PEOPLES BANCORP INC. RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
SIGNATURES
===========
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
Date: June 12, 2003 By:/s/ ROBERT E. EVANS
-------------------------------------
Robert E. Evans
President and Chief Executive Officer
CONTENTS
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PAGE
Independent Auditor's Report ................................................1
Statements of Net Assets Available for Benefits at
December 31, 2002 and 2001.............................................2
Statements of Changes in Net Assets Available for the
Years Ended December 31, 2002 and 2001.....................................3
Notes to Financial Statements..............................................4-9
SUPPLEMENTAL INFORMATION
Schedule of Assets Held for Investment Purposes at the End of Year..........10
May 22, 2003
To the Plan Administrative Committee
Peoples Bancorp, Inc. Retirement Savings Plan
Marietta, Ohio
INDEPENDENT AUDITORS' REPORT
----------------------------
We have audited the accompanying statements of net assets
available for benefits of Peoples Bancorp, Inc. Retirement
Savings Plan as of December 31, 2002 and 2001, and the related
statements of changes in net assets available for benefits for
the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with U. S. generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the December 31, 2002 and 2001 financial
statements referred to above present fairly, in all material
respects, the net assets available for benefits with fund
information of Peoples Bancorp, Inc. Retirement Savings Plan
as of December 31, 2002 and 2001, and the changes in net
assets available for benefits with fund information for the
years then ended in conformity with U.S. generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental information included in Schedule H - Assets Held
for Investment Purposes at End of Year referred to as
"Supplemental Information" is presented for the purpose of
additional analysis and is not a required part of the basic
financial statements but is supplementary information required
by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental information is the
responsibility of the Plan's management. The supplemental
information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
REA & ASSOCIATES, INC.
PEOPLES BANCORP, INC. RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2002 AND 2001
ASSETS
2002 2001
-------- ---------
ASSETS
Cash and cash equivalents $ 0 $ 429
Investments, at fair value:
Money market funds 293,810 3,723,181
Peoples certificates of deposit 0 1,090,051
Shares of Registered Investment Companies 3,125,176 1,284,835
Shares of Common/Collective Trusts 3,192,167 0
Common stock-Peoples Bancorp Stock Fund 7,116,109 5,140,753
Participant loan receivable 262,406 250,626
---------- ----------
Total investments 13,989,668 11,489,446
Receivables:
Interest and dividends receivable 41,233 45,041
---------- ----------
Total receivables 41,233 45,041
TOTAL ASSETS 14,030,901 11,534,916
LIABILITIES
Accrued expenses 4,086 0
Excess contributions payable 0 5,364
TOTAL LIABILITIES 4,086 5,364
Net assets available for benefits $ 14,026,815 $ 11,529,552
============ ============
PEOPLES BANCORP, INC. RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
2002 2001
------ -------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and dividend income $ 798,011 $ 297,277
Net realized gain and unrealized appreciation on investments 1,117,490 1,015,674
Participant contributions 816,948 649,133
Rollover contributions 89,906 103,629
Employers' contributions 413,324 351,551
--------- --------
Total additions 3,235,679 2,417,264
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 728,029 564,801
Administration fees 10,387 0
-------- --------
Total deductions 738,416 564,801
-------- --------
Net increase 2,497,263 1,852,463
Net Assets Available for Benefits
Beginning of year 11,529,552 9,677,089
----------- ----------
End of year $ 14,026,815 $ 11,529,552
============= =============
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
PEOPLES BANCORP, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1: DESCRIPTION OF PLAN
The following brief description of Peoples Bancorp, Inc.
Retirement Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
General
-------
The Plan is a defined contribution plan covering substantially
all employees of Peoples Bancorp, Inc. and its Subsidiary,
Peoples Bank, NA. The Plan is a qualified trust under Sections
401(a) and 401(k) of the Internal Revenue Code. The Plan is
subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). The Trustee of the Plan is
Invesco.
Eligibility
-----------
Employees are eligible to participate in the Plan upon
reaching age 21 and with one hour of service. The employee
completes the service requirement on his/her employment
commencement date. Employees may join the Plan at any time by
completing the election form on a day to day basis beginning
January 1, 2002.
Contributions
-------------
Each year, participants may contribute a percentage of pretax
annual compensation not to exceed a dollar limit which is set
by law. Participants may also directly rollover amounts
representing distributions from other qualified plans. In
addition, Peoples Bancorp, Inc. or its Subsidiary will make a
matching contribution on the employee's behalf. The amount of
this matching contribution will be determined each year by the
Employer's Board of Directors. Effective for 2002 and 2001,
the Employer's matching was 100% of the employee's
contribution up to the first 3% of the employee's compensation
and 50% of the employee's contribution on the next 2% of the
employee's compensation.
Participant Directed Investments
--------------------------------
Participants direct the investment of their contributions and
their allocated share of the matching contributions into
various investment options offered by the Plan. From the
period of January to October of 2002 the Plan was administered
by First Merchantile. The Plan currently offers twelve funds
as investment options for participants through the Plan's
administered trust fund with Invesco.
Participants may change their investment options at any time
via the internet.
PEOPLES BANCORP, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1: DESCRIPTION OF PLAN (Continued)
Participant Accounts
--------------------
Each participant's account is credited with the participant's
contribution and allocations of the Employer's matching
contribution and Plan earnings. Allocations are based on
participants' earnings or account balances, as defined. The
benefit to which a participant is entitled is the benefit that
can be provided from the participant's account.
Vesting
-------
Participants are immediately fully vested in their voluntary
contributions, the Employer's matching contributions and
actual earnings thereon.
Participant Loans Receivable
----------------------------
Participants may apply for a loan from their account under the
Plan. Certain legal restrictions impose limits on the amount
of the loan and repayment terms. The maximum loan amount is
$50,000. The specific limit for any participant is 50% of
their account balance. If a participant has an existing loan
at the time of application, the $50,000 limit is reduced by
the highest outstanding balance of the participant's loan over
the previous twelve-month period or the total of all
outstanding loans the day the new loan is granted. Generally,
the participant's loan must be repaid within five years,
unless the proceeds are used to purchase a principal
residence.
Payment of Benefits
-------------------
The participant's benefit will equal the sum of the salary
deferral, the voluntary nondeductible contribution, the
rollover contribution and the Employer's matching contribution
plus net income and net losses resulting from the investment
of these amounts as valued on the valuation date as defined.
Payment of such amounts upon termination of employment may be
deferred until the participant reaches normal retirement,
becomes eligible for early retirement benefits, terminates
employment prior to retirement, becomes disabled or dies. If
the benefit is $5,000 or less, the benefit will be paid in a
lump-sum payment. If the benefit exceeds $5,000, the
participant may elect to have benefits paid in a lump-sum
payment or in equal installments over a fixed period of time
not to exceed ten years.
If a participant dies without a surviving spouse, either
before or after retirement, but before a complete distribution
of their accounts, then the full value of the participant's
accounts will be paid to a designated beneficiary. If a
participant dies with a surviving spouse, either before or
after retirement, but before a complete distribution of their
accounts, then the full value of the participant's accounts
will be paid to the surviving spouse.
PEOPLES BANCORP, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
-------------------
The financial statements of the Plan are prepared using the
accrual method of accounting.
Estimates
---------
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Plan
administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
Investment Valuation and Income Recognition
-------------------------------------------
Shares of the common/collective trusts are valued at the
Plan's proportionate share of net shares of the fund as of the
most recent valuation date.
Shares of the registered investment companies are revalued at
quoted market prices which represent the net asset value of
shares held by the Plan at year end.
Investments in Peoples Bancorp, Inc. common stock are carried
at quoted market prices.
The investment in Peoples Bank, NA, certificates of deposit,
money market funds, and the participant loans are recorded at
cost which approximates fair market value.
Dividends and interest received from investments are recorded
as earned on an accrual basis.
The Plan presents in the Statement of Changes in Net Assets
Available for Benefits the net appreciation (depreciation) in
the fair value of its investments which consists of the
realized gains or losses and the unrealized appreciation
(depreciation) on those investments.
Payment of Benefits
-------------------
Benefits are recorded when paid.
PEOPLES BANCORP, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 3: INVESTMENTS
The Plan's investments are held by a bank-administered trust
fund. The following table presents the fair values of
investments. Investments that represent 5% or more of the
Plan's net assets are identified with an asterisk.
December 31,
----------------------------------------------------------------
2002 2001
------------------------------- -----------------------------
FAIR FAIR
UNITS VALUE UNITS VALUE
INVESTMENTS AT FAIR VALUE AS DETERMINED BY QUOTED MARKET
PRICE
Fidelity U.S. Treasury Income Portfolio Fund 0 $0 3,723,181 $ 3,723,181
Invesco Cash Reserve Fund 293,810 293,810 0 0
* Acorn Fund 70,015 1,085,232 71,859 1,284,835
American Century Strategic Allocation 1,290 6,289 0 0
American Growth Fund 18,358 339,079 0 0
Dodge & Cox Common Stock 2,083 183,378 0 0
* Dodge & Cox Balanced Fund 12,295 746,967 0 0
ING Pilgrim International Value 32,935 338,905 0 0
Aim Mid-Cap Core Equity 20,081 425,326 0 0
* Invesco 500 Index Trust 57,929 1,259,366 0 0
Invesco Structured Small-Cap Val Equity Trust 1,310 72,921 0 0
Invesco Core Fixed Income Trust 11,786 342,017 0 0
* Invesco Stable Value Trust 1,517,863 1,517,863 0 0
* Peoples Bancorp, Inc. Common Stock 531,551 7,116,109 280,150 5,140,753
----------- -----------
$13,727,262 $10,148,769
=========== ===========
INVESTMENTS AT ESTIMATED FAIR VALUE
Peoples Certificates of Deposit 0 $ 0 1,090,051 $ 1,090,051
Participants Loans Receivable 262,406 250,626
----------- -----------
$ 262,406 $ 1,340,677
----------- -----------
TOTAL INVESTMENTS $13,989,668 $11,489,446
=========== ===========
PEOPLES BANCORP, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 3: INVESTMENTS (Continued)
During 2002 and 2001, the Plan's investments (including
investments bought, sold and held during the year) appreciated
in value by $1,117,490 and $1,015,674, respectively as
follows:
2002 2001
------------- --------------
CHANGES IN INVESTMENTS REPORTED AT FAIR VALUE AS DETERMINED BY QUOTED MARKET PRICE
Acorn Fund $ (195,491) $ 67,092
Templeton Foreign Fund 0 (483)
Janus Worldwide Fund 0 (83,632)
White Oak Growth Fund (164,149) (162,125)
T Rowe Price Mid-Cap Growth 0 823
Vanguard Total Bond Fund 7,600 (361)
Vanguard 500 Index Fund (351,377) (183,655)
Vanguard Asset Allocation Fund 0 (53,228)
ING International Value (91,760) 0
Calvert Income A (315) 0
Dodge & Cox Balanced Fund (43,831) 0
Dodge & Cox Stock Fund (12,900) 0
Money Market Funds 9,118 0
AMRO Income Plus-Stable Value 8,469 0
Heartland Value Fund (8,524) 0
Fidelity Mid-Cap (136,685) 0
American Funds-Growth Fund of America (17,999) 0
Invesco 500 Index Trust (25,428) 0
Invesco Structured Small-Cap Value Equity Trust (16) 0
Invesco Core Fixed Income Trust 7,292 0
Aim Mid-cap Core Equity 449 0
American Century Strategic Allocation Funds (51) 0
Notes Receivable-participant loan fund (2,005) 0
Domini Social Equity (2,429) 0
Peoples Bancorp, Inc. Common Stock 2,137,522 1,431,243
--------- ---------
NET CHANGE IN FAIR VALUE $1,117,490 $1,015,674
========== ==========
NOTE 4: RELATED PARTY TRANSACTIONS
Certain Plan investments such as certificates of deposit and
shares in the common/collective trusts were managed by Peoples
Bank, NA, a subsidiary of Peoples Bancorp, Inc. for the first
few days of the this plan year. Peoples Bank, NA was also the
trustee as defined by the Plan for the first few days of this
plan year and, therefore, these transactions qualify as
party-in-interest.
PEOPLES BANCORP, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 5: PAYMENT OF EXPENSES
The Corporation elected to pay certain administrative expenses
and investment costs of the Plan. Should the Corporation elect
not to pay all or part of such expenses, the Trustee then pays
these expenses from the Plan.
NOTE 6: PLAN TERMINATION
Although it has not expressed any intent to do so, Peoples
Bancorp, Inc. has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to
the provisions of ERISA. In the event of Plan termination,
participants will continue to be 100% vested in their
accounts.
NOTE 7: TAX STATUS
The Internal Revenue Service has determined and informed the
Corporation by letter dated July 25, 1996, stating that the
Plan constitutes a qualified trust under Sections 401(a) and
401(k) of the Internal Revenue Code and is, therefore, exempt
from Federal income taxes under the provisions of Section
501(a). The Plan has been amended since receiving the
determination letter. However, the plan administrator has not
applied for a determination letter from the Internal Revenue
Service because the Plan adopted a prototype plan sponsored by
Institutional Trust Co. which has received a favorable
determination letter (dated August 30, 2001) from the IRS.
Therefore, the plan administrator and the Plan's tax counsel
believe that the Plan is currently designed and being operated
in compliance with the applicable requirements of the Internal
Revenue Code and that the Plan was qualified and the related
trust was tax-exempt as of the financial statement date.
PEOPLES BANCORP RETIREMENT SAVINGS PLAN
Employer Identification Number: 31-0987416
Three Digit Plan Number: 002
SCHEDULE H - Assets Held for Investment Purposes at End of Year
As of December 31, 2002
(a) (b) Identity of issues, (c) Description of investment including (d) Cost (e) Current Value
borrower, lessor or maturity date, rate of interest, collateral, Units
similar party par or maturity value
------------------------------------------------------------------------------------------------------------------------------------
Invesco Cash Reserve Fund 293,810 293,810 293,810
Acorn Fund 70,015 1,071,656 1,085,232
American Century Strategic Allocation 1,290 6,341 6,289
American Growth Fund 18,358 349,160 339,079
Dodge & Cox Common Stock 2,083 181,420 183,378
Dodge & Cox Balanced 12,295 742,531 746,967
ING Pilgrim International Value 32,935 343,614 338,905
Aim Mid-Cap Core Equity 20,081 424,990 425,326
Invesco 500 Index Trust 57,929 1,285,211 1,259,366
Invesco Structured Small-Cap Value Equity Trust 1,310 72,941 72,921
Invesco Core Fixed Income Trust 11,786 334,737 342,017
Invesco Stable Value Trust 1,517,863 1,517,863 1,517,863
Peoples Bancorp Inc Common Stock 531,551 2,662,149 7,116,109
Participant loans 262,406 262,406