Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (July 2012)
39 slides from Peoples Bancorp's investor presentation, Jul 31, 2012
Slide 1: Investor Presentation
Investor Presentation August 2012 Chuck Sulerzyski Ed Sloane President and Chief Executive Officer Chief Financial Officer and Treasurer 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation which are not historical are “forward- “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
Slide 3: Key Discussion Points
Key Discussion Points Corporate Profile Mergers & Acquisitions Strategic Priorities Investment Rationale 3
Slide 4: Corporate Profile
Y Peoples 4a Bancorp’ Corporate Profile
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: $1.8 billion – Loans: $955 million – Deposits: $1.4 million Cleveland – Market capitalization: $230 million – Over 125,0
Slide 6: Corporate Culture
Corporate Culture Customer- Customer-focused approach to sales and service – Offer broad array of financial services – Provide exceptional advice and service to clients – Build long-lasting relationships Pursue disciplined franchise growth – Target areas with greater long-term growth potential –
Slide 7: Levers of Success
Levers of Success Asset quality – Renewed emphasis on credit basics and pricing discipline – Aggressive resolution of problem loans – Attention to portfolio management Revenue growth – Emphasis on fee-based revenues over net interest income – Greater sales discipline and management – Meaningful cont
Slide 8: 2012 Year-to-Date Results
2012 Year- Year-to to--Date Results Strong core operating results Earnings per Share – Positive operating leverage $1.10 – All-time record earnings in Q1 2012 $0.63 Favorable asset quality trends $0.26 $0.35 $0.33 $0.47 $0.38 – Steady reduction in nonperforming assets $0.13 – Sizable reserve rel
Slide 9: Recent Financial Summary
Recent Financial Summary 2Q 3Q 4Q 1Q 2Q Metrics 2011 2011 2011 2012 2012 Diluted EPS $0.26 $0.35 $0.33 $0.63 $0.47 Return on common equity 5.49% 7.19% 6.69% 12.90% 9.57% Financial Return on assets 0.65% 0.86% 0.84% 1.48% 1.11% Performance Net interest margin (FTE) 3.43% 3.39% 3.49% 3.41% 3.43% Effic
Slide 10: Stock Performance
Stock Performance Total Annual Return 1-Year 3-Year 5-Year 98% 13% 15% 12% 7% 7% 5% 5% 1% 0% -2% -8% 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 pro
Slide 11: Mergers & Acquisitions
Y Peoples /4 Bancorp Mergers & Acquisitions
Slide 12: 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 13: Market Growth Opportunities
Market Growth Opportunities I-70 Expansion I-77 Expansion • High growth potential • Possible M&A opportunities • Recently added new talent Cleveland • Wealth management opportunities I-75 Corridor • High growth potential Columbus • Attractive market dynamics Dayton Zanesville Lancaster Morgantown Ci
Slide 14: Strategic Priorities
Y Peoples 4a Bancorp’ Strategic Priorities
Slide 15: Strategic Progression
Strategic Progression Our path to “top performer” status 2011 2012 2013 & Beyond • Aggressive resolution of • Return to credit basics • Balance growth with risk Asset problem loans management Quality • Prudent approach with • Redesign credit function allowance for loan losses • Lessen CRE exposures
Slide 16: Strategic Targets
Strategic Targets Actual Strategic Actual Actual YTD 5-Year Focus Metrics 2010 2011 2012 Target Range Improve NPAs to total loans + OREO 4.64% 3.41% 1.85% 0.80% to 1.00% Asset Quality Net charge-offs to average loans (1) 2.66% 1.16% 0.11% 0.25% to 0.50% Adjust Balance Loans to total assets 52.27% 52
Slide 17: Key Performance Drivers
Key Performance Drivers Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Metric Classified Assets Ratio (1) 45.28% 47.91% 48.02% 40.44% 30.13% Revenue Growth (2) - 7.1% - 5.7% - 0.4% 2.9% 3.6% Efficiency Ratio 67.43% 69.70% 73.53% 65.47% 69.61% Loan Growth (3) - 1.6% - 0.3% 0.4% - 0.2% 1.4% Pre-Provision Net
Slide 18: Balance Sheet Trends
Balance Sheet Trends Average Balances Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 ($ in millions) Total Loans $ 947.6 $ 944.4 $ 948.6 $ 946.2 $ 959.6 Total Investments (1) 655.6 656.2 660.8 664.8 662.5 Interest-Bearing 1,070.5 1,057.6 1,055.8 1,060.2 1,083.4 Retail Deposits Non-Interest-Bearing 226.7 22
Slide 19: Asset Quality Trends
Asset Quality Trends $186.6 $186.7 $171.7 $154.3 $153.3 $136.7 $114.8 $109.7 $94.9 $93.6 $87.1 $84.8 $75.6 $57.4 ($ in millions) 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 30-89 Days Past Due $8,651 $14,118 $10,525 $9,847 $10,981 $10,309 $11,814 Nonperforming Loans $40,477 $32,359 $31,545 $33,103 $30,022 $2
Slide 20: Investment Rationale
Investment Rationale Long- Long-standing, stable company – Sizable market share in several areas – Strong community reputation and active involvement Unique community banking model – Greater revenue diversity for a community bank our size – Local market teams capable of outmaneuvering larger ban
Slide 21: Appendix
Appendix
Slide 22: Utica / Marcellus Shale Opportunity
Utica / Marcellus Shale Opportunity Marietta Marietta Peoples Bancorp’s current market area overlaps portions of both shale opportunities 22
Slide 23: Executive Management Team
Executive Management Team Years in Banking Officer Background PEBO Total Chuck W. Sulerzyski • Diverse financial services experience • Progressive executive leadership 1 36 President and CEO Edward G. Sloane • Progressive finance and accounting leadership EVP, CFO and Treasurer • Extensive experienc
Slide 24: Focus on Business Lines
Focus on Business Lines Sales and Service Discipline Define Rewards Measure- Measure- the Training Coaching and ments Goals Consequences • Leadership sales and coaching training started in December 2011 • Front-line training completed in Q1 2012 • All managers trained in coaching and sales managemen
Slide 25: Winning the Checking Account Challenge
Winning the Checking Account Challenge Total fee income increased 3.2% year- year-over- over-year in 2012 – Both service charge and other income related to delivery channels Redesigned consumer checking product line in 2011 – Eliminated “free checking” but provide ability to avoid fees – Maintai
Slide 26: 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 27: Earnings Performance
Earnings Performance Annual Results $1.94 $2.01 $1.71 $1.74 $1.07 $0.72 $0.83 $0.88 $0.91 $0.72 $0.78 $0.34 $0.22 $0.66 $0.40 $0.41 2004 2005 2006 2007 2008 2009 2010 2011 Earnings per common share Cash dividends declared per common share Quarterly Results $0.63 $0.47 $0.35 $0.33 $0.26 $0.13 $0.10 $
Slide 28: Net Interest Margin
Net Interest Margin 5.32% 5.24% 5.24% 4.94% 4.89% 4.81% 4.66% 4.64% 4.45% 4.35% 3.52% 3.49% 3.58% 3.49% 3.44% 3.43% 3.43% 3.39% 3.41% 3.43% 2.09% 2.04% 1.94% 1.77% 1.72% 1.63% 1.51% 1.39% 1.26% 1.14% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 20111 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Earning Assets Net
Slide 29: Operating Leverage
Operating Leverage Year Year--over over--Year Change in Revenue & Expenses 16.6% 10.5% 7.9% Total Operating Expenses 6.2% 2.9% 0.3% 2.9% 2.9% -0.9% 3.6% 0.5% 2.7% -3.1% -2.6% -1.2% -0.4% -1.3% -4.5% -6.8% -7.1% -5.7% -7.8% Total Revenue Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
Slide 30: Non-Interest Income
Non--Interest Income Non ($ in thousands) $32,944 $31,350 $32,097 $32,050 $31,634 $30,379 2006 2007 2008 2009 2010 2011 Other $3,288 $3,385 $3,037 $3,594 $3,173 $3,224 E-Banking $3,080 $3,524 $3,882 $3,954 $4,686 $5,142 Trust & investment $4,258 $4,983 $5,139 $4,722 $5,348 $5,548 Insurance $9,538 $9
Slide 31: Revenue & Expense Trends
Revenue & Expense Trends ($ in millions) Operating Revenues 3.51% 3.48% 3.51% 3.43% 3.29% 3.32% $83.6 $86.9 36% 38% 2006 2007 2008 2009 2010 2011 Net interest income Non-interest income Net interest margin Operating Expenses 60.30% 68.98% 60.14% 57.51% 57.07% 56.30% $61.3 $51.3 51% 55% 547 559 546 5
Slide 32: Balance Sheet Trends
Balance Sheet Trends ($ in millions) Earning Assets $1,105.2 $1,081.1 $1,024.8 $1,024.7 $988.9 $983.7 $934.0 $923.6 $915.0 $925.6 $914.8 $922.9 $935.4 $763.7 $767.0 $747.2 $710.0 $682.4 $687.6 $664.5 $678.8 $672.4 $675.8 $676.8 $689.0 $567.4 2007 2008 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2
Slide 33: Loan Composition
Loan Composition ($ in thousands) 2006 2007 2008 2009 2010 2011 Q1 2012 Q2 2012 Retail $419,868 $363,363 $368,983 $356,682 $353,882 $356,720 $356,128 $355,287 C&I $191,847 $171,937 $178,834 $159,915 $153,192 $140,857 $150,431 $161,893 CRE $520,679 $585,641 $556,215 $535,461 $453,123 $440,929 $437,54
Slide 34: Asset Quality Trends
Asset Quality Trends ($ in millions) Provision for Loan Losses & Net Charge-offs Nonperforming Assets 2.68% 2.65% 2.58% 3.85% 3.71% 3.84% 2.53% 3.41% $7,628.0 2.25% 2.25% $5,311.0 2.09% 1.85% $36.8 $35.1 $36.8 $32.2 $2,295.0 $1,578.0 $21.4 $865.0 $818.0 $1,023.0 $331.0 $204.0 $17.8 Provision for loa
Slide 35: Deposit Composition
Deposit Composition 2006 2007 2008 2009 2010 2011 Q1 2012 Q2 2012 Checking & Savings $376,229 $372,766 $376,845 $437,623 $427,912 $484,453 $534,272 $546,767 Public Funds $78,900 $101,039 $105,714 $112,074 $122,444 $122,916 $161,798 $155,881 MMDs $134,387 $153,299 $213,498 $263,257 $289,657 $268,410
Slide 36: Non-GAAP Measures
Non--GAAP Measures Non 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 buil
Slide 37: 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 their calculation removes the impact of intangible assets acquired through acquisitions on the consolidated balance
Slide 38: 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 their calculation removes the impact of intangible assets acquired through acquisitions on the consolidated balance
Slide 39: Investor Presentation
Investor Presentation August 2012 Chuck Sulerzyski Ed Sloane President and Chief Executive Officer Chief Financial Officer and Treasurer 39