Peoples Bancorp Reports 18% gain in Fiscal 2011 Earnings

For Immediate Release                  

Pink Sheets Symbol:    PBNI
Contact:                           Maurice F. Winkler, III
Phone:                             260-925-2500

Peoples Bancorp Reports 18% gain in Fiscal 2011 Earnings

AUBURN, INDIANA (November 3, 2011)-Peoples Bancorp reported net income for the fiscal year ended September 30, 2011, increased to $3,770,296 versus the previous year’s income of $3,290,544. Fiscal 2011 earnings per diluted share were $1.52 per share compared to $1.28 per share for the year ended September 30, 2010, an 18.75% increase.

Maurice F Winkler, III, President of Peoples Bancorp, stated “2011 marked the fourth consecutive year of an increase in earnings per share. We are very pleased with our performance during what has continued to be difficult times for the national economy, the local economy and for the banking industry as a whole.

We were able to overcome the ongoing compression in net interest margin by increasing non-interest income and decreasing the provision for loan losses. Led by a $625,406 increase in gains from the sale of securities, nearly all areas of non-interest income increased when compared to the previous year. Fees and service charges increased by more than 16%.   Management recognizes that any increase in market interest rates will make the security gains difficult to duplicate. Salaries and benefits expense increased as a result of a 21% increase in the cost of providing health insurance benefits to our valued employees. A change in the method used for calculating deposit insurance premiums by the FDIC helped to decrease that expense by 27%. The increase in taxable income also increased the company’s tax provision for the year by nearly 44%.”

On September 30, 2011, stockholders equity was $61,618,203 with a capital to assets ratio of 12.82% and a book value of $25.12.  Peoples had 2,453,347 shares of stock outstanding as of September 30, 2011.  The closing price of Peoples Bancorp stock as of November 2, 2011, was $16.51 per share as quoted on the Pink Sheets under the symbol PBNI.

Peoples Bancorp, through its subsidiary, Peoples Federal Savings Bank, operates fifteen full-service offices located in Auburn, Avilla, LaGrange, Garrett, Howe, Kendallville, Middlebury, Waterloo, Topeka, and Columbia City (two offices), in Indiana, and Three Rivers (two offices), Schoolcraft, and Union in Michigan.