UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report - July 18, 2002
THE PEOPLES HOLDING COMPANY
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(Exact name of registrant as specified in its charter)
Mississippi 1-13253 64-0676974
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(State or (Commission (I.R.S. Iden-
other file tification
jurisdiction) number) number)
209 Troy Street, Tupelo, Mississippi 38802-0709
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(Address of principal executive officers) (Zip Code)
Registrant's Telephone Number: (662)680-1001
ITEM 1: CHANGES IN CONTROL OF REGISTRANT.
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Not applicable
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS.
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Not applicable
ITEM 3: BANKRUPTCY OR RECEIVERSHIP.
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Not applicable
ITEM 4: CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS.
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Not applicable
ITEM 5: OTHER EVENTS.
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At the close of business on July 17, 2002, The Peoples Holding Company
issued a press release concerning its earnings and results for the
second quarter of 2002.
ITEM 6: RESIGNATION OF REGISTRANT'S DIRECTORS.
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Not applicable
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
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99.1 Press Release, dated July 17, 2002, issued by The Peoples
Holding Company.
ITEM 8: CHANGE IN FISCAL YEAR.
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Not applicable
ITEM 9: SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
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Not applicable
SIGNATURE
Pursuant to the requirements of The Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on it's behalf by the
undersigned thereunto duly authorzied.
THE PEOPLES HOLDING COMPANY
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Registrant
/s/ E. Robinson McGraw
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E. Robinson McGraw
President & Chief Executive Officer
DATE: July 18, 2002
EXHIBIT 99.1
The Peoples Holding Company (AMEX:PHC)
P.O. Box 709
Tupelo, MS 38801-0709
Phone: (662) 680-1001
Fax: (662) 680-1234
www.thepeoplesbankandtrust.com
Press Release
- --------------------------------------------------------------------
For additional information, contact:
Jim Gray
Executive Vice President, Investor Relations and Planning Director
(662) 680-1217
Stuart Johnson
Executive Vice President and Chief Financial Officer
(662) 680-1472
Date: July 17, 2002
PEOPLES HOLDING COMPANY RECORD QUARTERLY EARNINGS UP 33.3%
The Peoples Holding Company (the Company)(AMEX: PHC) reported today record
results for second quarter 2002, bettering the record results posted for the
comparable period in 2001. Earnings per share for the second quarter were $.80,
compared to $.60 for the same period one year ago, an increase of 33.33%, and
net income was $4,489,000 compared to $3,587,000 for the same period in 2001.
Net interest income for second quarter 2002 was up 14.69% while non-interest
income increased 13.75% for the same period. These results generated a return on
average equity for second quarter 2002 of 14.36% compared to 11.21% for second
quarter 2001, and a return on average assets for second quarter 2002 of 1.37%
compared to 1.13% for the comparable period in 2001.
We have now had six consecutive quarters of record core earnings, noted E.
Robinson McGraw, President & CEO. "These results reflect our strategic focus on
asset quality, margin improvement, non-interest income, operating expense
control, capital management and growth. Although we are pleased with our
earnings results, the progress on our strategic plan and the prospects for
continuing our positive performance, we will not be satisfied until we are a
top-performing company compared to our peers."
Stock Price, Dividends And Repurchases
The market price of The Peoples Holding Company shares was $41.00 per share at
June 30, 2002, an increase of 24.20% from $33.01 at June 30, 2001. "I believe
this significant gain in share price to be a direct result of our commitment to
both earnings improvement and capital management," McGraw said.
The Company announced an increase in its quarterly dividend to $.26 per share on
June 18, increasing the annual dividend to $1.04. This marks the sixteenth
consecutive year of dividend increases.
Since January 2002, the Company has repurchased 97,806 shares, or 1.71% of
shares outstanding, at an average purchase price of $34.87 per share. Peoples
initiated a tender offer on April 16, 2001 to purchase up to 604,312 shares or
approximately 10% of its common shares outstanding. Since that time, the Company
has repurchased a total of approximately 436,000 shares.
Financial Details
"For second quarter 2002, the net interest margin improved to 4.75% compared to
4.43% for 2001, continuing to reflect our proactive stance on pricing", noted
McGraw.
The provision for loan losses decreased to $1,075,000 for second quarter 2002
from $1,125,000 for the same period in 2001. Allowance for loan losses as a
percentage of loans remains unchanged at 1.39% at June 30, 2002 and 2001,
respectively. Net charge-offs as a percentage of average loans was .15% for
second quarter 2002 compared to .10% for the same period in 2001. Non-performing
loans decreased to .44% for second quarter 2002 compared with .73% for the same
period in 2001. The Company's non-performing loan coverage ratio stood at 317%
for the quarter compared to 191% for second quarter 2001. "Our asset quality
continues to improve as a result of our commitment to credit scoring, central
credit analysis and central collections," McGraw stated.
Total non-interest income for the second quarter ended June 30, 2002 and 2001
was $6,650,000 and $5,846,000, respectively, an increase of 13.75%. "With
non-interest income representing 33% of net interest income and non-interest
income combined, growth of this diversified revenue stream remains strong. It
underscores the fact that we are increasingly meeting the total financial needs
of our clients through the sale of insurance and investment products as well as
traditional banking services. Significant gains in non-interest income have been
generated through fees on the sale of insurance and investments, mortgage loan
fees, service charges, fiduciary services and bank owned life insurance among
others," McGraw said.
Second quarter 2002 non-interest expense increased 10.12% over that of second
quarter 2001. This increase was due primarily to increasing health insurance
costs and increases in computer depreciation related to a number of recent
technology upgrades. Net non-interest expense as a percentage of assets has
remained relatively steady at 1.81% for second quarter 2002 as compared to 1.80%
for the same period in 2001. In addition, the efficiency ratio improved for the
second quarter from 62.30% in 2001 to 60.54% for 2002.
Conference Call Information
A live audio Webcast of a conference call with analysts will be available
beginning at 9 A. M. Central time on Monday, July 22 through the Investor
Relations page of our website, www.thepeoplesbankandtrust.com; through
www.streetevents.com or any of CCBN's distribution network. The event will be
archived for 90 days. The conference may also be heard live via telephone by
dialing 877-279-3019 and entering the conference I. D. number, 4431755. A
digital telephone recording of the conference call, available two hours after
the event and available for 48 hours, may be accessed by dialing 1-800-642-1687
or 706-645-9291 and entering the conference I. D. number, 4431755.
About The Peoples Holding Company
The Peoples Holding Company is the parent of Mississippi's fourth largest
commercial bank headquartered in the state. Through its wholly owned subsidiary,
The Peoples Bank & Trust Company, the Company is also parent of The Peoples
Insurance Agency, Inc. The Peoples Bank has assets of approximately $1.3 billion
and operates 40 community banking offices in 27 north and north central
Mississippi cities.
Note To Investors
This news release contains forward-looking statements regarding The Peoples
Holding Company. All forward-looking statements involve risk and uncertainty and
a number of factors could cause actual results to differ materially from the
anticipated results or other expectations expressed in the forward-looking
statements. Those factors include, but are not limited to, interest rate
fluctuation, regulatory changes, portfolio performance and other factors
discussed in our recent filings with the Securities and Exchange Commission
(SEC).
The Peoples Holding Company
Selected Financial Information
(Dollars in Thousands, Except Share Data)
Unaudited
For The Three Months Ended June 30, For The Six Months Ended June 30,
-------------------------------------- --------------------------------------
Core Earnings Summary * 2002 2001 % Change 2002 2001 % Change
----------------------- ----------- ----------- ---------- ----------- ----------- ----------
Reported net income ............................. $ 4,489 $ 3,587 25.15 % $ 7,254 $ 6,889 5.30 %
Goodwill amortization, net of tax ............... - 102 (100.00) - 204 (100.00)
Transitional goodwill impairment ................ - - - 1,300 - -
----------- ----------- ---------- ----------- ----------- ----------
Core net income ................................. $ 4,489 $ 3,689 21.69 % $ 8,554 $ 7,093 20.60 %
=========== =========== ========== =========== =========== ==========
Basic and diluted earnings per share:
Reported net income ............................. $ 0.80 $ 0.60 33.33 % $ 1.29 $ 1.15 12.17 %
Goodwill amortization, net of tax ............... - 0.02 (100.00) - 0.03 (100.00)
Transitional goodwill impairment ................ - - - 0.23 - -
----------- ----------- ---------- ----------- ----------- ----------
Core net income ................................. $ 0.80 $ 0.62 29.03 % $ 1.52 $ 1.18 28.81 %
=========== =========== ========== =========== =========== ==========
* The table above presents net income for the prior periods as reported as well
as core net income, which has been adjusted for the exclusion of goodwill
amortization and the cumulative effect of the transitional goodwill impairment.
For The Three Months Ended June 30, For The Six Months Ended June 30,
-------------------------------------- --------------------------------------
Earnings Summary 2002 2001 % Change 2002 2001 % Change
---------------- ----------- ----------- ---------- ----------- ----------- ----------
Interest income ................................. $ 19,971 $ 22,422 (10.93)% $ 39,500 $ 45,095 (12.41)%
Interest expense ................................ 6,720 10,868 (38.17) 13,810 22,459 (38.51)
----------- ----------- ---------- ----------- ----------- ----------
Net interest income ............................. 13,251 11,554 14.69 25,690 22,636 13.49
Provision for loan losses ....................... 1,075 1,125 (4.44) 2,200 2,250 (2.22)
Noninterest income .............................. 6,650 5,846 13.75 13,259 11,576 14.54
Noninterest expenses ............................ 12,526 11,375 10.12 24,824 22,430 10.67
----------- ----------- ---------- ----------- ----------- ----------
Income before taxes and cumulative effect
of accounting change ....................... 6,300 4,900 28.57 11,925 9,532 25.10
Income taxes .................................... 1,811 1,313 37.93 3,371 2,643 27.54
----------- ----------- ---------- ----------- ----------- ----------
Net income before cumulative effect
of accounting change ....................... 4,489 3,587 25.15 8,554 6,889 24.17
Cumulative effect of accounting change .......... - - - (1,300) - -
----------- ----------- ---------- ----------- ----------- ----------
Net income ...................................... $ 4,489 $ 3,587 25.15 % $ 7,254 $ 6,889 5.30 %
=========== =========== ========== =========== =========== ==========
Common Stock Data
-----------------
Earnings per share - basic and diluted:
Income before cumulative effect
of accounting change ....................... $ 0.80 $ 0.60 33.33 % $ 1.52 $ 1.15 32.17 %
Cumulative effect of accounting change ....... - - - (0.23) - -
----------- ----------- ---------- ----------- ----------- ----------
Net income ................................... 0.80 0.60 33.33 1.29 1.15 12.17
=========== =========== ========== =========== =========== ==========
Book value per share ............................ 22.60 21.13 6.96
Market value per share .......................... 41.00 33.01 24.20
Cash dividends per share ........................ 0.26 0.24 8.33 0.51 0.47 8.51
Weighted average shares outstanding ............. 5,614,265 5,935,987 (5.42) 5,635,854 5,992,167 (5.95)
Weighted average shares outstanding - diluted ... 5,622,047 5,935,987 (5.29) 5,641,245 5,992,167 (5.86)
End of period shares outstanding ................ 5,606,874 5,807,568 (3.46)
Balance Sheet Summary
---------------------
Total loans ..................................... $ 835,789 $ 820,475 1.87 %
Allowance for loan losses ....................... 11,658 11,403 2.24
Total investment securities ..................... 344,752 283,993 21.39
Total assets .................................... 1,310,925 1,240,074 5.71
Total deposits .................................. 1,106,793 1,067,855 3.65
Total borrowings ................................ 59,416 29,896 98.74
Shareholders' equity ............................ 126,717 122,688 3.28
For The Three Months Ended June 30, For The Six Months Ended June 30,
-------------------------------------- --------------------------------------
Selected Ratios 2002 2001 % Change 2002 2001 % Change
--------------- ----------- ----------- ---------- ----------- ----------- ----------
Return on average assets * ...................... 1.37 % 1.13 % 21.24 % 1.19 % 1.11 % 7.21 %
Return on average shareholders' equity * ........ 14.36 11.21 28.10 12.50 10.91 14.57
Adjusted for cumulative effect
of accounting change:
Core return on average assets* .............. 1.37 1.16 18.10 1.29 1.14 13.16
Core return on average shareholders' equity*. 14.36 11.54 24.44 13.54 11.24 20.46
Shareholders' equity to assets (actual) ......... 9.67 9.89 (2.22)
Net interest margin (TE) * ...................... 4.75 4.43 7.22 4.67 4.37 6.86
Allowance for loan losses to total loans ........ 1.39 1.39 -
Reserve coverage of nonperforming loans ......... 317.57 191.62 65.73
Average loans to average deposits ............... 74.76 76.52 (2.30) 74.82 76.64 (2.37)
Average earning assets to average assets ........ 90.51 91.18 (0.73) 90.43 91.38 (1.04)
Nonperforming loans to total loans .............. 0.44 0.73 (39.73)
Net charge-offs to average loans * .............. 0.59 0.39 51.28 0.46 0.34 35.29
Noninterest income (less securities
gains/losses) to average assets* ............... 2.02 1.90 6.32 2.00 1.88 6.38
Noninterest expense to average assets* .......... 3.83 3.70 3.51 3.82 3.66 4.37
Overhead ratio * ................................ 1.81 1.80 0.56 1.82 1.78 2.25
Efficiency ratio ................................ 60.54 62.30 (2.83) 61.28 62.44 (1.86)
Nonperforming Assets
--------------------
Nonaccruing loans ............................... $ 832 $ 2,228 (62.66)%
Accruing loans past due 90 days or more ......... 2,839 3,723 (23.74)
----------- ----------- ----------
Total nonperforming loans .................. 3,671 5,951 (38.31)
ORE and repossessions ........................... 3,092 2,351 31.52
----------- ----------- ----------
Total nonperforming assets ................. $ 6,763 $ 8,302 (18.54)%
=========== =========== ==========
* Ratios annualized
TE - taxable equivalent basis
The Peoples Holding Company
Allowance for Loan Losses
(Dollars in Thousands)
Unaudited
For The Three Months Ended June 30, For The Six Months Ended June 30,
-------------------------------------- --------------------------------------
2002 2001 % Change 2002 2001 % Change
----------- ----------- ---------- ----------- ----------- ----------
Reserve for loan losses at beginning of period .. $ 11,811 $ 11,067 6.72 % $ 11,354 $ 10,536 7.76 %
Provision for loan losses ....................... 1,075 1,125 (4.44) 2,200 2,250 (2.22)
Loans charged-off ............................... 1,310 871 50.40 2,296 1,573 45.96
Recoveries of loans previously charged-off ...... 82 82 - 400 190 110.53
----------- ----------- ---------- ----------- ----------- ----------
Reserve for loan losses at end of period ........ $ 11,658 $ 11,403 2.24 % $ 11,658 $ 11,403 2.24 %
=========== =========== ========== =========== =========== ==========
The Peoples Holding Company
Loans and Credit Quality
(Dollars in Thousands)
Unaudited
Loans, Net Charge-offs
Net of Unearned Income Non-performing Loans For The Six Months Ended
As of June 30, As of June 30, June 30,
------------------------- ------------------------ ------------------------
2002 2001 2002 2001 2002 2001
----------- ----------- ---------- ----------- ----------- ----------
Commercial, financial, agricultural ............. $ 152,321 $ 159,469 $ 563 $ 601 $ 463 $ 367
Real estate - construction ...................... 31,889 27,542 159 117 88 18
Real estate - mortgage .......................... 552,541 517,173 2,736 4,518 926 304
Consumer ........................................ 99,038 116,291 213 715 419 694
----------- ----------- ---------- ----------- ----------- ----------
Total ...................................... $ 835,789 $ 820,475 $ 3,671 $ 5,951 $ 1,896 $ 1,383
=========== =========== ========== =========== =========== ==========
The Peoples Holding Company
Condensed Consolidated Statements of Income
(Dollars in Thousands, Except Share Data)
Unaudited
For The Three Months Ended June 30, For The Six Months Ended June 30,
-------------------------------------- --------------------------------------
2002 2001 % Change 2002 2001 % Change
----------- ----------- ---------- ----------- ----------- ----------
Interest income:
Loans ....................................... $ 15,347 $ 17,966 (14.58)% $ 30,664 $ 36,146 (15.17)%
Securities .................................. 4,599 4,231 8.70 8,633 8,363 3.23
Other ....................................... 25 225 (88.89) 203 586 (65.36)
----------- ----------- ---------- ----------- ----------- ----------
Total interest income ................. 19,971 22,422 (10.93) 39,500 45,095 (12.41)
Interest expense:
Deposits .................................... 6,123 10,508 (41.73) 12,627 21,728 (41.89)
Borrowings .................................. 597 360 65.83 1,183 731 61.83
----------- ----------- ---------- ----------- ----------- ----------
Total interest expense ................ 6,720 10,868 (38.17) 13,810 22,459 (38.51)
Net interest income ................... 13,251 11,554 14.69 25,690 22,636 13.49
Provision for loan losses ....................... 1,075 1,125 (4.44) 2,200 2,250 (2.22)
----------- ----------- ---------- ----------- ----------- ----------
Net interest income after provision
for loan losses ................... 12,176 10,429 16.75 23,490 20,386 15.23
Noninterest income:
Service charges on deposit accounts ......... 3,064 2,816 8.81 6,000 5,608 6.99
Fees and commissions ........................ 2,226 1,665 33.69 4,275 3,453 23.81
Trust revenue ............................... 231 265 (12.83) 462 530 (12.83)
Gains on sale of securities ................. 8 2 300.00 8 45 (82.22)
Other ....................................... 1,121 1,098 2.09 2,514 1,940 29.59
----------- ----------- ---------- ----------- ----------- ----------
Total noninterest income .............. 6,650 5,846 13.75 13,259 11,576 14.54
Noninterest expenses:
Salaries and employee benefits .............. 7,390 6,346 16.45 14,319 12,423 15.26
Data processing ............................. 959 869 10.36 1,881 1,727 8.92
Net occupancy ............................... 777 777 - 1,584 1,605 (1.31)
Equipment ................................... 790 733 7.78 1,594 1,462 9.03
Other ....................................... 2,610 2,650 (1.51) 5,446 5,213 4.47
----------- ----------- ---------- ----------- ----------- ----------
Total noninterest expenses ............ 12,526 11,375 10.12 24,824 22,430 10.67
Income before taxes and cumulative effect
of accounting change ........................ 6,300 4,900 28.57 11,925 9,532 25.10
Income taxes .................................... 1,811 1,313 37.93 3,371 2,643 27.54
----------- ----------- ---------- ----------- ----------- ----------
Net income before cumulative effect
of accounting change ........................ 4,489 3,587 25.15 8,554 6,889 24.17
Cumulative effect of accounting change .......... - - - (1,300) - -
----------- ----------- ---------- ----------- ----------- ----------
Net income ...................................... $ 4,489 $ 3,587 25.15 % $ 7,254 $ 6,889 5.30 %
=========== =========== ========== =========== =========== ==========
The Peoples Holding Company
Average Consolidated Balance Sheet and Net Interest Analysis *
(Dollars in Thousands)
Unaudited
For The Three Months For The Six Months
Ended June 30 Ended June 30
------------------------- ------------------------
2002 2001 2002 2001
----------- ----------- ---------- -----------
Earning Assets:
Loans and leases:
Interest (TE) ............................. $ 15,465 $ 18,121 $ 30,910 $ 36,449
Average balance ........................... 830,748 812,473 824,301 810,862
Yield ..................................... 7.47% 8.95% 7.56% 9.06%
Interest bearing bank balances, federal
funds sold and repos:
Interest .................................. 25 225 203 586
Average balance ........................... 4,863 19,617 23,801 23,266
Yield ..................................... 2.06% 4.60% 1.72% 5.08%
Investment securities:
Interest (TE) ............................. 5,269 4,936 9,948 9,772
Average balance ........................... 347,245 288,129 324,861 285,494
Yield ..................................... 6.09% 6.81% 6.18% 6.84%
Total earning assets:
Interest (TE) ........................ 20,759 23,282 41,061 46,807
Average balance ...................... 1,182,856 1,120,219 1,172,963 1,119,622
Yield ................................ 7.04% 8.32% 7.06% 8.41%
Interest Bearing Liabilities:
Interest bearing demand deposit accounts:
Interest .................................. 422 554 839 1,176
Average balance ........................... 94,330 77,607 93,453 77,219
Rate ...................................... 1.79% 2.86% 1.81% 3.07%
Savings and money market accounts:
Interest .................................. 1,169 1,701 2,343 3,734
Average balance ........................... 293,261 251,988 291,570 255,172
Rate ...................................... 1.60% 2.71% 1.62% 2.95%
Time deposits:
Interest .................................. 4,532 8,253 9,445 16,818
Average balance ........................... 569,184 586,144 563,882 583,908
Rate ...................................... 3.19% 5.65% 3.38% 5.81%
Total interest bearing deposits:
Interest ............................. 6,123 10,508 12,627 21,728
Average balance ...................... 956,775 915,739 948,905 916,299
Rate ................................. 2.57% 4.60% 2.68% 4.78%
Other interest bearing liabilities:
Interest .................................. 597 360 1,183 731
Average balance ........................... 55,155 24,000 54,622 24,079
Rate ...................................... 4.34% 6.02% 4.37% 6.12%
Total interest bearing liabilities:
Interest ............................. 6,720 10,868 13,810 22,459
Average balance ...................... 1,011,930 939,739 1,003,527 940,378
Rate ................................. 2.66% 4.64% 2.78% 4.82%
Net interest income (TE) ........................ $ 14,039 $ 12,414 $ 27,251 $ 24,348
Net interest margin (TE) ........................ 4.75% 4.43% 4.67% 4.37%
* Interest amounts annualized for purposes of calculating yields and rates
TE - taxable equivalent basis