Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (February 2012)
50 slides from Peoples Bancorp's investor presentation, Feb 10, 2012
Slide 1: Investor Presentation February 2012
Peoples Bancorp Nasdaq: PEBO Investor Presentation February 2012 Chuck Sulerzyski Ed Sloane President and Chief Financial Officer Chief Executive Officer and Treasurer
Slide 2: Safe Harbor Statement
Peoples [scares 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 Liti
Slide 3: Strategic Progression
Peoples 4 Bancorp Strategic Progression Our path to “top performer” status FIX IT LEVERS OF BUILD IT SUCCESS Working Together, Building Success.
Slide 4: Levers of Success
Peoples Bancorp “Levers of Success” ¢ Asset quality — Renewed emphasis on credit basics and pricing discipline — Aggressive resolution of problem loans ¢ Revenue growth — Emphasis on fee-based revenues over net interest income — Greater sales discipline and management ¢ Expense management — Return t
Slide 5: 2011 Recap
Peoples Bancorp 2011 Recap Significant earnings improvement in 2011 — EPS of $1.07 versus $0.34 in 2010 — Credit costs were $9 million compared to $30 million in 2010 Repaid 100% of TARP Capital in 2011 without capital raise — Plan to repurchase the warrant from the U.S. Treasury Experiencing favora
Slide 6: 2012 Expectations
Peoples = Bancorp 2012 Expectations Sustain favorable asset quality trends — Will take prudent approach with allowance for loan losses — Some segments remain under stress Modest top-line revenue growth — Enhancing sales execution and management — Double-digit increases in wealth management and insur
Slide 7: Discussion Points
Peoples . : . noe Discussion Points * Background ¢ Asset Quality ¢ Operating Leverage ¢ Market Growth ¢ Summary
Slide 8: Background
Peoples Bancorp Background
Slide 9: Corporate Profile
Peoples fit inks Corporate Profile ¢ Financial holding company headquartered in Marietta, Ohio. — Provide a broad range of banking, insurance, and investment services ¢ Current snapshot: — Assets: $1.8 billion — Loans: $939 million — Deposits: $1.4 million — Market capitalization: $180 million — Ove
Slide 10: Recent Financial Summary
Peoples Macro 4Q 2010 1Q 2011 2Q Recent Financial Summary 3Q 2011 4Q 2011 Financial Capital Total capital Ameena ALLL to total loans Diluted EPS $0.01 $0.13 $0.26 $0.35 $0.33 Return on common equity 0.11% 2.83% 5.49% 7.19% 6.69% ououiciiaas Net interest margin (FTE) 3.44% 3.43% 3.43% 3.39% 3.49% Eff
Slide 11: Key Performance Drivers
Peoples - Bancorp Key Performance Drivers Metric Q42010 =Q12011 9 Q22011 Q32011 Q42011 Classified Assets Ratio (1) 59.85% 50.28% | 45.28% 47.1% | 48.02% Revenue Growth @) -3.5% -1.3% -2.5% 1.6% 1.9% Efficiency Ratio 62.14% | 65.21% | 67.43% 69.70% | 73.53% Loan Growth (2) -1.5% -3.8% -1.6% - 0.3% 0.
Slide 12: Balance Sheet Focus
Peoples Bancorp Balance Sheet Focus @ in millions) “Average Balances Q3 2011 Q42011 Q42010 Q12011 Total Loans $ 1,001.4 Total Investments (1) 674.7 655.1 655.6 656.2 660.8 Q2 2011 Interest-Bearing Retail 1,089.2 | 1,067.3 1,070.5 1,057.6 | 1,055.8 Deposits Non-Interest-Bearing Retail Deposits Wholes
Slide 13: Capital Trends
Peo, fit inks Capital Trends (S in millions) Tay 12.82% Tam 171% ‘12.05% 10.18% 10.17% naar 9.80% a“ _ ~ 73% 816% «8.22% 7.10% 742% 721% 7.16% 717% 7.36% 621% YE2006 © YE2007 «««YE2008 «= YE2009 «32010 © 42010) Q1.2011: «22011: «32011: «= 4 2011 —=— Tier 1 Common Ratio —+—Tangible Common Equity to T
Slide 14: Asset Quality
Peoples Bancorp Asset Quality
Slide 15: 2011 Asset Quality Initiatives
Peo, fit inks 2011 Asset Quality Initiatives ¢ Restructured commercial lending function — Renewed emphasis on credit basics — Aligned talent against task ¢ Increased monitoring activities — Standardized tracking report for criticized assets — Requiring written workout plans for each problem loan ¢ E
Slide 16: Asset Quality Trends
Peo, [scares Asset Quality Trends (Sin millions) Nonperforming A: 4646 $36.8 $368 $35.1 aoe 032010 a4m0 = at 201 onze sant Q32010 42010 a12011 —gz.2011 32011 a4 2014 1a Provision fr Joan losses ONe cargo + -ALLLte Loa am Soret NPAsto Lome + OREO ified A: s1iTs yg ats emo gaz gt tt aa zotsgz0t1 gaat
Slide 17: Asset Quality Outlook
Peo, [scares Asset Quality Outlook ¢ Asset quality trends should remain favorable — Continued reduction in classified assets — Lower credit losses than recent years — Maintain good allowance coverage over problem loans ¢ New loan production is building — Balances have started to stabilize — Potentia
Slide 18: Operating Leverage
Peoples Bancorp Operating Leverage
Slide 19: Operating Trends
Peoples fit inks Operating Trends 68.98% 59.05% 5751% 57.07% 56.30% eons ze Sloe + —+ i — $93.9 915 $80.9 $83.6 $853 So08 ! 8 $86.9 2005 2006 2007 2008 2009 2010 2011 1 Total Revenue Total Operating Expenses —+Efficiency ratio ¢ Diversified revenue is a source of strength — Fee-based revenue generat
Slide 20: Key Operating Initiatives
Peoples ; ao Bancorp Key Operating Initiatives ¢ Increase revenue generation across all business lines — Double-digit growth in insurance and wealth management — Stabilize net interest income through loan growth ¢ Enhance sales and service discipline — Internally developed sales training program in
Slide 21: Operating Leverage Goals
Peoples fit inks Operating Leverage Goals ¢ Redeploy resources as revenue grows — Invest in areas with high growth potential — Committed to growing revenue faster than expenses — Lower operating expenses in 2012 versus 2011 absent M&A ¢ Maintain balance sheet discipline — Improve asset yield through
Slide 22: Market Growth
Mpark ne Market Growth
Slide 23: Our Growth Strategy
Peoples fit inks Our Growth Strategy Leverage relationships with existing customers — Enhance long-term loyalty of profitable customers — Increase cross-sales through exception advice and service — Capitalize on consumer lending opportunities Target areas with high growth potential — Expand along ma
Slide 24: Business line growth initiatives
mime! ¢ Build stronger sales force ¢ Increase production levels ¢ Expand talent in growth markets « Add producers in growth markets ¢ Branch rationalization/efficiency * Develop niche lending programs « Consumer loan growth ¢ Capitalize on cross-sell opportunities « Alternate delivery channels * Gre
Slide 25: Market Growth Opportunities
Peoples fit inks Market Growth Opportunities L + Possible M&A opportunities GeSerl > Wealth management opportunities '7 Expansion Central Ohio + High growth potential + Recently added new talent Footprint Development * Increase market share in all areas * Possible M&A opportunities * Insurance & Wea
Slide 26: Key Strategic Targets
Bancorp Key Strategic Targets Actual Actual ar Strategic Focus 2010-2011 get Range Improve NPAs to total loans + OREO 4.64% 3.41% 0.80% to 1.00% Asset Quality Net charge-offs to average loans (1) 2.66% 1.16% 0.50% to 1.00% PNUMasriciaes Loans to total assets 52.27% 52.31% 60% to 65% Sheet M Deposits
Slide 27: Our Philosophy
Peo, Patio Our Philosophy Focus on customers first — Offer universal financial services — Maintain community-minded approach — Build long-lasting relationships Pursue disciplined growth — Target areas with greater long-term potential — Add talent to expand sales force — Selective with acquisitions a
Slide 28: Appendix
Mpark ne Appendix
Slide 29: Our Differentiators
Peoples noe Our Differentiators ¢ Community banking model — Parity in products and delivery channels é . NATM surcharges, dng away with fee-checking and — More nimble and responsive to market needs | emu — Positive community stature and involvement Dear Neighbor nutes frou '2 tegh several oor ecking
Slide 30: Checking Designed with Life in Mind
Checking Designed with LIFE in Mind Online Banking, Bill Pay & FinanceWorks™ © Peoples checking Peoples Student Checking
Slide 31: Product comparison with national and community banks
"National Banke ae 7" Community Bauke™** Wells Bankof Ptraeety Advantage Community Wes- First United Fargo America PNC__ Huntington Bank Trst___ Baro _Centmy _ Bank Yes Yes Yes Yes Yes Yes Yes Yes | No | Yes Electonic Statements Yes Yes Yes Yes Yes Yes No Yes | No | Yes Online Account Opening Yes Ye
Slide 32: Focus on Business Lines
Peoples = . Bancorp Focus on Business Lines Sales and Service Discipline « Leadership sales and coaching training started in December 2011 ¢« Commercial, Insurance and Investment training completed in Q1 2012 ¢ Retail training completed by end of April 2012 All managers trained in coaching and sales
Slide 33: Growing Our Franchise
Peoples Wesnror Growing Our Franchise Enhanced Online Banking Services... Increased visibility through social media channels... YouG (3 www. facebook.com/PeoplesBank www.twitter.com/PeoplesBank www.youtube.com/PeoplesBankTV New Website with Peop les Online Account Opening comin: Fast, convenient and
Slide 34: Growing Our Franchise
Peoples . Wesrtore Growing Our Franchise Created new partnerships within our communities ... ? What does your business need? — 4 Tell us at HelpGrowMyBiz.com ? WIN $5,000 in office equipment 34
Slide 35: Asset Allocation Trend
ae Asset Allocation Trend ans and Investments 60% to 60% 53% Geko i; ; ; H ; 2006 2007 2008 2009 2010 2011 Strategic Plan Goal BCRE ocal Retail —- Investments Strategic Plan Goal data represents target range at the end of the S-year plan period. 35
Slide 36: Funding Allocation Trends
Peoples . : Bancorp Funding Allocation Trends Deposits and Borrowings 33% HAM 2006 2007 2008 2009 2010 2011 Strategic Plan _ Goal —+ Wholesale funding G Retail CDs OMMDs B Checking & Savings Strategic Plan Goal data represents target range at the end of the S-year plan period. 36
Slide 37: Revenue & Expense Trend
Peopl. M encom Revenue & Expense Trend Operating Leverage 68.98% 60.30% 60.14% 57.51% 57.07% 56.30% 2006 2007 2008 2009 2010 2011 Strategic Plan r r ‘ 5 Goal Bi Net interest income DNon-interest income Efficiency ratio NM REE Plan Goal data cae sc ae at the end OnE ns aD pe 37
Slide 38: Annualized Returns
Wi Peoples Bancorp Annualized Returns PEBO 289% KBW Regional 180% KBW Bank 302% Annualized Returns PEBO KBW Regional KBW Bank
Slide 39: Stock Performance
Bancorp Stock Performance i Peoples Bancorp O SPX 500 Index @ NASDAQ Bank Index OG Peer Group Peer Group data is comprised of the 22 publicly-traded financial institution holding companies more fully defined in Peoples’ definitive proxy materials for the 2011 Annual Meeting of Shareholders. 39 Nee e
Slide 40: Earnings Performance
Bancorp Earnings Performance Annual Results 2004 2005 2006 2007 2008 2009 2010 2011 Earnings per common share Gi Cash dividends declared per common share Quarterly Results $0.35 $0.33 $0.26 $0.13 aint [ $0.10 j Ta ] $0.10 j $0.10 ] $0.11 42010 Qi2011 22011 32011 42011 Dividend data presented above r
Slide 41: Pre-Tax, Pre-Provision Income
Bp feces Bancorp Pre-Tax, Pre-Provision Income 2007 2008 2009 2010 2011 Q4 2010 Q3 2011 Q4 2011 Income before income taxes $23,874 $ 7,615 $ 3,126 $ 5,753 $17,151 $ 87 $ 5,806 $ 5,177 Add: Provision for loan losses 3,959 27,640 25,721 «26,916 = 7,998 6,952 865 - Less: Recovery of loan losses - - - -
Slide 42: Net Interest Margin
Peoples as Bancorp Net Interest Margin 551% Bae 5.24% 5.24% 4.94% 489% 481% 4.64% BEG BREN 3.49% 3.44% 3.43% 3.43% 339% so 235% Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q12011 = Q220111 3.2011 Q4 2011 4 Earning Assets —o—Net Interest Margin — Interest Bearing liabil 42 Presented on a fulh valent b
Slide 43: Non-Interest Income
Peoples Bancorp Non-Interest Income in thousands) $32,044 $31,350 $32,097 $32,050 $31,634 f ' ' ' 2006 2007 2008 2009 2010 Bother $3,288 $3,385 $3,087 $3,594 $3173 |G E-Banking $3,080 $3,524 $3,882 $3,954 $4,686 |@ Trust & investment $4,258 $4,983 $5,139 $4,722 $5,348 insurance $9,538 $9,568 $9,902
Slide 44: Revenue & Expense Trends
Peoples Wesrtore Revenue & Expense Trends millions) Operating Revenues ole 348% —< 3.43% 329% aa = 2006 2007. 2008 , 2009 Bi Net interest income D Non-interest income Operating Expenses 2006 Salary & Benefits 2008 2009 1 Other operating expense FDIC expense
Slide 45: Balance Sheet Trends
Peoples Bancorp Balance Sheet Trends (S in millions) Earning Assets $1,105.2 $1,081.1 $1,0248 $923.6 $915.0 $925.6 2007 2008 2009 Q12010 © 22010» 932010 4201012011 «a2 2011» 032011 «a4 2011 Net Loans UoTotal Investments Funding Sources 2007 2008 2009 Q12010 «022010 = 031042010 201122011 3.2011 2011
Slide 46: Regulatory Capital
Peoples . M Bancorp Regulatory Capital Net $1,348 su3i6 Risk-Weighted $1,301 $1,246 1,245, $1213 gam Assets (3 in millions) $1150 $1143 $1,135 128 1 g209,144 $0947 S21L509 soia.76g $209,738 $192,663 $195,485 $199,672 Paces $177,523 giant $173,470 Total Regulatory Capital (8 in thousands) wae ge2010
Slide 47: Asset Quality Trends
Peoples Bancorp Asset Quality Trends (Sin millions) —@-NPAs to Total Assets —*- Net Charge offs to Avg. Loans 2.66% 2.09% 2.03% Total Credit Losses GLoans GOREO Olnvestments 053% 0.43% 037% Eas a+ 116% 04 2005 006 2007 2008 2009 Ea) 2011 4209 u2010 ean 2010 qu2010 qu201 Cron 2011 qn 47
Slide 48: Non-GAAP Measures
Peoples Bancorp Non-GAAP Measures (Sin thousands) Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non- GAAP financial information since their calculation removes the impact of intangible assets acquired through acquisitions
Slide 49: Non-GAAP Measures
Peo, [scares Non-GAAP Measures (Sin thousands) Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non- GAAP financial information since their calculation removes the impact of intangible assets acquired through acquisitions on
Slide 50: Bancorp
Peoples Bancorp Nasdaq: PEBO Investor Presentation February 2012 Chuck Sulerzyski Ed Sloane President and Chief Financial Officer Chief Executive Officer and Treasurer
Peoples Bancorp — Investor Presentation (February 2012) on 6ix