Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q3 2021 Earnings Presentation
48 slides from Peoples Bancorp's earnings presentation, Oct 26, 2021
Slide 1: Investor Presentation 3rd Quarter 2021
INVESTOR PRESENTATION 3RD QUARTER 2021
Slide 2: Table of Contents
WORKING TABLE OF CONTENTS TOGETHER PAGE 4 PROFILE, INVESTMENT RATIONALE, CULTURE AND STRATEGY PAGE 10 BUILDING COVID-19 CREDIT IMPACT, CAPITAL & LIQUIDITY PAGE 25 Q3 & YTD 2021 FINANCIAL INSIGHTS PAGE 39 SUCCESS Q3 & YTD 2021 APPENDIX 2
Slide 3: 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 Ac
Slide 4: Profile, Investment Rationale, Culture and Strategy
WORKING TOGETHER PROFILE, INVESTMENT RATIONALE, CULTURE AND STRATEGY BUILDING SUCCESS 4
Slide 5: Geographic Profile
PEBO GEOGRAPHIC PROFILE NASDAQ: PEBO PEOPLES BANK GEOGRAPHIC FOOTPRINT PEBO SNAPSHOT AS OF SEPTEMBER 30, 2021 PEBO FOOTPRINT Loans: $4.5 billion COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* CLEVELAND Assets: $7.1 billion COUNTIES WHERE PEBO HAS OVER $100 MILLION OF Deposits: $5.8 billion OH DEPOSITS
Slide 6: Investment Rationale
INVESTMENT RATIONALE NASDAQ: PEBO UNIQUE COMMUNITY BANKING MODEL • Strongest deposit market share positions in more rural markets where we can affect pricing • Presence near larger cities puts us in a position to capture lending opportunities in urban markets (e.g. Cincinnati, Cleveland, Columbus, W
Slide 7: Corporate Culture
CORPORATE CULTURE NASDAQ: PEBO OUR VISION OUR VALUES Our vision is to be the PROMISE CIRCLE BEST COMMUNITY BANK IN AMERICA Peoples’ core values are represented by our Promise Circle, which represents how we do business and our never-ending pursuit of creating value for our clients, our associates, o
Slide 8: External Recognition
2021 EXTERNAL RECOGNITION NASDAQ: PEBO Peoples Bank was IN TERMS OF SBA 7(a) one of only 16 banks APPROVED DOLLARS PEOPLES BANK RANKED nationally to make Forbes list of TOP 5 TOP 10 DOING WELL BY DOING GOOD 2021 AWARD Best-In-State Banks in 2 or more states. in OHIO in WV TOP 15% NATIONALLY FOR FISC
Slide 9: Strategic Road Map
STRATEGIC ROAD MAP NASDAQ: PEBO NASDAQ: PEBO BEST COMMUNITY BANK IN AMERICA • Commitment to Superior Shareholder Returns • Great Place to Work • Clients’ 1st Choice for Banking, Investing and Insurance • Meaningful Impact on Our Communities RESPONSIBLE EXTRAORDINARY PROFITABLE FIRST CLASS RISK MANAG
Slide 10: COVID-19 Credit Impact, Capital & Liquidity
WORKING TOGETHER COVID-19 CREDIT IMPACT, CAPITAL & LIQUIDITY BUILDING SUCCESS 10
Slide 11: Our Response to COVID-19
OUR RESPONSE TO COVID-19 NASDAQ: PEBO NASDAQ: PEBO THE CHANGES THAT THE PANDEMIC HAS HAD ON OUR INDUSTRY HAVE BEEN WIDESPREAD AND SWEEPING. CLIENTS • COVID-19 changed the way we provide our products and services, which is now more digital • Redesigned lobbies to enable social distancing • One of two
Slide 12: Credit Risk Management Process
CREDIT RISK MANAGEMENT PROCESS NASDAQ: PEBO LOANS & LEASES* PORTFOLIO COMPOSITION MANAGEMENT & MONITORING • Robust concentration management process focused on portfolio • Clear segregation of duties between sales & credit functions risk diversification • Signature approval process with Credit Admini
Slide 13: Asset Quality
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO OUR DELINQUENCY AND NET CHARGE-OFF TRENDS HAVE REMAINED STABLE FOR FIVE YEARS. Percentage of Loans Considered “Current” Percentage of Net Charge-Offs to Average Loans Annualized Percentage of Loans considered Current Charge Offs Annualized 100% 0.375% 99.0% 99
Slide 14: Asset Quality - NPAs/Assets
ASSET QUALITY NASDAQ: PEBO Asset Quality - NPAs/Assets NPAS AS A PERCENTAGE OF TOTAL ASSETS HAVE CONSISTENTLY BEEN SUPERIOR 1.4% TO MIDWEST BANKS WITH $1 TO $10 BILLION IN TOTAL ASSETS. 1.2% 1.0% 0.8% NPAS / ASSETS 0.75% 0.57% 0.60% 0.59% 0.56% 0.6% 0.54% 0.53% 0.49% 0.50% 0.50% 0.51% 0.48% 0.49% 0.
Slide 15: NPA Composition
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO NPA Composition NPA Composition NPAS AT 9/30/21 Q3 WERE PRIMARILY COMPOSED OF WELL-COLLATERALIZED COMMERCIAL REAL ESTATE AND RESIDENTIAL REAL ESTATE LOANS. INCREASE DURING Q3 2021 WAS MAINLY DUE TO ACQUIRED COMMERCIAL REAL ESTATE LOANS.* $30 $60 $25 $50 $20 $4
Slide 16: Asset Quality - Classified and Criticized Loans
ASSET QUALITY NASDAQ: PEBO CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED. INCREASE IN Q3 DUE TO ACQUISITION OFAsset Quality PREMIER FINANCIAL BANCORP, INC. 50% CRITICIZED LOANS / 45% TIER 1 CAPITAL + ALLL * 40% 36.43% 35% CLASSIFIED LOANS / TIER 1 CAPITAL + ALLL
Slide 17: CRE Concentration Analysis
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO NASDAQ: PEBO CRE EXPOSURE IS WELL BELOW SUPERVISORY CRITERIA ESTABLISHED TO IDENTIFY INSTITUTIONS WITH HEIGHTENED CRE CONCENTRATION RISK. Peer Bank Subs - CRE Loans / Risk-Based Capital 400% • Exposure levels also compare favorably to peer institution concentr
Slide 18: CRE Concentration Analysis - Construction and Land
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO PEBO IS MEANINGFULLY BELOW THE AVERAGE FOR $1-10 BILLION BANKS Peer PEERBank Subs BANK SUBS -- Construction, – CONSTRUCTION, LAND ANDLand, and LandLOANS LAND DEVELOPMENT Development Loans / / RISK-BASED CAPITAL Risk-Based Capital 110% 100% 90% 100% IS THE LEVE
Slide 19: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO NASDAQ: PEBO C&IC hart LOAN COMPOSITION REFLECTS HEALTHY RISK DIVERSITY. Loan Composition TOTAL LOAN PORTFOLIO* = $4.5 BILLION, TOTAL CRE PORTFOLIO** = $1.6 BILLION TOTAL C&I PORTFOLIO = $0.9 BILLION WHICH INCLUDES $136 MILLION OF PPP LOANS Commercial Real Estate Portfo
Slide 20: Current Expected Credit Losses Summary
CURRENT EXPECTED CREDIT LOSSES SUMMARY NASDAQ: PEBO ECONOMIC FORECAST – KEY DRIVERS AT SEPTEMBER 30, 2021 US Unemployment Ohio Unemployment Ohio GDP Percentage of Loans considered Current Percentage of Loans considered Current Percentage of Loans considered Current 12% 12% 12% 6% 6% 4.02% 6% 5.94% 4
Slide 21: Reserves to Loans
RESERVES TO ASSETS NASDAQ: PEBO NASDAQ: PEBO PEBO IS IN LINE WITH PEERS AS OF JUNE 30, 2021 2Q21 Reserves RESERVES ASas A%a% OF of Loans LOANS * 3 2.5 Reserve as a % of Loans 2 1.42 1.5 Median, 1.31 Average, 1.31 1 0.5 0 Source: S&P Global Market Intelligence, Commercial Bank Call Report Data as of
Slide 22: Prudent Use of Capital
PRUDENT USE OF CAPITAL NASDAQ: PEBO ACQUISITIONS • Bank acquisitions completed in 2014 (3), 2015 (1), 2018 (1), 2019 (1) and 2021 (1) • Insurance acquisitions completed in 2014 (1), 2015 (1), 2017 (2), 2020 (1), and 2021 (1) • One investment acquisition was completed in 2016 • One premium finance ac
Slide 23: Deposit Franchise in a COVID-19 Environment
DEPOSIT FRANCHISE IN A COVID-19 ENVIRONMENT NASDAQ: PEBO NASDAQ: PEBO AS OF JUNE 30, 2021, OUR LOAN-TO-DEPOSIT RATIO WAS LOW COMPARED TO PEER GROUP, WHICH POSITIONS US WELL FROM A LIQUIDITY PERSPECTIVE. LOANS / DEPOSITS - PEER GROUP Loans / Deposits - Peer Group 95% 90% 85% UNIV. $1- $10 B AVERAGE:
Slide 24: Cost of Deposits
COST OF DEPOSITS NASDAQ: PEBO W PEBO IS BELOW THE $1 - $10 BILLION BANK UNIVERSE IN TERMS OF COST OF DEPOSITS AS OF JUNE 30, 2021. Total Deposit Cost (%) TOTAL DEPOSIT COST (%) 0.45 T 0.40 0.35 0.32 NOT TO SCALE 0.30 0.24 0.25 B 0.20 0.15 0.10 0.05 24 * Includes seven basis points related to cash fl
Slide 25: Q3 & YTD 2021 Financial Insights
WORKING TOGETHER Q3 & YTD 2021 FINANCIAL INSIGHTS BUILDING SUCCESS 25
Slide 26: Acquisition of North Star Leasing
ACQUISITION OF NORTH STAR LEASING NASDAQ: PEBO ACQUISITION EFFECTIVE MARCH 31, 2021 • Founded in 1979 and headquartered in Burlington, VT, North Star Leasing (NSL) leases a broad range of essential equipment used by small-and medium-sized businesses across the U.S. • NSL is an integrated origination
Slide 27: Acquisition of Premier Financial Bancorp, Inc.
ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. NASDAQ: PEBO NASDAQ: PEBO ACQUISITION EFFECTIVE AS OF SEPTEMBER 17, 2021 • Premier Financial Bancorp, Inc. (Nasdaq: PFBI) was headquartered in Huntington, WV and was the holding company for Citizens Deposit Bank and Trust, Inc. and Premier Bank, Inc. •
Slide 28: Financial Expectations
FINANCIAL EXPECTATIONS NASDAQ: PEBO FINANCIAL EXPECTATIONS - Q4 2021 • Fourth quarter non-interest expenses, excluding non-core expenses, will range somewhere between $46 and $48 million. • Net interest margin will grow and settle between 3.50% and 3.60% for the fourth quarter. • Fee-based income wi
Slide 29: Q3 & YTD 2021 Highlights & Key Impacts
Q3 & YTD 2021 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO NASDAQ: PEBO FINANCIAL: • Net interest income increased $2.9 million, or 7%, compared to the second quarter of 2021 and increased $7.5 million, or 21%, compared to the third quarter of 2020. • Net interest margin increased 5 basis points to 3.50% f
Slide 30: Q3 & YTD 2021 Highlights - Technology
Q3 & YTD 2021 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO PEOPLES BANK CONTINUES TO ADD TECHNOLOGY THAT CLIENTS CARE ABOUT • Contactless debit cards • Cardless cash (ability to use ATM via mobile app without debit card) • Card Controls (ability to lock/unlock debit card) • Transaction alerts • Ability to
Slide 31: Stock Performance
STOCK PERFORMANCE NASDAQ: PEBO NASDAQ: PEBO PEOPLES BANK HAS OUTPERFORMED THE PEER GROUP AND S&P 500 IN TERMS OF 1 YEAR TOTAL ANNUAL RETURN AS OF SEPTEMBER 30, 2021. TOTAL ANNUAL RETURN AS OF SEPTEMBER 30, 2021 CUMULATIVE TOTAL RETURN FOR THE NINE MONTHS ENDED SEPTEMBER 2021 80% 74% 30% 70% 20% 60%
Slide 32: Total Revenue
TOTAL REVENUE NASDAQ: PEBO TOTAL REVENUE OF $168 MILLION FOR FIRST NINE MONTHS OF 2021. $250,000 $200,000 Beginning in the second quarter of $64,892 $64,330 2018, Peoples benefited from the $57,234 acquisition of ASB Financial Corp. Additionally, beginning in the second $150,000 $52,653 $50,233 Lore
Slide 33: Insurance & Investment Income Composition
INSURANCE & INVESTMENT n * INCOME COMPOSITION ue io en sit ev tR po en om m NASDAQ: PEBO NASDAQ: PEBO st eC ve In om nc TOTAL INVESTMENT REVENUE INCREASED 22% COMPARED TO FIRST NINE MONTHS OF 2020. AND tI en TOTAL INSURANCE REVENUE INCREASED 9% COMPARED TO FIRST NINE MONTHS OF 2020. m st ve In noiti
Slide 34: Expense & Efficiency Ratio
EXPENSE & EFFICIENCY RATIO NASDAQ: PEBO THE RECENT ESCALATION IN EXPENSES WAS DUE COVID-19 AND INCREASED NON-INTEREST TO ACQUISITIONS, AND AN INCREASE IN FTE’S FOR EXPENSE IMPACTED THE EFFICIENCY RATIO GROWTH AND TECHNOLOGY INVESTMENTS. IN 2020 & 2021. Core Non-Interest Expense* Efficiency RATIO Rat
Slide 35: Improvement in Key Metrics
IMPROVEMENT IN KEY METRICS NASDAQ: PEBO WE HAVE MADE STEADY PROGRESS ON THESE METRICS OVER THE RECENT YEARS. THE PROVISION FOR CREDIT LOSSES, INTEREST RATE ENVIRONMENT, Improvement AND OTHER ECONOMIC IMPACTS OF COVID-19 In Key Metrics Improvement In Key Metrics SIGNIFICANTLY IMPACTED THESE METRICS I
Slide 36: Total Loan Growth
TOTAL LOAN GROWTH NASDAQ: PEBO TotalASLoan TOTAL LOANS* WERE $4.5 BILLION Growth 30 2021, WHICH INCLUDED $136 MILLION PPP LOANS. OF SEPTEMBER $5,000 $4,000 PREMIER FINANCIAL BANCORP, INC. ACQUIRED LOANS TOTAL PPP LOANS $3,000 TOTAL ACQUIRED LEASES PREMIUM FINANCE ACQUIRED LOANS $2,000 FIRST PRESTONS
Slide 37: Earning Asset Mix
EARNING ASSET MIX NASDAQ: PEBO Earning Asset Mix IN 2020, THE INCREASE IN TOTAL LOANS AS A PERCENTAGE OF EARNING ASSETS WAS DUE TO PPP LOANS. 80% 76% 80% $7 PERCENTAGE OF TOTAL EARNING ASSETS 73% 74% 74% $6 70% TOTAL EARNING ASSETS $5 60% (IN $BILLIONS) $4 50% $3 40% $2 30% $1 26% 27% 26% 20% 20% $0
Slide 38: Deposit Growth
DEPOSIT GROWTH NASDAQ: PEBO W DEPOSIT BALANCES BENEFITED FROM PPP LOAN PROCEEDS, FISCAL STIMULUS FOR CONSUMERS AND COMMERCIAL CLIENTS, AND THE ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. Deposit Growth T $6,000 $5,832 BROKERED CERTIFICATES OF DEPOSIT GOVERNMENTAL DEPOSIT ACCOUNTS $5,000 MONEY MAR
Slide 39: Q3 & YTD 2021 Appendix
WORKING TOGETHER Q3 & YTD 2021 APPENDIX BUILDING SUCCESS 39 39
Slide 40: Non-US GAAP Measures - Pre-Provision Net Revenue
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO PRE-PROVISION NET REVENUE PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) has become a key financial measure used by federal bank regulatory agencies when assessing the capital adequacy of financial institutions. PPNR is defined as net interest i
Slide 41: Non-US GAAP Measures - PPNR Adjusted for Non-Core Items
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO PRE-PROVISION PRE-PROVISION NETREVENUE NET REVENUE ADJUSTED ADJUSTED FORFOR NON-CORE ITEMS ITEMS NON-CORE Pre-provision net revenue (PPNR) has become a key financial measure used by federal bank regulatory agencies when assessing the capital adequacy of fin
Slide 42: Non-US GAAP Measures - Core Non-Interest Income
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO CORENON-INTEREST CORE NON-INTEREST INCOME INCOME Core non-interest income is a financial measure used to evaluate Peoples’ recurring non-interest revenue stream. This measure is non-US GAAP since it excludes the impact of all gains and/or losses, and core b
Slide 43: Non-US GAAP Measures - Efficiency Ratio
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO EFFICIENCY RATIOEFFICIENCY AND ADJUSTED FOR NON-CORE ITEMS 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
Slide 44: Non-US GAAP Measures - Tangible Equity and Book Value
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO TANGIBLE EQUITY TO TANGIBLE ASSETS AND TANGIBLE BOOK VALUE PER SHARE TANGIBLE EQUITY TO TANGIBLE ASSETS AND TANGIBLE BOOK VALUE PER SHARE Peoples uses tangible capital measures to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent
Slide 45: Non-US GAAP Measures - Return on Average Assets
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO RETURN ON AVERAGE ASSETS AND ADJUSTED FOR NON-CORE ITEMS RETURN ON AVERAGE ASSETS ADJUSTED FOR NON-CORE ITEMS The return on average assets adjusted for non-core items represents an non-US GAAP financial measure since it excludes the release of the deferred
Slide 46: Non-US GAAP Measures - Return on Tangible Equity
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY 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
Slide 47: Non-US GAAP Measures - Return on Stockholders' Equity
($ in Thousands) FY-15 FY-16 FY-17 FY-18 FY-19 YTD-20 YTD-21 APPENDIX Annualized net income $ 10,941 $ 31,157 $ 38,471 $ 46,255 $ 53,695 $ 34,767 $ 26,483 Add: amortization of other intangible assets 4,077 4,030 3,516 3,338 3,359 3,223 4,368 NON-US GAAP MEASURES Less: tax effect of amortization of o
Slide 48: Contact: Chuck Sulerzyski and Katie Bailey
CHUCK SULERZYSKI President and Chief Executive Officer P: 740.374.6163 Chuck.Sulerzyski@pebo.com KATIE BAILEY Executive Vice President Chief Financial Officer and Treasurer P: 740.376.7138 Kathryn.Bailey@pebo.com Peoples Bancorp® is a federally registered service mark of Peoples Bancorp Inc. The thr