News Releases

"Third quarter 2011 results were greatly improved as favorable asset quality trends provided additional relief from several quarters of high credit losses,” said Chuck Sulerzyski, President and Chief Executive Officer.  “While restoring asset quality remains our top priority, we also began devoting additional resources to growing revenue and improving our operating efficiency.  These efforts produced positive results in several key areas during the third quarter, including modest linked quarter loan growth and new business in our insurance and wealth management areas."

Third quarter 2011 net interest income of $13.3 million was consistent with the linked quarter, while net interest margin compressed slightly to 3.39%.  Interest income was negatively impacted by lower average loan balances during the third quarter of 2011, coupled with lower reinvestment rates within the investment portfolio.  However, the lower interest income was nearly matched by a decrease in interest expense largely attributable to downward repricing of various interest-bearing deposits during the quarter, coupled with continued reductions in higher-cost certificates of deposit.  Year-over-year, net interest income decreased 13% for the third quarter and on a year-to-date basis, while net interest margin compressed nineteen and twelve basis points, respectively.  These reductions primarily reflected the impact of the sustained low interest rate environment and lower average loan balances.

"Maintaining net interest income was a challenge considering the yield curve flattened during the third quarter," said Edward G. Sloane, Chief Financial Officer and Treasurer.  “This success reflects our more disciplined approach to loan and deposit pricing, coupled with the benefit of a continued shift in our funding mix to lower-cost, core deposits.  As we start the fourth quarter, sustaining the third quarter loan growth should help stabilize earning assets and ease some of the pressure on net interest income and margin from the current slope of the yield curve.  We remain focused on enhancing net interest income and margin through changes in our balance sheet mix as opportunities arise."

In the third quarter of 2011, non-interest income totaled $8.4 million, 9% higher than the prior year third quarter and up 6% compared to the linked quarter.  These increases primarily reflected growth in both deposit account service charges and insurance income.  Other significant drivers of the year-over-year growth included stronger trust and investment income, plus increased electronic banking income.  Through nine months of 2011, total non-interest income was up 5% over the same period last year, as growth occurred in nearly every major revenue category.

"Our initiatives to grow revenue have started to generate positive results during the third quarter," added Sloane.  "Deposit account service charges continued to benefit from our new checking product offering and pricing structure introduced earlier in the year.  Also in the third quarter, our insurance sales producers were successful in obtaining new accounts, which drove the 5% year-over-year increase in insurance income.  We also have seen growth in our trust and brokerage assets from the addition of new sales associates, resulting in double-digit revenue growth from the prior year, although the downturn in the financial markets during the third quarter caused a corresponding decline in our trust and investment income on a linked quarter basis."

Total non-interest expense was higher in the third quarter than both the linked and prior year quarters, increasing $0.7 million and $1.5 million, respectively.  On a year-to-date basis, total non-interest expense increased $1.9 million, or 4%, over the same period last year.   These increases were driven by higher employee compensation and benefit costs, coupled with additional marketing expense.  In the third quarter of 2011, Peoples incurred pension settlement charges of $408,000, as a result of lump sum distributions to participants during the quarter.  No such charges were incurred in prior quarters.  Other significant contributors to the increased salary and employee benefit costs were higher employee medical benefit costs and additional incentive plan expense corresponding with the stronger third quarter operating results.  Marketing expense was higher in the third quarter of 2011 versus both the linked quarter and third quarter of 2010, due primarily to a $100,000 contribution to the Peoples Bancorp Foundation Inc.  Professional fees, primarily legal and consulting costs, were substantially lower than those for the linked quarter due to the timing of external legal services, and more than offset the increase in marketing expenses.  Peoples' FDIC insurance costs benefited, when compared to the third quarter of 2010, from the change in assessment calculation that became effective in the second quarter of 2011.

"Our efforts to control operating expenses during the third quarter were overshadowed by the higher employee benefit costs and marketing expense," said Sloane.  "The pension settlement charges were anticipated as the benefit freeze that took effect in early 2011 significantly reduced the threshold for recognizing such charges.  The third quarter contribution to our private foundation increases its ability to make charitable distributions on our behalf to organizations within our market area. We had limited contributions to the foundation in recent quarters as part of cost savings initiatives.  Overall, we remain focused on improving our efficiency ratio by growing revenue and reducing operating expenses where possible."   

During the third quarter of 2011, portfolio loan balances increased $10.7 million, to $950.8 million at September 30, 2011.  This growth occurred as a result of commercial real estate lending opportunities within Peoples' market area.  Total portfolio loan balances have decreased $9.9 million since year-end 2010, due mostly to paydowns and charge-offs during the first half of the year.

“We are pleased with modest linked quarter loan growth after enduring several quarters of declining balances due to elevated charge-off levels and weak demand,” said Sulerzyski.  “Although commercial real estate lending accounted for the third quarter growth, we remain committed to adjusting our loan mix by making consumer loans a larger part of our portfolio.  In addition, our commercial lending activity continues to emphasize small business lending and growth opportunities in major industries within our markets, such as health care.”

Through nine months of 2011, Peoples has experienced a decline in the total amount of loans classified as either watch, substandard or doubtful.  These criticized loans decreased $17.1 million, or 11%, during the third quarter and $25.1 million, or 15%, compared to December 31, 2010.  Both of these reductions occurred primarily as a result of several loans being upgraded to a pass rating in response to improvement in the financial condition of the borrowers.  In contrast, a single commercial loan relationship with an aggregate recorded principal balance of $2.4 million became impaired during the third quarter and was placed on nonaccrual status.  The corresponding increase in nonperforming assets was partially offset by $1.2 million in paydowns.  As a result, total nonperforming assets increased to $36.8 million, or 2.04% of total assets, at September 30, 2011, from $35.1 million and 1.95% at June 30, 2011, but remained 18% lower than $45.0 million, or 2.45% of total assets, at year-end 2010, due mostly to payoffs during the first half of 2011.   

“Overall asset quality showed signs of continued improvement during the third quarter,” commented Sloane.  “Net charge-offs were at the lowest level for Peoples since the third quarter of 2008.   Migration trends remain encouraging as additional loans were upgraded in the third quarter.  While we are experiencing generally improving trends in asset quality, the unfavorable economic conditions and weakness in commercial real estate values are continuing to place stress on certain industries and segments of our portfolio, such as the hospitality sector.  Still, we remain optimistic overall asset quality trends will be favorable over the next several quarters.”

Peoples' allowance for loan losses was $25.2 million, or 2.65% of gross loans, at September 30, 2011, consistent with the prior quarter end and lower than the year-end 2010 level of $26.8 million and 2.79%.  The reduction from the prior year-end corresponds with the decrease in substandard-rated loans and the utilization of specific reserves for impaired loans charged-down during the first quarter of 2011.  To maintain the adequacy of the allowance for loan losses, Peoples recorded a third quarter 2011 provision for loan losses of $0.9 million versus $2.3 million and $8.0 million for the linked quarter and prior year third quarter, respectively.  Also in the third quarter of 2011, Peoples realized a net gain of $0.4 million from the sale of OREO.  In comparison, Peoples incurred net losses on OREO and loans held-for-sale of $0.6 million and $1.0 million in the second quarter of 2011 and third quarter of 2010, respectively.

  Retail deposit balances experienced a modest decrease during the third quarter as growth in low-cost core deposit balances were more than offset by a reduction in higher-cost funding sources, specifically certificates of deposits, money market balances and governmental deposit balances.  The fluctuations experienced were a result of Peoples' funding strategy of emphasized growth of low-cost deposits and reduction in reliance on high-cost funding sources.  This strategy has been reflected in the pricing of certificates of deposit and money market accounts.

"Overall, we are very pleased with the stronger third quarter performance," summarized Sulerzyski.  "We are working diligently to build upon the earnings momentum of the past two quarters, while maintaining our focus on asset quality and positioning for the return of the remaining TARP funds in coming quarters.  We believe our efforts will help to return the company to a steady, dependable performer."

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 42 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units - Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC.  Peoples' common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com. 
 

Conference Call to Discuss Earnings:

Peoples will conduct a facilitated conference call to discuss third quarter 2011 results of operations today at 11:00 a.m., Eastern Daylight Saving Time, with members of Peoples' executive management participating.  Analysts, media and individual investors are invited to participate in the conference call by calling (800) 860-2442.  A simultaneous Webcast of the conference call audio will be available online via the “Investor Relations” section of Peoples' website, www.peoplesbancorp.com.  Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software.  A replay of the call will be available on Peoples' website in the “Investor Relations” section for one year.
 

Safe Harbor Statement:

Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions.

These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations.  Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially.  These factors include, but are not limited to: (1) deterioration in the credit quality of Peoples' loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions 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, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, sale volumes and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) economic conditions, either nationally or in areas where Peoples and its subsidiaries do business, may be less favorable than expected, which could decrease the demand for loans, deposits and other financial services and increase loan delinquencies and defaults; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions, 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 and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their business; (8) changes in accounting standards, policies, estimates or procedures 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; (13) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (14) 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; (15) Peoples' ability to secure confidential information through the use of computer systems and telecommunications network may prove inadequate, which could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss 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 disclosures under the heading “ITEM 1A. RISK FACTORS” of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance.  Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements.  Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website.

As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its September 30, 2011 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC.  Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.
 

Please click here to view the complete earnings release.

END OF RELEASE

PEOPLES BANCORP INC. ELECTS NEW BOARD MEMBER

___________________________________________

August 25, 2011

Contact: Charles W. Sulerzyski
President and Chief Executive Officer
(740) 373-3155

Marietta, Ohio – Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) announces the election of Susan D. Rector as a director of Peoples and of its subsidiary, Peoples Bank, National Association (“Peoples Bank”). Rector is a principal in the law firm of Schottenstein, Zox & Dunn, Co., LPA (“SZD”) in Columbus, Ohio. She has been appointed to the Governance and Nominating Committee of the Peoples Board of Directors and to the Information Technology Committee of the Peoples Bank Board of Directors.

“It is an honor to welcome Susan to Peoples,” said Richard Ferguson, Chairman for the Peoples Bancorp Inc. Board of Directors. “She is a distinguished leader with a history of making valuable contributions as a member of several other boards and community organizations.”

Chuck Sulerzyski, President and Chief Executive Officer for Peoples said that he too is pleased about Rector’s election. “Susan is an accomplished business attorney who brings a wealth of knowledge in areas of intellectual property to Peoples. Her extensive experience advising publicly and privately held companies in business transactions and intellectual property ownership will be especially valuable to Peoples. She also has ties to our core market area, having grown up in Parkersburg, West Virginia and graduated from Parkersburg High School.” 

Rector leads SZD’s intellectual property practice group and has a strong background in software acquisition and licensing, technology-based companies and the legal issues encountered in conducting business online. Additionally, her law practice has involved a wide variety of business transactions, such as business formation, restructurings, and mergers and acquisitions.

Rector earned a Bachelor of Arts from Wake Forest University, Winston-Salem, N.C. and, a Juris Doctor from The University of North Carolina, Chapel Hill, N.C. She is a Life Fellow in the American Bar Association, has been named for ten consecutive years as one of The Best Lawyers in America for Intellectual Property Law and Corporate Law, and has attained an AV®  from  Martindale-Hubbell. Her community leadership activities include being appointed to the Columbus Zoo board of directors and elected to the board of directors of Women for Economic and Leadership Development (WELD). She has authored various publications and undertaken numerous speaking engagements on legal topics including board leadership.

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 42 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com.

END OF RELEASE

PEOPLES BANCORP INC. HIRES EXECUTIVE VICE PRESIDENT, CHIEF CREDIT OFFICER

___________________________________________

Marietta, Ohio – Peoples Bancorp Inc. and its banking subsidiary, Peoples Bank, National Association (“Peoples Bank”) announce the hiring of Timothy H. Kirtley to the position of Executive Vice President, Chief Credit Officer effective August 29, 2011. Kirtley will oversee all credit policies for the company, maintain sound credit operations and direct the bank’s credit approval process, lending philosophy and loan portfolio management.

“Tim has demonstrated the ability to drive healthy and balanced credit cultures,” said Chuck Sulerzyski, President and Chief Executive Officer for Peoples Bank. “I am pleased that he will now be leading Peoples' credit function. He is an experienced Chief Credit Officer who will help reinforce the company’s emerging disciplined credit approach,” Sulerzyski said.

During his tenure in the banking industry, which spans two decades, Kirtley has held progressively more responsible senior-management positions with several financial organizations. In such positions he has been accountable for business development and portfolio and credit administration across a broad spectrum of geographic markets, which has heightened his awareness of community banking strategies.

Kirtley earned his Bachelor of Science in Business Administration, Finance from Miami University, in Oxford, Ohio in 1992. In 1997, he earned his Master of Business Administration from The Ohio State University, Columbus, Ohio.

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 42 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com. 

END OF RELEASE

PEOPLES BANCORP INC. DECLARES QUARTERLY DIVIDEND

___________________________________________

MARIETTA, Ohio - The Board of Directors of Peoples Bancorp Inc. (NASDAQ: PEBO) yesterday declared a cash dividend of $0.10 per common share, payable August 22, 2011, to common shareholders of record on August 8, 2011.

This quarterly dividend represents a payout of approximately $1.1 million, or 39.5% of Peoples’ reported second quarter 2011 earnings, based on 10.6 million common shares currently outstanding.  This quarterly dividend also produces an annualized yield of 3.40% based on the closing stock price of Peoples’ common shares of $11.78 on July 27, 2011. 

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 48 locations and 42 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank) and Peoples Insurance Agency, LLC, which includes the Putnam and Barengo divisions.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly traded companies.  Learn more about Peoples at www.peoplesbancorp.com.

END OF RELEASE

PEOPLES BANCORP INC. ANNOUNCES
LINKED QUARTER IMPROVEMENT IN EARNINGS
___________________________________________

July 26, 2011

Contact: Edward G. Sloane
Chief Financial Officer and Treasurer
(740) 373-3155

MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced results for the second quarter of 2011. Net income available to common shareholders totaled $2.7 million for the quarter ended June 30, 2011, representing earnings per diluted common share of $0.26. In comparison, diluted earnings per common share were $0.13 for the first quarter of 2011 and $0.27 for the second quarter of 2010. The linked quarter earnings improvement was driven by lower loan-related credit losses. Second quarter 2010 earnings included net security gains of $2.2 million or $0.14 per common share after-tax. On a year-to-date basis, earnings per diluted common share improved 12% to $0.38 compared to the $0.34 earned in the first half of 2010.

Summary points regarding second quarter 2011 results:

• Loan-related credit losses, consisting of the provision for loan losses plus gains and losses on loans held-for-sale and other real estate owned ("OREO'"), were $2.8 million for the second quarter of 2011 compared to $6.8 million for the second quarter of 2010. This reduction was driven mostly by lower second quarter net loan charge-offs, which were 0.67% and 1.86% of average loans on an annualized basis in 2011 and 2010, respectively. Another significant factor was $0.5 million in gains realized on the sale of two commercial real estate loans during the second quarter of 2011, which partially offset a $1.0 million net loss on OREO resulting mostly from write-downs attributable to decreased real estate values.
• The level of substandard-rated loans decreased 8% during the quarter due to $4 million in paydowns and $3 million in charge-offs. Nonperforming loans were down modestly on a linked quarter basis as paydowns and charge-offs were mostly offset by $4.3 million in substandard-rated loans to six unrelated borrowers being placed on nonaccrual status, of which the majority are secured by commercial real estate. As a result, total nonperforming assets as a percentage of gross loans and OREO was 3.71% at June 30, 2011, versus 3.85% last quarter and 4.64% at year-end 2010.
• At June 30, 2011, the allowance for loan losses was 2.68% of total loans and 79.8% of nonperforming loans versus 2.58% and 75.6%, respectively, at March 31, 2011, and 2.79% and 66.1%, respectively, at year-end 2010. The linked quarter increases reflect the impact of specific reserves for two commercial loan relationships placed on nonaccrual status during the second quarter.
• Net interest income and margin were consistent with the first quarter but down moderately year-over-year, due mostly to decreased loan balances and the impact of the sustained low interest rate environment.
• Non-interest income grew 2% over the prior year driven by a higher volume of revenue generated by fiduciary, brokerage and electronic banking activities. Linked quarter growth in several non-interest categories was more than offset by the impact of annual performance-based insurance revenues in the first quarter, which totaled $943,000. Consequently, total non-interest income was down $483,000 or 6% from the linked quarter.
• Total non-interest expense, while comparable to the first quarter, was 3% higher than the prior year second quarter and up 2% on a year-to-date basis. Increased employee benefit costs and professional fees were mostly offset by reduced FDIC insurance costs and lower foreclosed real estate and other loan costs.
• Total loan balances decreased modestly, as new production was more than offset by commercial loan payoffs. During the quarter, promotional efforts produced consumer loan growth of $4 million, or 20% annualized, comprised mostly of direct auto lending. Through six months, total loan balances were down $21 million at June 30, 2011.
• Retail deposit balances were essentially unchanged during the quarter and remained $17 million higher than year-end 2010. Efforts to adjust Peoples' deposit mix to increase low-cost, core deposits remained ongoing in the second quarter, which produced an increase in non-interest-bearing balances and declines in money market balances. The year-to-date increase was driven mostly by higher governmental and savings account balances.
  

"Second quarter results exceeded our expectations given the persistence of challenging economic conditions,” said Chuck Sulerzyski, President and Chief Executive Officer. “Economic activity and employment levels in many of our market areas continue to remain weaker than national averages. Despite these conditions, we are encouraged by the second consecutive quarterly reduction in credit losses and problem assets, which we consider to be another step towards restoring our asset quality to more historical levels. Additionally, our second quarter fee-based revenue generation also was stronger than prior quarters, although linked quarter growth was obscured by the annual insurance revenues in the first quarter."

Net interest income and margin were $13.4 million and 3.43% for the second quarter of 2011, consistent with the linked quarter. Interest income decreased on a linked quarter basis, due mostly to declining loan balances, which was offset by reduced interest expense largely attributable to the repricing of a large government deposit relationship early in the quarter. Year-over-year, net interest income decreased 11% for the second quarter and 12% on a year-to-date basis, while net interest margin compressed six and eight basis points, respectively. These reductions primarily reflect the impact of the sustained low interest rate environment and lower average loan balances.

"We are pleased to have maintained a stable net interest income and margin during the second quarter," said Edward G. Sloane, Chief Financial Officer and Treasurer. “Earning asset levels continued to be pressured by the lack of loan growth. During the first half of 2011, we redeployed short-term assets and maintained a slightly larger investment portfolio and have been more disciplined in our loan and deposit pricing. These actions have helped mitigate the impact of declining loan balances on earnings. However, net interest income and margin will be pressured in the second half of 2011 unless loan demand strengthens or market interest rates increase."

In the second quarter of 2011, non-interest income totaled $7.9 million, comparable with the prior year second quarter, as stronger fiduciary, brokerage and electronic banking revenues were tempered by lower insurance income. Compared to the linked quarter, non-interest income was lower in the second quarter due to the recognition of annual performance-based insurance revenues during the first quarter. This impact was partially offset by stronger deposit account service charges. Through six months of 2011, total non-interest income was up 3% over the same period last year, due mostly to higher debit card revenue and mortgage banking income.

Trust and investment income grew 17% year-over-year and 6% on a linked quarter basis, driven mostly by the timing of annual tax compliance revenues. Contributing to the increase from the prior year was increased market value of managed assets. Electronic banking income continues to benefit from increased debit card usage by Peoples' customers. Deposit account service charges, while consistent with the second quarter of 2010, increased 13% from the linked quarter. Second quarter deposit account service charges reflect a full quarter's impact of Peoples' new consumer checking account product offering and pricing structure, which took effect in March 2011. Additionally, overdraft and non-sufficient funds fees increased 20% on a linked quarter basis, due mostly to normal seasonal fluctuations but were down 6% year-over-year as a result of changes in banking regulations and consumer behavior.

"Our overall revenue growth is being challenged by conditions within our markets and the banking industry," said Sulerzyski. "During the remainder of 2011, generating profitable revenue growth across all lines of business will be a key priority. As part of this focus, we will be placing greater emphasis on execution of a sales discipline, making greater investments in our marketing and brand positioning and adding talent in growth or underserved markets. While some of these efforts will take several quarters to reach their full potential, we believe many initiatives will begin producing positive results almost immediately."

Second quarter 2011 non-interest expense totaled $14.7 million, comparable to the linked quarter and 3% higher than the second quarter of 2010. Salary and employee benefit costs were up 4% on a linked quarter basis and 6% year-over-year. Higher employee medical benefit plan costs was the key driver of the linked quarter increase, while additional incentive plan expense corresponding with stronger second quarter operating results accounted for most of the increase over the prior year. Professional fees, primarily legal and consulting costs, were substantially higher than those for both the linked quarter and second quarter of 2010, due to the timing of external legal services for problem loan workouts and external consulting services associated with various strategic initiatives. Peoples' FDIC insurance costs benefited from the change in assessment calculation that became effective for the second quarter of 2011. Foreclosed real estate and other loan expenses continued to be lower than recent quarters, reflecting the stabilization in asset quality. On a year-to-date basis, total non-interest expense was up 2% to $29.3 million, driven mostly by higher personnel costs and professional fees.

During the second quarter of 2011, portfolio loan balances decreased $7.9 million, to $940.1 million at June 30, 2011. This decline was the result of commercial loan payoffs exceeding new production, coupled with continued sluggish demand for new loans and lower utilization of credit lines by commercial borrowers than historical levels. In contrast, Peoples experienced 20% annualized growth in consumer loans during the second quarter of 2011 driven by targeted promotions, primarily direct auto lending opportunities. Since year-end 2010, total portfolio loan balances have decreased $20.6 million.

“Our efforts during the first half of 2011 to increase loan production and grow loans have been hindered by intense competition for quality loans,” said Sloane. “However, the rate of decline in loan balances appears to be slowing and the potential for growth in the near-term exists. During the remainder of 2011, we will be expanding our consumer lending efforts, adding new niche commercial lending, opening new loan production offices and restructuring our commercial lending function as means of increasing our overall lending activity. Based on our second quarter success, we see consumer lending as an opportunity for future loan growth given our small consumer portfolio and historic reliance on commercial lending. We intend to balance our focus on loan growth with prudent risk management and sound underwriting standards.”

At June 30, 2011, nonperforming assets totaled $35.1 million, or 1.95% of total assets, versus $36.8 million and 2.04% at March 31, 2011. Much of this reduction was the result of $1.3 million in write-downs on OREO based upon deterioration in commercial real estate values. During the second quarter of 2011, Peoples also experienced an 8% decline in substandard-rated loans to $75.8 million at quarter-end from a combination of paydowns and charge-offs. This decline was limited by six commercial relationships with aggregate balances of $4.3 million being downgraded and placed on nonaccrual status during the quarter in response to updated financial information regarding the borrowers. Of these loans, $3.7 million involving five relationships are secured by commercial real estate, with the remaining loans secured by other business assets. The level of watch-rated loans, which are credits with indicators of potential weakness, remained virtually unchanged during the second quarter as the impact of downgrading two large commercial real estate loans into this category was matched by payoffs and upgrades. Since year-end 2010, nonperforming assets have decreased 22% from $45.0 million, or 2.45% of total assets. During the same period, the amount of substandard-rated loans has declined 25%, driven by paydowns and charge-offs.

During the second quarter, Peoples' allowance for loan losses increased to $25.2 million, or 2.68% of gross loans, versus $24.4 million and 2.58% at March 31, 2011. The key driver of these increases were specific reserves for the two previously mentioned commercial loan relationships placed on nonaccrual status during the quarter. Even with the second quarter increase, the allowance for loan losses remained lower than the year-end 2010 level of $26.8 million and 2.79%, reflecting the decrease in substandard-rated loans and the utilization of specific reserves for impaired loans charged-down during the first quarter. Net charge-offs for the second quarter of 2011 were down substantially from recent quarters and the lowest level for Peoples since the third quarter of 2008. This improvement reflects a reduction in gross charge-offs in the second quarter, plus higher than normal recoveries for the quarter. To maintain the adequacy of the allowance for loan losses, Peoples recorded a second quarter 2011 provision for loan losses of $2.3 million versus $5.3 million and $5.5 million for the linked quarter and prior year second quarter, respectively.

“We intensified our monitoring and workout efforts associated with our under-performing loans during the second quarter, which is producing positive results,” commented Sulerzyski. “As part of these efforts, we performed a detailed review of our significant problem loans and established a comprehensive workout plan for each loan. While recent trends suggest our asset quality may be stabilizing, we believe additional losses will be required to resolve some of our larger distressed commercial real estate assets. Still, we anticipate credit costs over the next several quarters to remain substantially lower than the level experienced during the last couple years.”

Retail deposit balances were virtually unchanged during the second quarter, as increased low-cost core deposit balances were matched by a planned reduction in money market balances. Governmental deposit balances remained higher than year-end 2010 at June 30, 2011, reflecting first quarter tax collections. Peoples' funding strategy over the past several quarters has emphasized growing low-cost deposits and reducing reliance on high-cost funding sources. As part of this focus, Peoples has priced its certificates of deposit and money market accounts less aggressively, which has led to reductions in these balances.

During the second quarter of 2011, Peoples' Board of Directors adopted a new schedule for considering the declaration of dividends payable to common shareholders. Beginning with the second quarter dividend, Peoples' Board of Directors will determine whether to declare future dividends on common shares, if financial conditions warrant, during the first month of the following calendar quarter. In recent quarters, the Board of Directors declared dividends in the final month of each calendar quarter. As a result of this change, no common dividends were declared during the second quarter of 2011, which had a positive impact on Peoples' common equity and corresponding capital ratios at June 30, 2011. The Board of Directors will consider the declaration of a dividend on common shares with respect to second quarter 2011 results at a regularly scheduled meeting to be held later this week.

"Overall, we are pleased with second quarter results, which were highlighted by favorable asset quality trends," summarized Sulerzyski. "During my first quarter at Peoples, I have enjoyed visiting every office and reviewed every troubled asset. I am impressed with our team and am even more optimistic about our future than when I first joined the company. Still, more work is needed to position the company for long-term growth. In the coming quarters, we will be implementing several strategic initiatives designed to grow revenues and enhance operating efficiency. As we execute these strategies, improving asset quality and preparing to return the remaining TARP funds will remain key priorities."

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 48 locations and 42 ATMs in Ohio, West Virginia and Kentucky. Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units - Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC. Peoples' common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies. Learn more about Peoples at www.peoplesbancorp.com.

Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss second quarter 2011 results of operations today at 11:00 a.m., Eastern Daylight Saving Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (800) 860-2442. A simultaneous Webcast of the conference call audio will be available online via the “Investor Relations” section of Peoples' website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the “Investor Relations” section for one year.

Safe Harbor Statement:
Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions.

These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to: (1) deterioration in the credit quality of Peoples' loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions 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, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, sale volumes and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) economic conditions, either nationally or in areas where Peoples and its subsidiaries do business, may be less favorable than expected, which could decrease the demand for loans, deposits and other financial services and increase loan delinquencies and defaults; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions, including in particular the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations to be promulgated thereunder, which may adversely affect the business of Peoples and its subsidiaries; (8) changes in accounting standards, policies, estimates or procedures 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; (13) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (14) the costs and effects of regulatory and legal developments, including the outcome of regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; and (15) 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 disclosures under the heading “ITEM 1A. RISK FACTORS” of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website.

As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its June 30, 2011 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

Please click here to view the complete earnings release.

END OF RELEASE

PEOPLES BANCORP INC. ELECTS BOARD MEMBERS
AND ADOPTS NEW SCHEDULE FOR DIVIDENDS
___________________________________________

May 3, 2011

Contact: Charles W. Sulerzyski
President and Chief Executive Officer
(740) 374-6163

MARIETTA, Ohio – At the 2011 Annual Meeting of Shareholders held on April 28, the shareholders of Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) elected Wilford D. Dimit, Brenda F. Jones, M.D., and Theodore P. Sauber as directors of Peoples for a three-year term expiring in 2014.  Also at the 2011 Annual Meeting, Peoples’ shareholders approved, in a non-binding advisory vote, the compensation of Peoples’ executive officers as disclosed in Peoples’ proxy statement for the 2011 Annual Meeting and ratified the appointment of Ernst & Young LLP as Peoples’ independent registered public accounting firm for the fiscal year ending December 31, 2011.

In addition, Peoples’ Board of Directors, at its regular meeting following the 2011 Annual Meeting of Shareholders, adopted a new schedule, effective with the quarterly period ending June 30, 2011, for consideration of whether future dividends should be declared in respect of common shares.  Peoples’ Board of Directors will determine whether to declare future dividends, if financial conditions warrant, in respect of common shares at the meetings of Peoples’ Board of Directors held in January, April, July and October of each year.  Such dividends, if declared, would then be paid to shareholders in the following month.

Previously, Peoples’ Board of Directors declared dividends payable to common shareholders in March, June, September and December.  The new schedule for declaring future quarterly dividends provides the Board of Directors with the necessary time to assess the prior quarter’s results of operations and consider paying dividends aligned with the financial condition of the Company.

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 40 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com. 

END OF RELEASE

PEOPLES BANCORP INC. ANNOUNCES
FIRST QUARTER RESULTS
___________________________________________

April 26, 2011

Contact: Edward G. Sloane
Chief Financial Officer and Treasurer
(740) 373-3155

MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced results for the first quarter of 2011. Net income available to common shareholders totaled $1.3 million for the first quarter of 2011, representing earnings per diluted common share of $0.13. In comparison, diluted earnings per common share were $0.01 and $0.08 for the fourth and first quarters of 2010, respectively. This earnings improvement was driven primarily by a reduction in credit-related losses on loans and investments.

Summary points regarding first quarter 2011 results:

• Peoples redeemed $21 million of its outstanding TARP preferred equity during the quarter using short-term assets. However, preferred dividends recorded in the first quarter included $186,000 for the unamortized original issuance discount attributable to the shares repurchased. Future quarterly preferred dividends are expected to approximate $240,000 compared to $513,000 in previous quarters.

• The level of loans rated as substandard by Peoples decreased nearly $20 million or 19%, which included an $8 million, or 20%, reduction in nonaccrual loans due to charge-offs. The remaining portion of the decline was the result of paydowns and loans being upgraded to watch status during the quarter. As a result, total nonperforming assets comprised 2.04% of total assets at quarter-end versus 2.45% at year-end 2010.

• Net loan charge-offs were $7.6 million, or 3.21% of average loans on an annualized basis, comprised mostly of write-downs on impaired commercial real estate loans, of which a portion represented specific reserves established in prior quarters. The allowance for loan losses declined $2.3 million from year-end 2010, driven by the reduction in substandard loans and impaired loan write-downs, and represented 2.58% of gross loans versus 2.79% at December 31, 2010. As a result, first quarter provision for loan losses was $5.3 million.

• Net interest income was lower than both the linked and year ago quarters, due mostly to decreased loan balances and the impact of the sustained low interest rate environment. Net interest margin, while consistent with the fourth quarter of 2010, was down moderately year-over-year as the decline in asset yields outpaced the reduction in funding costs.

• First quarter 2011 non-interest income was up 4% year-over-year and 3% on a linked quarter basis. These increases occurred primarily as a result of Peoples’ recognizing performance-based insurance revenues, which are earned annually in the first quarter. The linked quarter increase in total non-interest income was tempered by a slowdown in mortgage banking activity, coupled with a seasonal decline in deposit account service charges.

• First quarter 2011 non-interest expense was consistent with the prior year quarter and up 3% over the fourth quarter, primarily driven by increased personnel costs.

• Total loan balances decreased modestly, as new production was more than offset by commercial loan payoffs and charge-offs, coupled with decreased utilization of credit lines by commercial customers.

• During the first quarter, seasonal increases in consumer and governmental deposit balances were matched by planned reductions in money market balances and higher-cost certificates of deposit. As a result, total deposit balances were essentially unchanged since year-end 2010.

• Peoples' capital levels stayed strong and significantly higher than the minimum regulatory amount needed to be considered “well capitalized”. Total Risk-Based Capital ratio was 16.60% at quarter-end compared to 18.24% at December 31, 2010, reflecting the partial TARP capital redemption, while tangible common equity was 7.36% and 7.17% of tangible assets, respectively.

“First quarter 2011 results were generally in line with our expectations, especially considering the interest rate environment and general economic conditions remained challenging for financial institutions,” said David L. Mead, Director and former interim President and Chief Executive Officer. “Loan credit costs were lower than recent quarters but remained elevated from our historical levels as anticipated. We also continued to work out several problem assets, which led to additional charge-offs but reduced the level of under-performing loans. Our core net revenue stream remained strong, although pressures from very low interest rates and regulatory changes have intensified. We also successfully redeemed a portion of our TARP capital without diluting our common shareholder value.”

“Overall, I am pleased with the positive progress made during the first quarter of 2011 in key areas,” said Chuck W. Sulerzyski, who succeeded Mr. Mead as President and Chief Executive Officer on April 4, 2011. “Much work still remains to improve Peoples’ asset quality and stabilize earnings. However, the entire management team is focused on positioning Peoples to emerge from this economic cycle as a strong, growing company. I am excited to be working with Peoples' Board and its entire team of talented associates on the execution of our strategic plan and achievement of the goals and objectives for 2011 and beyond.”

In early February 2011, Peoples redeemed $21 million of its $39 million TARP preferred equity, originally issued in 2009 as part of the U.S. Treasury's TARP Capital Purchase Program, using short-term assets. The repurchase of this equity reduces the amount of annual preferred cash dividends by $1.1 million. However, Peoples was required to recognize $186,000 in additional preferred dividends for the unamortized original issuance discount attributable to the shares repurchased. This one-time amount decreased first quarter diluted earnings per common share by $0.02.

In the first quarter of 2011, net interest income was down 4% compared to the fourth quarter of 2010. Interest income decreased more than interest expense, as the impact of the sustained low interest rate environment on asset yields could only be partially offset by reductions in funding costs. While loan balances also were lower in the first quarter, Peoples redeployed short-term investments into longer-term investments, as a means of tempering the impact on net interest income. This action also benefited net interest margin, which was held flat with the fourth quarter of 2010. Compared to the first quarter of 2010, net interest income was down 13% and net interest margin compressed 8 basis points, due mostly to decreased loan balances.

“The persistence of a very low interest rate environment during the first quarter pressured our net interest income and margin," said Edward G. Sloane, Chief Financial Officer and Treasurer. “The current level of short-term interest rates requires us to be even more disciplined in our loan and deposit pricing strategies. We also have continued to adjust Peoples' funding mix away from higher-cost funding sources. However, our ability to reduce funding costs as a means of offsetting the impact of lower reinvestment rates on asset yields remains limited. Our balance sheet strategies for 2011 will remain focused on maintaining good liquidity to prepare the balance sheet for growth and the eventual return of our remaining TARP capital."

Non-interest income totaled $8.4 million for the first quarter of 2011, versus $8.1 million last quarter and $8.0 million for the first quarter of 2010. Recognition of annual performance-based insurance revenues accounted for most of these increases. Compared to the linked quarter, Peoples experienced decreases in mortgage banking income and deposit account service charges, which largely offset the impact of annual insurance revenues.

In the first quarter of 2011, Peoples recognized $943,000 of performance-based insurance revenues, versus $585,000 in the first quarter of 2010. The majority of these revenues are earned in the first quarter of each year; thus, no such revenue was recognized in the fourth quarter of 2010. Peoples' other insurance revenues benefited from relatively stable pricing margins within the industry during the first quarter of 2011. Mortgage banking activity, while stronger than a year ago, slowed in the first quarter of 2011 compared to the fourth quarter of 2010, as long-term mortgage rates increased. Trust and investment income was down year-over-year as a result of Peoples' recording $256,000 of nonrecurring estate fees during the first quarter of 2010. Deposit account service charges continue to be impacted by a lower volume of overdraft and non-sufficient funds fees based mostly on consumer behavior.

Total non-interest expense increased 3% in the first quarter of 2011, compared to the linked quarter, but was consistent with the prior year first quarter. Total salary and employee benefit costs were up 7% on a linked quarter basis and 3% year-over-year, due to a combination of annual base salary adjustments and the addition of several new associates. Professional fees, primarily legal and consulting costs, decreased 18% from the linked quarter but remained 15% higher than the first quarter of 2010. The key driver of these variances was the timing of external legal services for problem loan workouts and external consulting services associated with various strategic initiatives.

At March 31, 2011, total portfolio loan balances were $948.0 million, down $12.7 million, or 1.3%, for the quarter primarily as a result of commercial loan payoffs and charge-offs exceeding new production. Additionally, the lack significant economic recovery in Peoples' market areas continues to impact the demand for new loans and utilization of credit lines by commercial borrowers. Despite the prolonged economic weakness, Peoples experienced modest growth in consumer loans.

“New loan production remained steady in the first quarter, due in part to the addition of several new lenders over the last several months,” said Sloane. “Competition for quality loans has intensified while charge-offs have remained elevated. We also experienced sizable paydowns on commercial loans during the quarter, including $10 million from a single commercial borrower. These factors, plus the impact of unfavorable economic conditions on overall loan demand, have challenged loan growth.”

In the first quarter of 2011, total nonperforming assets decreased 18% from $45.0 million, or 2.45% of total assets, at year-end 2010, to $36.8 million at March 31, 2011, or 2.04%, while the amount of loans with substandard credit quality ratings decreased by 19%. During the first quarter, the financial condition of several borrowers showed improvement, resulting in approximately $7 million in loans being upgraded from their previous substandard credit quality rating and another $5 million paid down by the borrowers. In contrast, certain existing impaired loans continued to progress through the workout process, which resulted in these loans being charged-down by $1.1 million based on the estimated net realizable value of their underlying collateral. These losses had been provided for in prior quarters through the allowance for loan losses. Additionally, two other existing impaired loans were charged-down by $4.9 million in response to continued weakness in commercial real estate values. Both of these factors contributed to the overall decline in nonperforming assets during the first quarter of 2011.

Peoples' allowance for loan losses was $24.4 million, or 2.58% of gross loans, at March 31, 2011, versus 2.79% at year-end 2010 and 2.53% at March 31, 2010. Key drivers of the reduction in the allowance for loan losses compared to year-end was the decrease in loans rated as substandard and the elimination of specific reserves for the impaired loans charged-down during the first quarter. First quarter 2011 net charge-offs remained elevated due in large part to the previously discussed losses on existing imapired loans. To maintain the adequacy of the allowance for loan losses, Peoples recorded a first quarter 2011 provision for loan losses of $5.3 million versus $7.0 million and $6.5 million for the linked quarter and prior year first quarter, respectively.

“Reducing problem loans and improving overall asset quality are key goals for 2011,” commented Mead. “Our diligent focus on working out under-performing loans over the last several quarters generated positive results in the first quarter of 2011. Several loans moved closer to final resolution during the quarter, which resulted in the write-downs to amounts we expect to realize. Other commercial borrowers are overcoming some of the challenges of a weak economy and enhancing their overall financial position, which allowed us to upgrade their loans during the quarter. While we enjoyed a significant improvement in our substandard loan portfolio, we believe continued progress will come at a slower pace given the nature of certain problem loans. In addition, charge-offs and credit costs are anticipated to remain higher than long-term historic levels absent a dramatic improvement in our local economies.”

During the first quarter of 2011, Peoples experienced seasonal growth in consumer and governmental deposit balances. Non-interest-bearing deposit balances increased $4.1 million, while low-cost savings and interest-bearing deposits increased $9.9 million and $1.1 million, respectively. Government deposit balances increased $30.4 million, or 25%, attributable to the collection of annual tax revenues. People' funding strategy continues to emphasize growing low-cost deposits and reducing reliance on high-cost funding sources. As part of this focus, Peoples has priced its higher-cost deposits less aggressively during the past several quarters, which has led to reductions in certificates of deposit and money market account balances since year-end 2010.

At March 31, 2011, Peoples' capital position remained substantially higher than the regulatory minimums needed to be considered “well capitalized”, even with the partial TARP capital redemption during the quarter. Peoples' Tier 1 Common Capital ratio was 11.72% compared to 11.59% at year-end 2010, while the Total Capital ratio was 16.60% versus 18.24%. The lower Total Capital ratio reflects the impact of repurchasing the $21 million in preferred equity, which was completed without the need to issue new dilutive equity capital.

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 40 ATMs in Ohio, West Virginia and Kentucky. Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units - Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC. Peoples' common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies. Learn more about Peoples at www.peoplesbancorp.com.

Conference Call to Discuss Earnings:

Peoples will conduct a facilitated conference call to discuss first quarter 2011 results of operations today at 11:00 a.m., Eastern Daylight Saving Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (800) 860-2442. A simultaneous Webcast of the conference call audio will be available online via the “Investor Relations” section of Peoples' website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the “Investor Relations” section for one year.

Safe Harbor Statement:

Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions.

These forward-looking statements reflect management's current expectations based on all information available and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to: (1) continued deterioration in the credit quality of Peoples' loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions may increase significantly, impacting product and pricing pressures and Peoples' ability to attract, develop and retain qualified professionals; (3) changes in the interest rate environment, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, sale volumes and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) general economic conditions and weakening in the real estate market, either nationally or in the states in which Peoples and its subsidiaries do business may be worse than expected, which could decrease the demand for loans, deposits and other financial services and increase loan delinquencies and defaults; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) the nature, extent and timing of legislative or regulatory changes or actions, including in particular the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations to be promulgated thereunder, which may adversely affect the business of Peoples and its subsidiaries; (8) changes in accounting standards, policies, estimates or procedures 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) a delayed or incomplete resolution of regulatory issues that could arise; (11) Peoples' ability to receive dividends from its subsidiaries; (12) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity; (13) the impact of larger or similar financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples; (14) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (15) the costs and effects of regulatory and legal developments, including the outcome of regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; and (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 disclosures under the heading “ITEM 1A. RISK FACTORS” of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website.

As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the filing date of its March 31, 2011 consolidated financial statements on Form 10-Q with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

Please click here to view the complete earnings release.

END OF RELEASE

PEOPLES BANCORP INC. DECLARES FIRST QUARTER 2011 DIVIDEND

___________________________________________

MARIETTA, Ohio - The Board of Directors of Peoples Bancorp Inc. (NASDAQ: PEBO) yesterday declared a cash dividend of $0.10 per common share, payable April 18, 2011, to common shareholders of record on April 4, 2011.

The first quarter dividend represents a payout of approximately $1.1 million based on 10.5 million common shares currently outstanding and an annualized dividend yield of 3.32% based on the closing stock price of Peoples’ common shares of $12.05 on March 24, 2011. 

Peoples also announced it intends to release first quarter 2011 results of operations before the market opens on Tuesday, April 26, 2011, and host a facilitated conference call at 11:00 a.m. Eastern Daylight Saving Time on the same date.  A simultaneous Webcast of the conference call audio will be available on Peoples’ website, www.peoplesbancorp.com, in the “Investor Relations” section.

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 40 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank) and Peoples Insurance Agency, LLC, which includes the Putnam and Barengo divisions.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly traded companies.  Learn more about Peoples at www.peoplesbancorp.com. 

END OF RELEASE

PEOPLES BANCORP INC. NAMES PRESIDENT AND CHIEF EXECUTIVE OFFICER

___________________________________________

MARIETTA, Ohio –Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced the hiring of Charles W. “Chuck” Sulerzyski to the position of President and Chief Executive Officer.  He will succeed David L. Mead, who has served in these capacities on an interim basis since August 2010.  Chuck will join Peoples effective April 4, 2011.   

Sulerzyski has been a financial services executive for over 30 years, most recently as Regional President of the Great Lakes Region for KeyBank, N.A, a national bank located in Cleveland, Ohio.  His experience in community banking reflects Peoples’ 100-year legacy of community engagement. 

"I am privileged to have been given the opportunity to lead Peoples through the current economic challenges and build upon the heritage of community banking, insurance and investment services that Peoples represents,” Sulerzyski said. "Community banks have long represented the economic engine on 'Main Street America', supporting communities and small businesses.  I look forward to building on Peoples long legacy of commitment to communities.”

Richard Ferguson, Chairman of the Board of Peoples, said Sulerzyski’s leadership and experience in retail and business banking, trust and insurance will enhance the value of our services and relationships with our customers.

"Chuck brings significant experience to the Peoples family of companies,” Ferguson said.  “His leadership and his ability to execute on our strategic plan and proactively grow the company, will allow us to continue to succeed in providing competitive services to our customers and value to our shareholders.”

David L. Mead, interim President and Chief Executive Officer of Peoples, said Sulerzyski is a goal-oriented leader with a track record of developing strategic sales initiatives, controlling costs and increasing profits. 

 “Chuck was the ideal choice to lead the company in the next stage of its growth and development,” Mead said.  “His approach to leading Peoples will play a significant role in enhancing shareholder value.  We look forward to Chuck’s leadership and implementation of Peoples’ long-term vision to be the leading financial services provider to the clients and markets we serve.”

Prior to his service with KeyBank, NA, Sulerzyski was a Managing Director with Marsh & McLennan, Inc., a company located in New York, New York, which provides risk and insurance services and solutions.  He has also been a Managing Director with Marsh Affinity and Private Client Practices, a U.S. Practice Leader/Private Client Services firm.  Preceding these positions, he served with The Provident Bank, located in Cincinnati, Ohio, with Fidelity Investments, located in Boston, Massachusetts and with Banc One Corporation located in Columbus, Ohio. 

He earned his Bachelor of Arts in Economics from New York University and his MBA in Marketing from Fordham University Graduate School of Business.  Sulerzyski also holds the National Association of Security Dealers Series 7, 24, and 63 licenses.

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 40 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com.  

END OF RELEASE

PEOPLES BANCORP INC. NAMES EXECUTIVE VICE PRESIDENT, HUMAN RESOURCES

___________________________________________

MARIETTA, Ohio – Peoples Bancorp Inc. and its banking subsidiary, Peoples Bank, National Association (“Peoples Bank”) announce the hiring of Michael W. Hager to the position of Executive Vice President, Human Resources.  Hager is responsible for the design and implementation of all human resources strategies, policies and processes throughout the company. Additionally, he will oversee leadership and talent development initiatives, compensation, benefits, staffing, education, workplace planning programs, and overall organizational effectiveness for Peoples’ 580 associates.

“We welcome Mike to our leadership team,” said David L. Mead, President and Chief Executive Officer of Peoples Bancorp Inc. and Peoples Bank.  “His experience and talent for building relationships, along with his impressive business acumen, will be assets for our company.”

Hager has held various executive level positions during his 40-year career, including a presidential appointment as Acting Director of the U.S. Office of Personnel Management.  He also has extensive experience in the financial services industry.  He earned his Bachelor of Science in Business Administration from Bluefield State College, Bluefield, West Virginia.

“Mike’s approach to leadership will play a significant role in driving shareholder value,” Mead said.  “We look forward to Mike’s contributions building upon the corporate culture that supports Peoples vision to be the leading financial services provider to the clients and markets we serve.”

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 40 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com. 

END OF RELEASE

PEOPLES BANCORP INC. ANNOUNCES
FOURTH QUARTER AND 2010 RESULTS

___________________________________________

January 25, 2011

Contact: Edward G. Sloane
Chief Financial Officer and Treasurer
(740) 373-3155

MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced results for the quarter and year ended December 31, 2010.  In addition, Peoples reported that on January 24, 2011, it received notification from the U.S. Department of the Treasury (the “Treasury”) that, after consultation with Peoples’ Federal banking agency, it has granted Peoples’ request for a partial redemption of the $39 million received under the TARP Capital Purchase Program.  The actual redemption, which is expected to occur in early February 2011, will involve Peoples repurchasing $21 million of its outstanding preferred shares and will reduce the annual dividends on Peoples’ preferred shares by $1.1 million. 

 “We are pleased to report our ability to repay a portion of our TARP capital, which will occur without raising any new equity capital due to our already strong capital and liquidity levels,” said David L. Mead, President and Chief Executive Officer. “We believe this action is in the long-term best interest of our common shareholders since it reduces annual preferred dividends while maintaining a strong capital position.”    

Net income available to common shareholders totaled $55,000 for the fourth quarter and $3.5 million for the year, representing earnings per diluted common share of $0.01 and $0.34, respectively.  Provision for loan losses and other loan-related credit losses were higher than historical levels throughout 2010, which had an adverse impact on fourth quarter and 2010 earnings.  In comparison, diluted earnings per common share were $0.07 and $0.22, respectively, for the same periods in 2009.
Summary points regarding fourth quarter and 2010 results:

• The provision for loan losses was $7 million for the fourth quarter of 2010 and $27 million for the entire year, while net charge-offs were $7 million, or 2.93% of average loans on an annualized basis, for the quarter and $27 million, or 2.66% of average loans, for the year.  Almost all of the fourth quarter charge-offs were attributable to write-downs on impaired loans resulting from continued general weakness in the commercial real estate market and overall economy.  The allowance for loan losses was $26.8 million, or 2.77% of gross loans and 66.1% of nonperforming loans, at year-end 2010 compared to 2.59% and 79.3%, respectively, at December 31, 2009. 
• In the fourth quarter, commercial real estate loans to six unrelated borrowers were placed on nonaccrual status due to the impact of ongoing economic problems in key market areas.  These loans had been classified as substandard in prior quarters and were charged-down to their estimated net realizable value of $5.2 million at year-end 2010.  As a result, nonperforming assets totaled $45.0 million and comprised 2.45% of total assets at December 31, 2010, versus $41.6 million and 2.21% at the prior quarter-end.  In contrast to this increase, other asset quality metrics improved in 2010, including reductions in overall loan delinquencies and the level of watch-rated commercial loans, which are credits with indicators of potential weakness.
• In the fourth quarter of 2010, Peoples incurred losses on loans held-for-sale and other real estate owned (“OREO”) of $0.8 million.  These losses were the result of further declines in commercial real estate values experienced during the quarter.  In 2010, write-downs on loans held-for-sale and OREO totaled $3.2 million. 
• Net interest income and margin for the fourth quarter and year were negatively impacted by lower earning asset levels during 2010 due to commercial loan payoffs, coupled with lower reinvestment rates based upon current market interest rates.  Peoples experienced slight net interest margin expansion for the year due to management’s efforts to reduce funding costs by growing low-cost deposits and repaying higher-cost borrowings.      
• Fourth quarter 2010 non-interest income grew 5% over the prior quarter and 4% versus the year ago quarter, due mostly to stronger mortgage banking activity. Another contributing factor to the year-over-year increase was a 21% growth in electronic banking revenue.  For the year, non-interest income was down slightly as increased income from trust, investment and electronic banking activities was offset by declines in other revenue categories.
• Operating expenses were controlled in 2010, with total non-interest expense down 3% year-over-year for both the fourth quarter and year.  Compared to the third quarter of 2010, fourth quarter non-interest expense was up 2%, due primarily to higher professional consulting fees related to various management projects.
• Total loan balances decreased $50 million in the fourth quarter due to unusually high commercial loan payoffs and seasonal paydowns on credit lines exceeding new production.  Compared to year-end 2009, total loans were down $91 million in 2010, primarily as a result of loan payoffs and, to a lesser extent, charge-offs. 
• Non-interest-bearing deposit balances grew $5 million during the fourth quarter and $17 million for the year.  These increases were more than offset by intentional reductions in higher-cost, non-core deposits, such as governmental public funds and certificates of deposit.  At year-end 2010, total retail deposit balances were 2% lower than both the prior quarter-end and year-end 2009. 
• Peoples’ capital levels remained strong and substantially higher than the minimum regulatory amount needed to be considered “well capitalized”.  The total Risk-Based Capital ratio was 18.21% at year-end 2010 compared to 16.80% at December 31, 2009, while the tangible common equity to tangible assets ratio was 7.17% and 7.22%, respectively.

“Low earnings for the fourth quarter were driven in large part by persistent asset quality issues,” commented Mead. “Going into the quarter, we had anticipated loan credit losses could remain elevated as we intensified efforts to identify weakening credits and assess their collectability.  Loan charge-offs and write-downs on other nonperforming assets in the quarter, while slightly less than amounts in the third quarter, were higher than historical levels.  As previously noted, nonperforming assets increased during the quarter.  However, we have seen some improvement in the level of watch credits during the past several quarters.  The very sluggish recovery in our markets has also contributed to a smaller loan portfolio and lower net interest income for the quarter and year.  The impact of these items on earnings has overshadowed proactive efforts to increase non-interest income categories and to control operating costs.”

Fourth quarter 2010 net interest income was $14.1 million compared to $15.3 million last quarter and $15.4 million for the fourth quarter of 2009.  The combination of declining loan balances and lower reinvestment rates have caused a decrease in interest income, which exceeded the reduction in interest expense.  The lower loan balances also compressed net interest margin, which was 3.44% for the fourth quarter of 2010 versus 3.58% for the linked quarter and 3.50% for the fourth quarter of 2009.  For the year, net interest income was down 3% in 2010 versus 2009, while net interest margin expanded 3 basis points as funding costs decreased more than earning asset yields.

“The flatter yield curve during the third quarter and much of the fourth quarter adversely impacted net interest income and margin, as excess funds had to be reinvested at lower rates,” said Edward G. Sloane, Chief Financial Officer and Treasurer.  “Throughout 2010, we took steps to reduce funding costs to offset the lower asset yields, although opportunities were somewhat limited by the lack of significant high-cost liabilities maturing in recent quarters.  Still, we maintained strong asset liquidity to position the balance sheet for a return of TARP capital and future earning asset growth.  We also have remained disciplined in our approach to managing the balance sheet interest rate risk position, while adjusting funding mix away from high-cost deposits and wholesale borrowings to lower-cost, core deposits.”

Non-interest income totaled $8.1 million for the fourth quarter of 2010, up 5% from the linked quarter and up 4% year-over-year.  Key drivers of these increases were higher mortgage banking income, trust and investment revenue and electronic banking income, which offset declines in other non-interest income categories.  For the year, total non-interest income was $31.6 million in 2010 versus $32.1 million in 2009, as growth in trust and investment income and electronic banking income was eclipsed by reductions in other non-interest income categories. 
“In 2010, we saw the benefits of a diversified revenue stream, as economic conditions and regulatory changes challenged certain revenue sources,” commented Sloane.  “Fourth quarter non-interest income was bolstered by sizable gains on mortgage loan sales due to refinancing activity, plus higher debit card usage by our customers.  We also have been successful thus far in mitigating the impact of new overdraft fee regulations on our revenue stream.  On the other hand, insurance revenues were adversely affected in 2010 by lower commercial insurance activity due to the weak economy and competitive pricing of premiums by underwriters.” 

Fourth quarter 2010 mortgage banking income was more than double the linked quarter and year ago amounts, as lower long-term mortgage rates during the fourth quarter resulted in substantial refinancing activity.  Despite the increased activity in the fourth quarter, mortgage banking income finished 2010 down 9% from the prior year, due mostly to higher long-term mortgage interest rates during much of the first half of 2010.  Increased debit card activity throughout 2010 has produced growth in electronic banking revenue, with fourth quarter revenue up 5% over the linked quarter and 21% over the fourth quarter of 2009.  For the year, electronic banking revenue increased 19% compared to 2009.  While fourth quarter deposit account service charges were consistent with the third quarter of 2010, Peoples has experienced lower volumes of overdrafts during 2010 due to changes in consumer behavior, resulting in year-over-year decreases in deposit account service charges of 10% and 8% for the fourth quarter and full year, respectively. 

Total non-interest expense for both the fourth quarter of 2010 and entire year were 3% lower than the same 2009 amounts, due to cost control initiatives implemented during 2010.  These initiatives included limiting the exposure to escalating salary and benefit costs, which were held flat throughout the year.  For the year, Peoples’ FDIC insurance costs were lower because the special assessment imposed on all banks in the second quarter of 2009 was not repeated.  However, the overall reduction in non-interest expense for 2010 was partially offset by higher costs associated with foreclosed real estate and problem loan workouts, such as fees for legal and valuation services.  On a linked quarter basis, total non-interest expense was up slightly due to higher professional fees for consulting services related to various management projects during the fourth quarter.

During the fourth quarter of 2010, total portfolio loan balances declined $50.2 million to $960.7 million at December 31.  Since year-end 2009, total portfolio loans have decreased $91.3 million.  These declines occurred primarily as a result of commercial loan payoffs and charge-offs exceeding new production.  Weak economic conditions in 2010 caused decreased demand for new loans.  Also during 2010, Peoples focused on managing commercial real estate loan exposures to enhance its overall balance sheet risk profile.  Both of these factors contributed to the lower loan balances compared to the prior year-end. 

“Our ability to maintain loan balances during the second half of 2010 was impacted by increased competition for quality loans, while the protracted weak economy in our market areas caused lower demand for new loans and elevated charge-offs,” said Sloane.  “Other factors contributing to the reduction in loan balances in 2010 were actions taken to moderate commercial real estate concentrations and the continued customer demand for long-term, fixed rate mortgage loans, which we typically sell in the secondary market.  Despite current economic conditions, we remain committed to meeting the lending needs of our communities and growing loans in a disciplined manner.  Along these lines, we have added new commercial lenders in previously underserved market areas and continue to seek opportunities to grow consumer loans.”

In 2010, Peoples experienced an improving trend in the level of watch-rated credits, which are loans possessing some credit deficiency or potential weakness.  These watch-rated credits declined 43% from December 31, 2009 to year-end 2010.  During the fourth quarter of 2010, commercial real estate loans to six unrelated relationships, with an aggregate outstanding balance of $9.5 million, became impaired and were placed on nonaccrual status.  These loans had been classified as substandard in prior quarters in response to credit deterioration.  As a result of impairment, the loans were charged-down by $4.2 million during the quarter based upon the estimated net realizable value of the underlying collateral.   The $5.2 million net increase in nonperforming assets was partially offset by write-downs on nonaccrual loans held-for-sale.  As a result, total nonperforming assets were $45.0 million, or 2.45% of total assets, at December 31, 2010, versus $41.6 million, or 2.21%, at September 30, 2010, and $40.7 million, or 2.03%, at year-end 2009.    

Peoples’ allowance for loan losses was $26.8 million, or 2.77% of gross loans, at December 31, 2010, versus 2.68% at the prior quarter and 2.59% at year-end 2009.  The increase in allowance percentage was primarily attributable to elevated charge-offs in recent quarters, and was partially offset by the lower level of watch-rated credits.  Fourth quarter 2010 net loan charge-offs were $7.4 million, or 2.93% of average loans on an annualized basis, compared to $8.0 million, or 3.11%, last quarter and $5.7 million, or 2.14%, for the fourth quarter of 2009.  Write-downs on commercial real estate loans driven by the weak economy and declines in collateral values accounted for the majority of fourth quarter net charge-offs. For the year, net charge-offs were $27.4 million in 2010, or 2.66% of average loans, compared to $21.4 million, or 1.96%, in 2009.   To maintain the adequacy of the allowance for loan losses, Peoples recorded a fourth quarter 2010 provision for loan losses of $7.0 million versus $8.0 million and $6.8 million for the linked quarter and prior year fourth quarter.   In 2010, the provision for loan losses totaled $26.9 million, up from $25.7 million in 2009.

“In the second half of 2010, we intensified our efforts to resolve existing problem loans, which produced higher credit losses in both the third and fourth quarters,” commented Mead.  “The financial strain from an extremely difficult economy continues to overwhelm many of our commercial borrowers, while continued weakness in commercial real estate values is adversely affecting collateral values and the disposal of some problem assets.  These conditions hindered our efforts to reduce nonperforming assets and improve asset quality, which will remain a top priority for us.  We realize it will take time for our asset quality metrics to return to more historical levels but are encouraged by a modest improvement in loan delinquencies, as loans 30 to 90 days past due held around 1% during the fourth quarter, and a reduction in watch credits in 2010.”

In 2010, Peoples successfully grew non-interest-bearing deposit balances, with increases of $5.4 million, or 10% annualized, in the fourth quarter and $17.1 million, or 9%, for the year.  Due to this growth in non-interest-bearing balances and lack of earning asset growth, management focused on reducing higher-cost, non-core deposits in 2010.  As a result, retail deposit balances decreased $30.9 million in the fourth quarter of 2010 and $30.6 million for the year, due to lower interest-bearing balances at December 31, 2010.  Government deposit balances, which historically have carried higher interest rates, decreased by $20.3 million in the fourth quarter and were down $28.2 million compared to year-end 2009, accounting for the majority of the reduction in interest-bearing balances.  Certificates of deposit balances were also lower at year-end 2010 compared to recent quarters due to less competitive pricing of these higher costing deposits.  Peoples also reduced borrowed funds by 33% in 2010, to $231.8 million at year-end.  A portion of this decrease was attributable to the prepayment of $60.0 million of wholesale repurchase agreements during the third quarter in order to de-leverage the balance sheet and improve the balance sheet risk profile.

 “In 2010, we faced many challenges as we worked to position the company for the eventual return to more favorable economic conditions,” summarized Mead. “Already in 2011, we have enhanced shareholder return with the recent approval to repay a portion of the $39 million TARP capital received in early 2009.  Although the TARP capital has afforded us greater ability to work through credit issues, we have always viewed it as temporary and will work to return those funds as soon as possible.  We also will be focused on executing strategies for future expansion of the company and growth in earnings.”        

Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in assets, 47 locations and 40 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC.  Peoples’ common shares are traded on the NASDAQ Global Select Market® under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly-traded companies.  Learn more about Peoples at www.peoplesbancorp.com. 

Conference Call to Discuss Earnings:

Peoples will conduct a facilitated conference call to discuss fourth quarter and 2010 results of operations today at 11:00 a.m., Eastern Standard Time, with members of Peoples’ executive management participating.  Analysts, media and individual investors are invited to participate in the conference call by calling (800) 860-2442.  A simultaneous Webcast of the conference call audio will be available online via the “Investor Relations” section of Peoples’ website, www.peoplesbancorp.com.  Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software.  A replay of the call will be available on Peoples’ website in the “Investor Relations” section for one year.

Safe Harbor Statement:

Certain statements made in this news release regarding Peoples’ financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions.

These forward-looking statements reflect management’s current expectations based on all information available and its knowledge of Peoples’ business and operations.  Additionally, Peoples’ financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertain­ties that may cause actual results to differ materially.  These factors include, but are not limited to: (1) continued deterioration in the credit quality of Peoples’ loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions 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, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, sale volumes and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) general economic conditions and weakening in the real estate market, either nationally or in the states in which Peoples and its subsidiaries do business may be less favorable than expected, which could decrease the demand for loans, deposits and other financial services and increase loan delinquencies and defaults; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions, including in particular the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations to be promulgated thereunder, which may adversely affect the business of Peoples and its subsidiaries; (8) changes in accounting standards, policies, estimates or procedures 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) a delayed or incomplete resolution of regulatory issues that could arise; (11) Peoples’ ability to receive dividends from its subsidiaries; (12) Peoples’ ability to maintain required capital levels and adequate sources of funding and liquidity; (13) the impact of larger or similar financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples; (14) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (15) the costs and effects of regulatory and legal developments, including the outcome of regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; and (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 disclosures under the heading “ITEM 1A. RISK FACTORS” of Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2009. 

Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance.  Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements.  Copies of documents filed with the SEC are available free of charge at the SEC’s website at http://www.sec.gov and/or from Peoples’ website.

As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the filing date of its December 31, 2010 consolidated financial statements on Form 10-K with the SEC.  Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

Please click here to view the complete earnings release.

END OF RELEASE

Back To Top