Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (February 2013)
54 slides from Peoples Bancorp's investor presentation, Feb 11, 2013
Slide 1: Investor Presentation 4th Quarter 2012
Peoples ¢ ay reop! NCORP Nasdaq: PEBO Investor Presentation 4 Quarter 2012 Chuck Sulerzyski Ed Sloane \ Chief Executive Officer Chief Financial Otticer and Treasurer
Slide 2: Harbor Statement
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 Act of
Slide 3: 2012 highlights
* 79% year-over-year increase in earnings — Achieved all-time record earnings in 1st quarter * Return to positive operating leverage — Combination of revenue growth and expense management ¢ 5% increase in loan balances — New loan production up nearly 60% to over $500 million ¢ Asset qualitynearly re
Slide 4: 2013 Outlook
2013 Outlook ; * Totalrevenue growth of 4% to 6% — Fee-basedrevenue growth simular to 2012 — Higher net interest income due to 8% to 10% loan growth + More than half due to increased consumer lending * CRE growth of 2% to 4 — Maintain revenue diversity * Maintain operating expense discipline — Total
Slide 5: Investment Rationale
Investment Ration ¢ Unique community banking model Greater revenue diversity for a community bank our size Strong community reputation and active involvement Local market teams capable of outmaneuvering larger banks More sophistication and product breadth than smaller banks ¢ Strong, growing fee-bas
Slide 6: Stock Performance
Stock Performance Total Annual Return 1-Year 3-Year 5-Year 28% 22% 19% 15% 14% 13% tha 8% 5% a @ Peoples Bancorp Peer Group NASDAQ Bank Index @SPX 500 Index Total Retum includes impact of dividends Peers include: BKYF, BUSE, CCNE, CHCO, CTBI, ESBF, FCBC, FCF, FCZA, FDEF, FFBC, FFKT, FMNB, FRME, ABC,
Slide 7: Corporate Profile
AA Corporate Profile ‘Peoples @\
Slide 8: Corporate Profile
Corporate Profil * Financial holding company headquartered in Marietta, Ohio, — Provide a broad range of banking, insurance, and investment services * Current snapshot — Over 125,000 client relationships & 75,000 households : $1.9 billion : $985 million — Deposits: $1.5 billion — Market capitalizati
Slide 9: Customer-centric approach to sales and service
Q * Customer-centric approach to sales and service — Provide exceptional advice and service to chents — Build long-lasting relationships ¢ Adhere to sound operating principles — Disciplined underwniting and credit culture — Generate positive operating leverage — Maintain prudent capital and liquidit
Slide 10: Revenue growth, expense management, asset quality, capital
Q Revenue growth — Emphasis on fee-based revenues over net interest income — Greater sales disapline and management — Meaningful contribution from acquisitions eer management — Commutted to positive operating leverage — Branch and staffrationalization. Investin people — Outsource for efficency and b
Slide 11: Community banking strengths
5 i earin buisk + Broad product and services offering VES es SENN S Seas: — Banking, Insurance, Investments * Active involvement and support — Retirement Plan Services — Community Investment / Development — Sizable alternative delivery channels — Youth and Education _ — 47 officesand 43 ATMs — Healt
Slide 12: Senior leadership team
Chuck W. Sulerzyski President and CEO Diverse financial services experience Progressive exeautive leadership Edward G. Sloane Progressive finance and accounting leadership EVP, CFO and Treasurer Extensive experience with ALM, M&A, strategic 29 planning Carol A. Schneeberger Extensive history of PEBO
Slide 13: Financial Performance
Financial Performance ‘Peo, plese) BANCORP
Slide 14: Annual financial metrics
Diluted EPS $0.72 $0.22 $0.34 $1.07 $1.92 Return on common equity 3.67% 1.17% 1.76% 5.61% 9.52% Return on assets 0.21% 0.28% 0.69% 1.11% Net interest margin (FTE) 3.48% 3.51% 3.43% 39% Efficiency ratio 60.14% 60.30% 68.98% 6: % Tier 1 common equity 10.17% 10.58% 11.59% 12.82% 14.06% Total capital 13
Slide 15: Quarterly financial metrics
Diluted EPS $0.33 $0.63 $0.47 $0.45 $0.36 Return on common equity 6.69% 12.90% 9.57% 6.99% Return on assets 0.84% 1.48% 1.11% 0.82% Net interest margin (FTE) 3.49% 3.41% 3.43% 3.42% Efficiency ratio 73.53% 65.47% 69.61% 70.06% 72.99% Tier 1 common equity 12.82% 13.82% 13.92% 13.86% 14.06% Total capi
Slide 16: Key metrics
Metric 48.02% 40.4496 30.13% 32.03% 26.87% - 0.496 2.9% 3.7% 1.1% 3.9% 73.53% 65.47% 69.61% 70.06% 72.99% 0.49% - 0.29 1.49% 0.7% 3.0% 1.21% 1.67% 1.42% 1.349% 1.23% (1) Substandard loans, OREO, classifiedinvestments as a% of Tier! capital +ALLL (3) Sequential growth in average balances ~ (2) Year-o
Slide 17: Average Balances
Average Balances (Sin millions) 1s $ 948.6 $ 946.2 $ 959.6 $ 966.8 $ 995.8 660.8 664.8 662.5 677.1 665.3 1,055.8 1,060.2 1,083.4 1,093.7 1,111.0 236.4 247.5 269.3 280.2 298.2 281.0 272.1 235.2 231.9 229.4 ing value without FHLB/FRB stock = Wy
Slide 18: Strong core operating results
¢ Strongcore operating results - Growing, diversified revenues - Good expense control ¢ Favorable asset quality trends - Reducing problem loans - Minimalnet charge-offs - Releasing reserves ¢ All business lines contributing x= eo Ae - Solid performancein each area Q42011 0942012 souroe: SNE Financah
Slide 19: Drivers of Shareholder Value
© Drivers of Shareholder Vall }2012PeE YTD Dividend Payout Dividend Yield 11.99x 11.82x 11.82x PEBO Peers $1-5B PEBO Peers PEBO Peers S1-5B ¢ Exhibiting stronger earnings and revenue growth than peers * Significant asset quality improvement in 2012 * Capacity exists to undertake meaningful growth *
Slide 20: Asset Quality Trends
Asset Quality Irends $170.1 ( in millions) 2011 3Qn 4Qu 1912 2Q12 3Q12 4Q12 |@mm 30-89 Days Past Due $10,525 $9,847 $13,745 $10,981 $11,814 $6,961 $23,217 mmm Nonperforming Loans $31, $33,103 $30,022 $20,492 $16,618 mmm Watch Loans $78,838 $55,602 $64,688 $50,337 $46,663 mmm Classified Loans $81,984
Slide 21: Trust Preferred Redemption
rust Preferred Redem pliom * Notice of redemption issued November 16, 2012 — Filredempton of outstanding trust preferred securities — Redemption date = December 19, 2012 — Redemption being funded by parent company loan ¢ S-year, fully amortizing, fixed rate ¢ Historical information: — $30 nullion of
Slide 22: Customers and Markets
Customers and Markets ‘Peo, plese) BANCORP
Slide 23: Our Brand Promise
Our Brand Promi a We will work side by side to overcome challenges and seize opportunities. We will listen and work with you. Together we will build and execute thoughtful plans and actions, blending our experience & expertise to move you toward your financial goals. Our core difference is providing
Slide 24: Product and channel comparison versus competitors
"Yes “Yes ‘Yes ‘Yes ‘Yes ‘Yes_| No Yes Yes Yes Yes No ¥e_|_No Yes Yes Ye No No No_| No No Yes Yes No No No | No Yes Yes Ye Yes Yes Yes_| Yes Positive P Yes Yes Ye No No No_| No a Yes Yes Ye: Yes No Yes | No P2P Payment Ye Yes Ye No No No__| No Online Ch No Yes Ye No No No_[ No [Mobile Channel ext Al
Slide 25: Peoples
Peoples SC reopies
Slide 26: Branch refresh program
- Floor to- calissreney ations — Over $5 million being invested — Fist phase begins Q1 2013 - Depgnationa branch design experts e Key! Ben - Consistentlook with our new brand — More engaging customer environment — Better utilization of office space — All delivery channels will be “Best in Class” * C
Slide 27: PEBO Market Population & Household Income
$53.5 PEBO Market Population & Household Income (By County) , (Amounts in thousands) $35.2 $35.6 $31.6 96,552 61,870 64,901 39,829 37,199 49-531 Meigs OH Boyd KY OH Greenup Ky 3 2 2 2 Population ——Median Income a cea Guemsey Washington OH
Slide 28: Shale opportunities in PEBO's market area
Both opportunities are p resent in PEBO’s market area z r oe 1 i wit mi Etat Hy INE) E Ty it Emery ges = Total gas, sons ot cave et psa me Marans Sle rf ase [utes — agian erase aes 1 Marcellus } op TEBE Utica undertying Marceus HB 205-2480 ¢ Key driver of stronger economic activity — Land owners acq
Slide 29: Current Strategic Priorities
Current Strategic Priorities ‘Peo, plese) BANCORP
Slide 30: Strategic Targets
Strategic largets) Strategic Actual Focus 2010 Actual 2011 Actual 2012 5-Year Strategic Target Range Improve NPASto total loans + OREO 4.64% 3.41% 1.48% 0.70% to 1.00% Eweleilingay) Net charge-offsto averageloans() 2.66% 1.16% 0.12% 0.30% to 0.50% PMinearieitea| Loansto total assets 52.27% 52.31% 51
Slide 31: Our Levers of Success
Our “Levers of Success” Enhance sales and service 2013 & Beyond discipline } Reveme | « invest innew talent Growth Fg ee + New Loan Production Offices tabilize net interest margin Double-digit growth in wealth management and insurance revenue Rebranding Preserve diversity Balance sheet pricing disci
Slide 32: Current Strategic Roadmap
Current Strategic R “The Best Community Bank in America” Profitable Revenue Responsible Extraordinary Superior Growth Risk Management Client Experience Workforce > M&A > Our Way of Life > Broad Delivery Channels | > RightPeople / Right Job > Sales & Service Process > Asset Quality > Delight the cust
Slide 33: Business Line Focus: Core Banking Activities
Business Line Foot Core Banking Activities Lending Activities Deposit Generation * Profitable portfolio growth — Focus onrisk versus reward — Maintain pricing discipline * Create greater diversity — Emphasis on consumer lending —C&I and small business — Targeted CRElending ¢ Process improvements — I
Slide 34: Business Line Focus: Value Added Services
Business Line Focus Value Added Services WeallsManagemen * Top-line revenue growth — Managed assets = $1.3 billion — Currently 7% of totalrevenue ¢ Adding talent across footpmnt — Organic + acquisitions — 3 advisors addedin 2012 — Currently 9 advisors; Goal=12 * Leveraging branch capabilities — Plac
Slide 35: Mergers & Acquisitions
Mergers & Acquisitions ‘Peo, plese) BANCORP
Slide 36: Our M&A Strategy
Our M&A Sirate ‘ay * Optimize our current footprint — Gam market share and improve operating efficiency — Create more density through disciplined expansion ¢ Target areas with characteristics similar to existing markets — Expand along major transportation routes — Focused on “mid-major” communities
Slide 37: Completed acquisitions
* Sistersville Bancorp, Inc. —Completed September 14, 2012 —Parent of First Federal Savings Bank — Two offices in West Virginia ¢ Sistersville and Parkersburg — Transaction summary: * Deal price = $9.8 milion Consideration = 100% cash Total Assets = $46.6 milion Total Loans = 30.8 million Total Depo
Slide 38: Footprint development and expansion
L7 asion * High growth potential + Recentlyadded new talent 1-77 Expansion + Possible M&A opportunities + Wealth management 1-7 Cormidor * High growth potential + Attractive market dynamics Footprint Development + Increase market share in all areas + Insurance & Wealth Management expansion potential
Slide 39: Historical Financial Data
Historical Financial Data ‘Peo, plese) BANCORP
Slide 40: Annual and Quarterly Results
Annual Results $194 $2.01 Earnings per common share Ae $174 Cash dividends declared per common share $1.07 $0.7. 2005 2006 2007 2008 2009 201 2012 Quarterly Results $0.63 $0.47 $0.45 $0.35 $0.33 $0.36 Q3 2011 Q4 2011 Ql 2012 Q22012 Q3:2012 Q42012 Dividend data presented above reflects amounts declar
Slide 41: Net Interest Margin
Net Interest Marsim 5.24% 494% 489% 481% 4.66% 4.64% 424% 3.58% 6 44% 3.43% 3.39% 3.49% 3.41% 3.43% 3.41% a -+— — a —+ SS 194% Q32010 —Q42010 © QU2012, —Q2 2012, 32012, «42011 = Q12012, 22012, 32012, 42012 —&-Farning Assets. —¢—Net Interest Margin x equivalent basis Peoples 41
Slide 42: Year-over-Year Change in Revenue & Expenses
@ Year-over-Year Change in Revenue & Expenses 16.6% Total Operating Expenses 9% 3.3% 2.6% 1.1% “0.4% Total Revenue 4.5% ~$.7%, ~6.8% Q42010 Q12011 = Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Total Revenue represents Net Interest Income plus Non-interest Income, exclusive of any gains or losse
Slide 43: Non-interest income
($ in thousands) (ay $30,379 $31,350 $32,097 $32,050 2007 2008 2009 $31,634 2010 $32,944 2011 $34, @Other $3,207 $3,252 $3,037 $3,594 $3,173 $3,224 $4,078 @E-Banking $3,080 $3,524 $3,882 $3,954 $4,686 $5,142 $5,955 OTrust & investment $4,258 $4,983 $5,139 $4,722 $5,348 $5,548 $6,129 G@Insurance $9,6
Slide 44: Operating Revenues and Expenses
4) = : 5 (Sin millions) Operating Revenues 351% 351% 248% We qa0%e Eee 332% 2006 2007 2008 2009 2010 2011 2012 Net interest income @Non-interest income —emNet interest margin Ex Operating Expenses 68.98% EE 5751% 57.07% 56.30% 60.1490 bee $63.5 $513 51% 53% S47 FTEs | | 559FTEs| | 546FTEs| | 537FTEs
Slide 45: Earning Assets and Funding Sources
(Sin millions) Earning Assets $1,081.1 $1,024.83 oas0 $914.8 $922.9 $935.4 $970.2 $967.4 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 012012 02 2012 03 2012 04 2012 aNetLoans Total hvestments Funding Sources $536.6 $581.6 $448.0 $319.2 $280.6 $228.2 $227.1 $221.7 $232.2 YE 2007 YE 2008 YE 2009 YE 2010 YE
Slide 46: Loan portfolio composition
e 37% | | 38% | | 38% 49% YE 2007 ‘| "| YE2008 | YE2009 | YE2010 | YE2011 | Q12012 | Q22012 | Q32012 | Q42012 |DRetail) $400,482 | $397,650 | $383,326 | $353,882 | $356,720 | $356,128 | $355,287 | $386,334 | $392,703 CAT | $168,909 | $176,187 | $160,678 | $153,713 | $140,857 | $150,431 | $161,893 |
Slide 47: Asset Quality Trends
Asset Quality Trends; (Sin millions) 2.6506 25396 ALLL io Loa 3.8496 809 $0.5) $@5) iaFroviion for oan bsses say $0.0) Netcharge offs $2.1) 3201 04201 042012” a22012 032012 042012 032011 470142012 a22012 03201242012 BOREO ——NPAsio Loare+ OREO Allowance for Loan Losses Classified Assets ——Albwanceto
Slide 48: Deposit Composition
(ay ($ in thousands) Deposit Composition (YE2007 [YE 2008 | YE 2009 | YE 2010 | YE 2011 [Q12012 | Q22012 | 32012 [042012 | O PublicFunds | $ | $161,798 $155,881) $154,835] $130,630 MMDs (8153, "299 $213. 498] $263. a $239, 65 $268, 410 | $255,907 $249,608| $254,702 $288,404 Retail CDs [$499,684 $518
Slide 49: Appendix
Appendix
Slide 50: Non-GAAP Measures: Pre-provision net revenue
Non-GAAP Measures) PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) income represents a non-GAAP financial measure commonly used to evaluate the operating performance and trends of financial services companies, including Peoples. PPNR represents the earnings capacity that can be either ret
Slide 51: Non-GAAP Measures: Pre-provision net revenue quarterly
ION NET REVENUE Pre-provision net revenue (PPNR) income represents a non-GAAP financial measure commonly used to evaluate the operating performance and trends of financial services companies, including Peoples. PPNR represents the earnings capacity that can be either retained in order to build capit
Slide 52: Non-GAAP Measures: Tangible common equity
ay) 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 the consolidated balance sheets. Management
Slide 53: Non-GAAP Measures: Tangible common equity quarterly
ay) Non-GAAP Measures) Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. GAAP financial information since their calculation removes the impact of intangible assets acquired through acquisitions on the consolidated balance sheets. Management believe
Slide 54: Peoples Bancorp closing
4 Poopies @ Nasdaq: PEBO Investor Presentation 4 Quarter 2012 Shuck W. Sulerzyski Edward G. Sloane \ Chet Execuave Officer Chief Financial Otticer and Treasurer
Peoples Bancorp — Investor Presentation (February 2013) on 6ix