Slide 1: Investor Presentation 3rd Quarter
INVESTOR PRESENTATION I 3rd QUARTER WORKING TOGETHER. BUILDING SUCCESS.
Slide 2: Table of Contents
WORKING TABLE OF CONTENTS TOGETHER PAGE 4 PROFILE, INVESTMENT RATIONALE, BUILDING CULTURE & STRATEGY PAGE 11 CREDIT, CAPITAL & LIQUIDITY SUCCESS PAGE 23 Q3 2023 FINANCIAL INSIGHTS PAGE 35 Q3 2023 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 & Strategy
PROFILE, INVESTMENT RATIONALE, CULTURE & STRATEGY 4
Slide 5: Geographic Profile
PEBO GEOGRAPHIC PROFILE NASDAQ: PEBO NASDAQ: PEBO PEOPLES BANK GEOGRAPHIC FOOTPRINT PEBO SNAPSHOT AS OF SEPTEMBER 30, 2023 CURRENT PEBO FOOTPRINT Loans: $6.1 billion COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* CLEVELAND Assets: $8.9 billion COUNTIES WHERE PEBO HAS OVER $100 MILLION OF Deposits: $7.0
Slide 6: Corporate Culture
CORPORATE CULTURE NASDAQ: PEBO OUR VISION Our vision is to be the BEST COMMUNITY BANK IN AMERICA for our employees, clients, shareholders, and local communities OUR CORE VALUES Our actions are guided by our core values represented by the Promise Circle, which embodies how we do business and our neve
Slide 7: Strategic Road Map
STRATEGIC ROAD MAP NASDAQ: PEBO NASDAQ: PEBO • Commitment to Superior Shareholder Returns • Great Place to Work • Clients’ First Choice for Financial Services • Meaningful Impact on Our Communities BEST COMMUNITY BANK IN AMERICA RESPONSIBLE EXTRAORDINARY PROFITABLE FIRST CLASS RISK MANAGEMENT CLIENT
Slide 8: Investment Rationale
INVESTMENT RATIONALE NASDAQ: PEBO UNIQUE COMMUNITY BANKING MODEL • Strongest deposit market share positions in more rural markets where we can affect pricing. Top 3 market share in 35 counties across three states. • Presence near larger cities puts us in a position to capture lending opportunities i
Slide 9: Investment Rationale: Strength in the Current Environment
INVESTMENT RATIONALE NASDAQ: PEBO NASDAQ: PEBO STRENGTH IN THE CURRENT ENVIRONMENT (AS OF SEPTEMBER 30, 2023) DEPOSITS CREDIT • Average customer deposit relationship: $29,000 • Stable metrics compared to year-end • 31% of our deposit balances exceeded FDIC • NPAs of 0.48% as a percentage of total as
Slide 10: External Recognition
EXTERNAL RECOGNITION NASDAQ: PEBO 2023 is the 3rd year in a row Peoples Bank has received 2023 is the 2nd year in a row Peoples Bank the American Banker Best Bank to Work For award has received Top Workplaces USA award COMMUNITY AWARDS BEST IN THE VALLEYS es t o f 2023 2023 B the T ri-Sta te WINNER
Slide 11: Credit, Capital & Liquidity
NASDAQ: PEBO CREDIT, CAPITAL & LIQUIDITY 11
Slide 12: Cost of Deposits
COST OF DEPOSITS NASDAQ: PEBO PEBO IS BELOW THE $1 - $10 BILLION BANK UNIVERSE IN TERMS OF COST OF DEPOSITS AS OF JUNE 30, 2023 PROXY PEER GROUP - TOTAL DEPOSIT COST (%) PEER GROUP - TOTAL DEPOSIT COST (%) 3.00% 2.50% 2.00% UNIV. $1-$10 B AVERAGE: 1.50% 1.50% 1.00% 0.87% 0.50% 0.00% FMNB CCNE FFBC P
Slide 13: Deposit Franchise
DEPOSIT FRANCHISE NASDAQ: PEBO NASDAQ: PEBO LOW LOAN TO DEPOSIT RATIO PROVIDES LOW COST LIQUIDITY TO FUND FUTURE GROWTH DATA AS OF JUNE 30, 2023 PEER GROUP PROXY PEER- GROUP LOANS-/LOANS DEPOSITS / DEPOSITS 120.00% 100.00% 85.89% UNIV. $1-$10 UNIV. $1-$10 B Average:87.86% B AVERAGE: 87.86% 80.00% 60
Slide 14: Net Interest Margin
NET INTEREST MARGIN NASDAQ: PEBO BEST IN CLASS NET INTEREST MARGIN LARGELY DUE TO STRONG DEPOSIT FRANCHISE DATA AS OF JUNE 30, 2023 PROXY PEER GROUP - NET INTEREST MARGIN PEER GROUP- NET INTEREST MARGIN 5.00% 4.55% 4.50% 4.00% UNIV.UNIV. $1-$10 B Average: 3.34% $1-$10 B AVERAGE: 3.34% 3.50% 3.00% 2.
Slide 15: Credit Risk Management Process
CREDIT RISK MANAGEMENT PROCESS NASDAQ: PEBO 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
Slide 16: Asset Quality
ASSET QUALITY NASDAQ: PEBO OUR DELINQUENCY AND NET CHARGE-OFF TRENDS HAVE REMAINED STABLE FOR 8 YEARS Percentage of Loans Considered “Current” Percentage of Net Charge-Offs to Average Loans Percentage of Loans considered Current Charge Offs Annualized 100% 0.375% 99.1% 99.0% 98.6% 98.8% 98.6% 98.5%
Slide 17: Asset Quality: NPA Composition
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO NPA Composition THE INCREASE IN NPAS IN Q3 2021 WAS MAINLY DUE TO ACQUISITION OF PREMIER FINANCIAL BANCORP, INC.* NONPERFORMING ASSETS $60 CRE $50 RESIDENTIAL C&I $40 HELOC NPA’S IN $ MILLIONS CONSUMER $30 $20 $10 $0 2017 2018 2019 2020 Q1-21 Q2-21 Q3-21 Q4-21
Slide 18: Asset Quality: Classified and Criticized Loans
ASSET QUALITY NASDAQ: PEBO CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED. Asset Quality INCREASE IN Q3 2021 DUE TO ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. CRITICIZED AND CLASSIFIED LOANS 50% CRITICIZED LOANS / 45% TIER 1 CAPITAL + ALLL * 40% 35.72% 35% CLA
Slide 19: 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 DATA AS OF JUNE 30, 2023 PEERPEER PROXY GROUP- CRE GROUP LOANS – CRE / RISK-BASED LOANS CAPITAL / RISK-BASED CAPITAL 400% 3
Slide 20: CRE Concentration Analysis: Construction Loans
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO PEBO IS NEAR AVERAGE FOR $1-10 BILLION BANKS AS OF JUNE 30, 2023 PROXY PEER GROUP – CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL PEER GROUP - CONSTRUCTION, LAND AND DEVELOPMENT LOANS / RISK- BASED CAPITAL 120% 100% IS THE LEVEL CONSIDERED
Slide 21: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO NASDAQ: PEBO C&IC hart LOAN COMPOSITION REFLECTS DIVERSIFIED RISK PROFILE n Comp Loa TOTAL LOAN PORTFOLIO = $6.1 BILLION osition TOTAL C&I PORTFOLIO = $1.1 BILLION, WHICH INCLUDES PPP LOANS Lo an Portf olio (Exc luding De posit Ov erdrafts 9 10 ) 1 FOOD SERVICES 21% 8 7
Slide 22: Prudent Use of Capital
PRUDENT USE OF CAPITAL NASDAQ: PEBO CAPITAL PRIORITIES • Organic growth • Dividends • Share repurchases • Acquisition activities DIVIDENDS • Over 7 consecutive years of increasing dividends. Dividend paid increased from $0.15 per share for Q1 2016 to $0.39 declared in Q4 2023 • Based on the closing
Slide 23: Q3 2023 Financial Insights
Q3 2023 FINANCIAL INSIGHTS 23
Slide 24: Q3 2023 Highlights & Key Impacts
Q3 2023 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO FINANCIAL: • Converted former Limestone Bank branches to Peoples Bank branches on August 7, 2023. • Reported net income of $31.9 million for the third quarter of 2023, representing earnings per diluted common share of $0.90. • In comparison, Peoples repo
Slide 25: 2023 Financial Expectations
FINANCIAL EXPECTATIONS NASDAQ: PEBO NASDAQ: PEBO 2023 NET INTEREST MARGIN EXPECT TO BE BETWEEN 4.40% - 4.60% LOAN GROWTH ANTICIPATE 6-8% ORGANIC LOAN GROWTH FEE-BASED EXPECT FEE BASED INCOME GROWTH TO BE IN LOW-TO-MID DOUBLE DIGITS COMPARED TO 2022 INCOME CREDIT COSTS EXPECT NET CHARGE-OFF RATE DURI
Slide 26: 2024 Financial Expectations
2024 FINANCIAL EXPECTATIONS NASDAQ: PEBO 2024 NET INTEREST MARGIN EXPECT HIGHER NET INTEREST INCOME DUE TO FULL YEAR BENEFIT OF LIMESTONE MERGER LOAN GROWTH EXPECT BETWEEN 6% AND 8%, COMPARED TO 2023 FEE-BASED ANTICIPATE GROWTH TO BE IN LOW DOUBLE-DIGIT PERCENTAGES COMPARED TO 2023 INCOME ANTICIPATE
Slide 27: Stock Performance
STOCK PERFORMANCE NASDAQ: PEBO NASDAQ: PEBO 80% 70% PEBO PERFORMANCE HAS PERFORMED BETTER THAN PEERS IN TERMS OF YTD, 1, 3 & 5 YEAR TOTAL ANNUAL RETURN 60% 50% 40% TOTAL RETURN AS OF SEPTEMBER 30, 2023 PEBO 30% PEER GROUP MEDIAN 22% KBW BANK INDEX 20% 16% S&P 500 13% 12% 10% 10% 10% 8% 6% 6% 6% 5% T
Slide 28: Total Revenue
TOTAL REVENUE NASDAQ: PEBO ON PACE FOR RECORD TOTAL REVENUE $350,000 $79,513 PEOPLES BENEFITED FROM: $300,000 $67,605 • The acquisition of ASB Financial Corp. in the second quarter of 2018, • The acquisition of First Prestonsburg $250,000 Bancshares Inc. in the second quarter $253,442 $251,005 $69,2
Slide 29: Insurance & Investment Income Composition
INSURANCE & INVESTMENT nue* INCOME COMPOSITION ent Reve ition Investm NASDAQ: PEBO NASDAQ: PEBO Compos REVENUE SOURCES OF OUR FEE BASED BUSINESSES e noitisopmoC emocnI tnemtsevnI dna ecnarusnI m TOTAL INVESTMENT REVENUE TOTAL INSURANCE REVENUE Inco YTD 2023 YTD 2023 stment *$12.8 euneveR tMILLION ne
Slide 30: 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 Efficiency Ratio Adjusted for Non-Cor CORE NON-IN
Slide 31: Improvement in Key Metrics
IMPROVEMENT IN KEY METRICS NASDAQ: PEBO NASDAQ: PEBO WE HAVE MADE STEADY PROGRESS ON THESE METRICS OVER THE RECENT YEARS. THE PROVISION FOR CREDIT LOSSES, INTEREST RATE ENVIRONMENT, AND OTHER ECONOMIC IMPACTS OF COVID-19 SIGNIFICANTLY IMPACTED THESE METRICS IN 2020 AND 2021. INCREASED NET INCOME IN
Slide 32: Total Loan Growth
TOTAL LOAN GROWTH NASDAQ: PEBO Total Loan Growth TOTAL LOANS* WERE $6.1 BILLION AS OF SEPTEMBER 30, 2023 $7,500 LIMESTONE ACQUIRED LOANS PREMIER FINANCIAL BANCORP, INC. ACQUIRED LOANS TOTAL PPP LOANS $5,000 TOTAL ACQUIRED LEASES PREMIUM FINANCE ACQUIRED LOANS ($ MILLIONS) FIRST PRESTONSBURG ACQUIRED
Slide 33: Deposit Growth
DEPOSIT GROWTH NASDAQ: PEBO NASDAQ: PEBO Deposit Growth 39% OF DEPOSIT BALANCES AT QUARTER END FOR Q3 2023 WERE DEMAND DEPOSIT ACCOUNTS (DDAS), INCLUDING $1.6 BILLION OF NON-INTEREST BEARING DDAS $7,500 $7,038 BROKERED CERTIFICATES OF DEPOSIT $5,862 $5,717 GOVERNMENTAL DEPOSIT ACCOUNTS MONEY MARKET
Slide 34: More Than Just a Bank
MORE THAN JUST A BANK NASDAQ: PEBO LOCATIONS IN OHIO, WEST VIRGINIA, KENTUCKY, VIRGINIA, WASHINGTON D.C. AND MARYLAND Recognized by Newsweek as one 17th largest bank owned insurance of America’s Best Banks 2023 company in the United States NATIONWIDE SPECIALTY FINANCE DIVISIONS 34
Slide 35: Q3 2023 Appendix
Q3 2023 APPENDIX 35
Slide 36: Appendix: Pre-Provision Net Revenue
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO 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 income plus total non-inter
Slide 37: Appendix: PPNR Adjusted for Non-Core Items
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO PRE-PROVISION NET REVENUE ADJUSTED FOR NON-CORE ITEMS 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 adjusted for non-core item
Slide 38: Appendix: Core Non-Interest Income and Expense
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO CORE NON-INTEREST INCOME Core non-interest income is a financial measure use by 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 banking system conversion revenue w
Slide 39: Appendix: Efficiency Ratio
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO EFFICIENCY RATIO AND ADJUSTED FOR NON-CORE ITEMS 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
Slide 40: Appendix: Tangible Equity and Book Value
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO TANGIBLE EQUITY TO TANGIBLE ASSETS AND TANGIBLE BOOK VALUE PER SHARE Peoples uses tangible capital measures to evaluate the adequacy of Peoples’ stockholders’. Such ratios represent non-US GAAP financial measures since the calculation removes the impact of
Slide 41: Appendix: Return on Average Assets
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO RETURN ON AVERAGE ASSETS AND ADJUSTED FOR NON-CORE ITEMS The return on average assets adjusted for non-core items represents a non-US GAAP financial measure since it excludes the release of the deferred tax asset valuation allowance, the impact of the Tax C
Slide 42: Appendix: Return on Tangible Equity
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO 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 asset
Slide 43: Appendix: Return on Equity Adjusted for Non-Core Items
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO RETURN ON AVERAGE STOCKHOLDERS’ EQUITY ADJUSTED FOR NON-CORE ITEMS The return on average stockholders’ equity adjusted for non-core items represents a non-US GAAP financial measure since it excludes the release of the deferred tax asset valuation allowance,
Slide 44: Contact: Executive Officers
CHUCK SULERZYSKI President and Chief Executive Officer 740.374.6163 Chuck.Sulerzyski@pebo.com TYLER WILCOX Senior Executive Vice President Chief Operating Officer 740.373.7737 Tyler.Wilcox@pebo.com KATIE BAILEY Executive Vice President Chief Financial Officer and Treasurer 740.376.7138 Kathryn.Baile