Slide 1: Investor Presentation 2Q 2018
Y Peoples), Nasdaq: PEBO Investor Presentation 24 Quarter 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement © Statements in this presentation which are not historical 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
Slide 3: Overview
Overview a * Profile and Investment Rationale ¢ Acquisition ° Strategy * Q2 2018 Performance ¢ Appendix
Slide 4: Profile and Investment Rationale
Profile and Investment Rationale BANCORP® /Peop ples
Slide 5: Financial holding company headquartered in Marietta, Ohio
Financial holding company headquartered in Marietta, Ohio. — Provides a broad range of banking, insurance, and investment services * Current snapshot: — Assets: $4.0 billion; Loans: $2.7 billion — Deposits: $2.9 billion — Market capitalization: $766 million — Assets Under Admin/Mgmt: $2.3 billion *
Slide 6: Investment Rationale
° Investment Rationale (ay Unique community banking model — Greater revenue diversity (80% fee-based) than the average $1 - 10 billion bank — Strong community reputation and active involvement — Local market teams capable of out-maneuvering larger banks — More sophistication and product breadth than
Slide 7: Acquisition
A Acquisition
Slide 8: ASB Financial Corp Acquisition
ASB Financial Corp Acquisition AMERICAN SAVINGS 9 BANK, fsb ASB Financial Corp merged into Peoples on April 13, 2018 Six full-service bank branches in the Portsmouth and Cincinnati, Ohio regions, and two loan production offices in the Cincinnati, Ohio region Total consideration paid was $41.5 millio
Slide 9: Strategy
Strategy
Slide 10: Strategic Road Map
Strategic Road Map (ay “Best Community Bank in America” * Commitmentto Superior Shareholder Returns * Great Place to Bank. * Great Place to Work + Meaningful Impact on Our Communities a fitable rowth, eae ee Pro} Reverme Gs First-Class Workplace + Our Wayof Life + Broad DeliveryChannels | « Understa
Slide 11: Focused on sustainable revenue growth
-» * Focused on sustainable revenue growth See page 18 ° Disciplined expense management See page 19 ¢ Expand revenue vs expense growth gap beyond 2% See page 20 * Drive core efficiency ratio to 60% See page 21 ¢ Preserve key metrics superior to most of our peers See page 22 ¢ Balance growth with pru
Slide 12: Financial metrics versus targets
NPAs asa percent of total loans and OREO (1) 0.88% 0.679% 0.70% to 1.0096 v Net charge-offs as a percent of average total loans (2) 0.11% 0.2296 0.30%to 0.50% ¥ Loans to total assets 65.09% 67.63% 65.0% 0 725% v Loans to deposits 85.70% 91.09% 87.5% t0 925% ¥ DDAs to deposits 40.18% 39.20% 40.0% to
Slide 13: Financial Expectations - Q3 and Q4 2018
Financial Expectations - Q3 and Q4 2018 a Annualized organic loan growth of 5% to 7% Quarterly credit costs slightly higher than those recognized in the second quarter of 2018 due to anticipated loan growth Net interest margin in the low 3.70s Quarterly fee-based revenue between $13.5 and $14.5 mill
Slide 14: Peoples versus community bank channels comparison
5 ¥e Ye FE| ve Neil |GENons | yei Ey 5 ¥e Ye Ye ee [Other Channels a a Ye $e] No | ¥e Nou Nou [Ne Ne [| Ne] ve | ves [No Ye fy] Ye ‘Ye Non [Ne Se | | | Na Ye ge Ne (Nowa | iNew [Noun [EN Indicates Peoples has advantage over Community -\ nformatioa accurate: a: of Joly 50, 5018 Bank grow uu
Slide 15: Peoples Market Insight
Peoples Market Insight ¢€ * Strongest deposit market share positions in more rural markets where we can affect pricing ¢ Presence near larger cities puts us in position to capture lending opportunities in more urban markets (e.g. Cleveland, Akron, Canton, ‘Total Deposits in MSA ‘MSA Name ‘Market ($0
Slide 16: Q2 2018 Performance
Q2 2018 Performance
Slide 17: Second Quarter 2018 Highlights
Second Quarter 2018 Highlights € * Reported second quarter net income of $7.9 million — $12.8 million excluding acquisition-related costs* * Achieved organic loan growth of 9%, annualized, compared to December 81, 2017, with strong performance in commercial lending * Achieved organic deposit growth
Slide 18: Total Revenue Growth
Total Revenue Growth 21% increase in total revenue from Q2-16 to Q2-18 $28,224 $28,000 Q216 Q816 Qt16 QLI7 Q217 Q817 Q417 QL-I8. —Q2-18* m Net Interest Income m Fee-Based Income $45,000 $40,000 $35,000 $30,000 $25,000 $2612: sap $20,000 $15,000 * The second quarter of 2018 benefited from the acquisi
Slide 19: Non-Interest Expense
(thousands) Not to scale n-Interest Expense * Eight consecutive quarters of controlled expenses Core Non-Interest Expenses * _ Ongoing Expenses Resulting from ASB Acqusition $29,000 $27,000 $25,000 $28,000 : 5 $21,000 $19,000 $17,000 Q316 Q4I6 = QLIT. 217, B17, HIT. QUES. Q2-18** Quarterly * Non-GAA
Slide 20: Adjusted Operating Leverage
Adjusted Operating Leverage (ay Adjusted operating leverage is the difference between total revenue growth and non- interest expense growth, on a percentage basis, excluding acquisition-related expenses. Versus the same quarter in the prior year, Versus the prior year, adjusted operating adjusted op
Slide 21: Core Efficiency Ratio
66.00% 65.00% 64.00% 63.00% 62.00% 61.00% 60.00% Core Efficiency Ratio* 64.89% 64.83" 63.28% 62.03% Paes 61.42% 60.71 QE16 QL16 QL-I7 Q217 QFI7 QL17 QL-18 Q2I8 7.49% 64.30% 61.85% 61.73% 9% Improvement from F¥ 2015to ‘Y¥TD2018 Fvis F¥i6 + The Core Efficiency Ratio is a non-GAAP financial measure (se
Slide 22: Deposits per full service branch
Deposits per full service branch has trended upward since 2015 Total Deposits Per Full Service Branch 44,000,000 $42,000,000 140,000,000 $38,000,000 70 19/81/15 19/81/16 19/81/17 6/20/18, GDeposits Full Service Branch —==Full-Service Bank Branches 22
Slide 23: Improvement in Key Metrics
Improvementin Key Metrics a) Peoples’ focus on steadily growing loans and deposits, managing expenses, and increasing operating leverage, has resulted in improvementin key financial metrics. Adjusted Rens Return on Average Assets " Adjusted Return on Average Tangible Stockholders’ Equity 140% som 15
Slide 24: Asset Quality - NPAs/Assets
Asset Quality - NPAs/Assets € )), Nonperforming assets (NPAs) as a percentage of total assets have consistently been superior to Midwest banks with $1 - $10 billion in total assets. 1.40% 1.20% 1.00% 0.80% NPAs / Assets 0.60% 0.40% 0.20% 0.00% VBS QS QUIS Q216 Q316 QH-I6 QU-I7 QUIT QT Q4I7 QUIS Q2-I
Slide 25: Asset Quality
Asset Quality Criticized and Classified loan levels remain reasonable $50,000 O08 345,000 |-33.3% . 5 28% 32.2% 34.3% | 55.0% 0,000 30.4% % 30.1% wa aii se eee a% 30.0% $35,000 ce $80,000 _ 825000 |-4g-9% 46.8% 174% —16.8% Oe $20,000 15.0% $15,000 10.0% $10,000 $5,000 5.0% s- t t 0.0% Q216 Q3-16 Q41
Slide 26: Loan portfolio composition
Data as of June 80,2018 iS "Includes CRE, C&d, and Construction BANCORP. 26
Slide 27: Total Loan Growth
tal Loan Growth Organic loan growth was 7% over June 30, 2017 In addition, loan balances acquired from ASB totaled $229 million at June 30, 2018 Total Q2-18 = $2,686. $2,700 a $2,600 a $2,500 $2,400 $2,800 $2,457 $2,357 $2,200 $2,327 $2,100 $2,000 Q217 Q317 Q417 QL18 Q218 mTotal Loans Except ASB = A
Slide 28: Organic growth in deposits
Organic growth in deposits was 4% over June 30, 2017 For the quarter ended June 30, 2018, cost of deposits was 0.42% * The Q2-18 total deposits amount below includes $106 million acquired from ASB, as of June 30, 2018, not including brokered deposits Ree, $2,738 $2,566 $2,572 $2,871 z “ CC] || || |_
Slide 29: Earning Asset Mix
Earning Asset Mix Since 2018, the percentage of earning assets composed of investments has decreased, while the percentage composed of loans has increased. $4,000,000 80% 2% $3,500,000 7 10% $3,000,000 : 3 60% 2 $2,500,000 $2,000,000 50% $1,500,000 40% $1,000,000 30% $500,000 Ss. 20% FY-13 FY-14 FY-
Slide 30: Prudent Use of Capital
Prudent Use of Capital * Dividends — Consistently evaluate dividend and adjust accordingly. Dividend yield for the second quarter of 2018 was 2.96%. Cash Dividends Declared Per Share 50.30 5028 S028 50.28 30.26 50.24 50.22 30.20 50.18 30.16 50.14 S012 50.10 QL16 Q216 816 O46 Q1I7 Q217 Q817 Q4I7 QlIs
Slide 31: CRE Concentration Analysis
CRE Concentration Analysis (a) * CRE exposure is well below supervisory criteria established to identify institutions with heightened CRE concentration risk — Exposure levels also compare favorably to peer institution concentration levels — Concentration levels have improved relative to peers on a l
Slide 32: CRE Concentration Analysis
CRE Concentration Analysis ¢€ 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Peer Bank Subs -- Construction, Land, and Land Development Loans / Risk-Based Capital + FEBOdataisas of6'3018, butallpeerdataisasof3S112, the mostrecentavadable 82
Slide 33: Business Highlights
Business Highlights (ay ¢ Commercial Banking — Average loans up 11% from Q2 2017 — $25 million lending “house limit” although legal limit is over $50 million ¢ Retail Banking — Indirect loans grew by $67.5 million, or 22%, since June 80, 2017 — Consumer DDA accounts at 43% of total consumer deposits
Slide 34: Insurance business detail
** Approximately 9076 attributable to P&C Commercial Lines * Trailing Twelve Months from 6/80/18 BANCORP. 384
Slide 35: Appendix
Appendix
Slide 36: Non-GAAP Measures
Non-GAAP Measures PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) has become a key financial measure used by state and federal bank regulatory agencies when assessing the capital adequacy of financial institutions. Pre-provision net revenue is defined as net interest income plus total fee
Slide 37: Non-GAAP Measures
Non-GAAP Measures ADJUSTED PRE-PROVISION NETREVENUE Pre-provision net revenue (PPNR) has become a key financial measure used by state and federal bank regulatory agencies when assessing the capital adequacy of financial institutions. Adjusted pre-provision net revenue is defined as net interest inco
Slide 38: Non-GAAP Measures
Non-GAAP Measures TE CORE FEE-BASEDIN Core fee-based income is a financial measure used to evaluate Peoples’ recurring fee-based revenue stream. This measure is non-GAAP since it excludes the impact of system upgrade revenue waived. Gin Thowandy FY-15 FY-16 YTD-18 Total fee-based income S 47441 S$ 5
Slide 39: Non-GAAP Measures
Non-GAAP Measures CORE NON-INTEREST EXPENSE Core non-interest expense is a financial measure used to evaluate Peoples’ recurring expense stream. This measure is non-GAAP since it excludes the impact of system upgrade costs, acquisition-related costs, pension settlement charges, severance charges, se
Slide 40: Non-GAAP Measures
Non-GAAP Measures EFFICIENCY RATIO The efficiency ratio is a key financial measure used to monitor performance. The 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-b
Slide 41: Non-GAAP Measures
Non-GAAP Measures ADJUSTED EFFICIENCY RATIO The adjusted efficiency ratio is a key financial measure used to monitor performance. The adjusted efficiency ratio is calculated as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net intere
Slide 42: Non-GAAP Measures
Non-GAAP Measures TANGIBLE EQUITY RATIOS Peoples uses tangible capital measures to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non- GAAP financial measures since the calculation removes the impact of goodwill and other intangible assets acquired through acquisitions
Slide 43: Non-GAAP Measures
Non-GAAP Measures RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY The return on average tangible stockholders’ equity ratio is a key financial measure used to monitor performance. It is calculated as net income (less after-tax impact of amortization of other intangible assets) divided by average tan
Slide 44: Non-GAAP Measures
Non-GAAP Measures RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY Continued from previous slide. (S in Thousands) Q217 Q347__Q417_—QL8 zis FY.I7_YTD-18 Return on Average StockhoMers' Equity Rati Anmalized net income $39,171 $ 43295 $ 35,710 $ 47616 $ 31,655 _$ 38471 $39,591 “Average stockholders’ eq
Slide 45: Non-GAAP Measures
Non-GAAP Measures ADJUSTED RETURN ON AVERAGE STOCKHOLDERS’ EQUITY AND RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY The adjusted return on average stockholders’ equity ratio is calculated as net income adjusted to exclude acquisition-related costs, divided by average total stockholders’ equity. Th
Slide 46: Non-GAAP Measures
Non-GAAP Measures ADJUSTED RETURN ON AVERAGE ASSETS The adjusted return on average assets ratio is calculated as net income adjusted to exclude acquisition-related costs, divided by average total assets. This measure is non-GAAP since it excludes acquisition-related costs. (Sin Thousands) gris yID-1