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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 27, 2006
(November 21, 2006)
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PEOPLES BANCORP INC.
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(Exact name of Registrant as specified in its charter)
Ohio 0-16772 31-0987416
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
138 Putnam Street, PO Box 738
Marietta, Ohio 45750-0738
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (740) 373-3155
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Not applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.06 Material Impairments.
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As previously disclosed in "ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATION AND FINANCIAL CONDITION - FINANCIAL CONDITION -
Allowance for Loan Losses" of the Quarterly Report on Form 10-Q of Peoples
Bancorp Inc. ("Peoples") for the quarterly period ended September 30, 2006 (the
"September 30, 2006 Form 10-Q"), commercial loans in a single commercial
relationship with an aggregate principal balance of $4.5 million were placed on
nonaccrual status during the third quarter of 2006. The loans in this commercial
relationship are secured primarily by liens on real estate and are guaranteed by
the principals. Management considered this loan relationship in determining the
adequacy of the allowance for loan losses at September 30, 2006, which resulted
in a specific reserve of $2.0 million for these loans.
Recently, management has identified an additional loan to one of the
guarantors of the related commercial loans with a principal balance of $1.7
million and secured by residential real estate that will be placed on nonaccrual
status in the fourth quarter of 2006. Management also recently received updated
information that indicated the value of the collateral on the aggregate $6.2
million loan relationship is no longer sufficient to cover the outstanding
principal balances. Based upon action of the Board of Directors of Peoples Bank,
National Association, the wholly-owned national bank subsidiary of Peoples, on
November 21, 2006 and based on this updated information and the continued
inability of the borrowers to meet the repayment terms of the loans, management
determined on November 22, 2006, to charge-off aggregate principal of
approximately $2.9 million relating to this impaired commercial relationship
during the fourth quarter of 2006, resulting in an aggregate principal balance
of approximately $3.3 million remaining on nonaccrual status. Future charge-offs
with respect to these loans may be required if the actual realizable value of
the collateral is less than currently estimated.
Peoples' out-of-pocket expenditures (including legal and accounting
fees) in connection with the resolution of these loans are not expected to be
material, although the actual amount of such expenditures ultimately will depend
on the length of time, and number of hours of professional assistance required
to finally resolve the loans, the nature of the proceedings in which the loans
are resolved, and other factors not susceptible to current estimation.
As of the date of this Current Report on Form 8-K, management
anticipates Peoples will record a provision for loan losses, excluding the
provision for deposit account overdrafts, of approximately $1.7 million in the
fourth quarter of 2006, compared to the $675,000 recorded in the third quarter
of 2006. However, the ultimate amount of the provision for loan losses to be
recorded in the fourth quarter of 2006 will reflect the amount necessary to
maintain the allowance for loan losses at an adequate level at December 31,
2006, based on management's normal quarterly procedural methodology that
estimates the amount of credit losses probable within the loan portfolio.
Item 8.01 Other Events.
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As previously disclosed in "ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATION AND FINANCIAL CONDITION - FINANCIAL CONDITION -
Allowance for Loan Losses" of Peoples' September 30, 2006 Form 10-Q, Peoples'
nonaccrual loans at September 30, 2006, included an aggregate principal balance
of $3.6 million to a single commercial borrower, who is unrelated to the
commercial relationship disclosed in "Item 2.06 Material Impairments" above,
that was well collateralized and not expected to result in Peoples incurring any
loss. Based on a recent evaluation of this relationship, management determined
that the collectibility of the total contractual principal and interest is no
longer considered doubtful. As a result, the loans in this relationship have
been restored to accrual status. This action, coupled with the expected
charge-off disclosed in "Item 2.06 Material Impairments" above, should reduce
the overall level of nonaccrual loans at December 31, 2006, from $13.2
million at September 30, 2006.
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.
PEOPLES BANCORP INC.
November 27, 2006 By: /s/ DONALD J. LANDERS
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Donald J. Landers
Chief Financial Officer and Treasurer