x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Large accelerated
filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
Table of Contents
|
|
|
|
|
June 30,
2013 |
December 31,
2012 |
||||
(Dollars in thousands)
|
||||||
Assets
|
|
|
||||
Cash and cash equivalents:
|
|
|
||||
Cash and due from banks
|
$
|
32,486
|
|
$
|
47,256
|
|
Interest-bearing deposits in other banks
|
5,271
|
|
15,286
|
|
||
Total cash and cash equivalents
|
37,757
|
|
62,542
|
|
||
Available-for-sale investment securities, at fair value (amortized cost of $606,441 at June 30, 2013 and $628,584 at December 31, 2012)
|
600,328
|
|
639,185
|
|
||
Held-to-maturity investment securities, at amortized cost (fair value of $46,610 at June 30, 2013 and $47,124 at December 31, 2012)
|
48,098
|
|
45,275
|
|
||
Other investment securities, at cost
|
24,822
|
|
24,625
|
|
||
Total investment securities
|
673,248
|
|
709,085
|
|
||
Loans, net of deferred fees and costs
|
1,030,229
|
|
985,172
|
|
||
Allowance for loan losses
|
(17,113
|
)
|
(17,811
|
)
|
||
Net loans
|
1,013,116
|
|
967,361
|
|
||
Loans held for sale
|
4,953
|
|
6,546
|
|
||
Bank premises and equipment, net
|
28,544
|
|
27,013
|
|
||
Bank owned life insurance
|
44,660
|
|
51,229
|
|
||
Goodwill
|
65,786
|
|
64,881
|
|
||
Other intangible assets
|
5,822
|
|
3,644
|
|
||
Other assets
|
25,955
|
|
25,749
|
|
||
Total assets
|
$
|
1,899,841
|
|
$
|
1,918,050
|
|
Liabilities
|
|
|
||||
Deposits:
|
|
|
||||
Non-interest-bearing
|
$
|
325,125
|
|
$
|
317,071
|
|
Interest-bearing
|
1,110,653
|
|
1,175,232
|
|
||
Total deposits
|
1,435,778
|
|
1,492,303
|
|
||
Short-term borrowings
|
92,521
|
|
47,769
|
|
||
Long-term borrowings
|
125,714
|
|
128,823
|
|
||
Accrued expenses and other liabilities
|
26,681
|
|
27,427
|
|
||
Total liabilities
|
1,680,694
|
|
1,696,322
|
|
||
Stockholders’ Equity
|
|
|
||||
Preferred stock, no par value, 50,000 shares authorized, no shares issued at June 30, 2013 and December 31, 2012
|
—
|
|
—
|
|
||
Common stock, no par value, 24,000,000 shares authorized, 11,183,245 shares issued at June 30, 2013 and 11,155,648 shares issued at December 31, 2012, including shares in treasury
|
167,964
|
|
167,039
|
|
||
Retained earnings
|
76,294
|
|
69,158
|
|
||
Accumulated other comprehensive (loss) income, net of deferred income taxes
|
(10,148
|
)
|
654
|
|
||
Treasury stock, at cost, 600,084 shares at June 30, 2013 and 607,688 shares at December 31, 2012
|
(14,963
|
)
|
(15,123
|
)
|
||
Total stockholders’ equity
|
219,147
|
|
221,728
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,899,841
|
|
$
|
1,918,050
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
(Dollars in thousands, except per share data)
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
Interest Income:
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
11,533
|
|
$
|
12,043
|
|
|
$
|
22,987
|
|
$
|
23,803
|
|
Interest and dividends on taxable investment securities
|
4,159
|
|
4,939
|
|
|
8,374
|
|
10,446
|
|
||||
Interest on tax-exempt investment securities
|
394
|
|
355
|
|
|
773
|
|
696
|
|
||||
Other interest income
|
25
|
|
4
|
|
|
43
|
|
8
|
|
||||
Total interest income
|
16,111
|
|
17,341
|
|
|
32,177
|
|
34,953
|
|
||||
Interest Expense:
|
|
|
|
|
|
||||||||
Interest on deposits
|
1,798
|
|
2,289
|
|
|
3,737
|
|
4,836
|
|
||||
Interest on short-term borrowings
|
22
|
|
19
|
|
|
35
|
|
38
|
|
||||
Interest on long-term borrowings
|
1,136
|
|
929
|
|
|
2,275
|
|
2,048
|
|
||||
Interest on junior subordinated debentures held by subsidiary trust
|
—
|
|
492
|
|
|
—
|
|
987
|
|
||||
Total interest expense
|
2,956
|
|
3,729
|
|
|
6,047
|
|
7,909
|
|
||||
Net interest income
|
13,155
|
|
13,612
|
|
|
26,130
|
|
27,044
|
|
||||
Recovery of loan losses
|
(1,462
|
)
|
(1,120
|
)
|
|
(2,527
|
)
|
(3,257
|
)
|
||||
Net interest income after recovery of loan losses
|
14,617
|
|
14,732
|
|
|
28,657
|
|
30,301
|
|
||||
Other Income:
|
|
|
|
|
|
||||||||
Insurance income
|
3,220
|
|
2,438
|
|
|
6,098
|
|
5,389
|
|
||||
Deposit account service charges
|
2,045
|
|
2,230
|
|
|
4,102
|
|
4,467
|
|
||||
Trust and investment income
|
1,772
|
|
1,449
|
|
|
3,474
|
|
2,945
|
|
||||
Electronic banking income
|
1,561
|
|
1,464
|
|
|
2,980
|
|
2,952
|
|
||||
Mortgage banking income
|
365
|
|
682
|
|
|
1,083
|
|
1,231
|
|
||||
Net gain on investment securities
|
26
|
|
—
|
|
|
444
|
|
3,163
|
|
||||
Net loss on asset disposals and other transactions
|
(6
|
)
|
(43
|
)
|
|
(11
|
)
|
(3,105
|
)
|
||||
Other non-interest income
|
253
|
|
235
|
|
|
551
|
|
596
|
|
||||
Total other income
|
9,236
|
|
8,455
|
|
|
18,721
|
|
17,638
|
|
||||
Other Expenses:
|
|
|
|
|
|
||||||||
Salaries and employee benefit costs
|
8,934
|
|
8,415
|
|
|
17,651
|
|
16,660
|
|
||||
Net occupancy and equipment
|
1,626
|
|
1,503
|
|
|
3,484
|
|
2,935
|
|
||||
Professional fees
|
1,002
|
|
1,204
|
|
|
1,896
|
|
2,017
|
|
||||
Electronic banking expense
|
885
|
|
870
|
|
|
1,725
|
|
1,564
|
|
||||
Marketing expense
|
562
|
|
481
|
|
|
1,012
|
|
956
|
|
||||
Data processing and software
|
488
|
|
485
|
|
|
949
|
|
972
|
|
||||
Franchise tax
|
413
|
|
414
|
|
|
826
|
|
826
|
|
||||
Communication expense
|
361
|
|
288
|
|
|
664
|
|
636
|
|
||||
FDIC insurance
|
250
|
|
223
|
|
|
530
|
|
532
|
|
||||
Foreclosed real estate and other loan expenses
|
223
|
|
255
|
|
|
440
|
|
476
|
|
||||
Amortization of other intangible assets
|
164
|
|
109
|
|
|
353
|
|
216
|
|
||||
Other non-interest expense
|
1,514
|
|
1,439
|
|
|
3,077
|
|
2,912
|
|
||||
Total other expenses
|
16,422
|
|
15,686
|
|
|
32,607
|
|
30,702
|
|
||||
Income before income taxes
|
7,431
|
|
7,501
|
|
|
14,771
|
|
17,237
|
|
||||
Income tax expense
|
2,510
|
|
2,471
|
|
|
4,828
|
|
5,550
|
|
||||
Net income
|
$
|
4,921
|
|
$
|
5,030
|
|
|
$
|
9,943
|
|
$
|
11,687
|
|
Earnings per share - basic
|
$
|
0.46
|
|
$
|
0.47
|
|
|
$
|
0.93
|
|
$
|
1.10
|
|
Earnings per share - diluted
|
$
|
0.46
|
|
$
|
0.47
|
|
|
$
|
0.93
|
|
$
|
1.10
|
|
Weighted-average number of shares outstanding - basic
|
10,576,643
|
|
10,524,429
|
|
|
10,566,508
|
|
10,518,909
|
|
||||
Weighted-average number of shares outstanding - diluted
|
10,597,033
|
|
10,524,429
|
|
|
10,584,383
|
|
10,518,929
|
|
||||
Cash dividends declared
|
$
|
1,512
|
|
$
|
1,175
|
|
|
$
|
2,807
|
|
$
|
2,347
|
|
Cash dividends declared per share
|
$
|
0.14
|
|
$
|
0.11
|
|
|
$
|
0.26
|
|
$
|
0.22
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
(Dollars in thousands)
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
Net income
|
$
|
4,921
|
|
$
|
5,030
|
|
|
$
|
9,943
|
|
$
|
11,687
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||||
Available-for-sale investment securities:
|
|
|
|
|
|
||||||||
Gross unrealized holding (loss) gain arising in the period
|
(16,727
|
)
|
2,638
|
|
|
(16,270
|
)
|
1,575
|
|
||||
Related tax benefit (expense)
|
5,854
|
|
(923
|
)
|
|
5,694
|
|
(551
|
)
|
||||
Less: reclassification adjustment for net gain included in net income
|
26
|
|
—
|
|
|
444
|
|
3,163
|
|
||||
Related tax expense
|
(9
|
)
|
—
|
|
|
(155
|
)
|
(1,107
|
)
|
||||
Net effect on other comprehensive (loss) income
|
(10,890
|
)
|
1,715
|
|
|
(10,865
|
)
|
(1,032
|
)
|
||||
Defined benefit plans:
|
|
|
|
|
|
||||||||
Net loss arising during the period
|
—
|
|
(355
|
)
|
|
—
|
|
(355
|
)
|
||||
Related tax benefit
|
—
|
|
124
|
|
|
—
|
|
124
|
|
||||
Amortization of unrecognized loss and service cost on benefit plans
|
52
|
|
41
|
|
|
97
|
|
79
|
|
||||
Related tax expense
|
(18
|
)
|
(14
|
)
|
|
(34
|
)
|
(27
|
)
|
||||
Recognition of loss due to settlement and curtailment
|
—
|
|
353
|
|
|
—
|
|
353
|
|
||||
Related tax expense
|
—
|
|
(124
|
)
|
|
—
|
|
(124
|
)
|
||||
Net effect on other comprehensive (loss) income
|
34
|
|
25
|
|
|
63
|
|
50
|
|
||||
Total other comprehensive (loss) income, net of tax
|
(10,856
|
)
|
1,740
|
|
|
(10,802
|
)
|
(982
|
)
|
||||
Total comprehensive (loss) income
|
$
|
(5,935
|
)
|
$
|
6,770
|
|
|
$
|
(859
|
)
|
$
|
10,705
|
|
|
|
|
Accumulated Other
|
|
Total
|
||||||||||
|
Common
|
Retained
|
Comprehensive
|
Treasury
|
Stockholders'
|
||||||||||
(Dollars in thousands)
|
Stock
|
Earnings
|
Income (Loss)
|
Stock
|
Equity
|
||||||||||
Balance, December 31, 2012
|
$
|
167,039
|
|
$
|
69,158
|
|
$
|
654
|
|
$
|
(15,123
|
)
|
$
|
221,728
|
|
Net income
|
|
9,943
|
|
|
|
9,943
|
|
||||||||
Other comprehensive loss, net of tax
|
|
|
(10,802
|
)
|
|
(10,802
|
)
|
||||||||
Common stock cash dividends declared
|
|
(2,807
|
)
|
|
|
(2,807
|
)
|
||||||||
Tax benefit from exercise of stock options
|
55
|
|
|
|
|
55
|
|
||||||||
Reissuance of treasury stock for deferred compensation plan
|
|
|
|
142
|
|
142
|
|
||||||||
Purchase of treasury stock
|
|
|
|
(86
|
)
|
(86
|
)
|
||||||||
Common shares issued under dividend reinvestment plan
|
207
|
|
|
|
|
207
|
|
||||||||
Common shares issued under Board of Directors' compensation plan
|
(20
|
)
|
|
|
104
|
|
84
|
|
|||||||
Stock-based compensation expense
|
683
|
|
|
|
|
683
|
|
||||||||
Balance, June 30, 2013
|
$
|
167,964
|
|
$
|
76,294
|
|
$
|
(10,148
|
)
|
$
|
(14,963
|
)
|
$
|
219,147
|
|
|
Six Months Ended
|
|||||
|
June 30,
|
|||||
(Dollars in thousands)
|
2013
|
2012
|
||||
Net cash provided by operating activities
|
$
|
20,343
|
|
$
|
17,593
|
|
Investing activities:
|
|
|
||||
Available-for-sale investment securities:
|
|
|
||||
Purchases
|
(162,360
|
)
|
(135,031
|
)
|
||
Proceeds from sales
|
120,974
|
|
63,650
|
|
||
Proceeds from principal payments, calls and prepayments
|
57,501
|
|
70,516
|
|
||
Held-to-maturity investment securities:
|
|
|
||||
Purchases
|
(3,231
|
)
|
(23,241
|
)
|
||
Proceeds from principal payments
|
230
|
|
2,278
|
|
||
Net increase in loans
|
(42,855
|
)
|
(17,467
|
)
|
||
Net expenditures for premises and equipment
|
(2,995
|
)
|
(1,146
|
)
|
||
Proceeds from sales of other real estate owned
|
912
|
|
1,387
|
|
||
Proceeds from bank owned life insurance
|
6,596
|
|
—
|
|
||
Business acquisitions, net of cash received
|
(2,248
|
)
|
(125
|
)
|
||
Investment in limited partnership and tax credit funds
|
(120
|
)
|
(187
|
)
|
||
Net cash used in investing activities
|
(27,596
|
)
|
(39,366
|
)
|
||
Financing activities:
|
|
|
||||
Net increase in non-interest-bearing deposits
|
8,054
|
|
32,790
|
|
||
Net (decrease) increase in interest-bearing deposits
|
(64,583
|
)
|
34,380
|
|
||
Net increase (decrease) in short-term borrowings
|
44,752
|
|
(8,296
|
)
|
||
Payments on long-term borrowings
|
(3,124
|
)
|
(38,951
|
)
|
||
Repurchase of preferred shares and common stock warrant
|
—
|
|
(1,201
|
)
|
||
Cash dividends paid on common shares
|
(2,604
|
)
|
(2,171
|
)
|
||
Purchase of treasury stock
|
(86
|
)
|
(48
|
)
|
||
Proceeds from issuance of common shares
|
4
|
|
3
|
|
||
Excess tax benefit from share-based payments
|
55
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(17,532
|
)
|
16,506
|
|
||
Net decrease in cash and cash equivalents
|
(24,785
|
)
|
(5,267
|
)
|
||
Cash and cash equivalents at beginning of period
|
62,542
|
|
38,950
|
|
||
Cash and cash equivalents at end of period
|
$
|
37,757
|
|
$
|
33,683
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||
(Dollars in thousands)
|
|
Quoted Prices in Active Markets for Identical Assets
|
Significant
Other
Observable
Inputs
|
Significant Unobservable Inputs
|
||||||||
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||
June 30, 2013
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
U.S. Treasury and government agencies
|
$
|
23
|
|
$
|
—
|
|
$
|
23
|
|
$
|
—
|
|
U.S. government sponsored agencies
|
400
|
|
—
|
|
400
|
|
—
|
|
||||
States and political subdivisions
|
50,579
|
|
1,893
|
|
48,686
|
|
—
|
|
||||
Residential mortgage-backed securities
|
503,574
|
|
—
|
|
503,574
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
33,606
|
|
—
|
|
33,606
|
|
—
|
|
||||
Bank-issued trust preferred securities
|
7,811
|
|
—
|
|
7,811
|
|
—
|
|
||||
Equity securities
|
4,335
|
|
4,201
|
|
134
|
|
—
|
|
||||
Total available-for-sale securities
|
$
|
600,328
|
|
$
|
6,094
|
|
$
|
594,234
|
|
$
|
—
|
|
December 31, 2012
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
U.S. Treasury and government agencies
|
$
|
26
|
|
$
|
—
|
|
$
|
26
|
|
$
|
—
|
|
U.S. government sponsored agencies
|
516
|
|
—
|
|
516
|
|
—
|
|
||||
States and political subdivisions
|
45,668
|
|
681
|
|
44,987
|
|
—
|
|
||||
Residential mortgage-backed securities
|
514,096
|
|
—
|
|
514,096
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
64,416
|
|
—
|
|
64,416
|
|
—
|
|
||||
Bank-issued trust preferred securities
|
10,357
|
|
—
|
|
10,357
|
|
—
|
|
||||
Equity securities
|
4,106
|
|
3,971
|
|
135
|
|
—
|
|
||||
Total available-for-sale securities
|
$
|
639,185
|
|
$
|
4,652
|
|
$
|
634,533
|
|
$
|
—
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||
(Dollars in thousands)
|
|
Quoted Prices in Active Markets for Identical Assets
|
Significant
Other
Observable
Inputs
|
Significant Unobservable Inputs
|
||||||||
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||
June 30, 2013
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
States and political subdivisions
|
$
|
4,059
|
|
$
|
—
|
|
$
|
4,059
|
|
$
|
—
|
|
Residential mortgage-backed securities
|
34,921
|
|
—
|
|
34,921
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
7,630
|
|
—
|
|
7,630
|
|
—
|
|
||||
Total held-to-maturity securities
|
$
|
46,610
|
|
$
|
—
|
|
$
|
46,610
|
|
$
|
—
|
|
December 31, 2012
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
States and political subdivisions
|
$
|
4,250
|
|
$
|
—
|
|
$
|
4,250
|
|
$
|
—
|
|
Residential mortgage-backed securities
|
34,560
|
|
—
|
|
34,560
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
8,314
|
|
—
|
|
8,314
|
|
—
|
|
||||
Total held-to-maturity securities
|
$
|
47,124
|
|
$
|
—
|
|
$
|
47,124
|
|
$
|
—
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||
(Dollars in thousands)
|
Carrying Amount
|
Fair Value
|
|
Carrying Amount
|
Fair Value
|
||||||||
Financial assets
:
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
37,757
|
|
$
|
37,757
|
|
|
$
|
62,542
|
|
$
|
62,542
|
|
Investment securities
|
673,248
|
|
671,760
|
|
|
709,085
|
|
710,934
|
|
||||
Loans
|
1,018,069
|
|
950,544
|
|
|
973,907
|
|
897,132
|
|
||||
Financial liabilities:
|
|
|
|
|
|
||||||||
Deposits
|
$
|
1,435,778
|
|
$
|
1,443,797
|
|
|
$
|
1,492,303
|
|
$
|
1,503,098
|
|
Short-term borrowings
|
92,521
|
|
92,521
|
|
|
47,769
|
|
47,769
|
|
||||
Long-term borrowings
|
125,714
|
|
132,932
|
|
|
128,823
|
|
141,691
|
|
(Dollars in thousands)
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
||||||||
June 30, 2013
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
U.S. Treasury and government agencies
|
$
|
23
|
|
$
|
—
|
|
$
|
—
|
|
$
|
23
|
|
U.S. government sponsored agencies
|
382
|
|
18
|
|
—
|
|
400
|
|
||||
States and political subdivisions
|
49,785
|
|
1,838
|
|
(1,044
|
)
|
50,579
|
|
||||
Residential mortgage-backed securities
|
512,492
|
|
6,481
|
|
(15,399
|
)
|
503,574
|
|
||||
Commercial mortgage-backed securities
|
34,046
|
|
203
|
|
(643
|
)
|
33,606
|
|
||||
Bank-issued trust preferred securities
|
8,500
|
|
—
|
|
(689
|
)
|
7,811
|
|
||||
Equity securities
|
1,213
|
|
3,208
|
|
(86
|
)
|
4,335
|
|
||||
Total available-for-sale securities
|
$
|
606,441
|
|
$
|
11,748
|
|
$
|
(17,861
|
)
|
$
|
600,328
|
|
December 31, 2012
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
U.S. Treasury and government agencies
|
$
|
26
|
|
$
|
—
|
|
$
|
—
|
|
$
|
26
|
|
U.S. government sponsored agencies
|
486
|
|
30
|
|
—
|
|
516
|
|
||||
States and political subdivisions
|
42,458
|
|
3,292
|
|
(82
|
)
|
45,668
|
|
||||
Residential mortgage-backed securities
|
511,305
|
|
12,558
|
|
(9,767
|
)
|
514,096
|
|
||||
Commercial mortgage-backed securities
|
62,129
|
|
2,330
|
|
(43
|
)
|
64,416
|
|
||||
Bank-issued trust preferred securities
|
10,966
|
|
73
|
|
(682
|
)
|
10,357
|
|
||||
Equity securities
|
1,214
|
|
2,977
|
|
(85
|
)
|
4,106
|
|
||||
Total available-for-sale securities
|
$
|
628,584
|
|
$
|
21,260
|
|
$
|
(10,659
|
)
|
$
|
639,185
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
(Dollars in thousands)
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
Gross gains realized
|
$
|
1,267
|
|
$
|
—
|
|
|
$
|
3,312
|
|
$
|
3,272
|
|
Gross losses realized
|
1,241
|
|
—
|
|
|
2,868
|
|
109
|
|
||||
Net gain realized
|
$
|
26
|
|
$
|
—
|
|
|
$
|
444
|
|
$
|
3,163
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||||||
(Dollars in thousands)
|
Fair
Value
|
Unrealized Loss
|
No. of Securities
|
|
Fair
Value
|
Unrealized Loss
|
No. of Securities
|
|
Fair
Value
|
Unrealized Loss
|
||||||||||||||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Obligations of:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury and government agencies
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
U.S. government sponsored agencies
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
States and political subdivisions
|
20,244
|
|
1,044
|
|
30
|
|
|
—
|
|
—
|
|
—
|
|
|
20,244
|
|
1,044
|
|
||||||
Residential mortgage-backed securities
|
316,939
|
|
12,779
|
|
71
|
|
|
22,945
|
|
2,620
|
|
9
|
|
|
339,884
|
|
15,399
|
|
||||||
Commercial mortgage-backed securities
|
22,996
|
|
579
|
|
5
|
|
|
5,103
|
|
64
|
|
1
|
|
|
28,099
|
|
643
|
|
||||||
Bank-issued trust preferred securities
|
4,374
|
|
113
|
|
2
|
|
|
2,421
|
|
576
|
|
3
|
|
|
6,795
|
|
689
|
|
||||||
Equity securities
|
—
|
|
—
|
|
—
|
|
|
90
|
|
86
|
|
1
|
|
|
90
|
|
86
|
|
||||||
Total
|
$
|
364,553
|
|
$
|
14,515
|
|
108
|
|
|
$
|
30,559
|
|
$
|
3,346
|
|
14
|
|
|
$
|
395,112
|
|
$
|
17,861
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Obligations of:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury and government agencies
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
U.S. government sponsored agencies
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
States and political subdivisions
|
4,558
|
|
82
|
|
8
|
|
|
—
|
|
—
|
|
—
|
|
|
4,558
|
|
82
|
|
||||||
Residential mortgage-backed securities
|
135,250
|
|
2,326
|
|
28
|
|
|
89,958
|
|
7,441
|
|
20
|
|
|
225,208
|
|
9,767
|
|
||||||
Commercial mortgage-backed securities
|
7,681
|
|
43
|
|
2
|
|
|
—
|
|
—
|
|
—
|
|
|
7,681
|
|
43
|
|
||||||
Bank-issued trust preferred securities
|
2,376
|
|
18
|
|
2
|
|
|
5,434
|
|
664
|
|
5
|
|
|
7,810
|
|
682
|
|
||||||
Equity securities
|
—
|
|
—
|
|
—
|
|
|
91
|
|
85
|
|
1
|
|
|
91
|
|
85
|
|
||||||
Total
|
$
|
149,865
|
|
$
|
2,469
|
|
40
|
|
|
$
|
95,483
|
|
$
|
8,190
|
|
26
|
|
|
$
|
245,348
|
|
$
|
10,659
|
|
(Dollars in thousands)
|
Within 1 Year
|
1 to 5 Years
|
5 to 10 Years
|
Over 10 Years
|
Total
|
||||||||||
Amortized cost
|
|
|
|
|
|
||||||||||
Obligations of:
|
|
|
|
|
|
||||||||||
U.S. Treasury and government agencies
|
$
|
—
|
|
$
|
20
|
|
$
|
3
|
|
$
|
—
|
|
$
|
23
|
|
U.S. government sponsored agencies
|
—
|
|
382
|
|
—
|
|
—
|
|
382
|
|
|||||
States and political subdivisions
|
467
|
|
1,718
|
|
17,346
|
|
30,254
|
|
49,785
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
3,573
|
|
46,468
|
|
462,451
|
|
512,492
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
5,305
|
|
23,203
|
|
5,538
|
|
34,046
|
|
|||||
Bank-issued trust preferred securities
|
—
|
|
—
|
|
—
|
|
8,500
|
|
8,500
|
|
|||||
Equity securities
|
|
|
|
|
1,213
|
|
|||||||||
Total available-for-sale securities
|
$
|
467
|
|
$
|
10,998
|
|
$
|
87,020
|
|
$
|
506,743
|
|
$
|
606,441
|
|
Fair value
|
|
|
|
|
|
||||||||||
Obligations of:
|
|
|
|
|
|
||||||||||
U.S. Treasury and government agencies
|
$
|
—
|
|
$
|
20
|
|
$
|
3
|
|
$
|
—
|
|
$
|
23
|
|
U.S. government sponsored agencies
|
—
|
|
400
|
|
—
|
|
—
|
|
400
|
|
|||||
States and political subdivisions
|
471
|
|
1,828
|
|
18,183
|
|
30,097
|
|
50,579
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
3,729
|
|
45,370
|
|
454,475
|
|
503,574
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
5,507
|
|
22,719
|
|
5,380
|
|
33,606
|
|
|||||
Bank-issued trust preferred securities
|
—
|
|
—
|
|
—
|
|
7,811
|
|
7,811
|
|
|||||
Equity securities
|
|
|
|
|
4,335
|
|
|||||||||
Total available-for-sale securities
|
$
|
471
|
|
$
|
11,484
|
|
$
|
86,275
|
|
$
|
497,763
|
|
$
|
600,328
|
|
Total average yield
|
4.73
|
%
|
4.05
|
%
|
3.01
|
%
|
2.70
|
%
|
2.79
|
%
|
(Dollars in thousands)
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
||||||||
June 30, 2013
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
States and political subdivisions
|
$
|
3,855
|
|
$
|
216
|
|
$
|
(11
|
)
|
$
|
4,060
|
|
Residential mortgage-backed securities
|
36,361
|
|
—
|
|
(1,441
|
)
|
34,920
|
|
||||
Commercial mortgage-backed securities
|
7,882
|
|
25
|
|
(277
|
)
|
7,630
|
|
||||
Total held-to-maturity securities
|
$
|
48,098
|
|
$
|
241
|
|
$
|
(1,729
|
)
|
$
|
46,610
|
|
December 31, 2012
|
|
|
|
|
||||||||
Obligations of:
|
|
|
|
|
||||||||
States and political subdivisions
|
$
|
3,860
|
|
$
|
390
|
|
$
|
—
|
|
$
|
4,250
|
|
Residential mortgage-backed securities
|
33,494
|
|
1,107
|
|
(41
|
)
|
34,560
|
|
||||
Commercial mortgage-backed securities
|
7,921
|
|
393
|
|
—
|
|
8,314
|
|
||||
Total held-to-maturity securities
|
$
|
45,275
|
|
$
|
1,890
|
|
$
|
(41
|
)
|
$
|
47,124
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||||||
(Dollars in thousands)
|
Fair
Value
|
Unrealized Loss
|
No. of Securities
|
|
Fair
Value
|
Unrealized Loss
|
No. of Securities
|
|
Fair
Value
|
Unrealized Loss
|
||||||||||||||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Obligations of:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
States and political subdivisions
|
$
|
326
|
|
$
|
11
|
|
1
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
326
|
|
$
|
11
|
|
Residential mortgage-backed securities
|
34,920
|
|
1,441
|
|
8
|
|
|
—
|
|
—
|
|
—
|
|
|
34,920
|
|
1,441
|
|
||||||
Commercial mortgage-backed securities
|
6,508
|
|
277
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
6,508
|
|
277
|
|
||||||
Total
|
$
|
41,754
|
|
$
|
1,729
|
|
10
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
41,754
|
|
$
|
1,729
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential mortgage-backed securities
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Commercial mortgage-backed securities
|
2,398
|
|
41
|
|
2
|
|
|
—
|
|
—
|
|
—
|
|
|
2,398
|
|
41
|
|
||||||
Total
|
$
|
2,398
|
|
$
|
41
|
|
2
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
$
|
2,398
|
|
$
|
41
|
|
(Dollars in thousands)
|
Within 1 Year
|
1 to 5 Years
|
5 to 10 Years
|
Over 10 Years
|
Total
|
||||||||||
Amortized cost
|
|
|
|
|
|
||||||||||
Obligations of:
|
|
|
|
|
|
||||||||||
States and political subdivisions
|
$
|
—
|
|
$
|
—
|
|
$
|
337
|
|
$
|
3,518
|
|
$
|
3,855
|
|
Residential mortgage-backed securities
|
—
|
|
—
|
|
536
|
|
35,825
|
|
36,361
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
—
|
|
—
|
|
7,882
|
|
7,882
|
|
|||||
Total held-to-maturity securities
|
$
|
—
|
|
$
|
—
|
|
$
|
873
|
|
$
|
47,225
|
|
$
|
48,098
|
|
Fair value
|
|
|
|
|
|
||||||||||
Obligations of:
|
|
|
|
|
|
||||||||||
States and political subdivisions
|
$
|
—
|
|
$
|
—
|
|
$
|
326
|
|
$
|
3,734
|
|
$
|
4,060
|
|
Residential mortgage-backed securities
|
—
|
|
—
|
|
513
|
|
34,407
|
|
34,920
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
—
|
|
—
|
|
7,630
|
|
7,630
|
|
|||||
Total held-to-maturity securities
|
$
|
—
|
|
$
|
—
|
|
$
|
839
|
|
$
|
45,771
|
|
$
|
46,610
|
|
Total average yield
|
—
|
%
|
—
|
%
|
2.57
|
%
|
2.74
|
%
|
2.73
|
%
|
(Dollars in thousands)
|
June 30,
2013 |
December 31, 2012
|
||||
Commercial real estate, construction
|
$
|
30,770
|
|
$
|
34,265
|
|
Commercial real estate, other
|
389,281
|
|
378,073
|
|
||
Commercial real estate
|
420,051
|
|
412,338
|
|
||
Commercial and industrial
|
184,981
|
|
180,131
|
|
||
Residential real estate
|
252,282
|
|
233,841
|
|
||
Home equity lines of credit
|
52,212
|
|
51,053
|
|
||
Consumer
|
119,029
|
|
101,246
|
|
||
Deposit account overdrafts
|
1,674
|
|
6,563
|
|
||
Total loans
|
$
|
1,030,229
|
|
$
|
985,172
|
|
(Dollars in thousands)
|
June 30,
2013 |
December 31,
2012 |
||||
Commercial real estate
|
$
|
1,890
|
|
$
|
2,145
|
|
Commercial and industrial
|
58
|
|
74
|
|
||
Residential real estate
|
12,084
|
|
12,873
|
|
||
Consumer
|
53
|
|
84
|
|
||
Total outstanding balance
|
$
|
14,085
|
|
$
|
15,176
|
|
Net carrying amount
|
$
|
13,607
|
|
$
|
14,700
|
|
|
|
|
|
Accruing Loans
|
|||||||||
|
Nonaccrual Loans
|
|
90+ Days Past Due
|
||||||||||
(Dollars in thousands)
|
June 30,
2013 |
December 31,
2012 |
|
June 30,
2013 |
December 31,
2012 |
||||||||
Commercial real estate, construction
|
$
|
80
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Commercial real estate, other
|
6,801
|
|
9,831
|
|
|
36
|
|
—
|
|
||||
Commercial real estate
|
6,881
|
|
9,831
|
|
|
36
|
|
—
|
|
||||
Commercial and industrial
|
297
|
|
627
|
|
|
—
|
|
181
|
|
||||
Residential real estate
|
3,311
|
|
3,136
|
|
|
—
|
|
—
|
|
||||
Home equity lines of credit
|
56
|
|
24
|
|
|
—
|
|
—
|
|
||||
Consumer
|
62
|
|
20
|
|
|
—
|
|
4
|
|
||||
Total
|
$
|
10,607
|
|
$
|
13,638
|
|
|
$
|
36
|
|
$
|
185
|
|
|
Loans Past Due
|
|
Current
|
Total
|
|||||||||||||||
(Dollars in thousands)
|
30 - 59 days
|
60 - 89 days
|
90 + Days
|
Total
|
|
Loans
|
Loans
|
||||||||||||
June 30, 2013
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate, construction
|
$
|
—
|
|
$
|
80
|
|
$
|
—
|
|
$
|
80
|
|
|
$
|
30,690
|
|
$
|
30,770
|
|
Commercial real estate, other
|
328
|
|
306
|
|
3,870
|
|
4,504
|
|
|
384,777
|
|
389,281
|
|
||||||
Commercial real estate
|
328
|
|
386
|
|
3,870
|
|
4,584
|
|
|
415,467
|
|
420,051
|
|
||||||
Commercial and industrial
|
134
|
|
65
|
|
263
|
|
462
|
|
|
184,519
|
|
184,981
|
|
||||||
Residential real estate
|
2,874
|
|
278
|
|
1,641
|
|
4,793
|
|
|
247,489
|
|
252,282
|
|
||||||
Home equity lines of credit
|
482
|
|
—
|
|
48
|
|
530
|
|
|
51,682
|
|
52,212
|
|
||||||
Consumer
|
571
|
|
95
|
|
61
|
|
727
|
|
|
118,302
|
|
119,029
|
|
||||||
Deposit account overdrafts
|
61
|
|
—
|
|
—
|
|
61
|
|
|
1,613
|
|
1,674
|
|
||||||
Total
|
$
|
4,450
|
|
$
|
824
|
|
$
|
5,883
|
|
$
|
11,157
|
|
|
$
|
1,019,072
|
|
$
|
1,030,229
|
|
December 31, 2012
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate, construction
|
$
|
—
|
|
$
|
77
|
|
$
|
—
|
|
$
|
77
|
|
|
$
|
34,188
|
|
$
|
34,265
|
|
Commercial real estate, other
|
11,382
|
|
705
|
|
5,144
|
|
17,231
|
|
|
360,842
|
|
378,073
|
|
||||||
Commercial real estate
|
11,382
|
|
782
|
|
5,144
|
|
17,308
|
|
|
395,030
|
|
412,338
|
|
||||||
Commercial and industrial
|
3,841
|
|
116
|
|
294
|
|
4,251
|
|
|
175,880
|
|
180,131
|
|
||||||
Residential real estate
|
4,640
|
|
1,049
|
|
2,019
|
|
7,708
|
|
|
226,133
|
|
233,841
|
|
||||||
Home equity lines of credit
|
274
|
|
25
|
|
24
|
|
323
|
|
|
50,730
|
|
51,053
|
|
||||||
Consumer
|
926
|
|
127
|
|
10
|
|
1,063
|
|
|
100,183
|
|
101,246
|
|
||||||
Deposit account overdrafts
|
55
|
|
—
|
|
—
|
|
55
|
|
|
6,508
|
|
6,563
|
|
||||||
Total
|
$
|
21,118
|
|
$
|
2,099
|
|
$
|
7,491
|
|
$
|
30,708
|
|
|
$
|
954,464
|
|
$
|
985,172
|
|
|
Pass Rated
|
Watch
|
Substandard
|
Doubtful
|
Not
|
Total
|
||||||||||||
(Dollars in thousands)
|
(Grades 1 - 4)
|
(Grade 5)
|
(Grade 6)
|
(Grade 7)
|
Rated
|
Loans
|
||||||||||||
June 30, 2013
|
|
|
|
|
|
|
||||||||||||
Commercial real estate, construction
|
$
|
26,531
|
|
$
|
—
|
|
$
|
71
|
|
$
|
—
|
|
$
|
4,168
|
|
$
|
30,770
|
|
Commercial real estate, other
|
354,212
|
|
12,290
|
|
22,350
|
|
—
|
|
429
|
|
389,281
|
|
||||||
Commercial real estate
|
380,743
|
|
12,290
|
|
22,421
|
|
—
|
|
4,597
|
|
420,051
|
|
||||||
Commercial and industrial
|
165,285
|
|
3,914
|
|
15,782
|
|
—
|
|
—
|
|
184,981
|
|
||||||
Residential real estate
|
22,814
|
|
1,740
|
|
7,481
|
|
1
|
|
220,246
|
|
252,282
|
|
||||||
Home equity lines of credit
|
948
|
|
—
|
|
1,086
|
|
—
|
|
50,178
|
|
52,212
|
|
||||||
Consumer
|
66
|
|
—
|
|
35
|
|
—
|
|
118,928
|
|
119,029
|
|
||||||
Deposit account overdrafts
|
—
|
|
—
|
|
—
|
|
—
|
|
1,674
|
|
1,674
|
|
||||||
Total
|
$
|
569,856
|
|
$
|
17,944
|
|
$
|
46,805
|
|
$
|
1
|
|
$
|
395,623
|
|
$
|
1,030,229
|
|
December 31, 2012
|
|
|
|
|
|
|
||||||||||||
Commercial real estate, construction
|
$
|
29,738
|
|
$
|
—
|
|
$
|
1,095
|
|
$
|
—
|
|
$
|
3,432
|
|
$
|
34,265
|
|
Commercial real estate, other
|
328,435
|
|
18,940
|
|
29,573
|
|
—
|
|
1,125
|
|
378,073
|
|
||||||
Commercial real estate
|
358,173
|
|
18,940
|
|
30,668
|
|
—
|
|
4,557
|
|
412,338
|
|
||||||
Commercial and industrial
|
150,180
|
|
21,566
|
|
7,054
|
|
—
|
|
1,331
|
|
180,131
|
|
||||||
Residential real estate
|
22,392
|
|
1,768
|
|
7,597
|
|
10
|
|
202,074
|
|
233,841
|
|
||||||
Home equity lines of credit
|
1,051
|
|
—
|
|
1,094
|
|
—
|
|
48,908
|
|
51,053
|
|
||||||
Consumer
|
66
|
|
—
|
|
47
|
|
—
|
|
101,133
|
|
101,246
|
|
||||||
Deposit account overdrafts
|
—
|
|
—
|
|
—
|
|
—
|
|
6,563
|
|
6,563
|
|
||||||
Total
|
$
|
531,862
|
|
$
|
42,274
|
|
$
|
46,460
|
|
$
|
10
|
|
$
|
364,566
|
|
$
|
985,172
|
|
|
Unpaid
|
Recorded Investment
|
Total
|
|
Average
|
Interest
|
|||||||||||||||
|
Principal
|
With
|
Without
|
Recorded
|
Related
|
Recorded
|
Income
|
||||||||||||||
(Dollars in thousands)
|
Balance
|
Allowance
|
Allowance
|
Investment
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||
June 30, 2013
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate, construction
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Commercial real estate, other
|
14,483
|
|
3,379
|
|
3,398
|
|
6,777
|
|
1,180
|
|
7,609
|
|
—
|
|
|||||||
Commercial real estate
|
14,483
|
|
$
|
3,379
|
|
$
|
3,398
|
|
$
|
6,777
|
|
$
|
1,180
|
|
$
|
7,609
|
|
$
|
—
|
|
|
Commercial and industrial
|
270
|
|
266
|
|
—
|
|
266
|
|
266
|
|
254
|
|
—
|
|
|||||||
Residential real estate
|
3,758
|
|
229
|
|
2,975
|
|
3,204
|
|
95
|
|
2,372
|
|
64
|
|
|||||||
Home equity lines of credit
|
348
|
|
—
|
|
348
|
|
348
|
|
—
|
|
296
|
|
8
|
|
|||||||
Consumer
|
245
|
|
—
|
|
245
|
|
245
|
|
—
|
|
167
|
|
10
|
|
|||||||
Total
|
$
|
19,104
|
|
$
|
3,874
|
|
$
|
6,966
|
|
$
|
10,840
|
|
$
|
1,541
|
|
$
|
10,698
|
|
$
|
82
|
|
December 31, 2012
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate, construction
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Commercial real estate, other
|
19,023
|
|
2,785
|
|
7,053
|
|
9,838
|
|
1,262
|
|
11,048
|
|
—
|
|
|||||||
Commercial real estate
|
19,023
|
|
$
|
2,785
|
|
$
|
7,053
|
|
$
|
9,838
|
|
$
|
1,262
|
|
$
|
11,048
|
|
$
|
—
|
|
|
Commercial and industrial
|
696
|
|
182
|
|
437
|
|
619
|
|
36
|
|
518
|
|
—
|
|
|||||||
Residential real estate
|
3,943
|
|
418
|
|
3,063
|
|
3,481
|
|
123
|
|
2,014
|
|
149
|
|
|||||||
Home equity lines of credit
|
349
|
|
—
|
|
349
|
|
349
|
|
—
|
|
140
|
|
17
|
|
|||||||
Consumer
|
114
|
|
—
|
|
114
|
|
114
|
|
—
|
|
49
|
|
14
|
|
|||||||
Total
|
$
|
24,125
|
|
$
|
3,385
|
|
$
|
11,016
|
|
$
|
14,401
|
|
$
|
1,421
|
|
$
|
13,769
|
|
$
|
180
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
Recorded Investment
(1)
|
|
Recorded Investment
(1)
|
||||||||||||||||||
|
Number of Contracts
|
Pre-Modification
|
Post-Modification
|
At June 30, 2013
|
Number of Contracts
|
Pre-Modification
|
Post-Modification
|
At June 30, 2013
|
||||||||||||||
Residential real estate
|
4
|
|
$
|
174
|
|
$
|
174
|
|
$
|
174
|
|
10
|
|
$
|
343
|
|
$
|
343
|
|
$
|
343
|
|
Home equity lines of credit
|
1
|
|
$
|
30
|
|
$
|
30
|
|
$
|
30
|
|
2
|
|
$
|
53
|
|
$
|
53
|
|
$
|
53
|
|
Consumer
|
12
|
|
$
|
109
|
|
$
|
109
|
|
$
|
109
|
|
22
|
|
$
|
164
|
|
$
|
164
|
|
$
|
164
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
Recorded Investment (1)
|
|
Recorded Investment (1)
|
||||||||||||||||||
|
Number of Contracts
|
Pre-Modification
|
Post-Modification
|
At June 30, 2012
|
Number of Contracts
|
Pre-Modification
|
Post-Modification
|
At June 30, 2012
|
||||||||||||||
Commercial real estate, other
|
3
|
|
$
|
1,291
|
|
$
|
1,291
|
|
$
|
1,261
|
|
3
|
|
$
|
1,291
|
|
$
|
1,291
|
|
$
|
1,261
|
|
Residential real estate
|
1
|
|
$
|
50
|
|
$
|
50
|
|
$
|
49
|
|
1
|
|
$
|
50
|
|
$
|
50
|
|
$
|
49
|
|
(1)
|
The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.
|
|
June 30, 2013
|
|||||||
|
Number of Contracts
|
Recorded Investment
(1)
|
Impact on the Allowance for Loan Losses
|
|||||
Commercial real estate, other
|
1
|
|
$
|
251
|
|
$
|
—
|
|
Residential Real Estate
|
2
|
|
70
|
|
—
|
|
||
Home equity lines of credit
|
1
|
|
24
|
|
—
|
|
||
Total
|
4
|
|
$
|
345
|
|
$
|
—
|
|
(1)
|
The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.
|
(Dollars in thousands)
|
Commercial Real Estate
|
Commercial and Industrial
|
Residential Real Estate
|
Home Equity Lines of Credit
|
Consumer
|
Deposit Account Overdrafts
|
Total
|
||||||||||||||
Balance, January 1, 2013
|
$
|
14,215
|
|
$
|
1,733
|
|
$
|
801
|
|
$
|
479
|
|
$
|
438
|
|
$
|
145
|
|
$
|
17,811
|
|
Charge-offs
|
(783
|
)
|
(11
|
)
|
(222
|
)
|
(2
|
)
|
(344
|
)
|
(245
|
)
|
(1,607
|
)
|
|||||||
Recoveries
|
2,806
|
|
21
|
|
261
|
|
13
|
|
236
|
|
99
|
|
3,436
|
|
|||||||
Net recoveries (charge-offs)
|
2,023
|
|
10
|
|
39
|
|
11
|
|
(108
|
)
|
(146
|
)
|
1,829
|
|
|||||||
Recovery of loan losses
|
(3,670
|
)
|
445
|
|
165
|
|
—
|
|
410
|
|
123
|
|
(2,527
|
)
|
|||||||
Balance, June 30, 2013
|
$
|
12,568
|
|
$
|
2,188
|
|
$
|
1,005
|
|
$
|
490
|
|
$
|
740
|
|
$
|
122
|
|
$
|
17,113
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Period-end amount allocated to:
|
|
|
|
|
|
|
|||||||||||||||
Loans individually evaluated for impairment
|
$
|
1,180
|
|
$
|
266
|
|
$
|
95
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,541
|
|
Loans collectively evaluated for impairment
|
11,388
|
|
1,922
|
|
910
|
|
490
|
|
740
|
|
122
|
|
15,572
|
|
|||||||
Ending balance
|
$
|
12,568
|
|
$
|
2,188
|
|
$
|
1,005
|
|
$
|
490
|
|
$
|
740
|
|
$
|
122
|
|
$
|
17,113
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2012
|
$
|
18,947
|
|
$
|
2,434
|
|
$
|
1,119
|
|
$
|
541
|
|
$
|
449
|
|
$
|
227
|
|
$
|
23,717
|
|
Charge-offs
|
(2,846
|
)
|
(33
|
)
|
(561
|
)
|
(77
|
)
|
(345
|
)
|
(254
|
)
|
(4,116
|
)
|
|||||||
Recoveries
|
2,411
|
|
148
|
|
532
|
|
14
|
|
352
|
|
124
|
|
3,581
|
|
|||||||
Net (charge-offs) recoveries
|
(435
|
)
|
115
|
|
(29
|
)
|
(63
|
)
|
7
|
|
(130
|
)
|
(535
|
)
|
|||||||
Recovery of loan losses
|
(2,300
|
)
|
(1,025
|
)
|
—
|
|
—
|
|
—
|
|
68
|
|
(3,257
|
)
|
|||||||
Balance, June 30, 2012
|
$
|
16,212
|
|
$
|
1,524
|
|
$
|
1,090
|
|
$
|
478
|
|
$
|
456
|
|
$
|
165
|
|
$
|
19,925
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Period-end amount allocated to:
|
|
|
|
|
|
|
|||||||||||||||
Loans individually evaluated for impairment
|
$
|
973
|
|
$
|
22
|
|
$
|
289
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,284
|
|
Loans collectively evaluated for impairment
|
15,239
|
|
1,502
|
|
801
|
|
478
|
|
456
|
|
165
|
|
18,641
|
|
|||||||
Ending balance
|
$
|
16,212
|
|
$
|
1,524
|
|
$
|
1,090
|
|
$
|
478
|
|
$
|
456
|
|
$
|
165
|
|
$
|
19,925
|
|
|
Common Stock
|
Treasury
Stock
|
||
Shares at December 31, 2012
|
11,155,648
|
|
607,688
|
|
Changes related to stock-based compensation awards:
|
|
|
||
Release of restricted common shares
|
17,666
|
|
3,429
|
|
Changes related to deferred compensation plan:
|
|
|
||
Purchase of treasury stock
|
|
712
|
|
|
Reissuance of treasury stock
|
|
(7,703
|
)
|
|
Common shares issued under dividend reinvestment plan
|
9,931
|
|
|
|
Common shares issued under Board of Directors' compensation plan
|
—
|
|
(4,042
|
)
|
Shares at June 30, 2013
|
11,183,245
|
|
600,084
|
|
(Dollars in thousands)
|
Unrealized Gain on Securities
|
Unrecognized Net Pension and Postretirement Costs
|
Accumulated Other Comprehensive Income (Loss)
|
||||||
Balance, December 31, 2012
|
$
|
6,892
|
|
$
|
(6,238
|
)
|
$
|
654
|
|
Reclassification adjustments to net income:
|
|
|
|
|
|||||
Realized gain on sale of securities, net of tax
|
(289
|
)
|
—
|
|
(289
|
)
|
|||
Other comprehensive (loss) income, net of reclassifications and tax
|
(10,576
|
)
|
63
|
|
(10,513
|
)
|
|||
Balance, June 30, 2013
|
$
|
(3,973
|
)
|
$
|
(6,175
|
)
|
$
|
(10,148
|
)
|
|
Pension Benefits
|
||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
(Dollars in thousands)
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
Interest cost
|
$
|
133
|
|
$
|
152
|
|
|
$
|
266
|
|
$
|
304
|
|
Expected return on plan assets
|
(165
|
)
|
(196
|
)
|
|
(330
|
)
|
(392
|
)
|
||||
Amortization of net loss
|
51
|
|
40
|
|
|
103
|
|
79
|
|
||||
Settlement of benefit obligation
|
—
|
|
353
|
|
|
—
|
|
353
|
|
||||
Net periodic cost
|
$
|
19
|
|
$
|
349
|
|
|
$
|
39
|
|
$
|
344
|
|
|
Postretirement Benefits
|
||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
(Dollars in thousands)
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
Interest cost
|
$
|
1
|
|
$
|
3
|
|
|
$
|
3
|
|
$
|
5
|
|
Amortization of net (loss) gain
|
(4
|
)
|
1
|
|
|
(4
|
)
|
(1
|
)
|
||||
Net periodic cost
|
$
|
(3
|
)
|
$
|
4
|
|
|
$
|
(1
|
)
|
$
|
4
|
|
|
|
Number of Common Shares Subject to Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 1
|
|
101,594
|
|
|
$
|
26.09
|
|
|
|
|
|
||
Expired
|
|
38,990
|
|
|
23.09
|
|
|
|
|
|
|||
Outstanding at June 30
|
|
62,604
|
|
|
$
|
27.95
|
|
|
1.8 years
|
|
$
|
—
|
|
Exercisable at June 30
|
|
62,604
|
|
|
$
|
27.95
|
|
|
1.8 years
|
|
$
|
—
|
|
|
Options Outstanding & Exercisable
|
|||||||
Range of Exercise Prices
|
Common Shares Subject to Options Outstanding
|
Weighted-Average Remaining Contractual Life
|
Weighted-Average
Exercise Price
|
|||||
$23.59
|
to
|
$25.94
|
2,792
|
|
1.1 years
|
25.41
|
|
|
$26.01
|
to
|
$27.74
|
22,644
|
|
1.3 years
|
27.05
|
|
|
$28.25
|
to
|
$28.26
|
17,632
|
|
2.5 years
|
28.25
|
|
|
$28.57
|
to
|
$30.00
|
19,536
|
|
1.9 years
|
29.10
|
|
|
Total
|
62,604
|
|
1.8 years
|
$
|
27.95
|
|
|
|
Number of Common Shares Subject to SARs
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining Contractual
Life
|
|
Aggregate Intrinsic
Value
|
|||||
Outstanding at January 1
|
|
22,849
|
|
|
$
|
25.85
|
|
|
|
|
|
||
Forfeited
|
|
1,557
|
|
|
25.99
|
|
|
|
|
|
|||
Outstanding at June 30
|
|
21,292
|
|
|
$
|
25.96
|
|
|
4.2 years
|
|
$
|
—
|
|
Exercisable at June 30
|
|
21,292
|
|
|
$
|
25.96
|
|
|
4.2 years
|
|
$
|
—
|
|
Exercise Price
|
Number of Common Shares Subject to SARs Outstanding & Exercisable
|
Weighted-
Average Remaining Contractual
Life
|
|
$23.26
|
2,000
|
|
4.1 years
|
$23.77
|
10,582
|
|
4.6 years
|
$29.25
|
8,710
|
|
3.6 years
|
Total
|
21,292
|
|
4.2 years
|
|
Time-Based Vesting
|
|
Performance-Based Vesting
|
||||||||
|
Number of Shares
|
Weighted-Average Grant Date Fair Value
|
|
Number of Shares
|
Weighted-Average Grant Date Fair Value
|
||||||
Outstanding at January 1
|
78,731
|
|
$
|
16.36
|
|
|
17,865
|
|
$
|
16.07
|
|
Awarded
|
5,500
|
|
21.67
|
|
|
72,706
|
|
21.82
|
|
||
Released
|
14,512
|
|
13.93
|
|
|
3,154
|
|
13.14
|
|
||
Forfeited
|
601
|
|
15.87
|
|
|
912
|
|
18.75
|
|
||
Outstanding at June 30
|
69,118
|
|
$
|
17.29
|
|
|
86,505
|
|
$
|
20.98
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
(Dollars in thousands)
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
Total stock-based compensation
|
$
|
386
|
|
$
|
259
|
|
|
$
|
683
|
|
$
|
485
|
|
Recognized tax benefit
|
(135
|
)
|
(91
|
)
|
|
(239
|
)
|
(170
|
)
|
||||
Net expense recognized
|
$
|
251
|
|
$
|
168
|
|
|
$
|
444
|
|
$
|
315
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
(Dollars in thousands, except per share data)
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
Distributed earnings allocated to shareholders
|
$
|
1,490
|
|
$
|
1,165
|
|
|
$
|
2,764
|
|
$
|
2,330
|
|
Undistributed earnings allocated to shareholders
|
3,388
|
|
3,826
|
|
|
7,094
|
|
9,278
|
|
||||
Net earnings allocated to shareholders
|
$
|
4,878
|
|
$
|
4,991
|
|
|
$
|
9,858
|
|
$
|
11,608
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
10,576,643
|
|
10,524,429
|
|
|
10,566,508
|
|
10,518,909
|
|
||||
Effect of potentially dilutive shares
|
20,390
|
|
—
|
|
|
17,875
|
|
20
|
|
||||
Total weighted-average diluted shares outstanding
|
10,597,033
|
|
10,524,429
|
|
|
10,584,383
|
|
10,518,929
|
|
||||
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.46
|
|
$
|
0.47
|
|
|
$
|
0.93
|
|
$
|
1.10
|
|
Diluted
|
$
|
0.46
|
|
$
|
0.47
|
|
|
$
|
0.93
|
|
$
|
1.10
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive common shares excluded from calculation:
|
|
|
|
|
|
||||||||
Stock options and SARs
|
86,986
|
|
141,776
|
|
|
103,438
|
|
157,995
|
|
(Dollars in thousands)
|
Goodwill
|
|
Gross Core Deposit
|
|
Gross Customer Relationships
|
||||||
Balance, December 31, 2012
|
$
|
64,881
|
|
|
$
|
8,853
|
|
|
$
|
7,190
|
|
Acquired intangible assets
|
905
|
|
|
—
|
|
|
2,458
|
|
|||
Balance, June 30, 2013
|
$
|
65,786
|
|
|
$
|
8,853
|
|
|
$
|
9,648
|
|
(Dollars in thousands)
|
Gross Intangible Assets
|
|
Accumulated Amortization
|
|
Net Intangible Assets
|
||||||
June 30, 2013
|
|
|
|
|
|
||||||
Core deposits
|
$
|
8,853
|
|
|
$
|
(8,306
|
)
|
|
$
|
547
|
|
Customer relationships
|
9,648
|
|
|
(6,519
|
)
|
|
3,129
|
|
|||
Total acquired intangible assets
|
$
|
18,501
|
|
|
$
|
(14,825
|
)
|
|
$
|
3,676
|
|
Mortgage servicing rights
|
|
|
|
|
2,146
|
|
|||||
Total other intangible assets
|
|
|
|
|
|
|
$
|
5,822
|
|
|
At or For the Three Months Ended
|
|
At or For the Six Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
|
2013
|
2012
|
|
2013
|
2012
|
||||||||
SIGNIFICANT RATIOS
|
|
|
|
|
|
||||||||
Return on average stockholders' equity
|
8.74
|
%
|
9.57
|
%
|
|
8.96
|
%
|
11.22
|
%
|
||||
Return on average assets
|
1.03
|
%
|
1.11
|
%
|
|
1.05
|
%
|
1.30
|
%
|
||||
Net interest margin
|
3.15
|
%
|
3.43
|
%
|
|
3.14
|
%
|
3.42
|
%
|
||||
Efficiency ratio (a)
|
71.71
|
%
|
69.61
|
%
|
|
71.66
|
%
|
67.52
|
%
|
||||
Pre-provision net revenue to average assets (b)
|
1.25
|
%
|
1.42
|
%
|
|
1.25
|
%
|
1.54
|
%
|
||||
Average stockholders' equity to average assets
|
11.82
|
%
|
11.60
|
%
|
|
11.70
|
%
|
11.55
|
%
|
||||
Average loans to average deposits
|
68.87
|
%
|
68.22
|
%
|
|
67.10
|
%
|
68.66
|
%
|
||||
Dividend payout ratio
|
30.73
|
%
|
23.36
|
%
|
|
28.23
|
%
|
20.08
|
%
|
||||
ASSET QUALITY RATIOS
|
|
|
|
|
|
||||||||
Nonperforming loans as a percent of total loans (c)(d)
|
1.03
|
%
|
1.73
|
%
|
|
1.03
|
%
|
1.73
|
%
|
||||
Nonperforming assets as a percent of total assets (c)(d)
|
0.57
|
%
|
0.97
|
%
|
|
0.57
|
%
|
0.97
|
%
|
||||
Nonperforming assets as a percent of total loans and other real estate owned (c)(d)
|
1.04
|
%
|
1.85
|
%
|
|
1.04
|
%
|
1.85
|
%
|
||||
Allowance for loan losses to loans net of unearned interest (d)
|
1.66
|
%
|
2.09
|
%
|
|
1.66
|
%
|
2.09
|
%
|
||||
Allowance for loan losses to nonperforming loans (c)(d)
|
160.80
|
%
|
119.90
|
%
|
|
160.80
|
%
|
119.90
|
%
|
||||
Recovery of loan losses to average loans (annualized)
|
(0.58
|
)%
|
(0.47
|
)%
|
|
(0.51
|
)%
|
(0.69
|
)%
|
||||
Net (recoveries) charge-offs as a percentage of average loans (annualized)
|
(0.45
|
)%
|
0.09
|
%
|
|
(0.37
|
)%
|
0.11
|
%
|
||||
CAPITAL INFORMATION (d)
|
|
|
|
|
|
||||||||
Tier 1 common capital ratio
|
14.17
|
%
|
13.92
|
%
|
|
14.17
|
%
|
13.92
|
%
|
||||
Tier 1 capital ratio
|
14.17
|
%
|
15.93
|
%
|
|
14.17
|
%
|
15.93
|
%
|
||||
Total risk-based capital ratio
|
15.54
|
%
|
17.27
|
%
|
|
15.54
|
%
|
17.27
|
%
|
||||
Leverage ratio
|
9.04
|
%
|
10.18
|
%
|
|
9.04
|
%
|
10.18
|
%
|
||||
Tangible equity to tangible assets (e)
|
8.07
|
%
|
8.45
|
%
|
|
8.07
|
%
|
8.45
|
%
|
||||
PER SHARE DATA
|
|
|
|
|
|
||||||||
Earnings per share – Basic
|
$
|
0.46
|
|
$
|
0.47
|
|
|
$
|
0.93
|
|
$
|
1.10
|
|
Earnings per share – Diluted
|
0.46
|
|
0.47
|
|
|
0.93
|
|
1.10
|
|
||||
Cash dividends declared per share
|
0.14
|
|
0.11
|
|
|
0.26
|
|
0.22
|
|
||||
Book value per share (d)
|
20.71
|
|
20.39
|
|
|
20.71
|
|
20.39
|
|
||||
Tangible book value per common share (d)(e)
|
$
|
13.94
|
|
$
|
14.18
|
|
|
$
|
13.94
|
|
$
|
14.18
|
|
Weighted-average shares outstanding – Basic
|
10,576,643
|
|
10,524,429
|
|
|
10,566,508
|
|
10,518,909
|
|
||||
Weighted-average shares outstanding – Diluted
|
10,597,033
|
|
10,524,429
|
|
|
10,584,383
|
|
10,518,929
|
|
||||
Common shares outstanding at end of period
|
10,583,161
|
|
10,526,954
|
|
|
10,583,161
|
|
10,526,954
|
|
(a)
|
Non-interest expense (less intangible asset amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income (excluding gains or losses on investment securities and asset disposals).
|
(b)
|
These amounts represent non-GAAP financial measures since they exclude the provision for loan losses and all gains and losses included in earnings. Additional information regarding the calculation of these measures can be found later in this section under the caption “Pre-Provision Net Revenue”.
|
(c)
|
Nonperforming loans include loans 90 days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and other real estate owned.
|
(d)
|
Data presented as of the end of the period indicated.
|
(e)
|
These amounts represent non-GAAP financial measures since they exclude the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders’ equity and total assets. Additional information regarding the calculation of these measures can be found later in this discussion under the caption “Capital/Stockholders’ Equity”.
|
(1)
|
the success, impact, and timing of Peoples' business strategies, including the successful completion of the Ohio Commerce acquisition, integration of recently completed insurance business acquisitions, expansion of consumer lending activity and rebranding efforts;
|
(2)
|
competitive pressures among financial institutions or from non-financial institutions may increase significantly, including product and pricing pressures and Peoples' ability to attract, develop and retain qualified professionals;
|
(3)
|
changes in the interest rate environment due to economic conditions and/or the fiscal policies of the U.S. government and Federal Reserve Board, which may adversely impact interest margins;
|
(4)
|
changes in prepayment speeds, loan originations and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated;
|
(5)
|
adverse changes in the economic conditions and/or activities, including impacts from the implementation of the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012, as well as continuing economic uncertainty in the U.S., the European Union, and other areas, which could decrease sales volumes and increase loan delinquencies and defaults;
|
(6)
|
legislative or regulatory changes or actions, including in particular the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations promulgated and to be promulgated thereunder, which may subject Peoples, its subsidiaries or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses;
|
(7)
|
deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses;
|
(8)
|
changes in accounting standards, policies, estimates or procedures which may adversely affect Peoples' reported financial condition or results of operations;
|
(9)
|
adverse changes in the conditions and trends in the financial markets, which may adversely affect the fair value of securities within Peoples' investment portfolio and interest rate sensitivity of Peoples' consolidated balance sheet;
|
(10)
|
Peoples' ability to receive dividends from its subsidiaries;
|
(11)
|
Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
|
(12)
|
the impact of larger or similar financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity;
|
(13)
|
the costs and effects of regulatory and legal developments, including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations;
|
(14)
|
Peoples' ability to secure confidential information through the use of computer systems and telecommunications networks, including those of our third-party vendors and other service providers, may prove inadequate, which could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;
|
(15)
|
the overall adequacy of Peoples' risk management program; and
|
(16)
|
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 “ITEM 1A. RISK FACTORS” of Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31,
2012
(the “
2012
Form 10-K”).
|
◦
|
On July 2, 2013, Peoples announced that Peoples Bank had signed a definitive agreement to acquire Ohio Commerce Bank ("Ohio Commerce"), which operates one full-service office in Beachwood, Ohio. Under the terms of the agreement, Peoples Bank has agreed to pay $13.75 in cash for each share of Ohio Commerce common stock for a total cash consideration of approximately $16.5 million. The transaction, which is subject to regulatory approval and Ohio Commerce shareholder approval, is anticipated to be completed during the fourth quarter of 2013.
|
◦
|
In May 2013, Peoples received a $5.2 million principal payout to reduce its bank owned life insurance principal. In July 2013, Peoples began taking steps to surrender bank owned life insurance reported at approximately $43 million, at a cost basis of $36.5 million. This process could take up to six months, and if completed, would result in Peoples incurring a related tax liability.
|
◦
|
On January 2, 2013, Peoples Insurance acquired a commercial insurance agency office and related customer accounts in the Pikeville, Kentucky area (the "Pikeville Acquisition"). On April 5, 2013, Peoples Insurance acquired McNelly Insurance and Consulting Agency, LLC and related customer accounts in Jackson, Ohio. On May 15, 2013, Peoples Insurance acquired two additional insurance agency offices and related customer accounts in Jackson, Ohio. These acquisitions help Peoples maintain revenue diversity by continuing to grow the fee-based businesses.
|
◦
|
Peoples periodically has taken actions to reduce interest rate exposure within the investment portfolio and entire balance sheet, which have included the sale of low yielding investment securities and repayment of high-cost borrowings. These actions included the sale of $68.8 million of investment securities, primarily low or volatile yielding residential mortgage-backed securities, during the first quarter of 2013. Some of the proceeds from these investment sales were reinvested in securities during the first quarter with the remaining reinvested early in the second quarter of 2013. In future quarters, Peoples intends to use the cash flow generated from the investment portfolio to fund loan growth.
|
◦
|
On December 19, 2012, Peoples repaid the entire $30.9 million aggregate outstanding principal amount of its Series A and Series B Junior Subordinated Debentures and the proceeds were used by PEBO Capital Trust I to redeem 22,975 Series B 8.62% Capital Securities having an aggregate liquidation amount of $23.0 million, held by institutional investors as well as 928 outstanding Common Securities and 7,025 Series B 8.62% Capital Securities, having an aggregate liquidation amount of $8.0 million, held by Peoples (the "Trust Preferred Redemption"). This transaction resulted in Peoples incurring a pre-tax loss of $1.0 million for the redemption premium and unamortized issuance costs. Peoples funded $24.0 million of the repayment with a term note from an unaffiliated financial institution at a significantly lower interest rate, and the balance with cash on hand. As a result of the Trust Preferred Redemption, Peoples will realize an annual interest expense savings of $1.1 million beginning in 2013. Through the first six months of 2013, as a result of the Trust Preferred Redemption, Peoples realized interest expense savings of approximately $0.5 million.
|
◦
|
On September 17, 2012, Peoples introduced its new brand as part of a company-wide brand revitalization. The brand is Peoples' promise, which is a guarantee of satisfaction and quality. Peoples will continue to incur costs throughout 2013 associated with the brand revitalization, including marketing due to advertisement, and depreciation for the revitalization of its branch network.
|
◦
|
Since the second quarter of 2011, Peoples has experienced generally improving trends in several asset quality metrics, after a three-year trend of higher credit losses and nonperforming assets than Peoples' long-term historical levels. Additionally, the amount of criticized loans has decreased due in part to Peoples upgrading the loan quality ratings of various commercial loans. These conditions have resulted in recoveries of or lower provisions for loan losses.
|
◦
|
Peoples' net interest income and margin are impacted by changes in market interest rates based upon actions taken by the Federal Reserve Board either directly or through its Open Market Committee. These actions include changing its target Federal Funds Rate (the interest rate at which banks lend money to each other), Discount Rate (the interest rate charged to banks for money borrowed from the Federal Reserve Bank) and longer-term market interest rates (primarily U.S. Treasury securities). Longer-term market interest rates also are affected by the demand for U.S. Treasury securities. The resulting changes in the yield curve slope have a direct impact on reinvestment rates for Peoples' earning assets.
|
◦
|
The Federal Reserve Board has maintained its target Federal Funds Rate at a historically low level of 0% to 0.25% since December 2008 and has maintained the Discount Rate at 0.75% since December 2010. The Federal Reserve Board continues to indicate there is the potential for these short-term rates to remain unchanged until certain inflation and unemployment rates are achieved.
|
◦
|
Since late 2008, the Federal Reserve Board has taken various actions to lower longer-term market interest rates as a means of stimulating the economy – a policy commonly referred to as “quantitative easing”. These actions have included the buying and selling of mortgage-backed and other debt securities through its open market operations. As a result, the slope of the U.S. Treasury yield curve has fluctuated significantly. Substantial flattening occurred in late 2008, in mid-2010 and since early third quarter of 2011, while moderate steepening occurred in the second half of 2009, late 2010 and mid 2013.
|
|
For the Three Months Ended
|
|||||||||||||||||||||||||
|
June 30, 2013
|
|
March 31, 2013
|
|
June 30, 2012
|
|||||||||||||||||||||
(
Dollars in thousands)
|
Average Balance
|
Income/ Expense
|
Yield/Cost
|
|
Average Balance
|
Income/ Expense
|
Yield/Cost
|
|
Average Balance
|
Income/ Expense
|
Yield/Cost
|
|||||||||||||||
Short-term investments
|
$
|
11,399
|
|
$
|
25
|
|
0.88
|
%
|
|
$
|
39,099
|
|
$
|
18
|
|
0.20
|
%
|
|
$
|
9,336
|
|
$
|
4
|
|
0.19
|
%
|
Investment Securities (1):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Taxable
|
657,644
|
|
4,202
|
|
2.56
|
%
|
|
657,319
|
|
4,262
|
|
2.59
|
%
|
|
638,538
|
|
4,984
|
|
3.09
|
%
|
||||||
Nontaxable (2)
|
50,978
|
|
607
|
|
4.76
|
%
|
|
48,213
|
|
583
|
|
4.84
|
%
|
|
39,000
|
|
546
|
|
5.61
|
%
|
||||||
Total investment securities
|
708,622
|
|
4,809
|
|
2.71
|
%
|
|
705,532
|
|
4,845
|
|
2.75
|
%
|
|
677,538
|
|
5,530
|
|
3.27
|
%
|
||||||
Loans (3):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial
|
611,631
|
|
6,785
|
|
4.45
|
%
|
|
606,836
|
|
6,701
|
|
4.48
|
%
|
|
623,492
|
|
7,571
|
|
4.88
|
%
|
||||||
Real estate (4)
|
280,889
|
|
3,263
|
|
4.65
|
%
|
|
271,128
|
|
3,359
|
|
4.96
|
%
|
|
244,131
|
|
3,101
|
|
5.03
|
%
|
||||||
Consumer
|
116,995
|
|
1,528
|
|
5.24
|
%
|
|
107,092
|
|
1,435
|
|
5.58
|
%
|
|
91,976
|
|
1,400
|
|
6.12
|
%
|
||||||
Total loans
|
1,009,515
|
|
11,576
|
|
4.61
|
%
|
|
985,056
|
|
11,495
|
|
4.73
|
%
|
|
959,599
|
|
12,072
|
|
5.05
|
%
|
||||||
Less: Allowance for loan losses
|
(17,866
|
)
|
|
|
|
(18,783
|
)
|
|
|
|
(21,650
|
)
|
|
|
||||||||||||
Net loans
|
991,649
|
|
11,576
|
|
4.68
|
%
|
|
966,273
|
|
11,495
|
|
4.81
|
%
|
|
937,949
|
|
12,072
|
|
5.17
|
%
|
||||||
Total earning assets
|
1,711,670
|
|
16,410
|
|
3.85
|
%
|
|
1,710,904
|
|
16,358
|
|
3.86
|
%
|
|
1,624,823
|
|
17,606
|
|
4.35
|
%
|
||||||
Intangible assets
|
71,081
|
|
|
|
|
69,988
|
|
|
|
|
64,737
|
|
|
|
||||||||||||
Other assets
|
128,237
|
|
|
|
|
133,827
|
|
|
|
|
133,991
|
|
|
|
|
|||||||||||
Total assets
|
$
|
1,910,988
|
|
|
|
|
$
|
1,914,719
|
|
|
|
|
$
|
1,823,551
|
|
|
|
|
||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Savings accounts
|
$
|
199,065
|
|
$
|
27
|
|
0.05
|
%
|
|
$
|
190,769
|
|
$
|
25
|
|
0.05
|
%
|
|
$
|
158,408
|
|
$
|
23
|
|
0.06
|
%
|
Governmental deposit accounts
|
147,824
|
|
168
|
|
0.46
|
%
|
|
145,714
|
|
202
|
|
0.56
|
%
|
|
155,888
|
|
251
|
|
0.65
|
%
|
||||||
Interest-bearing demand accounts
|
124,199
|
|
25
|
|
0.08
|
%
|
|
126,763
|
|
25
|
|
0.08
|
%
|
|
111,627
|
|
37
|
|
0.13
|
%
|
||||||
Money market accounts
|
266,602
|
|
93
|
|
0.14
|
%
|
|
288,161
|
|
96
|
|
0.14
|
%
|
|
250,080
|
|
111
|
|
0.18
|
%
|
||||||
Brokered deposits
|
51,952
|
|
468
|
|
3.61
|
%
|
|
54,134
|
|
476
|
|
3.57
|
%
|
|
53,843
|
|
487
|
|
3.64
|
%
|
||||||
Retail certificates of deposit
|
350,141
|
|
1,017
|
|
1.17
|
%
|
|
381,650
|
|
1,115
|
|
1.18
|
%
|
|
407,413
|
|
1,380
|
|
1.36
|
%
|
||||||
Total interest-bearing deposits
|
1,139,783
|
|
1,798
|
|
0.63
|
%
|
|
1,187,191
|
|
1,939
|
|
0.66
|
%
|
|
1,137,259
|
|
2,289
|
|
0.81
|
%
|
||||||
Borrowed Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Short-term FHLB advances
|
35,462
|
|
9
|
|
0.10
|
%
|
|
2,000
|
|
1
|
|
0.20
|
%
|
|
16,000
|
|
5
|
|
0.12
|
%
|
||||||
Retail repurchase agreements
|
33,340
|
|
13
|
|
0.16
|
%
|
|
31,975
|
|
12
|
|
0.15
|
%
|
|
36,172
|
|
14
|
|
0.15
|
%
|
||||||
Total short-term borrowings
|
68,802
|
|
22
|
|
0.13
|
%
|
|
33,975
|
|
13
|
|
0.15
|
%
|
|
52,172
|
|
19
|
|
0.14
|
%
|
||||||
Long-term FHLB advances
|
64,237
|
|
543
|
|
3.39
|
%
|
|
64,538
|
|
541
|
|
3.40
|
%
|
|
66,531
|
|
562
|
|
3.40
|
%
|
||||||
Wholesale repurchase agreements
|
40,000
|
|
367
|
|
3.67
|
%
|
|
40,000
|
|
363
|
|
3.63
|
%
|
|
40,000
|
|
367
|
|
3.63
|
%
|
||||||
Other borrowings
|
22,690
|
|
226
|
|
3.94
|
%
|
|
23,883
|
|
235
|
|
3.94
|
%
|
|
22,614
|
|
492
|
|
8.60
|
%
|
||||||
Total long-term borrowings
|
126,927
|
|
1,136
|
|
3.58
|
%
|
|
128,421
|
|
1,139
|
|
3.57
|
%
|
|
129,145
|
|
1,421
|
|
4.38
|
%
|
||||||
Total borrowed funds
|
195,729
|
|
1,158
|
|
2.36
|
%
|
|
162,396
|
|
1,152
|
|
2.86
|
%
|
|
181,317
|
|
1,440
|
|
3.16
|
%
|
||||||
Total interest-bearing liabilities
|
1,335,512
|
|
2,956
|
|
0.89
|
%
|
|
1,349,587
|
|
3,091
|
|
0.93
|
%
|
|
1,318,576
|
|
3,729
|
|
1.14
|
%
|
||||||
Non-interest-bearing deposits
|
326,020
|
|
|
|
|
319,994
|
|
|
|
|
269,316
|
|
|
|
||||||||||||
Other liabilities
|
23,568
|
|
|
|
|
|
23,381
|
|
|
|
|
|
24,191
|
|
|
|
|
|||||||||
Total liabilities
|
1,685,100
|
|
|
|
|
1,692,962
|
|
|
|
|
1,612,083
|
|
|
|
||||||||||||
Total stockholders’ equity
|
225,888
|
|
|
|
|
|
221,757
|
|
|
|
|
|
211,468
|
|
|
|
|
|||||||||
Total liabilities and
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
stockholders’ equity
|
$
|
1,910,988
|
|
|
|
|
|
$
|
1,914,719
|
|
|
|
|
|
$
|
1,823,551
|
|
|
|
|
||||||
Interest rate spread
|
|
$
|
13,454
|
|
2.96
|
%
|
|
|
$
|
13,267
|
|
2.93
|
%
|
|
|
$
|
13,877
|
|
3.21
|
%
|
||||||
Net interest margin
|
3.15
|
%
|
|
|
|
3.12
|
%
|
|
|
|
3.43
|
%
|
(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)
|
Average balances include nonaccrual and impaired loans. Interest income includes interest earned on nonaccrual loans prior to the loans being placed on nonaccrual status. 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.
|
|
For the Six Months Ended
|
||||||||||||||||
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||||
(
Dollars in thousands)
|
Average Balance
|
Income/ Expense
|
Yield/Cost
|
|
Average Balance
|
Income/ Expense
|
Yield/Cost
|
||||||||||
Short-term investments
|
$
|
25,172
|
|
$
|
44
|
|
0.35
|
%
|
|
$
|
7,808
|
|
$
|
8
|
|
0.21
|
%
|
Investment Securities (1):
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
657,482
|
|
8,463
|
|
2.57
|
%
|
|
642,693
|
|
10,537
|
|
3.28
|
%
|
||||
Nontaxable (2)
|
49,602
|
|
1,189
|
|
4.79
|
%
|
|
37,528
|
|
1,071
|
|
5.71
|
%
|
||||
Total investment securities
|
707,084
|
|
9,652
|
|
2.73
|
%
|
|
680,221
|
|
11,608
|
|
3.41
|
%
|
||||
Loans (3):
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
609,247
|
|
13,486
|
|
4.46
|
%
|
|
618,105
|
|
14,795
|
|
4.81
|
%
|
||||
Real estate (4)
|
276,036
|
|
6,622
|
|
4.80
|
%
|
|
244,051
|
|
6,241
|
|
5.14
|
%
|
||||
Consumer
|
112,071
|
|
2,963
|
|
5.46
|
%
|
|
90,759
|
|
2,825
|
|
6.26
|
%
|
||||
Total loans
|
997,354
|
|
23,071
|
|
4.67
|
%
|
|
952,915
|
|
23,861
|
|
5.03
|
%
|
||||
Less: Allowance for loan losses
|
(18,322
|
)
|
|
|
|
(23,039
|
)
|
|
|
||||||||
Net loans
|
979,032
|
|
23,071
|
|
4.74
|
%
|
|
929,876
|
|
23,861
|
|
5.15
|
%
|
||||
Total earning assets
|
1,711,288
|
|
32,767
|
|
3.85
|
%
|
|
1,617,905
|
|
35,477
|
|
4.40
|
%
|
||||
Intangible assets
|
70,538
|
|
|
|
|
64,581
|
|
|
|
||||||||
Other assets
|
130,794
|
|
|
|
|
132,348
|
|
|
|
||||||||
Total assets
|
$
|
1,912,620
|
|
|
|
|
$
|
1,814,834
|
|
|
|
||||||
Deposits:
|
|
|
|
|
|
|
|
||||||||||
Savings accounts
|
$
|
194,940
|
|
$
|
51
|
|
0.05
|
%
|
|
$
|
152,520
|
|
$
|
44
|
|
0.06
|
%
|
Governmental deposit accounts
|
146,775
|
|
370
|
|
0.51
|
%
|
|
149,725
|
|
488
|
|
0.66
|
%
|
||||
Interest-bearing demand accounts
|
125,474
|
|
50
|
|
0.08
|
%
|
|
109,975
|
|
71
|
|
0.13
|
%
|
||||
Money market accounts
|
277,322
|
|
189
|
|
0.14
|
%
|
|
255,674
|
|
236
|
|
0.19
|
%
|
||||
Brokered deposits
|
53,037
|
|
944
|
|
3.59
|
%
|
|
57,643
|
|
1,014
|
|
3.54
|
%
|
||||
Retail certificates of deposit
|
365,808
|
|
2,132
|
|
1.18
|
%
|
|
403,929
|
|
2,983
|
|
1.49
|
%
|
||||
Total interest-bearing deposits
|
1,163,356
|
|
3,736
|
|
0.65
|
%
|
|
1,129,466
|
|
4,836
|
|
0.86
|
%
|
||||
Borrowed Funds:
|
|
|
|
|
|
|
|
||||||||||
Short-term FHLB advances
|
18,823
|
|
10
|
|
0.11
|
%
|
|
15,634
|
|
8
|
|
0.11
|
%
|
||||
Retail repurchase agreements
|
32,661
|
|
25
|
|
0.15
|
%
|
|
39,207
|
|
30
|
|
0.15
|
%
|
||||
Total short-term borrowings
|
51,484
|
|
35
|
|
0.14
|
%
|
|
54,841
|
|
38
|
|
0.14
|
%
|
||||
Long-term FHLB advances
|
64,387
|
|
1,084
|
|
3.40
|
%
|
|
70,055
|
|
1,180
|
|
3.39
|
%
|
||||
Wholesale repurchase agreements
|
40,000
|
|
729
|
|
3.65
|
%
|
|
48,462
|
|
868
|
|
3.54
|
%
|
||||
Other borrowings
|
23,283
|
|
461
|
|
3.94
|
%
|
|
22,609
|
|
987
|
|
8.63
|
%
|
||||
Total long-term borrowings
|
127,670
|
|
2,274
|
|
3.57
|
%
|
|
141,126
|
|
3,035
|
|
4.28
|
%
|
||||
Total borrowed funds
|
179,154
|
|
2,309
|
|
2.58
|
%
|
|
195,967
|
|
3,073
|
|
3.12
|
%
|
||||
Total interest-bearing liabilities
|
1,342,510
|
|
6,045
|
|
0.91
|
%
|
|
1,325,433
|
|
7,909
|
|
1.20
|
%
|
||||
Non-interest-bearing deposits
|
323,024
|
|
|
|
|
258,401
|
|
|
|
||||||||
Other liabilities
|
23,252
|
|
|
|
|
|
21,458
|
|
|
|
|
||||||
Total liabilities
|
1,688,786
|
|
|
|
|
1,605,292
|
|
|
|
||||||||
Total stockholders’ equity
|
223,834
|
|
|
|
|
|
209,542
|
|
|
|
|
||||||
Total liabilities and
|
|
|
|
|
|
|
|
||||||||||
stockholders’ equity
|
$
|
1,912,620
|
|
|
|
|
|
$
|
1,814,834
|
|
|
|
|
||||
Interest rate spread
|
|
$
|
26,722
|
|
2.94
|
%
|
|
|
$
|
27,568
|
|
3.20
|
%
|
||||
Net interest margin
|
3.14
|
%
|
|
|
|
3.42
|
%
|
(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)
|
Average balances include nonaccrual and impaired loans. Interest income includes interest earned on nonaccrual loans prior to the loans being placed on nonaccrual status. 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.
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
June 30,
|
|||||||||||
(Dollars in thousands)
|
2013
|
2012
|
|||||||||||||
Net interest income, as reported
|
$
|
13,155
|
|
$
|
12,975
|
|
$
|
13,612
|
|
$
|
26,130
|
|
$
|
27,044
|
|
Taxable equivalent adjustments
|
299
|
|
292
|
|
265
|
|
592
|
|
524
|
|
|||||
Fully tax-equivalent net interest income
|
$
|
13,454
|
|
$
|
13,267
|
|
$
|
13,877
|
|
$
|
26,722
|
|
$
|
27,568
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
June 30, 2013
|
||||||||||||||||||||
|
Three Months Ended June 30, 2013 Compared to
|
|
Compared to
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
March 31, 2013
|
|
June 30, 2012
|
|
June 30, 2012
|
||||||||||||||||||||||||
Increase (decrease) in:
|
Rate
|
Volume
|
Total
(1)
|
|
Rate
|
Volume
|
Total
(1)
|
|
Rate
|
Volume
|
Total
(1)
|
||||||||||||||||||
INTEREST INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Short-term investments
|
$
|
96
|
|
$
|
(89
|
)
|
$
|
7
|
|
|
$
|
20
|
|
$
|
1
|
|
$
|
21
|
|
|
$
|
8
|
|
$
|
28
|
|
$
|
36
|
|
Investment Securities:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Taxable
|
(74
|
)
|
14
|
|
(60
|
)
|
|
(1,673
|
)
|
891
|
|
(782
|
)
|
|
(2,749
|
)
|
675
|
|
(2,074
|
)
|
|||||||||
Nontaxable
|
(55
|
)
|
79
|
|
24
|
|
|
(423
|
)
|
484
|
|
61
|
|
|
(419
|
)
|
537
|
|
118
|
|
|||||||||
Total investment income
|
(129
|
)
|
93
|
|
(36
|
)
|
|
(2,096
|
)
|
1,375
|
|
(721
|
)
|
|
(3,168
|
)
|
1,212
|
|
(1,956
|
)
|
|||||||||
Loans
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial
|
(155
|
)
|
239
|
|
84
|
|
|
(647
|
)
|
(139
|
)
|
(786
|
)
|
|
(1,094
|
)
|
(215
|
)
|
(1,309
|
)
|
|||||||||
Real estate
|
(682
|
)
|
586
|
|
(96
|
)
|
|
(1,186
|
)
|
1,348
|
|
162
|
|
|
(984
|
)
|
1,365
|
|
381
|
|
|||||||||
Consumer
|
(440
|
)
|
533
|
|
93
|
|
|
(1,017
|
)
|
1,145
|
|
128
|
|
|
(895
|
)
|
1,033
|
|
138
|
|
|||||||||
Total loan income
|
(1,277
|
)
|
1,358
|
|
81
|
|
|
(2,850
|
)
|
2,354
|
|
(496
|
)
|
|
(2,973
|
)
|
2,183
|
|
(790
|
)
|
|||||||||
Total interest income
|
(1,310
|
)
|
1,362
|
|
52
|
|
|
(4,926
|
)
|
3,730
|
|
(1,196
|
)
|
|
(6,133
|
)
|
3,423
|
|
(2,710
|
)
|
|||||||||
INTEREST EXPENSE:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Savings accounts
|
1
|
|
1
|
|
2
|
|
|
(9
|
)
|
13
|
|
4
|
|
|
(10
|
)
|
17
|
|
7
|
|
|||||||||
Government deposit accounts
|
(698
|
)
|
589
|
|
(109
|
)
|
|
(835
|
)
|
677
|
|
(158
|
)
|
|
(949
|
)
|
650
|
|
(299
|
)
|
|||||||||
Interest-bearing demand accounts
|
138
|
|
5
|
|
143
|
|
|
116
|
|
15
|
|
131
|
|
|
268
|
|
31
|
|
299
|
|
|||||||||
Money market accounts
|
(29
|
)
|
(42
|
)
|
(71
|
)
|
|
(45
|
)
|
(41
|
)
|
(86
|
)
|
|
(98
|
)
|
(88
|
)
|
(186
|
)
|
|||||||||
Brokered certificates of deposit
|
36
|
|
(44
|
)
|
(8
|
)
|
|
(3
|
)
|
(16
|
)
|
(19
|
)
|
|
40
|
|
(110
|
)
|
(70
|
)
|
|||||||||
Retail certificates of deposit
|
(17
|
)
|
(81
|
)
|
(98
|
)
|
|
(184
|
)
|
(179
|
)
|
(363
|
)
|
|
(586
|
)
|
(265
|
)
|
(851
|
)
|
|||||||||
Total deposit cost
|
(569
|
)
|
428
|
|
(141
|
)
|
|
(960
|
)
|
469
|
|
(491
|
)
|
|
(1,335
|
)
|
235
|
|
(1,100
|
)
|
|||||||||
Borrowed funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Short-term borrowings
|
(3
|
)
|
12
|
|
9
|
|
|
(3
|
)
|
6
|
|
3
|
|
|
(1
|
)
|
(2
|
)
|
(3
|
)
|
|||||||||
Long-term borrowings
|
7
|
|
(10
|
)
|
(3
|
)
|
|
(279
|
)
|
(6
|
)
|
(285
|
)
|
|
(536
|
)
|
(225
|
)
|
(761
|
)
|
|||||||||
Total borrowed funds cost
|
4
|
|
2
|
|
6
|
|
|
(282
|
)
|
—
|
|
(282
|
)
|
|
(537
|
)
|
(227
|
)
|
(764
|
)
|
|||||||||
Total interest expense
|
(565
|
)
|
430
|
|
(135
|
)
|
|
(1,242
|
)
|
469
|
|
(773
|
)
|
|
(1,872
|
)
|
8
|
|
(1,864
|
)
|
|||||||||
Net interest income
|
$
|
(745
|
)
|
$
|
932
|
|
$
|
187
|
|
|
$
|
(3,684
|
)
|
$
|
3,261
|
|
$
|
(423
|
)
|
|
$
|
(4,261
|
)
|
$
|
3,415
|
|
$
|
(846
|
)
|
(1)
|
The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the
|
(2)
|
Presented on a fully tax-equivalent basis.
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30,
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
Provision for (recovery of) checking account overdrafts
|
$
|
138
|
|
$
|
(15
|
)
|
$
|
80
|
|
|
$
|
123
|
|
$
|
68
|
|
Recovery of other loan losses
|
(1,600
|
)
|
(1,050
|
)
|
(1,200
|
)
|
|
(2,650
|
)
|
(3,325
|
)
|
|||||
Net recovery of loan losses
|
$
|
(1,462
|
)
|
$
|
(1,065
|
)
|
$
|
(1,120
|
)
|
|
$
|
(2,527
|
)
|
$
|
(3,257
|
)
|
As a percentage of average gross loans (a)
|
(0.58
|
)%
|
(0.44
|
)%
|
(0.47
|
)%
|
|
(0.51
|
)%
|
(0.69
|
)%
|
|||||
(a) Presented on an annualized basis
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30,
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
Net gain (loss) on OREO
|
$
|
81
|
|
$
|
(5
|
)
|
$
|
(48
|
)
|
|
$
|
76
|
|
$
|
8
|
|
Loss on debt extinguishment
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(3,111
|
)
|
|||||
Net (loss) gain on bank premises and equipment
|
(87
|
)
|
—
|
|
5
|
|
|
(87
|
)
|
(2
|
)
|
|||||
Net other losses
|
$
|
(6
|
)
|
$
|
(5
|
)
|
$
|
(43
|
)
|
|
$
|
(11
|
)
|
$
|
(3,105
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30,
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
Property and casualty insurance commissions
|
$
|
2,705
|
|
$
|
2,171
|
|
$
|
2,145
|
|
|
$
|
4,876
|
|
$
|
3,968
|
|
Performance-based commissions
|
81
|
|
504
|
|
63
|
|
|
585
|
|
982
|
|
|||||
Life and health insurance commissions
|
309
|
|
146
|
|
133
|
|
|
455
|
|
260
|
|
|||||
Credit life and A&H insurance commissions
|
34
|
|
23
|
|
40
|
|
|
57
|
|
63
|
|
|||||
Other fees and charges
|
91
|
|
34
|
|
57
|
|
|
125
|
|
116
|
|
|||||
Total insurance income
|
$
|
3,220
|
|
$
|
2,878
|
|
$
|
2,438
|
|
|
$
|
6,098
|
|
$
|
5,389
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30,
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
Overdraft and non-sufficient funds fees
|
$
|
1,732
|
|
$
|
1,605
|
|
$
|
1,894
|
|
|
$
|
3,337
|
|
$
|
3,634
|
|
Account maintenance fees
|
311
|
|
290
|
|
315
|
|
|
601
|
|
636
|
|
|||||
Other fees and charges
|
2
|
|
162
|
|
21
|
|
|
164
|
|
197
|
|
|||||
Total deposit account service charges
|
$
|
2,045
|
|
$
|
2,057
|
|
$
|
2,230
|
|
|
$
|
4,102
|
|
$
|
4,467
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30,
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
Fiduciary
|
$
|
1,293
|
|
$
|
1,189
|
|
$
|
1,137
|
|
|
$
|
2,482
|
|
$
|
2,206
|
|
Brokerage
|
479
|
|
513
|
|
312
|
|
|
992
|
|
739
|
|
|||||
Total trust and investment income
|
$
|
1,772
|
|
$
|
1,702
|
|
$
|
1,449
|
|
|
$
|
3,474
|
|
$
|
2,945
|
|
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
(Dollars in thousands)
|
|||||||||||||||
Trust assets under management
|
$
|
939,292
|
|
$
|
927,675
|
|
$
|
888,134
|
|
$
|
874,293
|
|
$
|
847,962
|
|
Brokerage assets under management
|
433,651
|
|
433,217
|
|
404,320
|
|
398,875
|
|
309,852
|
|
|||||
Total managed assets
|
$
|
1,372,943
|
|
$
|
1,360,892
|
|
$
|
1,292,454
|
|
$
|
1,273,168
|
|
$
|
1,157,814
|
|
Quarterly average
|
$
|
1,373,135
|
|
$
|
1,332,353
|
|
$
|
1,277,452
|
|
$
|
1,203,285
|
|
$
|
1,138,261
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30, 2013
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
Base salaries and wages
|
$
|
5,866
|
|
$
|
5,632
|
|
$
|
5,261
|
|
|
$
|
11,498
|
|
$
|
10,409
|
|
Sales-based and incentive compensation
|
1,874
|
|
1,525
|
|
1,527
|
|
|
3,399
|
|
2,872
|
|
|||||
Employee benefits
|
771
|
|
982
|
|
1,306
|
|
|
1,753
|
|
2,539
|
|
|||||
Stock-based compensation
|
386
|
|
297
|
|
259
|
|
|
683
|
|
485
|
|
|||||
Deferred personnel costs
|
(589
|
)
|
(494
|
)
|
(463
|
)
|
|
(1,083
|
)
|
(898
|
)
|
|||||
Payroll taxes and other employment costs
|
626
|
|
775
|
|
525
|
|
|
1,401
|
|
1,253
|
|
|||||
Total salaries and employee benefit costs
|
$
|
8,934
|
|
$
|
8,717
|
|
$
|
8,415
|
|
|
$
|
17,651
|
|
$
|
16,660
|
|
Full-time equivalent employees:
|
|
|
|
|
|
|
|
|||||||||
Actual at end of period
|
545
|
|
517
|
|
494
|
|
|
545
|
|
494
|
|
|||||
Average during the period
|
531
|
|
509
|
|
498
|
|
|
521
|
|
503
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30,
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
Depreciation
|
$
|
590
|
|
$
|
767
|
|
$
|
510
|
|
|
$
|
1,357
|
|
$
|
1,006
|
|
Repairs and maintenance costs
|
460
|
|
446
|
|
434
|
|
|
907
|
|
747
|
|
|||||
Net rent expense
|
200
|
|
221
|
|
227
|
|
|
421
|
|
467
|
|
|||||
Property taxes, utilities and other costs
|
376
|
|
424
|
|
332
|
|
|
799
|
|
715
|
|
|||||
Total net occupancy and equipment expense
|
$
|
1,626
|
|
$
|
1,858
|
|
$
|
1,503
|
|
|
$
|
3,484
|
|
$
|
2,935
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
June 30,
2013 |
March 31,
2013 |
June 30,
2012 |
|
June 30,
|
|||||||||||
(Dollars in thousands)
|
|
2013
|
2012
|
|||||||||||||
|
|
|
|
|
|
|
||||||||||
Pre-Provision Net Revenue:
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
7,431
|
|
$
|
7,340
|
|
$
|
7,501
|
|
|
$
|
14,771
|
|
$
|
17,237
|
|
Add: loss on debt extinguishment
|
—
|
|
—
|
|
—
|
|
|
—
|
|
3,111
|
|
|||||
Add: loss on loans held-for-sale and OREO
|
—
|
|
5
|
|
48
|
|
|
—
|
|
—
|
|
|||||
Add: loss on other assets
|
89
|
|
—
|
|
—
|
|
|
89
|
|
2
|
|
|||||
Less: recovery of loan losses
|
1,462
|
|
1,065
|
|
1,120
|
|
|
2,527
|
|
3,257
|
|
|||||
Less: gain on loans held-for-sale and OREO
|
81
|
|
—
|
|
—
|
|
|
76
|
|
8
|
|
|||||
Less: net gain on securities transactions
|
26
|
|
418
|
|
—
|
|
|
444
|
|
3,163
|
|
|||||
Less: gain on other assets
|
2
|
|
—
|
|
5
|
|
|
2
|
|
—
|
|
|||||
Pre-provision net revenue
|
$
|
5,949
|
|
$
|
5,862
|
|
$
|
6,424
|
|
|
$
|
11,811
|
|
$
|
13,922
|
|
|
|
|
|
|
|
|
||||||||||
Pre-provision net revenue
|
$
|
5,949
|
|
$
|
5,862
|
|
$
|
6,424
|
|
|
$
|
11,811
|
|
$
|
13,922
|
|
Total average assets
|
1,910,988
|
|
1,914,719
|
|
1,823,551
|
|
|
1,912,620
|
|
1,814,834
|
|
|||||
|
|
|
|
|
|
|
||||||||||
Pre-provision net revenue to total average assets (a)
|
1.25
|
%
|
1.24
|
%
|
1.42
|
%
|
|
1.25
|
%
|
1.54
|
%
|
|||||
(a) Presented on an annualized basis
|
|
|
|
|
|
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Residential
|
$
|
30,065
|
|
$
|
32,748
|
|
$
|
37,267
|
|
$
|
40,827
|
|
$
|
46,161
|
|
Commercial
|
—
|
|
—
|
|
—
|
|
—
|
|
997
|
|
|||||
Total fair value
|
$
|
30,065
|
|
$
|
32,748
|
|
$
|
37,267
|
|
$
|
40,827
|
|
$
|
47,158
|
|
Total amortized cost
|
$
|
28,820
|
|
$
|
31,915
|
|
$
|
36,395
|
|
$
|
38,681
|
|
$
|
45,512
|
|
Net unrealized gain
|
$
|
1,245
|
|
$
|
833
|
|
$
|
872
|
|
$
|
2,146
|
|
$
|
1,646
|
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Gross portfolio loans:
|
|
|
|
|
|
||||||||||
Commercial real estate, construction
|
$
|
30,770
|
|
$
|
24,108
|
|
$
|
34,265
|
|
$
|
50,804
|
|
$
|
43,775
|
|
Commercial real estate, other
|
389,281
|
|
381,331
|
|
378,073
|
|
379,561
|
|
394,323
|
|
|||||
Commercial real estate
|
420,051
|
|
405,439
|
|
412,338
|
|
430,365
|
|
438,098
|
|
|||||
Commercial and industrial
|
184,981
|
|
174,982
|
|
180,131
|
|
172,068
|
|
161,893
|
|
|||||
Residential real estate
|
252,282
|
|
237,193
|
|
233,841
|
|
233,501
|
|
212,813
|
|
|||||
Home equity lines of credit
|
52,212
|
|
50,555
|
|
51,053
|
|
51,137
|
|
48,414
|
|
|||||
Consumer
|
119,029
|
|
108,353
|
|
101,246
|
|
100,116
|
|
92,334
|
|
|||||
Deposit account overdrafts
|
1,674
|
|
3,996
|
|
6,563
|
|
1,580
|
|
1,726
|
|
|||||
Total portfolio loans
|
$
|
1,030,229
|
|
$
|
980,518
|
|
$
|
985,172
|
|
$
|
988,767
|
|
$
|
955,278
|
|
Percent of loans to total loans:
|
|
|
|
|
|
||||||||||
Commercial real estate, construction
|
3.0
|
%
|
2.4
|
%
|
3.5
|
%
|
5.1
|
%
|
4.6
|
%
|
|||||
Commercial real estate, other
|
37.8
|
%
|
38.9
|
%
|
38.4
|
%
|
38.4
|
%
|
41.2
|
%
|
|||||
Commercial real estate
|
40.8
|
%
|
41.3
|
%
|
41.9
|
%
|
43.5
|
%
|
45.8
|
%
|
|||||
Commercial and industrial
|
17.9
|
%
|
17.8
|
%
|
18.3
|
%
|
17.4
|
%
|
16.9
|
%
|
|||||
Residential real estate
|
24.5
|
%
|
24.2
|
%
|
23.7
|
%
|
23.6
|
%
|
22.3
|
%
|
|||||
Home equity lines of credit
|
5.1
|
%
|
5.2
|
%
|
5.2
|
%
|
5.2
|
%
|
5.1
|
%
|
|||||
Consumer
|
11.5
|
%
|
11.1
|
%
|
10.3
|
%
|
10.1
|
%
|
9.7
|
%
|
|||||
Deposit account overdrafts
|
0.2
|
%
|
0.4
|
%
|
0.6
|
%
|
0.2
|
%
|
0.2
|
%
|
|||||
Total percentage
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Residential real estate loans being serviced for others
|
$
|
338,854
|
|
$
|
343,769
|
|
$
|
330,721
|
|
$
|
307,052
|
|
$
|
296,025
|
|
(Dollars in thousands)
|
Outstanding Balance
|
Loan Commitments
|
Total Exposure
|
% of Total
|
|||||||
Commercial real estate, other:
|
|
|
|
|
|||||||
Lodging and lodging related
|
$
|
60,267
|
|
$
|
25
|
|
$
|
60,292
|
|
15.1
|
%
|
Apartment complexes
|
53,197
|
|
828
|
|
54,025
|
|
13.5
|
%
|
|||
Office buildings and complexes:
|
|
|
|
|
|||||||
Owner occupied
|
9,638
|
|
142
|
|
9,780
|
|
2.5
|
%
|
|||
Non-owner occupied
|
24,200
|
|
238
|
|
24,438
|
|
6.1
|
%
|
|||
Total office buildings and complexes
|
33,838
|
|
380
|
|
34,218
|
|
8.6
|
%
|
|||
Light industrial facilities:
|
|
|
|
|
|||||||
Owner occupied
|
25,229
|
|
1,674
|
|
26,903
|
|
6.7
|
%
|
|||
Non-owner occupied
|
8,185
|
|
—
|
|
8,185
|
|
2.1
|
%
|
|||
Total light industrial facilities
|
33,414
|
|
1,674
|
|
35,088
|
|
8.8
|
%
|
|||
Retail facilities:
|
|
|
|
|
|||||||
Owner occupied
|
10,483
|
|
248
|
|
10,731
|
|
2.7
|
%
|
|||
Non-owner occupied
|
18,523
|
|
417
|
|
18,940
|
|
4.7
|
%
|
|||
Total retail facilities
|
29,006
|
|
665
|
|
29,671
|
|
7.4
|
%
|
|||
Assisted living facilities and nursing homes
|
22,290
|
|
288
|
|
22,578
|
|
5.7
|
%
|
|||
Mixed commercial use facilities:
|
|
|
|
|
|||||||
Owner occupied
|
12,568
|
|
502
|
|
13,070
|
|
3.3
|
%
|
|||
Non-owner occupied
|
14,701
|
|
17
|
|
14,718
|
|
3.7
|
%
|
|||
Total mixed commercial use facilities
|
27,269
|
|
519
|
|
27,788
|
|
7.0
|
%
|
|||
Day care facilities:
|
|
|
|
|
|||||||
Owner occupied
|
12,643
|
|
—
|
|
12,643
|
|
3.2
|
%
|
|||
Non-owner occupied
|
4,518
|
|
—
|
|
4,518
|
|
1.1
|
%
|
|||
Total day care facilities
|
17,161
|
|
—
|
|
17,161
|
|
4.3
|
%
|
|||
Health care facilities:
|
|
|
|
|
|||||||
Owner occupied
|
7,220
|
|
9
|
|
7,229
|
|
1.8
|
%
|
|||
Non-owner occupied
|
16,852
|
|
—
|
|
16,852
|
|
4.2
|
%
|
|||
Total health care facilities
|
24,072
|
|
9
|
|
24,081
|
|
6.0
|
%
|
|||
Restaurant facilities:
|
|
|
|
|
|||||||
Owner occupied
|
10,120
|
|
118
|
|
10,238
|
|
2.6
|
%
|
|||
Non-owner occupied
|
1,899
|
|
—
|
|
1,899
|
|
0.5
|
%
|
|||
Total restaurant facilities
|
12,019
|
|
118
|
|
12,137
|
|
3.1
|
%
|
|||
Other
|
76,748
|
|
5,174
|
|
81,922
|
|
20.5
|
%
|
|||
Total commercial real estate, other
|
$
|
389,281
|
|
$
|
9,680
|
|
$
|
398,961
|
|
100.0
|
%
|
(Dollars in thousands)
|
Outstanding Balance
|
Loan Commitments
|
Total Exposure
|
% of Total
|
|||||||
Commercial real estate, construction:
|
|
|
|
|
|||||||
Assisted living facilities and nursing homes
|
$
|
5,607
|
|
$
|
6,386
|
|
$
|
11,993
|
|
21.4
|
%
|
Residential property
|
1,290
|
|
1,058
|
|
2,348
|
|
4.2
|
%
|
|||
Apartment complexes
|
11,639
|
|
17,013
|
|
28,652
|
|
51.1
|
%
|
|||
Restaurant facilities
|
3,801
|
|
—
|
|
3,801
|
|
6.8
|
%
|
|||
Mixed commercial use facilities - non-owner occupied
|
2,918
|
|
27
|
|
2,945
|
|
5.3
|
%
|
|||
Other
|
5,515
|
|
783
|
|
6,298
|
|
11.2
|
%
|
|||
Total commercial real estate, construction
|
$
|
30,770
|
|
$
|
25,267
|
|
$
|
56,037
|
|
100.0
|
%
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Commercial real estate
|
$
|
12,568
|
|
$
|
13,973
|
|
$
|
14,215
|
|
$
|
14,973
|
|
$
|
16,212
|
|
Commercial and industrial
|
2,188
|
|
1,750
|
|
1,733
|
|
1,667
|
|
1,524
|
|
|||||
Residential real estate
|
1,005
|
|
783
|
|
801
|
|
837
|
|
1,090
|
|
|||||
Home equity lines of credit
|
490
|
|
485
|
|
479
|
|
470
|
|
478
|
|
|||||
Consumer
|
740
|
|
383
|
|
438
|
|
480
|
|
456
|
|
|||||
Deposit account overdrafts
|
122
|
|
65
|
|
145
|
|
180
|
|
165
|
|
|||||
Total allowance for loan losses
|
$
|
17,113
|
|
$
|
17,439
|
|
$
|
17,811
|
|
$
|
18,607
|
|
$
|
19,925
|
|
As a percentage of total loans
|
1.66
|
%
|
1.78
|
%
|
1.81
|
%
|
1.88
|
%
|
2.09
|
%
|
|
Three Months Ended
|
||||||||||||||
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Gross charge-offs:
|
|
|
|
|
|
||||||||||
Commercial real estate, construction
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Commercial real estate, other
|
217
|
|
566
|
|
2,034
|
|
266
|
|
889
|
|
|||||
Commercial real estate
|
217
|
|
566
|
|
2,034
|
|
266
|
|
889
|
|
|||||
Commercial and industrial
|
11
|
|
—
|
|
1
|
|
—
|
|
33
|
|
|||||
Residential real estate
|
88
|
|
134
|
|
201
|
|
329
|
|
354
|
|
|||||
Home equity lines of credit
|
—
|
|
2
|
|
—
|
|
17
|
|
6
|
|
|||||
Consumer
|
185
|
|
159
|
|
144
|
|
83
|
|
131
|
|
|||||
Deposit account overdrafts
|
115
|
|
130
|
|
157
|
|
163
|
|
132
|
|
|||||
Total gross charge-offs
|
616
|
|
991
|
|
2,537
|
|
858
|
|
1,545
|
|
|||||
Recoveries:
|
|
|
|
|
|
||||||||||
Commercial real estate, construction
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Commercial real estate, other
|
1,432
|
|
1,374
|
|
1,861
|
|
127
|
|
805
|
|
|||||
Commercial real estate
|
1,432
|
|
1,374
|
|
1,861
|
|
127
|
|
805
|
|
|||||
Commercial and industrial
|
4
|
|
17
|
|
67
|
|
143
|
|
100
|
|
|||||
Residential real estate
|
145
|
|
116
|
|
165
|
|
76
|
|
228
|
|
|||||
Home equity lines of credit
|
5
|
|
8
|
|
9
|
|
9
|
|
7
|
|
|||||
Consumer
|
132
|
|
104
|
|
102
|
|
107
|
|
164
|
|
|||||
Deposit account overdrafts
|
34
|
|
65
|
|
40
|
|
34
|
|
37
|
|
|||||
Total recoveries
|
1,752
|
|
1,684
|
|
2,244
|
|
496
|
|
1,341
|
|
|||||
Net (recoveries) charge-offs:
|
|
|
|
|
|
||||||||||
Commercial real estate, construction
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Commercial real estate, other
|
(1,215
|
)
|
(808
|
)
|
173
|
|
139
|
|
84
|
|
|||||
Commercial real estate
|
(1,215
|
)
|
(808
|
)
|
173
|
|
139
|
|
84
|
|
|||||
Commercial and industrial
|
7
|
|
(17
|
)
|
(66
|
)
|
(143
|
)
|
(67
|
)
|
|||||
Residential real estate
|
(57
|
)
|
18
|
|
36
|
|
253
|
|
126
|
|
|||||
Home equity lines of credit
|
(5
|
)
|
(6
|
)
|
(9
|
)
|
8
|
|
(1
|
)
|
|||||
Consumer
|
53
|
|
55
|
|
42
|
|
(24
|
)
|
(33
|
)
|
|||||
Deposit account overdrafts
|
81
|
|
65
|
|
117
|
|
129
|
|
95
|
|
|||||
Total net (recoveries) charge-offs
|
$
|
(1,136
|
)
|
$
|
(693
|
)
|
$
|
293
|
|
$
|
362
|
|
$
|
204
|
|
Ratio of net (recoveries) charge-offs to average loans (annualized):
|
|
|
|
||||||||||||
Commercial real estate, construction
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|||||
Commercial real estate, other
|
(0.48
|
)%
|
(0.33
|
)%
|
0.07
|
%
|
0.06
|
%
|
0.04
|
%
|
|||||
Commercial real estate
|
(0.48
|
)%
|
(0.33
|
)%
|
0.07
|
%
|
0.06
|
%
|
0.04
|
%
|
|||||
Commercial and industrial
|
—
|
%
|
(0.01
|
)%
|
(0.03
|
)%
|
(0.06
|
)%
|
(0.03
|
)%
|
|||||
Residential real estate
|
(0.02
|
)%
|
0.01
|
%
|
0.01
|
%
|
0.11
|
%
|
0.05
|
%
|
|||||
Home equity lines of credit
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|||||
Consumer
|
0.03
|
%
|
0.02
|
%
|
0.02
|
%
|
(0.01
|
)%
|
(0.01
|
)%
|
|||||
Deposit account overdrafts
|
0.02
|
%
|
0.02
|
%
|
0.05
|
%
|
0.05
|
%
|
0.04
|
%
|
|||||
Total
|
(0.45
|
)%
|
(0.29
|
)%
|
0.12
|
%
|
0.15
|
%
|
0.09
|
%
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Loans 90+ days past due and accruing:
|
|
|
|
|
|
||||||||||
Commercial real estate
|
$
|
36
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
37
|
|
Commercial and industrial
|
—
|
|
—
|
|
181
|
|
27
|
|
—
|
|
|||||
Residential real estate
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Consumer
|
—
|
|
3
|
|
4
|
|
—
|
|
14
|
|
|||||
Total
|
36
|
|
3
|
|
185
|
|
27
|
|
51
|
|
|||||
Nonaccrual loans:
|
|
|
|
|
|
||||||||||
Commercial real estate, construction
|
80
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Commercial real estate
|
4,922
|
|
5,739
|
|
7,259
|
|
9,846
|
|
9,720
|
|
|||||
Commercial and industrial
|
297
|
|
327
|
|
627
|
|
408
|
|
474
|
|
|||||
Residential real estate
|
3,136
|
|
3,166
|
|
2,786
|
|
2,884
|
|
3,693
|
|
|||||
Home equity
|
32
|
|
78
|
|
24
|
|
15
|
|
215
|
|
|||||
Consumer
|
62
|
|
9
|
|
20
|
|
10
|
|
—
|
|
|||||
Total
|
8,529
|
|
9,319
|
|
10,716
|
|
13,163
|
|
14,102
|
|
|||||
Troubled debt restructurings:
|
|
|
|
|
|
||||||||||
Commercial real estate
|
1,879
|
|
2,208
|
|
2,572
|
|
1,891
|
|
2,416
|
|
|||||
Commercial and industrial
|
—
|
|
—
|
|
—
|
|
8
|
|
—
|
|
|||||
Residential real estate
|
175
|
|
276
|
|
350
|
|
419
|
|
49
|
|
|||||
Home equity
|
24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Total
|
2,078
|
|
2,484
|
|
2,922
|
|
2,318
|
|
2,465
|
|
|||||
Total nonperforming loans (NPLs)
|
10,643
|
|
11,806
|
|
13,823
|
|
15,508
|
|
16,618
|
|
|||||
Other real estate owned (OREO)
|
|
|
|
|
|
||||||||||
Commercial
|
—
|
|
815
|
|
815
|
|
815
|
|
815
|
|
|||||
Residential
|
120
|
|
—
|
|
21
|
|
358
|
|
325
|
|
|||||
Total
|
120
|
|
815
|
|
836
|
|
1,173
|
|
1,140
|
|
|||||
Total nonperforming assets (NPAs)
|
$
|
10,763
|
|
$
|
12,621
|
|
$
|
14,659
|
|
$
|
16,681
|
|
$
|
17,758
|
|
NPLs as a percent of total loans
|
1.03
|
%
|
1.20
|
%
|
1.39
|
%
|
1.55
|
%
|
1.73
|
%
|
|||||
NPAs as a percent of total assets
|
0.57
|
%
|
0.65
|
%
|
0.76
|
%
|
0.89
|
%
|
0.97
|
%
|
|||||
NPAs as a percent of gross loans and OREO
|
1.04
|
%
|
1.28
|
%
|
1.48
|
%
|
1.66
|
%
|
1.85
|
%
|
|||||
Allowance for loan losses as a percent of NPLs
|
160.80
|
%
|
147.71
|
%
|
128.86
|
%
|
119.98
|
%
|
119.90
|
%
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
||||||||||
Retail certificates of deposit
|
$
|
349,511
|
|
$
|
353,894
|
|
$
|
392,313
|
|
$
|
413,837
|
|
$
|
411,401
|
|
Money market deposit accounts
|
238,554
|
|
288,538
|
|
288,404
|
|
251,735
|
|
246,657
|
|
|||||
Governmental deposit accounts
|
146,817
|
|
167,441
|
|
130,630
|
|
157,802
|
|
158,832
|
|
|||||
Savings accounts
|
199,503
|
|
200,549
|
|
183,499
|
|
172,715
|
|
161,664
|
|
|||||
Interest-bearing demand accounts
|
125,875
|
|
124,969
|
|
124,787
|
|
112,854
|
|
112,476
|
|
|||||
Total retail interest-bearing deposits
|
1,060,260
|
|
1,135,391
|
|
1,119,633
|
|
1,108,943
|
|
1,091,030
|
|
|||||
Brokered certificates of deposits
|
50,393
|
|
52,648
|
|
55,599
|
|
55,168
|
|
54,639
|
|
|||||
Total interest-bearing deposits
|
1,110,653
|
|
1,188,039
|
|
1,175,232
|
|
1,164,111
|
|
1,145,669
|
|
|||||
Non-interest-bearing deposits
|
325,125
|
|
340,887
|
|
317,071
|
|
288,376
|
|
272,627
|
|
|||||
Total deposits
|
$
|
1,435,778
|
|
$
|
1,528,926
|
|
$
|
1,492,303
|
|
$
|
1,452,487
|
|
$
|
1,418,296
|
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Short-term borrowings:
|
|
|
|
|
|
||||||||||
FHLB advances
|
$
|
59,000
|
|
$
|
—
|
|
$
|
15,000
|
|
$
|
—
|
|
$
|
7,500
|
|
Retail repurchase agreements
|
33,521
|
|
32,395
|
|
32,769
|
|
37,651
|
|
35,847
|
|
|||||
Total short-term borrowings
|
92,521
|
|
32,395
|
|
47,769
|
|
37,651
|
|
43,347
|
|
|||||
Long-term borrowings:
|
|
|
|
|
|
||||||||||
FHLB advances
|
64,180
|
|
64,348
|
|
64,904
|
|
66,270
|
|
66,471
|
|
|||||
National market repurchase agreements
|
40,000
|
|
40,000
|
|
40,000
|
|
40,000
|
|
40,000
|
|
|||||
Other long-term borrowings
|
21,534
|
|
22,726
|
|
23,919
|
|
—
|
|
—
|
|
|||||
Total long-term borrowings
|
125,714
|
|
127,074
|
|
128,823
|
|
106,270
|
|
106,471
|
|
|||||
Subordinated debentures held by subsidiary trust
|
—
|
|
—
|
|
—
|
|
22,627
|
|
22,618
|
|
|||||
Total borrowed funds
|
$
|
218,235
|
|
$
|
159,469
|
|
$
|
176,592
|
|
$
|
166,548
|
|
$
|
172,436
|
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Capital Amounts:
|
|
|
|
|
|
||||||||||
Tier 1 common
|
$
|
166,576
|
|
$
|
164,329
|
|
$
|
160,604
|
|
$
|
157,520
|
|
$
|
156,565
|
|
Tier 1
|
166,576
|
|
164,329
|
|
160,604
|
|
180,147
|
|
179,183
|
|
|||||
Total (Tier 1 and Tier 2)
|
182,706
|
|
179,569
|
|
176,224
|
|
195,083
|
|
194,307
|
|
|||||
Net risk-weighted assets
|
$
|
1,175,647
|
|
$
|
1,118,644
|
|
$
|
1,141,938
|
|
$
|
1,136,532
|
|
$
|
1,124,982
|
|
Capital Ratios:
|
|
|
|
|
|
||||||||||
Tier 1 common
|
14.17
|
%
|
14.69
|
%
|
14.06
|
%
|
13.86
|
%
|
13.92
|
%
|
|||||
Tier 1
|
14.17
|
%
|
14.69
|
%
|
14.06
|
%
|
15.85
|
%
|
15.93
|
%
|
|||||
Total (Tier 1 and Tier 2)
|
15.54
|
%
|
16.05
|
%
|
15.43
|
%
|
17.16
|
%
|
17.27
|
%
|
|||||
Leverage ratio
|
9.04
|
%
|
8.90
|
%
|
8.83
|
%
|
10.13
|
%
|
10.18
|
%
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Tangible Equity:
|
|
|
|
|
|
||||||||||
Total stockholders' equity, as reported
|
$
|
219,147
|
|
$
|
226,079
|
|
$
|
221,728
|
|
$
|
218,835
|
|
$
|
214,623
|
|
Less: goodwill and other intangible assets
|
71,608
|
|
69,977
|
|
68,525
|
|
68,422
|
|
65,383
|
|
|||||
Tangible equity
|
$
|
147,539
|
|
$
|
156,102
|
|
$
|
153,203
|
|
$
|
150,413
|
|
$
|
149,240
|
|
|
|
|
|
|
|
||||||||||
Tangible Assets:
|
|
|
|
|
|
||||||||||
Total assets, as reported
|
$
|
1,899,841
|
|
$
|
1,938,722
|
|
$
|
1,918,050
|
|
$
|
1,866,510
|
|
$
|
1,831,359
|
|
Less: goodwill and other intangible assets
|
71,608
|
|
69,977
|
|
68,525
|
|
68,422
|
|
65,383
|
|
|||||
Tangible assets
|
$
|
1,828,233
|
|
$
|
1,868,745
|
|
$
|
1,849,525
|
|
$
|
1,798,088
|
|
$
|
1,765,976
|
|
Increase in Interest Rate
|
Estimated Increase in
Net Interest Income
|
|
Estimated (Decrease) Increase in Economic Value of Equity
|
||||||||||||||||||||||
(in Basis Points)
|
June 30, 2013
|
|
December 31, 2012
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||
300
|
$
|
3,741
|
|
|
7.2
|
%
|
|
$
|
9,688
|
|
19.6
|
%
|
|
$
|
(60,243
|
)
|
|
(24.6
|
)%
|
|
$
|
(20,348
|
)
|
(8.5
|
)%
|
200
|
3,890
|
|
|
7.5
|
%
|
|
8,627
|
|
17.5
|
%
|
|
(39,619
|
)
|
|
(16.2
|
)%
|
|
(3,888
|
)
|
(1.6
|
)%
|
||||
100
|
2,997
|
|
|
5.8
|
%
|
|
6,311
|
|
12.8
|
%
|
|
(17,609
|
)
|
|
(7.2
|
)%
|
|
7,344
|
|
3.1
|
%
|
(Dollars in thousands)
|
June 30,
2013 |
March 31,
2013 |
December 31,
2012 |
September 30,
2012 |
June 30,
2012 |
||||||||||
Home equity lines of credit
|
$
|
43,956
|
|
$
|
44,124
|
|
$
|
43,818
|
|
$
|
43,719
|
|
$
|
42,043
|
|
Unadvanced construction loans
|
25,646
|
|
19,092
|
|
11,839
|
|
14,261
|
|
17,578
|
|
|||||
Other loan commitments
|
138,783
|
|
127,665
|
|
113,868
|
|
142,269
|
|
112,604
|
|
|||||
Loan commitments
|
208,385
|
|
190,881
|
|
169,525
|
|
200,249
|
|
172,225
|
|
|||||
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
$
|
35,845
|
|
$
|
34,771
|
|
$
|
35,373
|
|
$
|
36,218
|
|
$
|
40,330
|
|
(a)
|
information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q 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 Executive Vice President, Chief Financial Officer and Treasurer, as appropriate to allow timely decisions regarding required disclosure;
|
(b)
|
information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q and other reports Peoples files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and
|
(c)
|
Peoples’ disclosure controls and procedures were effective as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q.
|
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)
|
|||||
April 1 - 30, 2013
|
—
|
|
(2)
|
$
|
—
|
|
(2)
|
—
|
|
—
|
|
May 1 - 31, 2013
|
—
|
|
(2)
|
$
|
—
|
|
(2)
|
—
|
|
—
|
|
June 1 - 30, 2013
|
—
|
|
|
$
|
—
|
|
|
—
|
|
—
|
|
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
—
|
|
(1)
|
Peoples’ Board of Directors has not authorized any stock repurchase plans or programs for 2013.
|
(2)
|
Information reflects solely common shares purchased in open market transactions by Peoples Bank under the Rabbi Trust Agreement establishing a rabbi trust holding assets to provide funds for the payment of the benefits under the Peoples Bancorp Inc. Second Amended and Restated Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries.
|
|
|
|
PEOPLES BANCORP INC.
|
|
|
|
|
Date:
|
July 25, 2013
|
By: /s/
|
CHARLES W. SULERZYSKI
|
|
|
|
Charles W. Sulerzyski
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
Date:
|
July 25, 2013
|
By: /s/
|
EDWARD G. SLOANE
|
|
|
|
Edward G. Sloane
|
|
|
|
Executive Vice President,
|
|
|
|
Chief Financial Officer and Treasurer
|
•
|
Earnings per share (actual or targeted growth);
|
•
|
Net income after capital costs;
|
•
|
Net income (before or after taxes);
|
•
|
Return measures (including, but not limited to, return on average assets, risk-adjusted return on capital, return on average equity, pre-provision net revenue, or return on tangible common equity);
|
•
|
Efficiency ratio;
|
•
|
Full-time equivalency control;
|
•
|
Stock price (including, but not limited to, growth measures, share price appreciation, or total shareholder return);
|
•
|
Non-interest income compared to net interest income ratio;
|
•
|
Expense targets (including, but not limited to, reduction in or maintenance of non-interest expense;
|
•
|
Operating efficiency;
|
•
|
Economic value added or EVA(R);
|
•
|
Credit quality measures;
|
•
|
Customer satisfaction measures;
|
•
|
Loan growth;
|
•
|
Deposit growth;
|
•
|
Net interest margin;
|
•
|
Fee income;
|
•
|
Operating expense;
|
•
|
Balance sheet measures including assets, loans, charge-offs, loan loss reserves, non-performing assets, deposits, asset quality levels, and investments;
|
•
|
Balance sheet management;
|
•
|
Interest income;
|
•
|
Investment management;
|
•
|
Maintenance or improvement of net interest income;
|
•
|
Market capitalization;
|
•
|
Market share;
|
•
|
Non-interest income growth;
|
•
|
Productivity ratios;
|
•
|
Revenues;
|
•
|
Risk management measures including interest-sensitivity gap levels, regulatory compliance, satisfactory internal or external audits, and financial ratings; and
|
•
|
Tangible common equity.
|
(i)
|
[___] shares on the six-month anniversary of the Grant Date;
|
2.01
|
Account:
The bookkeeping account established for each Participant under Section 6.01 of this Plan.
|
2.02
|
Affiliate:
Any entity that, along with the Company, would be considered a single employer under Code §§414(b) and 414(c).
|
2.03
|
Beneficiary:
The person or persons designated by a Participant to receive any portion of such Participant's benefit under the Qualified Plan that is unpaid at the time of the Participant's death. If a Participant has not made an effective designation of a Beneficiary or Beneficiaries, the Participant's Beneficiary will be his or her surviving spouse or, if there is no surviving spouse, the Participant's estate.
|
2.04
|
Board:
The Board of Directors of the Company.
|
2.05
|
Cause:
With respect to any Participant, “cause” as defined in any employment (or similar) agreement then in effect between the Participant and the Company or any of its Affiliates or, if not defined therein, the occurrence of any of the following: (a) gross negligence or gross neglect of duties; (b) commission of a felony or of a gross misdemeanor involving moral turpitude in connection with the Participant's employment with the Company or any of its Affiliates; (c) fraud, disloyalty, dishonesty or willful violation of any law, rule or regulation or any significant policy of the Company or any of its Affiliates committed in connection with the Participant's employment; or (d) issuance of an order for removal of the Participant by any agency which regulates the activities of the Company or any of its Affiliates. Any determination of “Cause” under this Plan shall be made by the Committee in its sole discretion.
|
2.06
|
Code:
The Internal Revenue Code of 1986, as amended.
|
2.07
|
Committee:
The Compensation Committee of the Board or a subcommittee thereof appointed by the Board to administer this Plan pursuant to Article 10.00.
|
2.08
|
Company:
Peoples Bancorp Inc. and its successors.
|
2.09
|
Compensation:
A Participant's “Compensation” as defined under the Qualified Plan calculated without regard to the compensation limit under Code §401(a)(17); provided, however, that for the 2013 Plan Year, Compensation shall exclude all equity awards.
|
2.10
|
Deferral Election Form:
The form each Eligible Employee and Participant, as the case may be, must complete to defer Compensation under this Plan.
|
2.11
|
Disability:
A Participant shall be considered disabled if:
|
a.
|
the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or
|
b.
|
the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Participant's employer; or
|
c.
|
the Participant is determined to be totally disabled by the Social Security Administration or the Railroad Retirement Board.
|
2.12
|
Discretionary Contribution:
A contribution made by the Company or any of its Affiliates that is credited to a Participant's Account in accordance with the terms of Section 4.03 of this Plan.
|
2.13
|
Distribution Election Form:
The form each Eligible Employee and Participant, as the case may be, must complete to designate the form of distribution of his or her Plan Benefit or may complete to change a prior designation as to the form of distribution of his or her Plan Benefit.
|
2.14
|
Effective Date:
July 25, 2013.
|
2.15
|
Eligible Employee:
Each person employed by the Company or any of its Affiliates who (a) is a highly compensated employee or a member of a select group of management (both within the meaning of Title I of ERISA) of the Company or any of its Affiliates, as determined by the Committee in its sole discretion, and (b) is designated as an Eligible Employee by the Committee. The designation of an employee as an Eligible Employee for any particular Plan Year shall not confer upon such employee any right to be designated as an Eligible Employee for any future Plan Year.
|
2.16
|
ERISA:
The Employee Retirement Income Security Act of 1974, as amended.
|
2.17
|
Participant:
An Eligible Employee who becomes a participant in this Plan as described in Article 3.00.
|
2.18
|
Plan:
The Peoples Bancorp Inc. Nonqualified Deferred Compensation Plan, as amended from time to time.
|
2.19
|
Plan Benefit:
The vested portion of a Participant's Account as of any Valuation Date.
|
2.20
|
Plan Year:
Each calendar year or portion thereof during which this Plan is in effect.
|
2.21
|
Qualified Plan:
The Peoples Bancorp Inc. Retirement Savings Plan, as amended from time to time.
|
2.22
|
Retirement:
A Termination by a Participant, other than due to death or Disability, on or after attaining 65 years of age and completing at least 10 years of service with the Company and its Affiliates.
|
2.23
|
Statutory Limits:
The compensation limit under Code §401(a)(17), the limit on maximum annual additions under Code §415(c), and the limit on elective deferrals under Code §402(g).
|
2.24
|
Termination:
A “separation from service” within the meaning of Code §409A and Treasury Regulation §1.409A-1(h).
|
2.25
|
Unforeseeable Emergency:
A severe financial hardship to a Participant within the meaning of Code §409A resulting from: (a) an illness or accident of the Participant or the Participant's spouse, Beneficiary or dependent (as defined in Code §152, without regard to Code §§152(b)(1), (b)(2) and (d)(1)(B)); (b) loss of the Participant's property due to casualty; or (c) other similar or extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
|
2.26
|
Valuation Date:
The last day of each calendar month or any other date or dates fixed by the Committee for the valuation and adjustment of an Account.
|
3.01
|
Commencement of Participation.
Subject to Section 3.02 of this Plan, each Eligible Employee shall become a Participant on the date on which the Eligible Employee executes and submits an effective Deferral Election Form.
|
3.02
|
Loss of Eligible Employee Status.
A Participant who is no longer an Eligible Employee shall not be permitted to submit a Deferral Election Form and shall no longer be eligible for Discretionary Contributions. All deferrals then in effect for such Participant shall cease as of the earlier to occur of (a) the Participant's Termination, or (b) the end of the Plan Year in which the Participant is
|
4.01
|
Deferrals.
|
(a)
|
Deferral Elections - In General.
|
(i)
|
A Participant may elect to defer Compensation under this Plan by submitting a signed Deferral Election Form to the Committee within the deadlines imposed by this Plan and set forth in Section 4.01(b). Any deferral election made by a Participant for a Plan Year shall be irrevocable after the expiration of the applicable deadline described in Section 4.01(b); provided, however, that a cessation of deferrals shall be allowed if the Participant suffers an Unforeseeable Emergency, becomes Disabled, or to the extent permitted by Treasury Regulation §1.409A-3(j)(4)(viii).
|
(ii)
|
Amounts deferred under this Plan shall not be made available to the Participant, except as provided in Article 7.00, and shall reduce the Compensation payable to the Participant in the year of the deferral in accordance with the provisions of the applicable Deferral Election Form; provided, however, that all such amounts shall be subject to the rights of the general creditors of the Company and its Affiliates as provided in Article 12.00 of this Plan.
|
(b)
|
Timing of Deferral Elections.
A deferral election under this Plan shall be effective only if it is made in a timely manner as follows:
|
(i)
|
In General
. Except as permitted under subsections (ii) and (iii) of this Section 4.01(b), a Deferral Election Form must be submitted to the Committee by the last day of the Plan Year preceding the Plan Year in which services giving rise to the Compensation to be deferred are to be performed.
|
(ii)
|
First Year of Eligibility
. Notwithstanding the foregoing, if and to the extent permitted by the Committee, during the first Plan Year in which an Eligible Employee is eligible to participate in this Plan, the Eligible Employee may submit a Deferral Election Form to the Committee no later than thirty (30) days after the date on which the Eligible Employee becomes so eligible, with respect to Compensation to be earned for services performed after such election is made; provided, however, that this subsection (ii) shall not apply if, at such time, the Eligible Employee also is eligible to participate in any other arrangement that, along with this Plan, is treated as a single nonqualified deferred compensation plan under Code §409A and the Treasury Regulations promulgated thereunder.
|
(iii)
|
Performance-Based Compensation
. Notwithstanding the foregoing and to the extent permitted by the Committee, a Deferral Election Form with respect to any performance-based compensation (within the meaning of Code §409A) may be submitted by an Eligible Employee or a Participant, as the case may be, by the date that is not later than six months before the end of the performance period with respect to which the performance-based compensation is based; provided that in no event may an election to defer be made after such performance-based compensation has become readily ascertainable.
|
(c)
|
Additional Requirements for Deferral Elections.
Deferrals made pursuant to a Deferral Election Form must be made in whole percentages and subject to such other limitations as the Committee may impose from time to time in its sole discretion.
|
4.02
|
Discretionary Contributions.
The Company or one of its Affiliates, as applicable, may make Discretionary Contributions to the Account of a Participant in such amount that would have been made pursuant to the Qualified Plan as matching contributions had all amounts elected to be deferred under this Plan pursuant to Section 4.01 been deferred under the Qualified Plan and as if the Statutory Limits did not exist. Such Discretionary Contributions shall be credited to the Accounts of Participants during the first calendar quarter following the last day of the Plan Year with respect to which the related Compensation was deferred.
|
(a)
|
Deferrals
. Deferrals of Compensation, if any, shall be credited to a Participant's Account as soon as administratively practicable following each payroll period.
|
(b)
|
Discretionary Contributions
. Any Discretionary Contribution shall be credited to a Participant's Account on the date of such Discretionary Contribution.
|
5.01
|
Deferrals of Compensation.
A Participant shall be one hundred percent (100%) vested in the portion of his or her Account attributable to deferrals of Compensation under Section 4.01 of this Plan and any deemed earnings or losses on the investment of such deferrals.
|
5.02
|
Discretionary Contributions.
Except as otherwise provided in Section 5.03 of this Plan, a Participant shall have a vested right to the portion of his or her Account attributable to any Discretionary Contribution and any deemed earnings and losses on the investment of such Discretionary Contribution in accordance with the vesting schedule under the Qualified Plan.
|
5.03
|
Accelerated Vesting Upon Occurrence of Certain Events.
Notwithstanding the foregoing, a Participant shall become fully vested in all amounts credited to his or her Account upon the Participant's Retirement or, if earlier, death.
|
5.04
|
Amounts Not Vested.
Any amounts credited to a Participant's Account that are not vested upon his or her Termination shall be forfeited.
|
6.01
|
Establishment of Accounts.
The Committee shall establish and maintain an Account for each Participant. Each Participant's Account shall be credited with, to the extent applicable, any deferrals of Compensation and Discretionary Contributions, and the Participant's allocable share of any deemed earnings or losses on the foregoing. Each Participant's Account shall be reduced by any distributions made from such Account plus, subject to Article 8.00 of this Plan and to the extent permitted by applicable law, any federal, state and local tax withholding as may be required by law.
|
6.02
|
Establishment of Subaccounts.
Within each Participant's Account, separate subaccounts shall be maintained to the extent necessary for the administration of the Plan.
|
6.03
|
Earnings or Losses on Accounts.
|
(a)
|
The Company shall invest the Account on behalf of the Participant or credit the Account with earnings or interest as though such Account were invested in such investments and under such criteria as the Committee may determine in its sole discretion. The Company may also permit the Participant to direct the investment or deemed investment of the Account in such investments as the Company may make available for this purpose from time to time or as the Participant may select. The Company assumes no responsibility or liability with respect to any loss or expense that may arise, result or be incurred from any investment or deemed investment of the Account. Any costs or expenses incurred by the Company in the investment or deemed investment of the Account shall be debited against the Account. The Account shall
|
(b)
|
As of each Valuation Date, each Participant's Account will be credited with earnings and charged with losses equal to the amount by which the Account would have been credited or charged since the prior Valuation Date had the Participant's Account been invested as described in Section 6.03(a) of this Plan.
|
(c)
|
Notwithstanding the foregoing, neither the Company nor any of its Affiliates shall have any obligation to invest any funds in accordance with the investment or deemed investment described in this Section 6.03. Participants' Accounts shall merely be bookkeeping entries on the books of the Company and its Affiliates, as applicable, and no Participant or Beneficiary shall obtain any property right or interest in any investment or any other particular assets of the Company or any of its Affiliates.
|
7.01
|
Distributions Upon Termination (Other than Death).
|
(a)
|
Except as otherwise provided in this Section 7.01 and subject to the requirements of Section 409A of the Code, a Participant may elect to have distribution of his or her Plan Benefit paid in up to ten (10) substantially equal annual installments beginning on the January 1 immediately following the Participant's Termination and on each January 1 thereafter by submitting a valid Distribution Election Form in accordance with Section 7.01(b). If no election is made, the Participant's Plan Benefit shall be distributed in a single lump sum on the January 1st immediately following the Participant's Termination.
|
(b)
|
An election to receive annual installments under this Section 7.01 must be made on a signed Distribution Election Form that is submitted to the Committee no later than thirty (30) days after the date on which the Participant first becomes eligible to participate in this Plan, with respect to any deferral of Compensation or Discretionary Contribution made or credited for services performed after such election is made. For purposes of the preceding sentence, an Eligible Employee shall be first eligible to participate in this Plan only if the Eligible Employee is not eligible to participate in any other arrangement that, along with this Plan, is treated as a single nonqualified deferred compensation plan under Code §409A and the Treasury Regulations promulgated thereunder.
|
(i)
|
The election described in this Section 7.01(b) shall be subject to the terms and conditions specified in this Plan and in the Distribution Election Form and, except as provided in Section 7.01(b)(ii) of this Plan, shall be irrevocable once made.
|
(ii)
|
A Participant may elect to change the form of distribution (based on the alternatives described in Section 7.01(a) of this Plan) by submitting a new Distribution Election Form to the Committee; provided, however, that: (A) such change may not take effect until at least twelve (12) months after the date on which such election is made; (B) the payment with respect to which such change is made must be deferred (other than a distribution upon death) for a period of not less than five (5) years from the date such payment would otherwise have been paid (or, in the case of installment payments, from the date the first amount was scheduled to be paid); and (C) such change must be made not less than twelve (12) months before the date the payment is scheduled to be paid (or, in the case of installment payments, from the date the first amount was scheduled to be paid).
|
(iii)
|
Once a Participant's Plan Benefit is or begins to be distributed, no further changes to the distribution of such Plan Benefit shall be permitted. For purposes of this
|
(c)
|
Notwithstanding any provision in the Plan to the contrary, the Committee, in its sole discretion, may require a lump sum distribution of a Participant's Plan Benefit if: (a) the distribution results in the termination and liquidation of the entirety of the Participant's interest under this Plan and all agreements, methods, programs or other arrangements with respect to which deferrals of compensation are treated as having been deferred under a single nonqualified deferred compensation plan under Code §409A; and (b) the aggregate distribution under the arrangements is not greater than $15,000.
|
(d)
|
Notwithstanding any provision in this Plan to the contrary, any Plan Benefit payable to a Participant who is a “specified employee” (as defined in Code §409A) of the Company or any of its Affiliates upon the Participant's Termination shall not be (or begin to be) distributed until six months after the date on which the Participant Terminates (or, if earlier, the date on which the Participant dies). The first payment to be made shall include the cumulative amount, if any, of any amounts that would otherwise have been paid in accordance with the Participant's Distribution Election Form but for the fact that such amounts could not be paid during such postponement period.
|
7.02
|
Distributions Upon Death.
|
(a)
|
Notwithstanding anything in this Plan to the contrary, if a Participant dies before his or her Plan Benefit has begun to be distributed or has been fully distributed, the Plan Benefit will be distributed to the Participant's Beneficiary in a lump sum within ninety (90) days after the date of the Participant's death.
|
(b)
|
If a Participant dies after the Participant's Termination and after his or her Plan Benefit has been fully distributed, no additional benefit will be due to such Participant or his or her Beneficiary under this Plan.
|
7.03
|
Termination for Cause.
Notwithstanding anything in this Plan to the contrary, if a Participant is Terminated by the Company for Cause, all Discretionary Contributions and any deemed earnings on the foregoing credited to the Participant's Account (whether or not vested) shall be forfeited as of the date of such Termination.
|
7.04
|
Unforeseeable Emergency.
A Participant may request a distribution of his or her Plan Benefit upon the occurrence of an Unforeseeable Emergency. As a condition of receiving a distribution under this Section 7.04, the Participant must file a signed, written application with the Committee specifying the nature of the Unforeseeable Emergency, the amount needed to address the Unforeseeable Emergency and supplying any other information that the Committee, in its discretion, may need to ensure the conditions specified in this Section 7.04 are satisfied. The Committee shall, in its sole discretion, determine whether an Unforeseeable Emergency exists. If the Committee determines that an Unforeseeable Emergency exists, the Company or one of its Affiliates, as applicable, shall distribute an amount to the Participant that shall not be greater than the amount reasonably necessary, in the Committee's determination, to satisfy the emergency need (which may include the amount necessary to pay any federal, state, local or foreign income taxes or penalties reasonably anticipated to result from the distribution) or, if less, the value of the Participant's Plan Benefit as of the Valuation Date immediately preceding the distribution date. A distribution on account of an Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, or by liquidation of the Participant's assets, to the extent that the liquidation of such assets would not cause a severe financial hardship.
|
7.05
|
Full Discharge.
Once the Participant's Plan Benefit has been fully distributed, none of the Company, its Affiliates, the Board, the Committee, their delegates or this Plan will have any further liability under this Plan to the Participant or the Participant's Beneficiary.
|
9.01
|
Filing Claims.
Any Participant or Beneficiary (a “claimant”) who believes that he or she is entitled to an unpaid Plan Benefit may file a written notification of his or her claim with the Committee.
|
9.02
|
Notification to Claimant.
If the claim is wholly or partially denied, the Committee will, within a reasonable period of time, and in any event within ninety (90) days of the receipt of such claim, provide the claimant with written notice of the denial setting forth in a manner calculated to be understood by the claimant:
|
(a)
|
The specific reason or reasons for which the claim was denied;
|
(b)
|
Specific reference to pertinent Plan provisions, rules, procedures or protocols upon which the Committee relied to deny the claim;
|
(c)
|
A description of any additional material or information that the claimant may file to perfect the claim and an explanation of why this material or information is necessary; and
|
(d)
|
An explanation of this Plan's claims review procedure and the time limits applicable to such procedure and a statement of the claimant's right to bring a civil action under ERISA §502(a) following an adverse determination upon review.
|
9.03
|
Review Procedure.
If a claim has been wholly or partially denied, the affected claimant, or his or her authorized representative may:
|
(a)
|
Request that the Committee reconsider its initial denial by filing a written appeal within sixty (60) days after receiving written notice that all or part of the initial claim was denied;
|
(b)
|
Review pertinent documents and other material upon which the Committee relied when denying the initial claim; and
|
(c)
|
Submit a written description of the reasons for which the claimant disagrees with the Committee's initial adverse decision.
|
(i)
|
Specific reason or reasons for the decision;
|
(ii)
|
Specific references to pertinent Plan provisions upon which the decision was based;
|
(iii)
|
The claimant's ability to review and receive copies of all documents relating to the claimant's claim for benefits, free of charge;
|
(iv)
|
An explanation of any voluntary review procedures describing the steps to be taken by a claimant who wishes to submit the claimant's claims for review and the time limits applicable to such procedures; and
|
(v)
|
A statement of the claimant's right to bring a civil action under ERISA §502(a).
|
10.01
|
Administration
.
|
(a)
|
The Committee is expressly empowered to interpret this Plan, determine all questions arising in the administration, interpretation and application of this Plan; employ actuaries, accountants, counsel and other persons the Committee deems necessary in connection with the administration of this Plan, request any information from the Company or any of its Affiliates the Committee deems necessary to determine whether the Company or any Affiliate would be considered insolvent or subject to a proceeding in bankruptcy, and take all other necessary and proper actions to fulfill its duties under this Plan.
|
(b)
|
The Committee shall not be liable for any actions by it hereunder, unless due to its own negligence, willful misconduct or lack of good faith.
|
(c)
|
The Committee (and any delegate under Section 10.01(d) of this Plan) shall be indemnified and saved harmless by the Company from and against all personal liability to which the Committee (and such delegate) may be subject by reason of any act done or omitted to be done in its official capacity as administrator in good faith in the administration of this Plan, including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense upon the request of the Committee (or such delegate).
|
(d)
|
In exercising its authority under this Plan, the Committee may allocate all or any part of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by the Committee. Any such allocation or delegation may be revoked at any time.
|
10.02
|
Compensation and Expenses.
|
(a)
|
The Committee and any delegate under Section 10.01(d) of this Plan will serve without compensation for services provided to this Plan. The Company and, if applicable, its Affiliates, will furnish the Committee and any delegate under Section 10.01(d) of this Plan with all clerical or other assistance necessary to perform their respective duties.
|
(b)
|
The Company and its Affiliates will pay all expenses of administering this Plan.
|
10.03
|
Effect of Committee Action.
|
(a)
|
All actions taken and all determinations made by the Committee in good faith will be final and binding upon all Participants, Beneficiaries, the Company and its Affiliates and any other
|
(b)
|
This Plan will be interpreted by the Committee in accordance with its terms and their intended meaning. The construction and interpretation of the provisions of this Plan are vested with the Committee, in its absolute discretion, including, without limitation, the determination of benefits and eligibility. All decisions, determinations and interpretations will be final, conclusive and binding upon all persons having an interest in this Plan.
|
13.01
|
No Contract.
The adoption and maintenance of this Plan shall not be deemed to constitute a contract of employment or otherwise between the Company or any of its Affiliates and any employee or Participant or other person, or to be consideration for, or an inducement or condition of, any employment. Nothing contained herein shall be deemed to give any employee or Participant or other person the right to be retained in the service of the Company or any of its Affiliates or to interfere with the right of the Company or any of its Affiliates (which right is expressly reserved) to discharge, with or without Cause, any employee or Participant or other person at any time without any liability for any claim either against this Plan (except to the extent provided herein) or against the Company or any of its Affiliates.
|
13.02
|
No Alienation.
The right of a Participant or any other person to receive Plan Benefits may not be assigned, transferred, pledged or encumbered except as provided in the Participant's designation of a Beneficiary, by will or by applicable laws of descent and distribution. Any attempt to assign, transfer, pledge or encumber a Plan Benefit will be null and void and of no legal effect. Any action taken (or attempted to be taken) contrary to the provisions of this Section 13.02 will be null and void and of no effect whatsoever; the Company, its Affiliates and the Committee may disregard such action (or attempted action) and will not in any manner be bound by it; and they, and each of them, will suffer no liability by doing so. If any Participant or other person acts (or attempts to take any action) contrary to this Section 13.02, the Company, its Affiliates and the Committee will be reimbursed and
|
13.03
|
Governing Law.
This Plan, and applicable forms associated with this Plan, will be governed by and construed in accordance with the laws of the United States and, to the extent applicable, the laws of the State of Ohio, excluding any conflicts of laws principles.
|
13.04
|
Headings.
Headings and subheadings in this Plan document are inserted for convenience of reference only. They constitute no part of this Plan.
|
13.05
|
Illegal or Invalid Provision.
If any provision of this Plan is held to be illegal or invalid for any reason, this Plan will be construed and enforced as if the offending provision had not been included in this Plan. However, that determination will not affect the legality or validity of the remaining parts of this Plan.
|
13.06
|
Coordination with Other Plans.
A Participant's or his or her Beneficiary's rights to any Plan Benefits will be determined solely by reference to the terms of this Plan document and will be unaffected by any other document or agreement between the Participant or the Beneficiary and the Company or any of its Affiliates.
|
13.07
|
Code §409A.
Although the Company makes no guarantee with respect to the treatment of payment or benefits under this Plan, this Plan is intended to comply with the requirements of Code §409A and the Treasury Regulations promulgated thereunder, and the Company will interpret, apply and administer this Plan in accordance with this intent. The Company may accelerate the time or schedule of a distribution to a Participant or the Participant's Beneficiary at any time this Plan fails to meet the requirements of Code §409A. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code §409A. Notwithstanding the foregoing, none of the Company, its Affiliates, the Board or the Committee or their delegates shall have any liability to a Participant for failure to comply with the requirements of Code §409A.
|
|
|
|
PEOPLES BANCORP INC.
|
|
|
|
|
Date:
|
July 25, 2013
|
By: /s/
|
CAROL SCHNEEBERGER
|
|
|
|
Carol Schneeberger
|
|
|
|
Executive Vice President, Chief Administrative Officer
|
|
|
|
|
•
|
The Company has net income greater than zero.
|
•
|
The Company maintains a “well-capitalized” status as determined in accordance with applicable regulatory standards.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2013
, 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.
|
|
|
|
|
|
Date:
|
July 25, 2013
|
|
By:/s/
|
CHARLES W. SULERZYSKI
|
|
|
|
|
Charles W. Sulerzyski
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2013
, 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.
|
|
|
|
|
|
Date:
|
July 25, 2013
|
|
By:/s/
|
EDWARD G. SLOANE
|
|
|
|
|
Edward G. Sloane
|
|
|
|
|
Executive Vice President,
|
|
|
|
|
Chief Financial Officer and Treasurer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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.
|
|
|
|
|
|
Date:
|
July 25, 2013
|
|
By:/s/
|
CHARLES W. SULERZYSKI
|
|
|
|
|
Charles W. Sulerzyski
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
July 25, 2013
|
|
By:/s/
|
EDWARD G. SLOANE
|
|
|
|
|
Edward G. Sloane
|
|
|
|
|
Executive Vice President,
|
|
|
|
|
Chief Financial Officer and Treasurer
|