Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q1 2024 Earnings Presentation
44 slides from Peoples Bancorp's earnings presentation, Apr 23, 2024
Slide 1: Working Together. Building Success. Investor Presentation 1st Quarter 2024
20 WORKING TOGETHER. BUILDING SUCCESS. 24 INVESTOR PRESENTATION I 1st 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 Q1 2024 FINANCIAL INSIGHTS PAGE 35 Q1 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 MARCH 31, 2024 PEOPLES BANK GEOGRAPHIC FOOTPRINT Loans: $6.2 billion CURRENT PEBO FOOTPRINT COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* Assets: $9.3 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 mob
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 1, 3 & 5 YEAR TOTAL ANNUAL RETURN TOTAL RETURN AS OF MARCH 31, 2024 40% PEBO PEER GROUP MEDIAN 33% KBW BANK INDEX 32% S&P 500 30% 22% 20% 15% 13% 11% 10% 7% 7% 7% 6% 6% 4% 3% 2% -1% -1% 0% 1-YEAR 3-YEAR 5-YE
Slide 12: External Recognition
EXTERNAL RECOGNITION NASDAQ: PEBO Peoples Bank has received American Banker, Best Banks to Work For & Top Workplaces USA award - THREE YEARS IN A ROW BEST IN THE VALLEYS f Best o 2023 ri-State 2023 the T WINNER 12
Slide 13: Built on a Solid Foundation
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 DECEMBER 31, 2023 PEER GROUP - TOTAL PEER GROUP DEPOSIT COST (%) - TOTAL DEPOSIT COST (%) 3.50% 3.00% 2.50% UNIV. $1-$10 B AVERAGE:2.03% 2.00% 1.68% 1.50% 1.00% 0.50% 0.00% FMNB CCNE FFB
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 DECEMBER 31, 2023 PEER GROUP - NET INTEREST MARGIN 5.00% 4.48% 4.50% 4.00% 3.50% UNIV. $1-$10 B AVERAGE: 3.25% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% FMNB FFBC CCNE P
Slide 16: Return on Average Assets
RETURN ON AVERAGE ASSETS NASDAQ: PEBO PEOPLES BANK HAS INCREASED ADJUSTED ROAA OVER THE LAST 3 YEARS RETURN ON AVERAGE ASSETS (ROAA) 1.75 1.47 1.61 1.50 1.41 1.43 1.37 1.30 1.25 1.12 1.10 1.00 0.95 1.08 0.87 0.75 0.84 0.50 0.25 0.00 FY2021 FY2022 FY2023 Avg. $1-$10 Billion Universe PEBO PEBO Adjuste
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 $100 NONPERFORMING ASSETS (NPAs) 1.00% AND NPA PERCENT OF TOTAL ASSETS $80 0.80% $60 0.60% NPA’S IN $ MILLIONS $40 0.40% $20 0.20% $0 0.00% FY-21 FY-22 FY-23 Q1-24 CRE Residential C&I HE
Slide 19: Asset Quality
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED Asset Quality CRITICIZED AND CLASSIFIED LOANS 50% CRITICIZED LOANS / 40% TIER 1 CAPITAL + ALLL * 29.11% 29.54% 30% 28.50% 26.66% CLASSIFIED LOANS / TIER 1 CAPITAL + ALLL * 20% 1
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 400% DATA AS OF DECEMBER 31, 2023 PEER GROUP – CRE LOANS / RISK-BASED CAPITAL 350% 300% IS THE LEVEL CONSIDERED HEIGHTENED CRE CONCENTRA
Slide 21: CRE Concentration Analysis
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO NASDAQ: PEBO PEER GROUP – CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL DATA AS OF DECEMBER 31, 2023 100% IS THE LEVEL CONSIDERED HEIGHTENED CONSTRUCTION, 120% LAND AND LAND DEVELOPMENT CONCENTRATION RISK PER SUPERVISORY GUIDANCE. 100% 80%
Slide 22: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO LOAN COMPOSITION REFLECTS DIVERSIFIED RISK PROFILE Loan Composition Loan Co TOTAL LOAN PORTFOLIO = $6.2 BILLION mposition COMMERCIAL LOAN PORTFOLIO = $3.8 BILLION lio Commercial Real Estate Portfo Total Lo Deposit Overdrafts) an Portfolio Loan Portfolio (Excluding 3 3 C
Slide 23: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO NASDAQ: PEBO C&IC hart TOTAL CRE PORTFOLIO* = $2.2 BILLION TOTAL C&I PORTFOLIO = $1.2 BILLION Commercial Real Estate Portfolio 1 APARTMENT 15% 11 1 FOOD SERVICES 25% 1 Other 2 RETAIL 13% 2 RETAIL TRADE 20% 11 3 CONTRACTORS 8% 3 INDUSTRIAL 11% Education 1 10 4 MANUFACTUR
Slide 24: Prudent Use of Capital
PRUDENT USE OF CAPITAL NASDAQ: PEBO SHARE ACQUISITION ORGANIC GROWTH DIVIDENDS REPURCHASES ACTIVITIES • Expect between 6% and • 8 consecutive years of • Repurchased shares in • Acquisitions completed 8% loan growth compared increasing dividends 2020, 2022 ($7.4 million), since 2011: to 2023 • Divide
Slide 25: Investment Rationale: Strength in the Current Environment
INVESTMENT RATIONALE NASDAQ: PEBO NASDAQ: PEBO STRENGTH IN THE CURRENT ENVIRONMENT (AS OF MARCH 31, 2024) DEPOSITS CREDIT • Average customer deposit relationship: $31,000 • Stable metrics compared to year-end 2022 • 32% of our deposit balances exceeded FDIC • NPAs of 0.50% as a percentage of total a
Slide 26: Q1 2024 Financial Insights
Q1 2024 FINANCIAL INSIGHTS 26
Slide 27: Q1 2024 Highlights & Key Impacts
Q1 2024 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO NASDAQ: PEBO RETURN ON AVERAGE ASSETS 1.32% NET INTEREST MARGIN 4.27% NET INCOME $29.6 MILLION OR $0.84 PER DILUTED COMMON SHARE NET CHARGE-OFFS 0.22% OF AVERAGE TOTAL LOANS EFFICIENCY RATIO 58% LOAN TO DEPOSIT RATIO 84.7% ® WORKING TOGETHER. BUILDING SU
Slide 28: Total Revenue
TOTAL REVENUE NASDAQ: PEBO RECORD TOTAL REVENUE IN 2023 $450,000 $93,950 $375,000 $339,374 $79,513 $300,000 ($ THOUSANDS) $253,442 $225,000 $69,254 $64,330 $172,553 $150,000 $138,923 $26,121 $75,000 $86,640 $0 FY-20 FY-21 FY-22 FY-23 Q1-24 NET INTEREST INCOME NON-INTEREST INCOME, EXCLUDING GAINS AND
Slide 29: Non-Interest Revenue Composition
NON-INTEREST REVENUE COMPOSITION NASDAQ: PEBO NASDAQ: PEBO REVENUE SOURCES OF OUR FEE BASED BUSINESSES noitisopmoC emocnI tnemtsevnI dna ecnarusnI 4 NON-INTEREST INCOME In *euneveR ecnarusnI In *euneveR tnemtsevnI su su ra TOTAL INSURANCE REVENUE nc ra e 5 Q1 2024 n 3 Re ce ve $6.5 MILLION n an ue 4
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. Efficiency Ratio Adjusted for Non- Core Non-Interest Expense* CORE NON-INTEREST EFFICIE
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. Improvement In Key Metrics Improvement
Slide 32: Total Loan Growth
TOTAL LOAN GROWTH NASDAQ: PEBO Total Loan Growth TOTAL LOANS WERE $6.2 BILLION AS OF MARCH 31, 2024 * $7,000 LIMESTONE ACQUIRED LOANS PREMIER FINANCIAL BANCORP, INC. ACQUIRED LOANS TOTAL PPP LOANS TOTAL ACQUIRED LEASES ($ MILLIONS) TOTAL LOANS NOT ACQUIRED $3,500 DURING THE CALENDAR YEAR EXCEPT PPP
Slide 33: Deposit Growth
DEPOSIT GROWTH NASDAQ: PEBO NASDAQ: PEBO 35% OF DEPOSIT BALANCES AT FIRST QUARTER END 2024 WERE Deposit DEMAND DEPOSIT ACCOUNTS (DDAS), Growth INCLUDING $1.5 BILLION OF NON-INTEREST BEARING DDAS $8,000 $7,327 $7,152 $6,000 $5,862 $5,717 BROKERED CERTIFICATES OF DEPOSIT GOVERNMENTAL DEPOSIT ACCOUNTS
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: Q1 2024 Appendix
NASDAQ: PEBO NASDAQ: PEBO Q1 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: Non-US GAAP Measures - Efficiency Ratio
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 Adjusted for Non-Core Items
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
APPENDIX FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 FY-23 YTD-24 NON-US GAAP MEASURES Annualized net income $ 31,157 $ 38,471 $ 46,255 $ 53,695 $ 34,767 $ 47,555 $ 101,292 $ 113,363 $ 29,584 Add: amortization of other intangible assets 4,030 3,516 3,338 3,359 3,223 4,775 7,763 11,222 2,788 Less: tax
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