Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (November 2011)
47 slides from Peoples Bancorp's investor presentation, Nov 15, 2011
Slide 1: Investor Presentation
Nasdaq: PEBO Investor Presentation November 2011 Chuck Sulerzyski Ed Sloane President and Chief Financial Officer Chief Executive Officer and Treasurer
Slide 2: 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 3: Strategic Priorities
Strategic Priorities • Diligent focus on problem loan workouts CLEAN • Meaningful improvement in credit costs • TARP return expected by January 2012 • Improve operating efficiencies via expense reductions LEAN • Free up capacity to grow our business • Enhance marketing and brand awareness • Build sa
Slide 4: Discussion Points
Discussion Points • Background • Credit – How do we know it’s fixed? • Efficiency – How will we control costs? • Growth – How will we grow? • Summary 4
Slide 5: Background
y Peoples Bancorp Background
Slide 6: Corporate Profile
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: $951 million Cleveland – Deposits: $1.3 million – Market capitalization: $144 million – Over 125,0
Slide 7: Recent Financial Summary
Recent Financial Summary 3Q 4Q 1Q 2Q 3Q Metrics 2010 2010 2011 2011 2011 Diluted EPS ($0.01) $0.01 $ 0.13 $0.26 $0.35 Financial Return on common equity – 0.20% 0.11% 2.83% 5.49% 7.19% Performance Net interest margin (FTE) 3.58% 3.44% 3.43% 3.43% 3.39% Efficiency 58.78% 62.14% 65.21% 67.43% 69.70% Ti
Slide 8: Key Performance Drivers
Key Performance Drivers Metric Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Classified Assets Ratio (1) 61.30% 59.85% 50.28% 45.28% 47.91% Revenue Growth (2) 0.1% - 3.5% - 1.3% - 2.5% 1.6% Efficiency Ratio 58.78% 62.14% 65.21% 67.43% 69.70% Loan Growth (2) - 0.5% - 5.0% - 1.3% - 0.8% 1.1% • 18% improveme
Slide 9: Balance Sheet Focus
Balance Sheet Focus ($ in millions) End of Period Balances Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Total Loans $1,010.9 $ 960.7 $ 948.0 $ 940.1 $ 950.8 Total Investments (1) 611.4 620.1 638.2 641.6 636.2 Interest-Bearing Retail 1,086.9 1,059.1 1,071.2 1,068.8 1,042.5 Deposits Non-Interest-Bearing Re
Slide 10: Capital Trends
Capital Trends ($ in millions) 12.40% 12.05% 11.59% 11.72% 11.13% 10.58% 10.18% 10.17% 9.80% 8.16% 7.83% 7.42% 7.22% 7.16% 7.17% 7.36% 7.10% 6.21% YE2006 YE2007 YE2008 YE 2009 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Tier 1 Common Ratio Tangible Common Equity to Tangible Assets • Plan to return remai
Slide 11: Credit
y Peoples Bancorp Credit
Slide 12: Recent Events
Recent Events • Partial TARP repayment in Q1 2011 – Completed without capital raise – Indication credit issues are stabilizing • Renewed emphasis on credit basics – Aligned talent against task – Filled Chief Credit Officer vacancy • Experiencing stable-to-improving trends in several credit metrics –
Slide 13: Asset Quality Trends
Asset Quality Trends ($ in millions) Provision for Loan Losses & Net Charge-offs Nonperforming Assets 2.79% 4.64% 4.23% 2.66% 2.69% 2.68% 2.65% 4.08% 2.58% 3.85% 3.84% 3.71% $8.0 $8.0 $7.6 $43.4 $41.6 $45.0 $7.0 $7.4 $36.8 $35.1 $36.8 $5.5 $5.3 $4.8 $2.3 $1.6 $0.9 $0.8 Q2 2010 Q3 2010 Q4 2010 Q1 201
Slide 14: 2011 Process Improvements
2011 Process Improvements • Increased monitoring activities – Standardized tracking report for criticized assets – Requiring written workout plans for each problem loan • Enhanced credit risk management function – Formalized Loan Quality Committee – Created a Special Assets group • Refined loan unde
Slide 15: Looking Ahead
Looking Ahead • Aggressive resolution of problem loans – Quarterly monitoring of workout plans – Focus on improving migration trends • Restructure commercial lending function – Deploy a “finders”, “minders” and “grinders” strategy – Segregate underwriting from production – Place greater emphasis on
Slide 16: Efficiency
y Peoples Bancorp Efficiency
Slide 17: Current Environment
Current Environment 67.44% 59.05% 60.14% 60.30% 57.51% 57.07% 56.30% $90.6 $93.9 $91.5 $83.6 $85.3 $86.5 $80.9 $58.7 $57.0 $58.5 $51.3 $51.3 $51.5 $53.5 2005 2006 2007 2008 2009 2010 Projected 2011 Total Revenue Total Operating Expenses Efficiency ratio • Diversified revenue is a source of strength
Slide 18: Looking Ahead
Looking Ahead • Revenue growth is expected across all business lines – Emphasizing execution of sales discipline – Greater focus on business line performance • Redeploying resources from underperforming areas – Ongoing rationalization of branch distribution network – Refining our senior management s
Slide 19: Growth
y Peoples Bancorp Growth
Slide 20: Our Differentiators
Our Differentiators • Community banking model – Parity in products and delivery channels – More nimble and responsive to market needs – Positive community stature and involvement • Sound financial fundamentals – Strong capital and liquidity positions – Diversified revenue stream – Good operating dis
Slide 21: Our Capabilities
Our Capabilities ***National Banks*** ***Community Banks*** PEOPLES Wells Bank of Advantage Community Wes- First United BANCORP Online Channel Chase Fargo America PNC Huntington Bank Trust Banco Century Bank Bill Pay Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Electronic Statements Yes Yes Yes Yes Ye
Slide 22: Key Strategic Targets
Key Strategic Targets Actual 5-Year Strategic Focus Metrics 3Q 2011 Target Range Improve NPAs to total loans + OREO 3.84% 0.80% to 1.00% Asset Quality Net charge-offs to average loans (1) 0.34% 0.50% to 1.00% Adjust Balance Loans to total assets 52.65% 60% to 65% Sheet Mix Deposits to total funding
Slide 23: Focus on Business Lines
Focus on Business Lines Retail Banking Commercial Banking • 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-se
Slide 24: Focus on Business Lines: Sales and Service Discipline
Focus on Business Lines Sales and Service Discipline Rewards Define Measure- Training Coaching and the Goals ments Consequences • Leadership sales and coaching training starts in December • Commercial, Insurance and Investment training completed in Q1 2012 • Retail training completed by end of April
Slide 25: Growing Our Franchise
Growing Our Franchise Since January 1, 2011… Opened new banking office in Lancaster OH Introduced new checking product lineup New office in Vienna WV coming soon! 25
Slide 26: Growing Our Franchise
Growing Our Franchise Enhanced Online Banking Services… Increased visibility through social media channels… www.facebook.com/PeoplesBank www.twitter.com/PeoplesBank www.youtube.com/PeoplesBankTV Expanded mobile banking to include … New Website with Online Account Opening coming soon! 26
Slide 27: Growing Our Franchise
Growing Our Franchise Created new partnerships within our communities … 27
Slide 28: Asset Allocation Trend
Asset Allocation Trend Loans and Investments 38% 20% to 37% 30% 29% 60% to 65% 60% 53% 53% 2006 2007 2008 2009 2010 Projected 2011 Strategic Plan Goal CRE C&I Retail Investments Strategic Plan Goal data represents target range at the end of the 5-year plan period. 28
Slide 29: Funding Allocation Trends
Funding Allocation Trends Deposits and Borrowings 33% 20% 10% 18% to 20% 35% to 39% 45% 35% 27% 2006 2007 2008 2009 2010 Projected 2011 Strategic Plan Goal Retail CDs MMDs Checking & Savings Wholesale funding Strategic Plan Goal data represents target range at the end of the 5-year plan period. 29
Slide 30: Revenue & Expense Trend
Revenue & Expense Trend Operating Leverage 65.21% 60.14% 60.30% 60% to 57.51% 57.07% 65% 56.30% 35% to 40% 36% 38% 3.51% 3.48% 3.51% 3.43% 3.29% 3.32% 3.55% to 3.65% 2006 2007 2008 2009 2010 Projected Strategic Plan Net interest income Non-interest income Efficiency ratio 2011 Goal NIM Strategic Pla
Slide 31: Market Growth Opportunities
Market Growth Opportunities Central Ohio • High growth potential Cleveland • Recently added new talent Morgantown Potential • Minimal community banks • Nearly 30,000 people Footprint Development Columbus • Increase market share in all areas Zanesville • Possible M&A opportunities Lancaster • Insuran
Slide 32: Summary
Summary Strengthen credit structure Return remaining TARP Control costs Pursue prudent growth 32
Slide 33: Questions?
Nasdaq: PEBO Questions? Chuck Sulerzyski Ed Sloane President and Chief Financial Officer Chief Executive Officer and Treasurer
Slide 34: Appendix
y Peoples Bancorp Appendix
Slide 35: Stock Performance
Stock Performance 12/31/2010 to 11/14/2011 Annualized Returns PEBO -12.6% KBW Regional -13.3% KBW Bank -28.1% 6/15/2011 to 11/14/2011 Annualized Returns PEBO 85.7% KBW Regional -11.0% KBW Bank -35.4% 35
Slide 36: Stock Performance
Stock Performance Total Returns 1–Year 3–Year 5–Year 55% 7% 2% -3% -4% -14% -6% -13% -16% -32% -46% -46% Peoples Bancorp SPX 500 Index NASDAQ Bank Index Peer Group Peer Group data is comprised of the 22 publicly-traded financial institution holding companies more fully defined in Peoples’ definitive
Slide 37: Earnings Performance
Earnings Performance Annual Results $1.94 $2.01 $1.71 $1.74 $0.72 $0.83 $0.88 $0.91 $0.72 $0.78 $0.66 $0.34 $0.22 $0.40 2004 2005 2006 2007 2008 2009 2010 Earnings per common share Cash dividends declared per common share Quarterly Results $0.35 $0.26 $0.13 $0.10 $0.01 $0.10 $0.10 $0.10 $0.10 $(0.01
Slide 38: Pre-Tax, Pre-Provision Income
Pre-Tax, Pre-Provision Income 2006 2007 2008 2009 2010 Q3 2010 Q2 2011 Q3 20111 Income before income taxes $ 29,423 $ 23,874 $ 7,615 $ 3,126 $ 5,753 $ 192 $ 3,807 $ 5,806 Add: Provision for loan losses 3,622 3,959 27,640 25,721 26,916 8,005 2,295 865 Add: Intangbile amortization 2,261 1,934 1,586 1,
Slide 39: Net Interest Margin
Net Interest Margin 5.60% 5.51% 5.32% 5.24% 5.24% 4.94% 4.89% 4.81% 4.66% 3.50% 3.52% 3.58% 3.45% 3.49% 3.44% 3.43% 3.43% 3.39% 2.51% 2.35% 2.09% 2.04% 1.94% 1.77% 1.72% 1.63% 1.51% Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 20111 Q3 2011 Earning Assets Net Interest Margin Interest B
Slide 40: Non-Interest Income
Non-Interest Income ($ in thousands) $31,350 $32,097 $32,050 $31,634 $32,268 $30,379 2006 2007 2008 2009 2010 2011* Other $3,288 $3,385 $3,037 $3,594 $3,173 $2,675 E-Banking $3,080 $3,524 $3,882 $3,954 $4,686 $5,125 Trust & investment $4,258 $4,983 $5,139 $4,722 $5,348 $5,300 Insurance $9,538 $9,568
Slide 41: Revenue & Expense Trends
Revenue & Expense Trends ($ in millions) Operating Revenues 3.51% 3.48% 3.51% 3.41% 3.29% 3.32% $83.6 $85.6 36% 36% 2006 2007 2008 2009 2010 2011* Net interest income Non-interest income Net interest margin Operating Expenses 60.14% 60.30% 57.51% 57.07% 65.21% 56.30% $58.5 $51.3 51% 52% 547 539 FTEs
Slide 42: Balance Sheet Trends
Balance Sheet Trends ($ in millions) Earning Assets $1,117.9 $1,105.2 $1,081.1 $1,024.8 $1,024.7 $988.9 $983.7 $934.0 $923.6 $915.0 $925.6 $763.7 $767.0 $747.2 $710.0 $682.4 $687.6 $664.5 $678.8 $672.4 $553.1 $567.4 2006 2007 2008 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Net Loan
Slide 43: Regulatory Capital
Regulatory Capital Net $1,348 $1,316 $1,301 Risk- Risk-Weighted $1,245 $1,246 Assets $1,213 $1,201 ($ in millions) $1,150 $1,143 $1,135 $1,128 $211,509 $210,768 $209,738 $209,144 $209,647 $192,663 $195,485 $189,672 $177,523 $172,117 $173,470 Total Regulatory Capital ($ in thousands) YE2006 YE2007 YE
Slide 44: Asset Quality Trends
Asset Quality Trends ($ in millions) NPAs to Total Assets Net Charge-offs to Avg. Loans 2.66% 2.09% 2.03% 2.45% Total Credit Losses 1.83% 1.96% Loans OREO Investments 0.43% 0.37% 0.53% 0.51% 0.41% $33.4 $31.9 $31.9 0.30% 0.25% 0.21% 0.35% 0.25% $10.1 $3.6 $3.6 $2.5 $2.0 2003 2004 2005 2006 2007 2008
Slide 45: Non-GAAP Measures
Non-GAAP Measures ($ in 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 the consolid
Slide 46: Non-GAAP Measures
Non-GAAP Measures ($ in 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 the consolid
Slide 47: Investor Presentation
Nasdaq: PEBO Investor Presentation November 2011 Chuck Sulerzyski Ed Sloane President and Chief Financial Officer Chief Executive Officer and Treasurer
Peoples Bancorp — Investor Presentation (November 2011) on 6ix