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
January 22, 2003
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Date of Report (Date of Earliest Event Reported)
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 Other (Commission (I.R.S. Iden-
Jurisdiction of File tification
Incorporation) Number) Number)
209 Troy Street, Tupelo, Mississippi 38802-0709
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number: (662)680-1001
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(a) The following exhibit is filed herewith:
99.1 Press Release, dated January 22, 2003, issued by The Peoples
Holding Company.
ITEM 9: REGULATION FD DISCLOSURE.
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At the close of business on January 22, 2003, The Peoples Holding
Company issued a press release announcing record fourth quarter and
annual earnings for 2002. The press release is filed as Exhibit 99.1
to this Form 8-K.
SIGNATURE
Pursuant to the requirements of The Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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: January 22, 2003
EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION
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99.1 Press Release, dated January 22, 2003, issued by
The Peoples Holding Company.
EXHIBIT 99.1
The Peoples Holding Company
Contact: Jim Gray Stuart Johnson
Executive Vice President Executive Vice President & CFO
(662) 680-1217 (662) 680-1001
jimg@thepeopleplace.com stuartj@thepeopleplace.com
THE PEOPLES HOLDING COMPANY ANNOUNCES RECORD
FOURTH QUARTER AND ANNUAL RESULTS
TUPELO, Miss. (January 22, 2003) - The Peoples Holding Company (AMEX:PHC) today
announced record results for the fourth quarter and year ended December 31,
2002. Earnings per share for the fourth quarter increased 22.39% to $0.82 from
$0.67 in the same period a year ago. Net income for the fourth quarter increased
18.57% to $4,572,000 from $3,856,000 in the fourth quarter of 2001. Net interest
income for the fourth quarter of 2002 was up 6.64% while non-interest income
grew 8.39%. These results produced an annualized return on average equity of
13.48% compared with 12.28% for the fourth quarter of 2001. The annualized
return on average assets for the fourth quarter was 1.35% compared with 1.22%
for the prior-year period.
ANNUAL EARNINGS PERFORMANCE
Earnings per share, before the cumulative effect of an accounting change
recognized in the first quarter of 2002, increased 27.02% to $3.15 from $2.48
per share in 2001. Net income, before the cumulative effect of the accounting
change, increased 21.14% to $17,670,000 from $14,587,000 in 2001. As a result,
the return on average equity before the accounting change for 2002 increased to
13.87% from 11.70% in 2001 and the return on average assets grew to 1.35% in
2002 from 1.18% the previous year. Earnings per share for the year ended
December 31, 2002, increased 17.74% to $2.92 from $2.48 per share for 2001. Net
income for 2002 increased 12.22% to $16,370,000 from $14,587,000 for 2001.
"We are particularly pleased that, despite a general slowing in the economy, we
have established consistent and sustained earnings growth," said E. Robinson
McGraw, President and Chief Executive Officer of The Peoples Holding Company.
"The record results reflect success in virtually every area of the Company. Both
loans and deposits continued to grow. Risk-based pricing for loans helped
improve asset quality and the net interest margin. Non-interest income continued
to increase as we work toward achieving our strategic goal of becoming our
clients primary source for all their financial services."
STOCK PRICE, DIVIDENDS AND REPURCHASES
After more than doubling in price in 2001, the Company's stock ended the year at
$40.75, up 10.14% for 2002. That compares with a 4% decline in the Standard &
Poor's bank index for 2002.
The Company's board of directors increased the quarterly cash dividend twice in
2002. The first increase, declared in June, was from $0.25 per share to $0.26
per share. The second increase, declared in November, moved the dividend up to
$0.27 per share. This now represents an annual cash dividend of $1.08 per share
and marks the sixteenth consecutive yearly increase.
As part of an overall capital management process, the Company has an ongoing
stock repurchase program. During 2002 the Company repurchased 129,947 shares of
its common stock at an average price of $36.09 per share. At year-end, the
Company had an additional 303,776 shares, or approximately 5% of the Company's
shares outstanding, authorized for repurchase.
FINANCIAL DETAILS
Net interest margin for the fourth quarter of 2002 was 4.61% up from 4.54% for
the comparable period in 2001. For the year, net interest margin increased to
4.66% from 4.47% in 2001. This improvement has occurred despite an aggressive
economic stimulus program by the Federal Reserve that produced twelve interest
rate reductions during the last two years.
McGraw indicated that loan quality improved again in 2002 as the Company
continued to utilize new tools for credit scoring and risk assessment. The
provision for loan losses was $4,350,000 in 2002, down 9.19% from $4,790,000 in
2001 and down 31.74% from the 2000 provision. Allowance for loan losses as a
percentage of loans was 1.41% at year-end 2002 compared with 1.37% at
December 31, 2001. Net charge-offs as a percentage of average loans decreased to
0.42% at December 31, 2002, from 0.49% in the prior year. Non-performing loans
as a percentage of total loans decreased to 0.42% at December 31, 2002, from
0.77% in 2001. The non-performing loan coverage ratio was 338.22% for 2002
compared with 178.63% for 2001.
Non-interest income increased 12.52% to $27,442,000 from $24,389,000 in 2001.
"This increase resulted from the sale of property and casualty insurance
products, fees from wealth management and trust services, loan and deposit fees,
merchant discount services, and debit card income. The growth in non-interest
income demonstrates progress toward becoming the financial services provider of
choice in the communities we serve," McGraw said. At year-end 2002, non-interest
income represented 25.92% of gross income.
Non-interest expense increased 8.02% for 2002. This was primarily due to
increases in depreciation related to recent technology upgrades, computer
processing charges, normal salary increases, commission and incentive bonuses,
and increased health insurance premiums. Net non-interest expense as a
percentage of assets improved to 1.77% for 2002 from 1.82% in 2001.
CONFERENCE CALL INFORMATION
A live audio webcast of a conference call with analysts will be available
beginning at 11:00 a.m. Eastern time on Friday, January 24, 2003, through the
Investor Relations page of the Company's website:
www.thepeoplesbankandtrust.com, and through www.companyboardroom.com, or any of
CCBN's distribution network. The event will be archived for 30 days. If Internet
access is unavailable, the conference may also be heard live (listen-only) via
telephone by dialing (913) 981-5520. A telephonic replay of the conference call
will be available approximately two hours after the call ends and run through
the end of the business day on January 31. To listen to the replay, dial (719)
457-0820, and enter 106664 when prompted for the access code.
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 also is parent of The Peoples
Insurance Agency, Inc. The Peoples Bank has assets of approximately $1.3 billion
and operates 40 community bank 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 expresses 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.
THE PEOPLES HOLDING COMPANY
Summary Financial Highlights (Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
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Earnings Summary 2002 2001 2002 2001
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Net interest income .................................. $ 13,050 $ 12,238 $ 51,893 $ 46,844
Provision for loan losses ............................ 1,025 1,315 4,350 4,790
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Net interest income after provision for loan losses .. 12,025 10,923 47,543 42,054
Noninterest income ................................... 7,198 6,641 27,442 24,389
Noninterest expenses ................................. 13,030 12,444 50,496 46,747
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Income before provision for income taxes ............. 6,193 5,120 24,489 19,696
Provision for income taxes ........................... 1,621 1,264 6,819 5,109
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Income before cumulative effect of accounting change . 4,572 3,856 17,670 14,587
Cumulative effect of accounting change ............... -- -- (1,300) --
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Net income ........................................... $ 4,572 $ 3,856 $ 16,370 $ 14,587
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Basic and diluted earnings per share:
Income before cumulative effect of accounting change. $ 0.82 $ 0.67 $ 3.15 $ 2.48
Cumulative effect of accounting change .............. -- -- (0.23) --
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Net income .......................................... $ 0.82 $ 0.67 $ 2.92 $ 2.48
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Weighted average shares outstanding - Basic .......... 5,574,162 5,719,549 5,609,289 5,873,423
Weighted average shares outstanding - Diluted ........ 5,580,698 5,719,549 5,614,266 5,873,423
Selected Ratios
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Net interest rate spread ............................. 4.26% 4.02% 4.27% 3.80%
Net interest margin .................................. 4.61% 4.54% 4.66% 4.47%
Noninterest expense ratio ............................ 3.94% 3.93% 3.86% 3.78%
Overhead ratio ....................................... 1.84% 1.83% 1.77% 1.82%
Return on average assets ............................. 1.35% 1.22% 1.25% 1.18%
Return on average equity ............................. 13.48% 12.28% 12.85% 11.70%
Dec. 31, Dec. 31,
Balance Sheet Summary: 2002 2001
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Total assets ........................................................................ $ 1,344,512 $ 1,254,727
Loans, net .......................................................................... 863,308 827,696
Deposits ............................................................................ 1,099,048 1,063,055
Shareholders' equity ................................................................ 132,778 123,582
Book value per common share ......................................................... 23.82 21.66
Financial information contained in this news release is derived from the
unaudited Condensed Balance Sheets and unaudited Condensed Statements of
Operations for the indicated periods. Additional financial information is
available on the Company's website (www.thepeoplesbankandtrust.com) under the
Financial Releases section of Investor Relations.