Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q3 2022 Earnings Presentation
44 slides from Peoples Bancorp's earnings presentation, Oct 25, 2022
Slide 1: Investor Presentation 3rd Quarter 2022
INVESTOR PRESENTATION 3rd QUARTER 2022
Slide 2: Table of Contents
WORKING TABLE OF CONTENTS TOGETHER PAGE 4 PROFILE, INVESTMENT RATIONALE, BUILDING CULTURE AND STRATEGY PAGE 10 CREDIT, CAPITAL & LIQUIDITY SUCCESS PAGE 21 Q3 & YTD 2022 FINANCIAL INSIGHTS PAGE 35 Q3 & YTD 2022 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, Investment Rationale, Culture & Strategy
PROFILE, INVESTMENT RATIONALE, CULTURE & STRATEGY 4
Slide 5: Geographic Profile
PEBO GEOGRAPHIC PROFILE NASDAQ: PEBO NASDAQ: PEBO PEOPLES BANK GEOGRAPHIC FOOTPRINT PEBO SNAPSHOT AS OF SEPTEMBER 30, 2022 PEBO FOOTPRINT Loans: $4.6 billion COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* CLEVELAND Assets: $7.0 billion COUNTIES WHERE PEBO HAS OVER $100 MILLION OF Deposits: $5.9 billion
Slide 6: Investment Rationale
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 32 counties across three states. • Presence near larger cities puts us in a position to capture lending opportunities i
Slide 7: Corporate Culture
CORPORATE CULTURE NASDAQ: PEBO NASDAQ: PEBO OUR VISION Our vision is to be the BEST COMMUNITY BANK IN AMERICA OUR CORE VALUES Our actions are guided by our core values represented by the Promise Circle, which embodies how we do business and our never ending pursuit of creative value for our associat
Slide 8: Strategic Road Map
STRATEGIC ROAD MAP 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 EXPERIENCE R
Slide 9: External Recognition
EXTERNAL RECOGNITION NASDAQ: PEBO North Star Leasing makes the TOP 101+ Companies in Equipment Finance and earns a 114 ranking on the 2022 Monitor 101+ list. (# 1 in micro-ticket.) When combining North Star Leasing Peoples Bank is one of only 30 companies with Vantage Financial, Peoples that have be
Slide 10: Credit, Capital & Liquidity
NASDAQ: PEBO CREDIT, CAPITAL & LIQUIDITY 10 10
Slide 11: 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 12: Asset Quality
ASSET QUALITY NASDAQ: PEBO OUR DELINQUENCY AND NET CHARGE-OFF TRENDS HAVE REMAINED STABLE FOR FIVE YEARS Percentage of Loans Considered “Current” Percentage of Net Charge-Offs to Average Loans Annualized Percentage of Loans considered Current Charge Offs Annualized 100% 0.375% 99.1% 98.9% 98.6% 98.5
Slide 13: Asset Quality: NPA Composition
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO NPA Composition NPAS HAVE CONTINUED TO DECREASE SINCE THE INCREASE IN Q3 2021, WHICH WAS MAINLY DUE TO ACQUIRED LOANS* $60 $50 CRE $40 RESIDENTIAL NPA’S IN $ MILLIONS C&I $30 HELOC CONSUMER $20 $10 $0 2017 2018 2019 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4
Slide 14: Asset Quality: Classified and Criticized Loans
ASSET QUALITY NASDAQ: PEBO CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED. Asset Quality INCREASE IN Q3 DUE TO ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. 50% CRITICIZED LOANS / 45% TIER 1 CAPITAL + ALLL * 40% 35.72% 35% CLASSIFIED LOANS / 30.93% TIER 1 CAPITAL
Slide 15: CRE Concentration Analysis
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO NASDAQ: PEBO CRE EXPOSURE IS WELL BELOW SUPERVISORY CRITERIA ESTABLISHED TO IDENTIFY Peer BankWITH INSTITUTIONS Subs - CRE Loans HEIGHTENED / Risk-BasedRISK CRE CONCENTRATION Capital 400% PEER BANK SUBS – CRE LOANS / RISK-BASED CAPITAL 350% 300% 300% IS THE LE
Slide 16: CRE Concentration Analysis
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO PEBO IS MEANINGFULLY BELOW THE AVERAGE FOR $1-10 BILLION BANKS Peer Bank Subs -- Construction, Land, and Land Development Loans / PEER BANK SUBS – CONSTRUCTION, Risk-Based Capital LOANS / RISK-BASED CAPITAL LAND AND LAND DEVELOPMENT 110% 100% 90% 100% IS THE L
Slide 17: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO NASDAQ: PEBO C&IC hart LOAN COMPOSITION REFLECTS DIVERSIFIED RISK PROFILE Loan Co TOTAL C&I PORTFOLIO = $0.9 BILLION TOTAL LOAN PORTFOLIO* = $4.6 BILLION mpo TOTAL CRE PORTFOLIO** = $1.6 BILLION sition WHICH INCLUDES PPP LOANS Loan Po rtfolio (E Commercial Real Estate P
Slide 18: Prudent Use of Capital
PRUDENT USE OF CAPITAL NASDAQ: PEBO CAPITAL PRIORITIES • Organic growth • Dividends • Share repurchases • Acquisition activities DIVIDENDS • 7 years of increasing dividends. Dividend paid increased from $0.15 per share for Q1 2016 to $0.38 in the most recent quarter • Based on the closing stock pric
Slide 19: Deposit Franchise
DEPOSIT FRANCHISE NASDAQ: PEBO NASDAQ: PEBO LOW LOAN TO DEPOSIT RATIO PROVIDES LOW COST LIQUIDITY TO FUND FUTURE GROWTH Loans / Deposits - Peer Group LOANS / DEPOSITS - PEER GROUP 105% 100% 95% 90% 85% UNIV. $1- $10 B AVERAGE: 82.47% NOT TO SCALE 80% 77.18% 75% 70% 65% 60% 55% Source: S&P Global Mar
Slide 20: Cost of Deposits
COST OF DEPOSITS NASDAQ: PEBO PEBO IS BELOW THE $1 - $10 BILLION BANK UNIVERSE Total Deposit IN TERMS CostOF(%) COST OF DEPOSITS AS OF JUNE 30, 2022 0.48 TOTAL DEPOSIT COST (%) 0.43 0.38 0.33 0.28 UNIV. $1- $10 B AVERAGE: 0.22% 0.23 0.18 0.14 0.14% 0.13 0.08 0.03 FMNB CCNE FFBC PEBO PRK PFC HBNC CTB
Slide 21: Q3 & YTD 2022 Financial Insights
Q3 & YTD 2022 FINANCIAL INSIGHTS 21
Slide 22: Q3 & YTD 2022 Highlights & Key Impacts
Q3 & YTD 2022 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO FINANCIAL: • Peoples reported net income of $26.0 million for the third quarter of 2022, representing earnings per diluted common share of $0.92. In comparison, Peoples recognized earnings per diluted common share of $0.88 for the second quarter of
Slide 23: Financial Expectations Q4 2022 / FY2022 and 2023
FINANCIAL EXPECTATIONS NASDAQ: PEBO NASDAQ: PEBO Q4 2022 / FY2022 2023 (not including Limestone Acquisition) FULL YEAR OF BETWEEN 4-6%, LOAN GROWTH EXCLUDING PPP LOANS ANTICIPATE 5-7% IN LOAN GROWTH FEE-BASED BETWEEN 12% AND 16% COMPARED EXPECT FEE BASED INCOME TO BE 5-7% HIGHER INCOME TO THE FULL Y
Slide 24: Acquisition of Limestone Bancorp, Inc
ACQUISITION OF LIMESTONE BANCORP, INC NASDAQ: PEBO ANNOUNCED OCTOBER 25, 2022 • Limestone, through its community bank subsidiary and 226 associates, operates 20 branches in 14 counties in Kentucky. As of September 30, 2022, Limestone had, on a consolidated basis, $1.5 billion in total assets, which
Slide 25: Acquisition of Vantage Financial
ACQUISITION OF VANTAGE FINANCIAL NASDAQ: PEBO NASDAQ: PEBO ACQUISITION EFFECTIVE MARCH 7, 2022 • Vantage Financial (“Vantage”) was a privately held, mid-ticket, national equipment finance company based in Excelsior, Minnesota. • The company originates leases primarily for mission critical IT equipme
Slide 26: Q3 2022 Mobile & Digital User Experience Improvement
Q3 2022 MOBILE & DIGITAL USER EXPERIENCE IMPROVEMENT NASDAQ: PEBO 10% lift in mobile activated devices compared to June 2022 We are excited to announce a new (As of September 2022) online and mobile banking experience 17% lift in online banking active users launched in August 2022! compared to June
Slide 27: Stock Performance
STOCK PERFORMANCE NASDAQ: PEBO NASDAQ: PEBO 80% 70% BANKING SECTOR PERFORMANCE HAS LAGGED S&P 500 60% IN TERMS OF 3 & 5 YEAR TOTAL ANNUAL RETURN 50% 40% TOTAL ANNUAL RETURN AS OF SEPTEMBER 30, 2022 CUMULATIVE TOTAL RETURN FOR THE NINE MONTHS ENDED SEPTEMBER 2022 30 30% 20 20% PEBO PEER GROUP 10 10%
Slide 28: Total Revenue
TOTAL REVENUE NASDAQ: PEBO TOTAL REVENUE OF $243 MILLION FOR FIRST NINE MONTHS OF 2022 $250,000 Peoples benefited from the $69,254 $60,009 acquisition of ASB Financial Corp. in the second quarter of 2018, the $200,000 acquisition of First Prestonsburg $64,892 $64,330 Bancshares Inc. in the second qu
Slide 29: Insurance & Investment Income Composition
n * ue io en sit INSURANCE & INVESTMENT ev tR po en om INCOME COMPOSITION m st eC ve In om NASDAQ: PEBO NASDAQ: PEBO nc tI en m st ve In noitisopmoC emocnI tnemtsevnI dna ecnarusnI nd TOTAL INVESTMENT REVENUE TOTAL INSURANCE REVENUE a ce YTD 2022 YTD 2022 n ra *$12.5 euneveR tMILLION *eun$12.0 eveR
Slide 30: Expense & Efficiency Ratio
EXPENSE & EFFICIENCY RATIO NASDAQ: PEBO THE RECENT ESCALATION IN EXPENSES WAS DUE COVID-19 AND INCREASED NON-INTEREST TO ACQUISITIONS, AND AN INCREASE IN FTE’S FOR EXPENSE IMPACTED THE EFFICIENCY RATIO GROWTH AND TECHNOLOGY INVESTMENTS IN 2020 & 2021 Efficiency Ratio Adjusted for Non-Core Core Non-I
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. THE PROVISION FOR CREDIT LOSSES, INTEREST RATE ENVIRONMENT, AND OTHER ECONOMIC IMPACTS OF COVID-19 SIGNIFICANTLY IMPACTED THESE METRICS IN 2020 AND 2021 Improvement In Key Metric
Slide 32: Total Loan Growth
TOTAL LOAN GROWTH NASDAQ: PEBO Total Loan Growth TOTAL LOANS* WERE $4.6 BILLION AS OF SEPTEMBER 30, 2022, WHICH INCLUDED $3.7 MILLION IN PPP LOANS $5,000 PREMIER FINANCIAL BANCORP, INC. ACQUIRED LOANS $4,000 TOTAL PPP LOANS TOTAL ACQUIRED LEASES $3,000 PREMIUM FINANCE ACQUIRED LOANS FIRST PRESTONSBU
Slide 33: Earning Asset Mix
EARNING ASSET MIX NASDAQ: PEBO NASDAQ: PEBO Earning Asset Mix THE INCREASE IN EARNING ASSETS IN 2021 WAS DUE TO ACQUISITIONS 80% $7 76% 80% PERCENTAGE OF TOTAL EARNING ASSETS 73% 74% 73% 74% $6 70% TOTAL EARNING ASSETS $5 60% (IN $BILLIONS) $4 50% $3 40% $2 30% $1 27% 26% 26% 20% 27% 24% $0 20% FY-1
Slide 34: Deposit Growth
DEPOSIT GROWTH NASDAQ: PEBO Deposit Growth DEPOSIT BALANCES BENEFITED FROM PPP LOAN PROCEEDS, FISCAL STIMULUS FOR CONSUMERS AND COMMERCIAL CLIENTS, AND THE ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. $6,500 $5,862 $5,866 BROKERED CERTIFICATES OF DEPOSIT $5,200 GOVERNMENTAL DEPOSIT ACCOUNTS MONEY
Slide 35: Q3 & YTD 2022 Appendix
Q3 & YTD 2022 APPENDIX 35
Slide 36: Appendix: 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: 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: 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
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
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
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 Equity
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY 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 Cuts and J
Slide 43: Appendix: Non-US GAAP Measures
APPENDIX NON-US GAAP MEASURES ($ in Thousands) FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 YTD-22 Annualized net income $ 10,941 $ 31,157 $ 38,471 $ 46,255 $ 53,695 $ 34,767 $ 47,555 $ 99,530 Add: amortization of other intangible assets 4,077 4,030 3,516 3,338 3,359 3,223 4,775 5,765 Less: tax effect
Slide 44: Contact: Chuck Sulerzyski and Katie Bailey
CHUCK SULERZYSKI President and Chief Executive Officer 740.374.6163 Chuck.Sulerzyski@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 arc