Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q2 2024 Earnings Presentation
44 slides from Peoples Bancorp's earnings presentation, Jul 23, 2024
Slide 1: Working Together. Building Success. Investor Presentation 2nd Quarter 2024
20 WORKING TOGETHER. BUILDING SUCCESS. 24 INVESTOR PRESENTATION I 2nd QUARTER
Slide 2: Table of Contents
WORKING TABLE OF CONTENTS TOGETHER PAGE 4 PROFILE, CULTURE, STRATEGY & INVESTMENT RATIONALE BUILDING PAGE 13 BUILT ON A SOLID FOUNDATION SUCCESS PAGE 26 Q2 2024 FINANCIAL INSIGHTS PAGE 35 Q2 2024 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, Culture, Strategy & Investment Rationale
PROFILE, CULTURE, STRATEGY & INVESTMENT RATIONALE 4
Slide 5: Geographic Profile
PEBO GEOGRAPHIC PROFILE NASDAQ: PEBO NASDAQ: PEBO PEBO SNAPSHOT AS OF JUNE 30, 2024 PEOPLES BANK GEOGRAPHIC FOOTPRINT Loans: $6.3 billion CURRENT PEBO FOOTPRINT COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* Assets: $9.2 billion COUNTIES WHERE PEBO HAS OVER $100 MILLION OF DEPOSITS AND IS NOT IN TOP 3
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 nev
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: Preparation: Crossing $10 Billion
PREPARATION CROSSING $10 BILLION NASDAQ: PEBO SINCE 2016, WE HAVE BEEN PROACTIVELY PREPARING TO CROSS $10 BILLION IN ASSETS AND BEYOND Core System Conversion 2016 Upgraded to Microsoft 365 for all associates Implemented best-in-class Revamped online and Customer Relationship Cloud native business mo
Slide 9: Leading Edge Products, Technology and Capabilities
LEADING EDGE PRODUCTS, TECHNOLOGY AND CAPABILITIES NASDAQ: PEBO NASDAQ: PEBO CREDIT CARD SOLUTIONS COMMERCIAL CAPABILITIES FRAUD PREVENTION TOOLS Purchasing card, ghost card, Remote deposit capture, sweep Positive pay, reverse positive pay, virtual card, credit cards for accounts and more debit card
Slide 10: Investment Rationale
INVESTMENT RATIONALE NASDAQ: PEBO UNIQUE COMMUNITY BANKING MODEL • Strongest deposit market share positions in 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 in urb
Slide 11: Stock Performance
STOCK PERFORMANCE NASDAQ: PEBO NASDAQ: PEBO PEBO HAS PERFORMED BETTER THAN PEERS IN TERMS OF 3 & 5 YEAR TOTAL ANNUAL RETURN TOTAL RETURN AS OF JUNE 30, 2024 40% 38% TOTAL RETURN AS OF JUNE 30, 2024 35% 30% 27% PEBO PEER GROUP MEDIAN 25% KBW BANK INDEX 20% S&P 500 20% 18% 15% 15% 13% 10% 10% 7% 6% 6%
Slide 12: External Recognition
EXTERNAL RECOGNITION NASDAQ: PEBO THREE YEARS IN A ROW MENTAL WELLBEING f Best o 2023 ri-State the T 12
Slide 13: Built on a Solid Foundation: Capital, Credit and Liquidity
NASDAQ: PEBO NASDAQ: PEBO BUILT ON A SOLID FOUNDATION CAPITAL, CREDIT AND LIQUIDITY ® WORKING TOGETHER. BUILDING SUCCESS. 13
Slide 14: 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 MARCH 31, 2024 PEER GROUP - TOTAL DEPOSIT COST (%) 3.50% PEER GROUP - TOTAL DEPOSIT COST (%) 3.00% 2.50% UNIV. $1-$10 B AVERAGE: 2.16% 2.00% 1.85% 1.50% 1.00% 0.50% 0.00% TMP GABC FFBC S
Slide 15: Net Interest Margin
NET INTEREST MARGIN NASDAQ: PEBO NASDAQ: PEBO BEST IN CLASS NET INTEREST MARGIN LARGELY DUE TO STRONG DEPOSIT FRANCHISE DATA AS OF MARCH 31, 2024 PEER GROUP - NET INTEREST MARGIN PEER GROUP- NET INTEREST MARGIN 4.50% 4.28% 4.00% 3.50% UNIV. UNIV. $1-$10 B $1-$10 Average: B AVERAGE: 3.19% 3.19% 3.00%
Slide 16: Return on Average Assets
RETURN ON AVERAGE ASSETS NASDAQ: PEBO PEOPLES ADJUSTED ROAA OVER THE LAST 3 YEARS RETURN ON AVERAGE ASSETS (ROAA)* 1.75 Return on Average Assets (ROAA) 1.61 1.50 1.47 1.41 1.43 1.37 1.33 1.30 1.32 1.25 1.12 1.10 1.02 1.08 1.00 0.95 0.87 0.87 0.84 0.75 FY2021 FY2022 FY2023 Q1 2024 Avg. $1-$10 Billion
Slide 17: 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 18: Asset Quality
ASSET QUALITY NASDAQ: PEBO NPAS HAVE REMAINED RELATIVELY FLAT AS PEOPLES BANK HAS CONTINUED TO GROW IN ASSET SIZE NONPERFORMING ASSETS (NPAs) NONPERFORMING ASSETS (NPAs) AND NPA AND NPA PERCENT PERCENT OF TOTAL OF TOTAL ASSETS ASSETS $100 1.00% $80 0.80% NPA’S IN $ MILLIONS $60 0.60% $40 0.40% $20 0
Slide 19: Asset Quality: Criticized and Classified Loans
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED CRITICIZED AND CLASSIFIED LOANS CRITICIZED AND CLASSIFIED LOANS 40% CRITICIZED LOANS / TIER 1 CAPITAL + ACL 29.11% 29.54% 30% 28.50% 26.66% 26.07% CLASSIFIED LOANS / TIER 1 CAPI
Slide 20: CRE Concentration Analysis
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO CRE EXPOSURE IS WELL BELOW SUPERVISORY CRITERIA ESTABLISHED TO IDENTIFY INSTITUTIONS WITH HEIGHTENED CRE CONCENTRATION RISK DATA AS OF MARCH 31, 2024 PEER GROUP – CRE LOANS / RISK-BASED CAPITAL PEER GROUP- CRE LOANS / RISK-BASED CAPITAL 400% 350% 300% IS THE L
Slide 21: CRE Concentration Analysis: Construction and Land Development
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO NASDAQ: PEBO PEER GROUP – CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL DATA AS OF MARCH 31, 2024 PEER GROUP - CONSTRUCTION, LAND AND DEVELOPMENT LOANS / RISK BASED CAPITAL 120% 100% 100% IS THE LEVEL CONSIDERED HEIGHTENED CONSTRUCTION, LA
Slide 22: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO LOAN COMPOSITION REFLECTS DIVERSIFIED RISK PROFILE TOTAL LOAN PORTFOLIO COMMERICAL LOAN PORTFOLIO TOTAL LOAN PORTFOLIO = $6.3 BILLION COMMERCIAL LOAN PORTFOLIO = $3.8 BILLION 1 COMMERCIAL 60% 9% 1 COMMERCIAL REAL ESTATE 58% 11% 2 CONSUMER 29% 2 COMMERCIAL & INDUSTRIAL 3
Slide 23: Loan Composition: CRE and C&I Portfolios
LOAN COMPOSITION NASDAQ: PEBO NASDAQ: PEBO TOTAL C&I PORTFOLIO= $1.3 BILLION FOOD SERVICES TOTAL CRE PORTFOLIO* = $2.2 BILLION TOTAL C&I PORTFOLIO = $1.3 BILLION TOTAL CRE PORTFOLIO* = $2.2 BILLION RETAIL TRADE 1 APARTMENT 14% CONTRACTORS 1 FOOD SERVICES 25% APARTMENT 14% 2 RETAIL 13% 18% 2 RETAIL 2
Slide 24: Prudent Use of Capital
PRUDENT USE OF CAPITAL NASDAQ: PEBO SHARE ACQUISITION ORGANIC GROWTH DIVIDENDS REPURCHASES ACTIVITIES • Expect between 5% and • 8 consecutive years of • Repurchased shares in • Acquisitions completed 7% loan growth compared increasing dividends 2020, 2022 ($7.4 million), since 2011: to 2023 • Divide
Slide 25: Investment Rationale: Strength in Current Environment
INVESTMENT RATIONALE NASDAQ: PEBO NASDAQ: PEBO STRENGTH IN THE CURRENT ENVIRONMENT (AS OF JUNE 30, 2024) DEPOSITS CREDIT • Average customer deposit relationship: $31,000 • Stable metrics compared to year-end 2022 • 30% of our deposit balances exceeded FDIC • NPAs of 0.53% as a percentage of total as
Slide 26: Q2 2024 Financial Insights
Q2 2024 FINANCIAL INSIGHTS 26
Slide 27: Q2 2024 Highlights & Key Impacts
Q2 2024 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO NASDAQ: PEBO RETURN ON AVERAGE ASSETS 1.27% NET INTEREST MARGIN 4.18% NET INCOME $29 MILLION OR $0.82 PER DILUTED COMMON SHARE NET CHARGE-OFFS 0.27% OF AVERAGE TOTAL LOANS EFFICIENCY RATIO 59% LOAN TO DEPOSIT RATIO 87% ® WORKING TOGETHER. BUILDING SUCCES
Slide 28: Total Revenue
TOTAL REVENUE NASDAQ: PEBO RECORD TOTAL REVENUE IN 2023 RECORD TOTAL REVENUE IN 2023 $500,000 $93,950 $400,000 ($ THOUSANDS) $79,513 $339,374 $300,000 $253,442 $69,254 $200,000 $50,606 $64,330 $172,553 $173,253 $138,923 $100,000 $0 FY-20 FY-21 FY-22 FY-23 YTD-24 NETINTEREST INCOME NON-INTEREST INCOM
Slide 29: Non-Interest Revenue Composition
NON-INTEREST REVENUE COMPOSITION NASDAQ: PEBO NASDAQ: PEBO REVENUE SOURCES OF OUR FEE BASED BUSINESSES NON-INTEREST NON-INTERESTINCOME INCOME YTD 2024 4 YTD 2024 TOTAL INSURANCE REVENUE YTD 2024 TOTAL INVESTMENT REVENUE YTD 2024 $9.2 MILLION $10.6 MILLION 1 PROPERTY & CASUALTY 18% COMMERCIAL ELECTRO
Slide 30: Expense & Efficiency Ratio
EXPENSE & EFFICIENCY RATIO NASDAQ: PEBO THE RECENT ESCALATION IN EXPENSES WAS DUE OUR EFFICIENCY RATIO HAS BEEN UNDER TO ACQUISITIONS, AN INCREASE IN FTE DUE TO 60% SINCE 2022. GROWTH, AND TECHNOLOGY INVESTMENTS. CORE NON-INTEREST EFFICIENCY RATIO ADJUSTED EXPENSE* FOR NON-CORE ITEMS* EFFICENCY RATI
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. INCREASED NET INCOME IN 2022 AND 2023 WERE DUE TO INCREASES IN MARKET INTEREST RATES AND THE PREMIER, VANTAGE, AND LIMESTONE ACQUISITIONS. RETURN ON AVERAGE ASSETS RETURN ON AVER
Slide 32: Total Loan Growth
TOTAL LOAN GROWTH NASDAQ: PEBO TOTAL LOANS* WERE $6.3 BILLION AS OF JUNE 30, 2024 TOTAL LOANS* WERE $6.3 BILLION AS OF JUNE 30, 2024 $7,000 LIMESTONEACQUIRED LIMESTONE ACQUIRED LOANS LOANS PREMIER FINANCIAL BANCORP, INC. PREMIER FINANCIAL BANCORP, INC, ACQUIRED LOANS ACQUIRED LOANS ($ MILLIONS) ($ M
Slide 33: Deposit Growth
DEPOSIT GROWTH NASDAQ: PEBO NASDAQ: PEBO 35% OF DEPOSIT BALANCES AT SECOND QUARTER END 2024 WERE DEMAND DEPOSIT ACCOUNTS (DDAS), INCLUDING $1.5 BILLION OF NON-INTEREST BEARING DDAS 35% OF DEPOSIT BALANCES AT SECOND QUARTER END 2024 WERE DEMAND DEPOSIT ACCOUNTS (DDAS), INCLUDING $1.5 BILLION OF NON-
Slide 34: 2024 Financial Expectations
2024 FINANCIAL EXPECTATIONS NASDAQ: PEBO 2024 EXPECT HIGHER NET INTEREST INCOME DUE TO FULL YEAR BENEFIT OF LIMESTONE MERGER. NET INTEREST MARGIN NET INTEREST MARGIN BETWEEN 4.10% AND 4.30% FEE-BASED ANTICIPATE GROWTH TO BE BETWEEN 6% AND 8% COMPARED TO 2023 INCOME ANTICIPATE AN INCREASE IN PROVISIO
Slide 35: Q2 2024 Appendix
NASDAQ: PEBO NASDAQ: PEBO Q2 2024 APPENDIX ® WORKING TOGETHER. BUILDING SUCCESS. 35
Slide 36: Appendix: Non-US GAAP Measures - 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: Non-US GAAP Measures - 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: Non-US GAAP Measures - Core Non-Interest Income
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 and Adjusted for Non-Core Items
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 Tangible Book Value per Share
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 and Adjusted
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 Average Tangible Stockholders' 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: Non-US GAAP Measures
($ in Thousands) FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 FY-23 YTD-24 Annualized net income Add: amortization of other intangible assets $ 38,471 $ 3,516 46,255 $ 3,338 53,695 $ 3,359 APPENDIX 34,767 $ 3,223 47,555 $ 4,775 101,292 $ 7,763 113,363 $ 11,222 117,826 5,575 NON-US GAAP MEASURES Less: tax eff
Slide 44: Contact: Tyler Wilcox and Katie Bailey
TYLER WILCOX President and Chief Executive Officer 740.373.7737 Tyler.Wilcox@pebo.com KATIE BAILEY Executive Vice President Chief Financial Officer and Treasurer 740.376.7138 Kathryn.Bailey@pebo.com Peoples Bancorp® is a federally registered service mark of Peoples Bancorp Inc. The three arched ribb