MARIETTA, Ohio, April 24, 2018 /PRNewswire/ -- Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for the quarter ended March 31, 2018.  Net income totaled $11.7 million for the first quarter of 2018, representing earnings per diluted common share of $0.64.  During the first quarter of 2018, earnings per diluted common share were positively impacted by $0.06 due to the reduced effective tax rate associated with the Tax Cuts and Jobs Act enacted in December 2017, and by $0.03 due to increases in the fair value of investments in equity securities.  In addition, earnings per diluted common share were negatively impacted by $0.01 due to non-core charges.  In comparison, earnings per diluted common share were $0.49 for the fourth quarter of 2017 and $0.48 for the first quarter of 2017.

On April 13, 2018, Peoples completed the previously announced merger with ASB Financial Corp. ("ASB").  ASB merged into Peoples and ASB's wholly-owned subsidiary, American Savings Bank, fsb, which operated six full service bank branches and two loan production offices in southern Ohio and northern Kentucky, merged into Peoples Bank.  Consideration of $41.5 million was paid for the acquisition, which was slightly higher than Peoples' initial estimate, due to a higher price of Peoples' common shares on the effective date of the merger, and a lower election of cash versus Peoples' common shares by the ASB shareholders than anticipated.

"We are pleased to announce record quarterly net income for the first quarter of 2018.  We generated positive operating leverage and achieved meaningful loan growth during the quarter.  Additionally, we improved key metrics, including our efficiency ratio, return on average assets, return on average stockholders' equity, and pre-provision net revenue, which demonstrates our continued focus on strengthening our core business," said Chuck Sulerzyski, President and Chief Executive Officer.  "We have remained disciplined in our approach to growing revenues faster than expenses, resulting in an improvement in the efficiency ratio of more than 300 basis points compared to the first quarter of 2017.  We are pleased with the good start to the year and believe we are well positioned to continue to provide solid shareholder returns as we move forward in 2018 and beyond.

"Of equal or greater importance, we are also pleased to welcome the shareholders, customers, employees and communities of ASB to Peoples."

Statement of Operations Highlights:

• Net interest income grew 1% compared to the fourth quarter of 2017, which included two additional days, and 9% compared to the first quarter of 2017.
• Net interest margin was 3.66% for the first quarter of 2018, compared to 3.63% for the linked quarter and 3.55% for the first quarter of 2017.
• The first quarter of 2018 benefited from proceeds received on an investment security that had previously been written down due to an other-than-temporary impairment, which added 4 basis points to net interest margin.
• Provision for loan losses was $2.0 million for the first quarter of 2018, an increase of $0.9 million from the linked quarter, and $1.4 million from the first quarter of 2017.
• During the first quarter of 2018, a charge-off of $827,000 was recorded for one acquired commercial loan relationship.
• Total fee-based income increased 14% during the first quarter of 2018 compared to the linked quarter, and 12% compared to the first quarter of 2017.
• The increase compared to the linked quarter was largely due to annual performance-based insurance commissions, which are recognized in the first quarter of each year.
• The increase compared to the first quarter of 2017 was partially due to the implementation of the new revenue recognition accounting standard and income related to the acquisition of a third-party insurance administration company on January 31, 2017 and a property and casualty focused independent insurance agency on October 2, 2017.
• Total non-interest expense was up 3% for the first quarter of 2018 compared to both the linked quarter and the first quarter of 2017.
• The first quarter of 2018 included certain salaries and benefits expenses that will not recur in subsequent quarters of 2018, including Health Savings Account contributions and a one-time stock award granted to employees, which together accounted for 57% of the increase in salaries and benefits expenses compared to the linked quarter.
• The efficiency ratio continued to improve and was 61.8% for the first quarter of 2018, compared to 62.1% for the fourth quarter of 2018 and 64.9% for the first quarter of 2017.
• Operating leverage was positive for the first quarter of 2018 compared to the first quarter of 2017.
• Compared to the first quarter of 2017, revenue was up 10%, while expenses grew 3%.
• Accounting Standards Update ("ASU") 2016-01, which requires changes in the fair value of equity securities to be recognized in income beginning January 1, 2018, contributed 2% of the revenue growth for the quarter.

Balance Sheet Highlights:

• Period-end loan balances grew 8%, on an annualized basis, compared to December 31, 2017, while average loan balances for the first quarter of 2018 grew 6% compared to the first quarter of 2017.
• Commercial loan balances grew $32.4 million, or 10% annualized, during the first quarter of 2018 compared to December 31, 2017, and $118.8 million, or 9%, compared to March 31, 2017.
• Indirect consumer loans grew $7.1 million, or 8% annualized, during the first quarter of 2018 compared to December 31, 2017, and $64.1 million, or 23%, compared to March 31, 2017.
• Asset quality remained relatively stable during the quarter.
• Nonperforming assets decreased to 0.72% of total loans and other real estate owned ("OREO") at March 31, 2018 compared to 0.74% at December 31, 2017, and 0.98% at March 31, 2017.
• Nonperforming assets decreased 1% at March 31, 2018, compared to December 31, 2017, and 21% compared to March 31, 2017.
• Allowance for loan losses as a percent of total loans was 0.78% at March 31, 2018, compared to 0.80% at December 31, 2017, and 0.82% at March 31, 2017.
• Compared to December 31, 2017, classified loans decreased $1.7 million, while criticized loans increased $25.9 million.
• Period-end total deposit balances at March 31, 2018 increased $82.9 million, or 3%, compared to December 31, 2017, and $111.0 million, or 4%, compared to March 31, 2017.
• Growth in governmental deposit balances during the first quarter of 2018 was $77.4 million, or 29%, compared to December 31, 2017, due primarily to seasonality.
• Total demand deposit balances were 41% of total deposits at March 31, 2018, compared to 42% at December 31, 2017, and 40% at March 31, 2017.

Net Interest Income:
Net interest income was $29.4 million for the first quarter of 2018, a 1% increase compared to the linked quarter and a 9% increase over the first quarter of 2017.  Net interest margin increased to 3.66% for the first quarter of 2018, compared to 3.63% for the fourth quarter of 2017 and 3.55% for the first quarter of 2017.  The increase in net interest income compared to the first quarter of 2017 was primarily due to loan growth and increasing interest rates.  The first quarter of 2018 also benefited from proceeds of $341,000 received on an investment security that had been previously written down due to an other-than-temporary impairment, which added 4 basis points to net interest margin for the quarter.  The increase in net interest income compared to the linked quarter was muted by two fewer days, in which interest was not earned during the first quarter of 2018.

The accretion income from acquisitions, net of amortization expense, was $566,000 for the first quarter of 2018, compared to $715,000 for the fourth quarter of 2017, and $829,000 for the first quarter of 2017, which added 7 basis points, 8 basis points, and 11 basis points, respectively, to net interest margin.

Provision for Loan Losses:
The provision for loan losses was $2.0 million for the first quarter of 2018, compared to $1.1 million for the fourth quarter of 2017 and $0.6 million for the first quarter of 2017.  During the first quarter of 2018, provision for loan losses increased due to circumstances that decreased the likelihood of collectibility for one acquired commercial loan relationship, which was ultimately charged off in the amount of $827,000 at the end of the first quarter of 2018.  The increase in the first quarter of 2018 compared to both the fourth quarter of 2017 and the first quarter of 2017 was also due to loan growth, partially offset by improvements in certain asset quality metrics. 

Total Fee-based Income:
Total fee-based income for the first quarter of 2018 was $14.9 million, compared to $13.1 million for the fourth quarter of 2017 and $13.3 million for the first quarter of 2017.  The increase of $1.8 million, or 14%, compared to the linked quarter was largely attributable to annual performance-based insurance commissions, which are primarily recognized in the first quarter of each year.  The annual performance-based insurance commissions for the first quarter of 2018 and the first quarter of 2017 were $1.3 million.  In addition, the implementation of ASU 2016-01, requiring changes in the fair value of equity securities to be recognized in income beginning January 1, 2018, added $460,000 to fee-based income during the first quarter of 2018.  An additional contributor to the increase in fee-based income compared to the fourth quarter of 2017 was Small Business Administration ("SBA") loan sale revenue of $313,000 recorded during the first quarter of 2018.  These increases were partially offset by a decrease of $364,000 in deposit account service charges compared to the linked quarter, which was largely due to a decline in overdrafts and non-sufficient funds fees.  During the first quarter of 2018, changes were made to the overdraft and non-sufficient funds methodology to be more in-line with industry practices.  The amount of deposit account service charges, particularly fees for overdrafts and non-sufficient funds, is largely dependent on the timing and volume of customer activity.

The increase of $1.6 million, or 12%, compared to the first quarter of 2017 was due in part to growth in insurance income, resulting from the implementation of the new revenue recognition accounting standard that was effective January 1, 2018, and the acquisition of a third-party insurance administration company on January 31, 2017 and a property and casualty focused independent insurance agency on October 2, 2017.  Other factors that contributed to the increase in total fee-based income compared to the first quarter of 2017 were growth in trust and investment income, primarily resulting from increases in assets under administration and management, and growth in electronic banking income, primarily resulting from an increase in customer transaction volume.  These factors were partially offset by a decrease in commercial loan swap fee income, which is dependent upon customer demand.

Total Non-interest Expense:
Total non-interest expense for the first quarter of 2018 was $28.2 million, compared to $27.4 million for the fourth quarter of 2017 and $27.3 million for the first quarter of 2017.  The increase compared to the linked quarter was primarily attributable to an increase in salaries and employee benefit costs, partially offset by a decrease in professional fees.  The increase in salaries and employee benefit costs was primarily attributable to increased stock-based compensation.   During the first quarter of 2018, the Board of Directors granted a one-time stock award of unrestricted common shares to all full-time and part-time employees who did not already participate in the equity plan, which resulted in an expense of $388,000.  In addition, Health Savings Account contributions are recorded in the first quarter of each year and resulted in an expense of $405,000 in the first quarter of 2018.  Additional contributors to the increase in salaries and employee benefit costs compared to the fourth quarter of 2017 were annual merit increases and an increase in employee count.  The decrease in professional fees during the first quarter of 2018 compared to the fourth quarter of 2017 was largely due to decreased acquisition-related charges. 

The increase in total non-interest expense compared to the first quarter of 2017 was largely due to increases in salaries and employee benefits costs, driven by the one-time stock award granted by the Board in the first quarter of 2018, annual merit increases, and an increase in employee count, partially offset by a decrease in medical insurance benefits expense.  An additional contributor to the increase in total non-interest expense compared to the first quarter of 2017 was an increase in data processing and software expense, driven by the implementation of enhanced functionalities for Peoples' core banking system, including certain mobile banking tools made available to customers.

Total non-interest expense, adjusted for non-core charges, was $28.1 million for the first quarter of 2018, compared to $26.8 million for the fourth quarter of 2017, and $27.3 for the first quarter of 2017.  In the first quarter of 2018, Peoples recognized $149,000 of acquisition-related costs.  In the fourth quarter of 2017, Peoples recognized $341,000 of acquisition-related costs and a $242,000 pension settlement charge.  No non-core charges were recorded in the first quarter of 2017.

The efficiency ratio for the first quarter of 2018 was 61.8%, compared to 62.1% for the linked quarter, and 64.9% for the first quarter of 2017.  The efficiency ratio, when adjusted for non-core charges, was 61.4% for the first quarter of 2018, compared to 60.7% for the linked quarter, and 64.9% for the first quarter of 2017.  The efficiency ratio, when adjusted for non-core charges, has remained below 65% for the last 10 quarters, with the increase compared to the linked quarter due primarily to the increase in total non-interest expense.

Income Tax Expense:
For the first quarter of 2018, Peoples recorded income tax expense of $2.4 million, compared to $5.3 million for the linked quarter, and $3.9 million for the first quarter of 2017.  The reduction in the income tax expense reported in the first quarter of 2018 was largely due to the decrease in the federal statutory corporate income tax rate from 35% to 21% as a result of the Tax Cuts and Jobs Act enacted in December 2017, and its impact on Peoples' effective tax rate, which decreased to 16.9%, compared to 37.2% for the fourth quarter of 2017 and 30.4% for the first quarter of 2017.  The first quarter of 2018 included a tax benefit of $290,000 as a result of stock awards that settled or vested during the quarter, compared to $104,000 tax benefit during the first quarter of 2017.  The settlement or vesting of a majority of stock awards granted by Peoples is recorded annually in the first quarter.  The fourth quarter of 2017 was impacted by the write down of $897,000 of net deferred tax assets that had been recorded in December 2017 in connection with the enactment of the Tax Cuts and Jobs Act.

Loans:
Period-end total loan balances at March 31, 2018 increased $45.2 million, or 8% annualized, compared to December 31, 2017.  Commercial lending continued to be a key component of loan growth, as commercial loan balances increased $32.4 million, or 10% annualized, during the quarter.  The growth in commercial loan balances was almost evenly split between commercial and industrial loans, which grew $16.5 million, or 14% annualized, and commercial real estate loans, which grew $15.9 million, or 7% annualized.  Residential real estate loans grew $7.6 million, or 6% annualized, compared to December 31, 2017, which was largely the result of Peoples acquiring a loan portfolio in the amount of $16.5 million.  Indirect consumer lending also contributed to the total increase in loan balances, with growth of $7.1 million, or 8% annualized, during the quarter.

Compared to March 31, 2017, period-end loan balances at March 31, 2018 increased $152.8 million, or 7%.  The increase was primarily the result of commercial loan growth of $118.8 million, or 9%, which was almost evenly split between commercial and industrial loans, which grew $60.3 million, or 14%, and commercial real estate loans, which grew $58.5 million, or 7%.  From a bank regulatory perspective, non-owner-occupied commercial real estate loan balances as of March 31, 2018 remained well below the financial institutions regulators' guidance of 300% of total risk-based capital.  The ratio at March 31, 2018 of non-owner-occupied commercial real estate loans to total risk-based capital was 155%, compared to 154% as of December 31, 2017, and 152% as of March 31, 2017.  Indirect consumer lending also contributed loan growth of $64.1 million, or 23%, compared to March 31, 2017, and was partially offset by decreases in residential real estate loans.  At both March 31, 2018 and December 31, 2017, commercial and industrial loan balances comprised 20%, and indirect consumer loan balances comprised 14% of the total loan portfolio, compared to 19% and 13%, respectively, at March 31, 2017.  The growth in indirect consumer loan balances has moderated over the last few quarters due to the increases in pricing that Peoples has implemented periodically over the last year, and increased competition.

Quarterly average gross loan balances increased $34.7 million, or 6% annualized, compared to the linked quarter.  Commercial loans provided growth of $38.2 million, while consumer indirect loan growth of $4.5 million was more than offset by decreases in other consumer lending categories.  Quarterly average gross loan balances for the three months ended March 31, 2018 increased 6% compared to the same period in 2017, with commercial loan growth of $101.7 million, or 8%, and consumer indirect loan growth of $73.3 million, or 27%.

Asset Quality:
Asset quality metrics remained stable during the first quarter of 2018.  Nonperforming assets as a percent of total loans and OREO decreased to 0.72% at March 31, 2018, compared to 0.74% at December 31, 2017 and 0.98% at March 31, 2017.  At March 31, 2018, nonperforming assets declined 1% from December 31, 2017, and 21% from March 31, 2017.

Annualized net charge-offs were 0.34% of average gross loans during the first quarter of 2018, compared to 0.22% in the linked quarter and 0.11% in the first quarter of 2017.  The higher net charge-off rate during the first quarter of 2018 was primarily due to the charge-off of a single acquired commercial loan relationship.

Classified loans, which are those categorized as substandard or doubtful, decreased $1.7 million, or 4%, compared to December 31, 2017 and $11.8 million, or 21%, compared to March 31, 2017.  As a percent of total loans, classified loans were 1.86% at March 31, 2018, compared to 1.97% at December 31, 2017 and 2.51% at March 31, 2017.  Criticized loans, which are those categorized as special mention, substandard or doubtful, increased $25.9 million, or 29%, compared to December 31, 2017, and increased $15.0 million, or 15%, compared to March 31, 2017.  As a percent of total loans, criticized loans were 4.84% at March 31, 2018, compared to 3.83% at December 31, 2017 and 4.50% at March 31, 2017.  The increase in criticized loans compared to the end of the linked quarter was primarily due to the downgrade of one large commercial loan relationship.

At March 31, 2018, the allowance for loan losses remained flat at $18.8 million compared to December 31, 2017, and increased $0.3 million compared to March 31, 2017.  The ratio of the allowance for loan losses as a percent of total loans was 0.78% at March 31, 2018, compared to 0.80% at December 31, 2017, and 0.82% at March 31, 2017.  The ratio includes total acquired loans of $413.2 million and allowance for acquired loan losses of $0.1 million.

Deposits:
As of March 31, 2018, period-end deposits increased $82.9 million, or 3%, compared to December 31, 2017, and $111.0 million, or 4%, compared to March 31, 2017.  Compared to the end of the linked quarter, the growth was largely due to an increase of $77.4 million, or 29%, in governmental deposits.  Balances in governmental deposits are seasonally higher in the first quarter of each year compared to other quarters.  Deposit balances for commercial customers in total were up $111.1 million at March 31, 2018 compared to December 31, 2017, and were partially offset by decreases of $28.2 million in consumer customer deposit balances.

Compared to the end of the first quarter of 2017, the increase was primarily attributable to growth of $78.1 million in demand deposit accounts, which was largely driven by increases in commercial customer balances.  In addition, total certificates of deposit grew $28.5 million compared to the end of the first quarter of 2017.  Total certificates of deposit increased compared to the first quarter of 2017 primarily due to the addition of relatively shorter term funding on the balance sheet in the form of brokered certificates of deposit.  Increases in deposit balances for commercial customers contributed 71% of the growth in total deposits at March 31, 2018 compared to March 31, 2017.

Average deposits for the first quarter of 2018 were relatively flat, increasing $9.7 million compared to the linked quarter.  This increase was largely attributable to increases of $14.7 million in total certificates of deposit, $10.1 million in governmental deposits, and $9.8 million in savings accounts, offset by decreases of $14.9 million in demand deposit accounts and $9.9 million in money market deposit accounts.  Compared to the first quarter of 2017, average deposits were up $133.5 million, or 5%, for the first quarter of 2018, largely due to increases of $75.8 million in demand deposit accounts, $71.7 million in brokered certificates of deposit, and $13.7 million in savings accounts, partially offset by a decrease of $30.9 million in money market deposit accounts.

Total demand deposit accounts comprised 41% of total deposits at March 31, 2018, compared to 42% at December 31, 2017 and 40% at March 31, 2017.

Stockholders' Equity:
At March 31, 2018, the tier 1 risk-based capital ratio was 13.57%, compared to 13.52% at December 31, 2017, and 13.34% at March 31, 2017.  The common equity tier 1 risk-based capital ratio was 13.28% at March 31, 2018, compared to 13.23% at December 31, 2017, and 13.05% at March 31, 2017.  The total risk-based capital ratio was 14.31% at March 31, 2018, compared to 14.39% at December 31, 2017 and 14.27% at March 31, 2017.  These capital ratios were impacted by increased earnings during the first quarter of 2018, compared to both the linked quarter and the first quarter of 2017, which exceeded the dividends declared and paid during the first quarter of 2018 by $7.0 million.

Peoples' capital position remained strong at March 31, 2018.  The book value per share was $24.87 at March 31, 2018, compared to $25.08 at December 31, 2017, and $24.25 at March 31, 2017.  The tangible book value per share was $17.04 at March 31, 2018, compared to $17.17 at December 31, 2017, and $16.28 at March 31, 2017.  The tangible equity to tangible assets ratio was 8.97% at March 31, 2018, compared to 9.14% at December 31, 2017, and 8.98% at March 31, 2017.  The primary contributor to the decrease in the book value per share, the tangible book value per share, and the tangible equity to tangible assets ratio at March 31, 2018 compared to December 31, 2017 was a decline in the market value of debt securities held within the investment portfolio.

Peoples Bancorp Inc. is a diversified financial services holding company with $3.9 billion in total assets, 81 locations, including 71 full-service bank branches, and 77 ATMs in Ohio, West Virginia and Kentucky.  Peoples makes available a complete line of banking, investment, insurance and trust solutions through its subsidiaries - 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 U.S. 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 2018 results of operations today at 11:00 a.m., Eastern Daylight Savings Time, with members of Peoples' executive management participating.  Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285.  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.

Use of Non-GAAP Financial Measures:
This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP").  Management uses these "non-GAAP" financial measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the non-GAAP financial measures used in this news release:

• Core non-interest expenses are non-GAAP since they exclude the impact of acquisition-related costs and pension settlement charges.
• Efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total fee-based income.  This measure is non-GAAP since it excludes amortization of other intangible assets and all gains and/or losses included in earnings (which are excluded from total fee-based income), and uses fully tax-equivalent net interest income.
• Tangible assets, tangible equity and tangible book value per common share measures are non-GAAP since they exclude the impact of goodwill and other intangible assets acquired through acquisitions on both total stockholders' equity and total assets.
• Pre-provision net revenue is defined as net interest income plus total fee-based income minus total non-interest expense.  This measure is non-GAAP since it excludes the provision for loan losses and all gains and/or losses included in earnings, which are excluded from total fee-based income.
• Return on tangible stockholders' equity is calculated as net income (less after-tax impact of amortization of other intangible assets) divided by tangible stockholders' equity.  This measure is non-GAAP since it excludes the after-tax impact of amortization of other intangible assets from earnings and the impact of goodwill and other intangible assets acquired through acquisitions on total stockholders' equity.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included at the end of this news release under the caption of "Non-GAAP Financial Measures."

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," "estimate," "may," "feel," "expect," "believe," "plan," "will," "would," "should," "could" 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. the success, impact, and timing of the implementation of Peoples' business strategies, including the successful integration of acquisitions and the expansion of consumer lending activity;
2. Peoples' ability to integrate acquisitions, including the merger with ASB, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;
3. competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, changes to third-party relationships and revenues, and Peoples' ability to attract, develop and retain qualified professionals;
4. changes in the interest rate environment due to economic conditions and/or the fiscal policies of the United States ("U.S.") government and the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which may adversely impact interest rates, interest margins, loan demand and interest rate sensitivity;
5. uncertainty regarding the nature, timing and effect of legislative or regulatory changes or actions, promulgated and to be promulgated by governmental and regulatory agencies in the State of Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses, including in particular the rules and regulations promulgated and to be promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Basel III regulatory capital reform;
6. uncertainties in Peoples' preliminary review of, and additional analysis of, the impact of the Tax Cuts and Jobs Act;
7. local, regional, national and international economic conditions and the impact these conditions may have on Peoples, its customers and its counterparties, and Peoples' assessment of the impact, which may be different than anticipated;
8. Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;
9. changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated;
10. adverse changes in the economic conditions and/or activities, including, but not limited to, continued economic uncertainty in the U.S., the European Union (including the uncertainty surrounding the actions to be taken to implement the referendum by British voters to exit the European Union), Asia, and other areas, which could decrease sales volumes, add volatility to the global stock markets, and increase loan delinquencies and defaults;
11. deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses;
12. changes in accounting standards, policies, estimates or procedures which may adversely affect Peoples' reported financial condition or results of operations;
13. Peoples' assumptions and estimates used in applying critical accounting policies, which may prove unreliable, inaccurate or not predictive of actual results;
14. adverse changes in the conditions and trends in the financial markets, including political developments, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;
15. Peoples' ability to receive dividends from its subsidiaries;
16. Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
17. the impact of minimum capital thresholds established as a part of the implementation of Basel III;
18. the impact of larger or similar sized financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity;
19. the costs and effects of new federal and state laws, and regulatory and legal developments, including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations;
20. Peoples' ability to secure confidential information through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;
21. Peoples' reliance on, and the potential failure of, a number of third party vendors to perform as expected, including its primary core banking system provider;
22. Peoples' ability to anticipate and respond to technological changes which can impact Peoples' ability to respond to customer needs and meet competitive demands;
23. changes in consumer spending, borrowing and saving habits, whether due to the recently enacted tax legislation,  changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;
24. the overall adequacy of Peoples' risk management program;
25. the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters, pandemics, cyber attacks, civil unrest, military or terrorist activities or international conflicts;
26. significant changes in the tax laws, which may adversely affect the fair values of deferred tax assets and obligations of states and political subdivisions held in Peoples' investment securities portfolio;
27. Peoples' continued ability to grow deposits; and
28. other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the 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, 2017.

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 March 31, 2018 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.