Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (August 2018)
25 slides from Peoples Bancorp's investor presentation, Aug 29, 2018
Slide 1: Investor Presentation 2nd Quarter 2018
Peoples () Investor Presentation 274 Quarter 2018 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 amen
Slide 2: Profile and Investment Rationale
¢ Profile and Investment Rationale ¢ Acquisition * Strategy Q2 2018 Performance Appendix Profile and Investment Rationale A Peoples ¢ BANCORP©N\
Slide 3: Corporate Profile and Investment Rationale
Corporate Profile * 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: $707 million — Assets Under Admin/M
Slide 4: ASB Financial Corp Acquisition
Acquisition /’Peop ples ——— BANCORP ASB Financial Corp Acquisition (ay xX M E R | S AN ASB Financial Corp merged into Peoples SAVINGS ¥& BANK, fsb 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
Slide 5: Strategic Road Map
Strategy /’ Peoples ¢ a reoples Strategic Road Map Best Community Bank in America * Commitmentto Superior Shareholder Returns * Great Place to Work * Clients’ 1°* Choice for Banking, Investing and Insurance + Meaningful Impact on Our Communities + Embrace Our Way of Life + Delightthe Client * Acquir
Slide 6: Strategic Priorities
‘ay Strategic Priorities _ * Focused on sustainable revenue growth (See paee 18 ) * Disciplined expense management See page 19 ¢ Expand revenue vs expense growth gap beyond 2% See page 20 ¢ Drive core efficiency ratio to 60% J See page 21 Nei: Babee Positive Operating Leverage ¢ Preserve key metrics
Slide 7: Financial Expectations - Q3 and Q4 2018
Financial Expectations - Q3 and Q4 2018 é ¢ 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 mi
Slide 8: 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, Cincinnati = shy ‘Total Deposits in MSA ‘MSA Name M
Slide 9: 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 31, 2017, with strong performance in commercial lending Achieved organic deposit growth of 4
Slide 10: Core Non-Interest Expense
Core Non-Interest Expense * (ay i Eight consecutive quarters of controlled expenses ™ Core Non-Interest Expenses" _™ Ongoing Expenses Resulting from ASB Acqusition $29,000 $27,000 $25,000 $23,000 (thousands) Not to seale $21,000 $19,000 $17,000 f Q316 Q4I6 = QIZs Q217, B17 HIT. QB. Q2.-18"* Quarterl
Slide 11: Core Efficiency Ratio
66.00% 65.00% 64.00% 63.00% 62.00% 61.00% 60.00% Core Efficiency Ratio” Efficiency ratio has improved as a result of expense control and revenue growth 63.28% 64.89% 61.19% 2% 68.00% 67.00% 66.00% 65.00% 64.00% 63.00% 62.00% 61.00% 60.00% 59.00% from QB 2016 to Q3-16 QL16 QU-17 Q2:17 Q3.17 Qt17 QI-1
Slide 12: Deposit Betas
Deposit Betas Deposit costs have been well managed over the past six quarters, allowing for consistently improving net interest margin. 78% —= 62% = 40% — 18% 20% Peer Group Deposit Beta Metrics Over Time 36% — 14% re ————* <= age y 12% = 13% 112% 72% 45% 2 eos 22% © 11% — 4h &% 4% = 10% 20% 1017 2Q
Slide 13: 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. NPAs / Assets QBS Q41S QU-16 Q2-16 Q3-16 Q4-16 QI-17 Q2-17 Q3-17 Q417 QI-I8 Q2-18 mmm S1-10 billion Midwest Banks © —~People
Slide 14: Asset Quality
AssetQualiy Criticized and Classified loan levels remain reasonable $50,000 aie ee Pg 32.3% 322% 34.3% | 35.0% $40,000 230.4% _29.9% 30.1% _. me F Se N27 4% i —* | 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.096 Q216 Q3-16 Q416 QI-17 Q217 Q317) Q417 QI1-18 Q218 mam Nonaccmual Loans —e—Criticized Loans / Ti
Slide 15: Total Loan Growth
Total Loan Growth (ay 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 $2,600 $2,500 2 g 3 82,400 = Zz $2,300 z $2,457 2 $2,357 $2,402 é $2,200 $2,294 $2,327 $2,100 $2,000 i P : / i Q2-17 Q3-
Slide 16: 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 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 ‘Total Earning Assets $1,000,000 $500,000 S 69% 75% 80% 2% 3% 73% ag > FY-13 F
Slide 17: CRE Concentration Analysis
CRE Concentration Analysis é * 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 lin
Slide 18: 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 30, 2017 — Consumer DDA accounts at 43% of total consumer deposits
Slide 19: Appendix
Appendix / Peop les BANCORP (a 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-based income
Slide 20: Non-GAAP Measures
Non-GAAP Measures ADJUSTED PRE. -PROVISIO:) 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 i
Slide 21: Non-GAAP Measures
Non-GAAP Measures CORE NO’ TEREST 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, sear
Slide 22: 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 23: Non-GAAP Measures
Non-GAAP Measures RETURN 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 tangib
Slide 24: Non-GAAP Measures
Non-GAAP Measures ADJUSTED RETURN ON AVERAGE STOCKHOLDERS’ EQUITY AND RETURN ON AVERAGE IBLE 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. This m
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