Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q4 2014 Earnings Presentation
44 slides from Peoples Bancorp's earnings presentation, Feb 12, 2015
Slide 1: Investor Presentation 4th Quarter 2014
Nasdaq: PEBO Investor Presentation 4th Quarter 2014
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: Additional Information
Additional Information This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, securities of Peoples Bancorp Inc. (“Peoples”). Peoples has filed with the SEC a registration statement on Form S-4 and a joint proxy statement/prospectus that was mailed to the sha
Slide 4: Overview
y Overview ’ Peoples e) BANCORP®
Slide 5: Corporate Profile
Corporate Profile • Financial holding company headquartered in Marietta, Ohio. – Provide a broad range of banking, insurance, and investment services • Current snapshot: – Assets: $3.2 billion* — Loans: $2.0 billion* – Deposits: $2.5 billion* – Market capitalization: $352 million – Assets under Mana
Slide 6: Key Accomplishments
Key Accomplishments • Building greater bottom- bottom-line earnings momentum – Solid performance in 2014 with meaningful contributions across the company • Growing top- top-line revenue while remaining disciplined with expenses – Strong organic revenue growth YTD; up 18% with M&A activity – Approxim
Slide 7: Current Outlook
Current Outlook • Committed to generating positive operating leverage each year – Revenue growth slightly ahead of expense growth for 2014 – Key drivers of revenue growth include acquisition activity, organic loan growth and an expanding net interest margin – Expense growth in 2014 due to acquisitio
Slide 8: 2015 Outlook
2015 Outlook • Target efficiency ratio below 65% for second half of 2015 – Expect full phase-in of cost savings from NB&T during the second quarter – Improve core efficiency in each business line • Effective balance sheet management – Reduce relative size of the investment portfolio to 25% of total
Slide 9: Investment Rationale
Investment Rationale • Unique community banking model – Greater revenue diversity for a community bank our size (35% to 40% fee-based) – Strong community reputation and active involvement – Local market teams capable of outmaneuvering larger banks – More sophistication and product breadth than small
Slide 10: Stock Performance
Stock Performance Total Annual Return YTD* 1-Year 3-Year 5-Year 20% 18% 18% 17% 16% 15% 15% 16% 16% 16% 11% 8% 0% - 5% - 4% - 7% PEBO Peer Group NASDAQ Banks SPX 500 *YTD Non- Non-Annualized Total Return includes impact of dividends Peers include: CCNE, CHCO, CNND, CTBI, FBMI, FDEF, FISI, FMNB, FRME
Slide 11: Recent Acquisition Activity
Recent Acquisition Activity
Slide 12: Recent Bank Acquisitions
Recent Bank Acquisitions October 2013 Ohio Commerce Bank Single office in Beachwood Total assets = $123 million October 2014 North Akron Savings Bank Four offices headquartered in North Akron Total assets = $146 million August 2014 Ohio Heritage Bancorp Six offices headquartered in Coshocton Total a
Slide 13: NB&T Financial Group Transaction
NB&T Financial Group Transaction Peoples Bancorp (56) NB&T Financial (22) NB&T Financial Group Inc. (NASDAQ: NBTF) • Deal announced on August 4, 2014 • 22 offices in SW Ohio • Important step in Peoples’ quest to “Build the Best Community Bank in America” • Top market share in both Clinton County and
Slide 14: NB&T Financial Group Transaction
NB&T Financial Group Transaction Transaction Summary Transaction rationale: – Market expansion to southwest, Ohio $109 million; $31 per share; 160% of (Cincinnati / Dayton) market place Deal Value: TBV – Hired Ed Reilly, former southwest Ohio District President for Key Bank, to lead 75% stock / 25%
Slide 15: Current Strategic Priorities
Current Strategic Priorities
Slide 16: Our Strategic Road Map
Our Strategic Road Map “The Best Community Bank in America” Responsible Extraordinary Superior Profitable Revenue Growth Risk Management Client Experience Workforce • Our Way of Life • Broad Delivery Channels • M&A • Right People / Right Job • Sales & Service Process • Asset Quality • Appetite for W
Slide 17: Strategic Priorities
Strategic Priorities •Primary emphasis on revenue growth Positive •Disciplined expense management Operating •Expand revenue vs. expense growth gap beyond 2% Leverage •Target efficiency ratio below 65% Superior •Balance growth with prudent credit practices Asset •Improve diversity within loan portfol
Slide 18: Strategic Targets
Strategic Targets 5-Year Actual Actual Actual Strategic Metrics 2012 2013 2014 Target Range Net interest margin (Fully-tax equivalent) 3.39% 3.23% 3.45% 3.60% to 3.80% Positive Total revenue growth 2.90% 3.53% 18.31% 5% to 8% Operating Total expense growth 3.49% 7.55% 24.52% 3% to 6% Leverage Non-in
Slide 19: Our M&A Strategy
Our M&A Strategy • Optimize our current footprint – Gain 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 o
Slide 20: Target Growth Areas
Target Growth Areas I-70 Expansion I-77 Expansion • High growth potential • Bank opportunities • Recently added new talent • Wealth management and insurance opportunities Southwest Ohio • Shale oil / gas activity • Wealth management or insurance opportunities to complement NB&T • Attractive growth a
Slide 21: Customers and Markets
Customers and Markets (Peoples ¢
Slide 22: Utica/Marcellus Shale Opportunity
Utica/Marcellus Shale Opportunity Both opportunities are present in PEBO’s market area Marietta Marietta • Key driver of stronger economic activity – Land owners acquiring wealth from selling drilling rights – Hospitality sector benefiting from nonresident workers – Local businesses supplying produc
Slide 23: Our Capabilities
Our Capabilities ***National Banks*** ***Community Banks*** PEOPLES Wells Bank of BANCORP City Community Wes- Park United Online Channel Chase Fargo America PNC Huntington National Trust Banco National Bank Bill Pay Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Online Account Opening Yes Yes Yes Yes Y
Slide 24: Our Businesses
Our Businesses • Commercial Banking – 12% organic commercial loan growth in 2014 – Legal lending limit over $30 million • Retail Banking – 4.5% checking account growth in 2014 – $38 million or 50% indirect loan growth in 2014 • Insurance – Property & Casualty – Life & Health – 11% revenue growth in
Slide 25: Our Brand Promise
Our Brand Promise 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 26: Refreshing our Branches
Refreshing our Branches Before • 18- 18-month, 5- 5-phase project – Floor-to-ceiling renovations – Over $5 million invested – Final phase completed Q1 2014 – Used national branch design experts • Retrofitting acquisition offices as acquired After • Key Benefits – All delivery channels “Best in Class
Slide 27: Financial Performance
Financial Performance (Peoples ©
Slide 28: Annual Financial Summary
Annual Financial Summary FY FY FY FY FY Metrics 2010 2011 2012 2013 2014 Diluted EPS $0.34 $1.07 $1.92 $1.63 $1.35 Return on common equity 1.76% 5.61% 9.52% 7.92% 6.16% Financial Return on assets 0.28% 0.69% 1.11% 0.91% 0.74% Performance Net interest margin (FTE) 3.51% 3.43% 3.39% 3.23% 3.45% Effici
Slide 29: Quarterly Financial Summary
Quarterly Financial Summary 4Q 1Q 2Q 3Q 4Q Metrics 2013 2014 2014 2014 2014 Diluted EPS $0.47 $0.44 $0.32 $0.32 $0.28 Return on common equity 9.09% 8.56% 5.91% 5.84% 5.03% Financial Return on assets 1.01% 0.95% 0.67% 0.73% 0.66% Performance Net interest margin (FTE) 3.43% 3.35% 3.39% 3.49% 3.53% Eff
Slide 30: Key Drivers of Shareholder Value
Key Drivers of Shareholder Value LTM Fee Revenue to LTM Revenue Growth NPAs to Loans and OREO Average Assets 18.2% 1.95% 1.77% 1.54% 1.23% 5.8% 0.63% 0.84% 2.8% PEBO Peers $1- $1-5B PEBO Peers $1- $1-5B PEBO Peers $1- $1-5B LTM Price to Earnings LTM Dividend Payout Dividend Yield 2.61% 44.44% 2.31%
Slide 31: Earnings Performance
Earnings Performance Annual Results $1.94 $2.01 Earnings per common share $1.92 $1.74 Cash dividends paid per common share $1.63 $1.35 $1.07 $0.72 $0.83 $0.88 $0.91 $0.78 $0.34 $0.22 $0.66 $0.57 $0.60 $0.40 $0.41 $0.46 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Quarterly Results $0.47 $0.46 $
Slide 32: Net Interest Margin
Net Interest Margin 4.64% 4.45% 4.35% 4.17% 4.24% 4.04% 4.00% 4.00% 3.86% 3.85% 3.91% 3.93% 3.92% 3.49% 3.49% 3.53% 3.41% 3.43% 3.42% 3.43% 3.35% 3.39% 3.30% 3.26% 3.12% 3.15% 1.39% 1.26% 1.14% 1.08% 1.03% 0.93% 0.89% 0.85% 0.80% 0.76% 0.72% 0.71% 0.65% Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 201
Slide 33: Non-Interest Income
Non--Interest Income Non ($ in thousands) $40,053 $37,220 $34,971 $31,634 $32,944 $32,097 $32,050 2008 2009 2010 2011 2012 2013 2014 Other $3,037 $3,594 $3,173 $3,224 $4,078 $2,942 $2,949 E-Banking $3,882 $3,954 $4,686 $5,142 $5,955 $6,191 $6,642 Trust & investment $5,139 $4,722 $5,348 $5,548 $6,129
Slide 34: Balance Sheet Trends
Balance Sheet Trends ($ in millions) Earning Assets $1,603.0 $1,485.8 $1,302.0 $1,179.2 $1,209.6 $1,024.8 $1,013.1 $1,040.3 $934.0 $967.4 $963.1 $914.8 $718.2 $689.1 $737.9 $682.1 $688.2 $679.7 $681.4 $663.4 $640.0 $659.8 $647.2 $642.3 YE 2009 YE 2010 YE 2011 YE 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
Slide 35: Loan and Deposit Composition
Loan and Deposit Composition Loan Portfolio Deposit Portfolio Deposit Account OD Construction 0.2% 2.4% HELOCs 5.0% Consumer 11.3% Non- Non- Interest Retail CDs Bearing 22.4% 25.4% CRE 34.3% Public Residential Funds MMDA Real Estate 8.3% 17.5% 29.5% C&I 17.3% Savings 15.3% Interest- Interest- Bearin
Slide 36: Asset Quality Trends
Asset Quality Trends ($ in millions) Provision for Loan Losses & Net Charge- Charge-offs Nonperforming Assets 1.57% 1.49% 1.49% 1.47% 1.48% 0.92% 0.79% 0.75% 0.67% 0.66% ALLL to loans originated Provision for loan losses Net charge-offs $12.2 $12.2 $0.6 $9.7 $0.2 $9.9 $0.0 $0.1 $0.1 $8.1 ($0.6) ($0.
Slide 37: Capital Trends
Capital Trends Leverage Ratios Per Share Basis 10.64% $22.92 $22.36 $22.56 $21.63 9.92% $20.89 8.76% 9.40% 9.39% 8.52% 8.56% $15.07 $15.50 $15.57 7.90% $14.38 7.66% $13.57 7.26% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Tier 1 Leverage Tangible Common Equity to
Slide 38: Appendix
y Appendix ’ Peoples e) BANCORP®
Slide 39: Non-GAAP Measures
Non--GAAP Measures Non PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) 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 retain
Slide 40: Non-GAAP Measures
Non--GAAP Measures Non PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) 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 retain
Slide 41: Non-GAAP Measures
Non--GAAP Measures Non Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non-GAAP financial information since the calculations remove the impact of intangible assets acquired through acquisitions on the consolidated balance sh
Slide 42: Non-GAAP Measures
Non--GAAP Measures Non Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non-GAAP financial information since the calculations remove the impact of intangible assets acquired through acquisitions on the consolidated balance sh
Slide 43: Investor Presentation 4th Quarter 2014
Nasdaq: PEBO Investor Presentation 4th Quarter 2014
Slide 44: 4th Quarter Earnings Release
4th Quarter Earnings Release