeberger
|
Chief
Financial Officer, Treasurer and Executive Vice President,
Operations
|
190,000
|
Joseph
S. Yazombek
|
Executive
Vice President – Chief Lending Officer
|
220,000
|
David
T. Wesel
|
Executive
Vice President
|
168,000
|
Larry
E. Holdren
|
Executive
Vice President – Business and Corporate Development
|
120,000
|
RETURN
ON AVERAGE ASSETS
|
Net
income/Average assets
|
|
RETURN
ON AVERAGE STOCKHOLDERS' EQUITY
|
Net
income/Average stockholders' equity
|
|
NET
INTEREST MARGIN
|
Fully
tax-equivalent net interest income/Average earning assets
|
|
EFFICIENCY
RATIO
|
(Non-interest
expense less intangible amortization)/(Fully tax-equivalent net interest
income plus non-interest income)
|
|
AVERAGE
STOCKHOLDERS' EQUITY TO AVERAGE ASSETS
|
Average
stockholders' equity/Average assets
|
|
AVERAGE
LOANS TO AVERAGE DEPOSITS
|
Average
gross loans/Average deposits
|
|
ALLOWANCE
FOR LOAN LOSSES TO TOTAL LOANS
|
Allowance
for loan losses/Total loans
|
|
CASH
DIVIDENDS TO NET INCOME OR DIVIDEND PAYOUT RATIO
|
Dividends
declared/Net income
|
|
TIER
1 CAPITAL RATIO
|
Stockholders'
equity less intangible assets and securities mark-to-market capital
reserve ("Tier 1 Capital")/Risk adjusted assets
|
|
TOTAL
RISK-BASED CAPITAL RATIO
|
Tier
1 Capital plus allowance for loan losses/Risk adjusted assets
|
|
TIER
1 LEVERAGE RATIO
|
Tier
1 Capital /Quarterly average assets
|
|
BOOK
VALUE PER SHARE
|
Total
stockholders' equity/Common shares outstanding at year-end
|
|
TANGIBLE
BOOK VALUE PER SHARE
|
(Total
stockholders' equity less goodwill and other intangible assets)/Common
shares outstanding at fiscal year-end
|
Subsidiaries
of Peoples Bancorp
Inc.
|
|||
The
following are the only subsidiaries of Peoples Bancorp
Inc.:
|
|||
Name
of Subsidiary
|
Jurisdiction
of
Incorporation
or Organization
|
||
Peoples
Bank, National Association (“Peoples Bank”)
|
United
States
|
||
Peoples
Insurance Agency, Inc. (“Peoples Insurance”)
|
Ohio
|
||
Peoples
Loan Services, Inc. (“PLS”)
|
Delaware
|
||
PBNA,
L.L.C.
|
Delaware
|
||
Peoples
Investment Company
|
Delaware
|
||
Peoples
Capital Corporation
|
Delaware
|
||
PEBO
Capital Trust I
|
Delaware
|
1.
|
I
have reviewed this Annual Report on Form 10-K for the fiscal year
ended
December 31, 2007, of Peoples Bancorp
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of registrant's
board of
directors (or persons performing the equivalent
functions):
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information;
and
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
1.
|
I
have reviewed this Annual Report on Form 10-K for the fiscal year
ended
December 31, 2007, of Peoples Bancorp
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of registrant's
board of
directors (or persons performing the equivalent
functions):
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information;
and
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934;
and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the consolidated financial condition and results of operations
of Peoples Bancorp and its
subsidiaries.
|