Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q3 2023 Earnings Presentation
44 slides from Peoples Bancorp's earnings presentation, Oct 31, 2023
Slide 1: Investor Presentation 3rd Quarter
INVESTOR PRESENTATION I 3rd QUARTER WORKING TOGETHER. BUILDING SUCCESS.
Slide 2: Table of Contents
WORKING TOGETHER BUILDING SUCCESS 2 TABLE OF CONTENTS PAGE 4 PROFILE, INVESTMENT RATIONALE, CULTURE & STRATEGY PAGE 11 CREDIT, CAPITAL & LIQUIDITY PAGE 23 Q3 2023 FINANCIAL INSIGHTS PAGE 35 Q3 2023 APPENDIX
Slide 3: Forward-Looking Statements
3 PAGE 4 PROFILE, INVESTMENT RATIONALE, CULTURE & STRATEGY PAGE 11 CREDIT, CAPITAL & LIQUIDITY PAGE 23 Q3 2023 FINANCIAL INSIGHTS PAGE 35 Q3 2023 APPENDIX Statements in this presentation which are not historical are “forward-looking statements” within the meaning of Section 27A of the Securities Act
Slide 4: Profile, Investment Rationale, Culture & Strategy
PROFILE, INVESTMENT RATIONALE, CULTURE & STRATEGY 4
Slide 5: PEBO Geographic Profile
NASDAQ: PEBO PEBO GEOGRAPHIC PROFILE 5WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO WV VAKY OH MD DC OHIO WARREN COUNTY 49 CARLISLE 50 FRANKLIN 51 HAMILTON TOWNSHIP 52 LEBANON 53 MASON 54 SPRINGBORO 55 WAYNESVILLE HAMILTON COUNTY 56 MADEIRA 57 MONTGOMERY 58 CINCINNATI LPO EAST 59 CINCINNATI LPO
Slide 6: Corporate Culture
6 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 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) MATTERS In 2023 and beyond, we are committed to continuing to conduct our business in a mann
Slide 7: Strategic Road Map
NASDAQ: PEBO STRATEGIC ROAD MAP 7WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO • Everyone is a Risk Manager • Know the Risks: Strategic, Reputation, Credit, Market, Liquidity, Operational, Compliance • Disciplined Credit Culture • Do Things Right the First Time • Raise Your Hand • Discover the
Slide 8: Investment Rationale: Unique Community Banking Model
8 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
Slide 9: Investment Rationale
NASDAQ: PEBO INVESTMENT RATIONALE 9WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO CREDIT • Stable metrics compared to year-end • NPAs of 0.48% as a percentage of total assets • 99.0% of loan portfolio “current” at quarter-end • Total outstanding balance of commercial office space was $135 millio
Slide 10: External Recognition
10 EXTERNAL RECOGNITION NASDAQ: PEBO 2023 is the 2nd year in a row Peoples Bank has received Top Workplaces USA award 2023 is the 3rd year in a row Peoples Bank has received the American Banker Best Bank to Work For award COMMUNITY AWARDS BEST IN THE VALLEYS 2023 WINNER Best of the Tri-State 2023
Slide 11: Credit, Capital & Liquidity
NASDAQ: PEBO 11 CREDIT, CAPITAL & LIQUIDITY
Slide 12: Cost of Deposits
0.87% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% EG BN LK FN FR M E CC N E FI SI SA SR SR CE CT BI PF C TO W N FF BC HB N C FM N B TH FF FC F ST BA SY BT G AB C TM P PR K PE BO N BT B N W BI CH CO CB U PEER GROUP - TOTAL DEPOSIT COST (%) 12 COST OF DEPOSITS NASDAQ: PEBO PEBO IS BELOW THE $1 - $10 BIL
Slide 13: Deposit Franchise
85.89% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% SA SR ST BA EG BN PF C FC F N W BI CC N E LK FN SR CE N BT B SY BT FI SI CT BI PR K PE BO FR M E TM P FF BC TO W N CH CO TH FF HB N C G AB C FM N B CB U PEER GROUP - LOANS / DEPOSITS UNIV. $1-$10 B Average: 87.86% PROXY PEER GROUP - TOTAL DEPO
Slide 14: Net Interest Margin
4.55% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% PE BO FF BC ST BA PR K CH CO FC F TH FF CC N E G AB C SR CE SY BT FR M E CT BI LK FN N W BI N BT B CB U TO W N FI SI FM N B TM P SA SR PF C HB N C EG BN PEER GROUP- NET INTEREST MARGIN UNIV. $1-$10 B Average: 3.34% 14 NET INTERE
Slide 15: Credit Risk Management Process
BEST IN CLASS NET INTEREST MARGIN LARGELY DUE TO STRONG DEPOSIT FRANCHISE PROXY PEER GROUP - NET INTEREST MARGIN NASDAQ: PEBO CREDIT RISK MANAGEMENT PROCESS 15WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO LOANS & LEASES* PORTFOLIO COMPOSITION • Robust concentration management process focused on
Slide 16: Asset Quality
16 ASSET QUALITY NASDAQ: PEBO 0.000% 0.125% 0.250% 0.375% YTD 20232022202120202019201820172016 Charge Offs Annualized Percentage of Net Charge-Offs to Average Loans 90% 95% 100% YTD 20232022202120202019201820172016 Percentage of Loans considered Current Percentage of Loans Considered “Current” OUR D
Slide 17: Asset Quality: NPAs
NASDAQ: PEBO ASSET QUALITY 17WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO THE INCREASE IN NPAS IN Q3 2021 WAS MAINLY DUE TO ACQUISITION OF PREMIER FINANCIAL BANCORP, INC.* *The accounting for purchased credit deteriorated loans under ASU 2016-13 resulted in the movement of $3.9 million of loan
Slide 18: Criticized and Classified Loans
18 ASSET QUALITY NASDAQ: PEBO Asset Quality 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Q3-23Q2-23Q1-23Q4-22Q3-22Q2-22Q1-22Q4-21Q3-21Q2-21Q1-21FY-20FY-19FY-18FY-17 CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED. INCREASE IN Q3 2021 DUE TO ACQUISITION OF PREMIER FINA
Slide 19: CRE Concentration Analysis
254.03% 190.68% 0% 50% 100% 150% 200% 250% 300% 350% 400% EG BN SA SR ST BA PF C FI SI TM P TO W N $1 -1 0B A ve ra ge CC N E SY BT FC F FF BC CH CO PE BO LK FN FM N B G AB C FR M E TH FF HB N C N BT B CB U PR K N W BI SR CE PEER GROUP- CRE LOANS / RISK-BASED CAPITAL NASDAQ: PEBO CRE CONCENTRATION A
Slide 20: CRE Concentration Analysis
51.07% 49.39% 0% 20% 40% 60% 80% 100% 120% EG BN FI SI PF C SA SR LK FN CC N E TO W N TH FF SY BT PE BO $1 -1 0B A ve ra ge FR M E G AB C FC F TM P ST BA FF BC HB N C FM N B CB U PR K N W BI N BT B SR CE CH CO PEER GROUP - CONSTRUCTION, LAND AND DEVELOPMENT LOANS / RISK- BASED CAPITAL 20 CRE CONCENT
Slide 21: Loan Composition
PROXY PEER GROUP – CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL NASDAQ: PEBO LOAN COMPOSITION 21WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO TOTAL LOAN PORTFOLIO = $6.1 BILLION Data as of September 30, 2023. *Total includes commercial real estate and construction loans, a
Slide 22: Prudent Use of Capital
22 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 closi
Slide 23: Q3 2023 Financial Insights
Q3 2023 FINANCIAL INSIGHTS 23
Slide 24: Q3 2023 Highlights & Key Impacts
24 Q3 2023 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO Social media data as of September 30, 2023 for proxy peer group (based on Nasdaq symbol): TOWN, FFBC, CBU, FRME, NWBI, SASR, NBTB, EGBN, PRK, FCF, STBA, SRCE, TMP, PFC, HBNC, LKFN, SYBT, CHCO, GABC, FISI, CTBI, CCNE, THFF, FMNB Peoples Bank is in the
Slide 25: 2023 Financial Expectations
NASDAQ: PEBO FINANCIAL EXPECTATIONS 25WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO 2023 LOAN GROWTH FEE-BASED INCOME NON-INTEREST EXPENSE EFFICIENCY RATIO CREDIT COSTS ANTICIPATE 6-8% ORGANIC LOAN GROWTH EXPECT FEE BASED INCOME GROWTH TO BE IN LOW-TO-MID DOUBLE DIGITS COMPARED TO 2022 EXPECT N
Slide 26: 2024 Financial Expectations
26 2024 FINANCIAL EXPECTATIONS NASDAQ: PEBO 2024 EXPECTATIONS • Net Interest Income: higher net interest income due to full year benefit of Limestone Merger. • Loan growth: between 6% and 8%, compared to 2023 • Fee-based income is: growth will be in low double-digit percentages compared to 2023. • C
Slide 27: Stock Performance
NASDAQ: PEBO STOCK PERFORMANCE 27WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO PEBO PERFORMANCE HAS PERFORMED BETTER THAN PEERS IN TERMS OF YTD, 1, 3 & 5 YEAR TOTAL ANNUAL RETURN 0% 10% 20% 30% 40% 50% 60% 70% 80% YTD (not annualized) 3-YEAR1-YEAR 5-YEAR 10-YEAR -6% 13% -21% -25% -20% 22% TOTAL
Slide 28: Total Revenue
28 TOTAL REVENUE NASDAQ: PEBO $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 YTD 23FY-22FY-21FY-20FY-19FY-18FY-17FY-16 Lorem ipsum ON PACE FOR RECORD TOTAL REVENUE $51,070 $52,653 $57,234 $64,892 $104,865 $113,377 $129,612 $140,838 NON-INTEREST INCOME, EXCLUDING GAINS AND LOSSESNET
Slide 29: Insurance & Investment Income Composition
NASDAQ: PEBO INSURANCE & INVESTMENT INCOME COMPOSITION 29WORKING TOGETHER. BUILDING SUCCESS. ® NASDAQ: PEBO 3 4 5 TOTAL INVESTMENT REVENUE YTD 2023 $12.8 MILLION 1 FIDUCIARY 44% 2 BROKERAGE 40% 3 EMPLOYEE BENEFITS 16% Insurance and Investment Income Composition Insurance Revenue*Investment Revenue*
Slide 30: Expense & Efficiency Ratio
30 EXPENSE & EFFICIENCY RATIO NASDAQ: PEBO THE RECENT ESCALATION IN EXPENSES WAS DUE TO ACQUISITIONS, AND AN INCREASE IN FTE’S FOR GROWTH AND TECHNOLOGY INVESTMENTS CORE NON-INTEREST EXPENSE* Efficiency Ratio Adjusted for Non-Core Items* 50% 52% 54% 56% 58% 60% 62% 64% 66% 68% 70% YTD-23FY-22FY-21FY
Slide 31: Improvement in Key Metrics
0.0% 0.5% 1.0% 1.5% 2.0% YTD-23FY-22FY-21FY-20FY-19FY-18FY-17FY-16 Improvement In Key Metrics Return on Average Assets Adjusted for Non-Core Items Return on Average Tangible Stockholders’ Equity Adjusted for Non-Core Items 0% 5% 10% 15% 20% 25% FY-22FY-21FY-20FY-19FY-18FY-17FY-16 $14 $15 $16 $17 $18
Slide 32: Total Loan Growth
32 TOTAL LOAN GROWTH NASDAQ: PEBO $0 $2,500 $5,000 $7,500 YTD-23FY-22FY-21FY-20FY-19FY-18FY-17FY-16 Total Loan Growth AMERICAN SAVINGS BANK (ASB) ACQUIRED LOANS TOTAL LOANS NOT ACQUIRED DURING THE CALENDAR YEAR EXCEPT PPP LOANS LIMESTONE ACQUIRED LOANS FIRST PRESTONSBURG ACQUIRED LOANS TOTAL LOANS*
Slide 33: Deposit Growth
Deposit Growth $0 $2,500 $5,000 $7,500 YTD-23FY-22FY-21FY-20FY-19FY-18FY-17 DDAs* 39% OF DEPOSIT BALANCES AT QUARTER END FOR Q3 2023 WERE DEMAND DEPOSIT ACCOUNTS (DDAS), INCLUDING $1.6 BILLION OF NON-INTEREST BEARING DDAS *DDAs stands for demand deposit accounts and represents interest-bearing and n
Slide 34: More Than Just a Bank
34 MORE THAN JUST A BANK NASDAQ: PEBO Recognized by Newsweek as one of America’s Best Banks 2023 17th largest bank owned insurance company in the United States LOCATIONS IN OHIO, WEST VIRGINIA, KENTUCKY, VIRGINIA, WASHINGTON D.C. AND MARYLAND NATIONWIDE SPECIALTY FINANCE DIVISIONS
Slide 35: Appendix
G, 03.2023 APPENDIX
Slide 36: Non-US GAAP Measures: Pre-Provision Net Revenue
NASDAQ: PEBO APPENDIX NON-US GAAP MEASURES 36 PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) has become a key financial measure used by federal bank regulatory agencies when assessing the capital adequacy of financial institutions. PPNR is defined as net interest income plus total non-in
Slide 37: Non-US GAAP Measures: PPNR Adjusted for Non-Core Items
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO 37 PRE-PROVISION NET REVENUE ADJUSTED FOR NON-CORE ITEMS Pre-provision net revenue (PPNR) has become a key financial measure used by federal bank regulatory agencies when assessing the capital adequacy of financial institutions. PPNR adjusted for non-core i
Slide 38: Non-US GAAP Measures: Core Non-Interest Income and Expense
NASDAQ: PEBO APPENDIX NON-US GAAP MEASURES 38 CORE NON-INTEREST INCOME CORE NON-INTEREST EXPENSE ($ in Thousands) FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 YTD-23 Total noninterest income $ 50,867 $ 55,573 $ 56,754 $ 64,274 $ 63,672 $ 68,885 $ 78,836 $ 63,279 Less: net gain (loss) on investment secu
Slide 39: Non-US GAAP Measures: Efficiency Ratio
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO 39 EFFICIENCY RATIO AND ADJUSTED FOR NON-CORE ITEMS ($ in Thousands) FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 YTD-23 Total noninterest expense $ 106,911 $ 107,975 $ 125,977 $ 137,250 $ 133,695 $ 183,737 $ 207,147 $ 198,798 Less: amortization on other intan
Slide 40: Non-US GAAP Measures: Tangible Equity and Book Value
NASDAQ: PEBO APPENDIX NON-US GAAP MEASURES 40 TANGIBLE EQUITY TO TANGIBLE ASSETS AND TANGIBLE BOOK VALUE PER SHARE ($ in Thousands) FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 YTD-23 Total stockholders equity $ 435,261 $ 458,592 $ 520,140 $ 594,393 $ 575,673 $ 845,025 $ 785,328 $ 993,219 Less: goodwil
Slide 41: Non-US GAAP Measures
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 goodwill and other intangible assets acquired through acquisitions on both total stockholders’ equity and total
Slide 42: Non-US GAAP Measures: Return on Average Tangible Equity
NASDAQ: PEBO APPENDIX NON-US GAAP MEASURES 42 (a) Tax effect is calculated using a 21% federal statutory tax rate for the 2023, 2022, 2021, 2020, 2019 and 2018 periods and 35% federal statutory rate for all other periods shown. RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY The return on average ta
Slide 43: Non-US GAAP Measures: Return on Average Equity Adjusted
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO 43 RETURN ON AVERAGE STOCKHOLDERS’ EQUITY ADJUSTED FOR NON-CORE ITEMS (a) Tax effect is calculated using a 21% federal statutory tax rate for the 2023, 2022, 2021, 2020, 2019 and 2018 periods and 35% federal statutory rate for all other periods shown. The r
Slide 44: Contact
peoplesbancorp.com Peoples Bancorp® is a federally registered service mark of Peoples Bancorp Inc. The three arched ribbons logo is a federally registered service mark of Peoples Bank. Peoples Bank (w/logo)® is a federally registered service mark of Peoples Bank. Working Together. Building Success.®