Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q3 2018 Earnings Presentation
28 slides from Peoples Bancorp's earnings presentation, Nov 2, 2018
Slide 1: Investor Presentation 3rd Quarter 2018
Peoples () Investor Presentation 34 Quarter 2018 Filed by Peoples Bancorp Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: First Prestonsburg Bancshares Inc. Commission File No. 000-16772 Sa
Slide 2: Additional Information
Additional Information (ay This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, securities of Peoples. Peoples will file a registration statement on Form S-4 and will file other documents regarding the proposed merger with First Prestonsbi Bancshares Inc. (
Slide 3: Corporate Profile
Profile, Investment Rationale, Strategy, and Culture \ / Peoples ¢ BANCORP®©X\% Corporate Profile * Financial holding company headquartered in Marietta, Ohio. — Provides a broad range of banking, insurance, and investment services * Current snapshot: — Assets: $4.0 billion; Loans: $2.7 billion — Dep
Slide 4: Investment Rationale
Investment Rationale a ¢ Unique community banking model — Greater revenue diversity (30% non-interest income, excluding gains and losses) than the average $1 - 10 billion bank — Strong community reputation and active involvement — Local market teams capable of out-maneuvering larger banks — More sop
Slide 5: Mission, Vision and Values
Mission, Vision and Values Our mission is to be the primary financial resource for our businesses and clients who value us as true financial parmers. We grow these relationships by delivering trusted advice, extraordinary personal service, and a seamless, integrated suite of services that meets all
Slide 6: Go To Market Proposition of Insurance, Investment and Banking
PEBO’s Go To Market proposition of Insurance, Investment and Banking is unique to our footprint and enables a complete financial relationship with our Clients Peoples has been in the Top 250 Most Profitable Clients banking business since 1902 100% - Peoples Insurance is 75% 4 one of the 20 largest b
Slide 7: First Prestonsburg Bancshares Inc. Transaction
Acquisition ‘ Peoples ¢ reoplies First Prestonsburg Bancshares Inc. Transaction : First Prestonsburg Bancshares Inc. is the F eo parent company of First Commonwealth Bank Bank of Prestonsburg, Inc. ae Deal announced on October 29, 2018 Eight full service branchesin and around the Heaven and Pikevill
Slide 8: First Prestonsburg Transaction Market Share
First Prestonsburg Bancshares Inc. T Floyd, KY ransaction Total Market Shar Deposit First Preston sbura Boshs ine (KY) Community Trust Bancorp Ine. (KY) Citizens National Corp. (KY), U.S. Bancorp (MN) BB&T Corp. (NC) Total For Institutions In Market Johnson, KY Citizens National Corp. (KY), City Hol
Slide 9: Strategic Priorities
Strategic Priorities Positive Operating Leverage ¢ Disciplined expense management ¢ Drive core efficiency ratio to 60% * Focused on sustainable revenue growth ¢ Expand revenue vs expense growth gap beyond 2% YS See page 23 See page 24 See page 25 )\ See page 26 Superior Asset Quality > a ¢ Preserve
Slide 10: Our Capabilities
Our Capabilities “National Banks“ ‘Community B anks’ k of 4 City Community United National Trust National _ Bank Information accurate as of October 26, 2018, based on data from competitor websites 19 WE Indicates PEBO has advange over Community Bank group 7Peoples BANCORP © ¢ Strongest deposit marke
Slide 11: Third Quarter 2018 Highlights
Q3 2018 Performance I Peoples ¢ BANCORP®X\% Third Quarter 2018 Highlights a ¢ Reported third quarter netincome of $12.7 million — $13.6 million excluding acquisition-related costs and pension settlement charges* Non-interest income, excluding gains and losses, grew 4% compared to the second quarter
Slide 12: Total Revenue Growth
Total Revenue Growth 20% increase in total revenue from Q3-16 to Q3-18 $45,000 $40,000 ll $35,000 t | iI $80,000 Hl i 1] $25,000 a - $2942 $29,359] $15,000 Q8-16 Q416 Ql-17 Q217) Q317) Q4l]7 = Q1-18 Q218" Q3-18" mw Net Interest Income @ Non-Interest Income, Excluding Gains and Losses * The second an
Slide 13: Adjusted Operating Leverage
Adjusted Operating Leverage Adjusted operating leverage is the difference between total revenue growth and non- interest expense growth, ona percentage basis, excluding acquisition-related expenses and pension settlement charges. Versus the prior year, adjusted operating leverage was positive for fi
Slide 14: Deposits Per Branch
Deposits Per Branch Deposits per full service branch has trended upward since 2015, assisting us in being a more efficient bank. Total Deposits Per Full Service Branch 544,000,000 $42,000,000 75 540,000,000 $38,000,000 70 $36,000,000 $34,000,000 65 532,000,000 [I $30,000,000 60 12/31/15 12/31/16 12/
Slide 15: Asset Quality - NPAs/Assets
Asset Quality - NPAs/Assets Nonperforming assets (NPAs) as a percentage of total assets have consistently been superior to Midwest banks with $1 - $10 billion in total assets. NPAs / Assets QEI5 QU-16 Q2-16 Q3-16 Q416 QI-17 Q2-17 Q3-17 Q4IT QU-18 Q2-18 Q3-18 mmm $1-10 billion Midwest Banks —¢+People
Slide 16: Asset Quality
Asset Quality Criticized and Classified loan levels remain reasonable $50,000 323% 32.2% 34 3%, 35.0% 545.000 | 30-4% 29.9% 30.1% 3% 30.0% suooo0 +——_+- 27.4% + 80.0% 40, $35,000 25.0% $30,000 , 17.4% p 20.0% 325,000 |16:5% 2 16.8% 46 40 $20,000 1m $15,000 mre $10,000 5.0% $5,000 Ss. 0.0% Q3-16 Q416
Slide 17: Total Loan Growth
Total Loan Growth Organic loan growth was 7% over September 30, 2017 $2,700 $2,600 $2,500 $2,400 $2,300 (hmillions) $2,200 $2,100 $2,000 + + + + Q2-17 Q3-17 Q417 Q1-18 Q2-18 Q3-18 mam Total Loans Except ASB mam ASB Acquired Loans —=Average Loan Balances "Peoples BANCORI Deposit Growth Deposits were
Slide 18: Deposit Costs and Betas
Deposit Costs and Betas Q1 18 to Q3 18 Change in Interest Bearing Q3 2018 IBD Cost Deposit (“IBD”) Cost 2.50% ° ° 1.50% ° ° ¥ 0% — ° ° a — = ——. = 3 ° ie ° ° gexueoue ge 2 Zz a2S22 2 & 3 Ze HUGS 2 } 2 a Ee ——Meen=0. —— Median = 0.25% @ Q118t0Q318 ——Median = 0.81% @ 3018 Popo ewens > Interest bearing
Slide 19: Prudent Use of Capital
Prudent Use of Capital * Dividends — Consistently evaluate dividend and adjust accordingly. Annualized dividend yield for the third quarter of 2018 was 3.20%. Cash Dividends Declared Per Share $0.35 $0.30 $0.25 3032 $0.3: am $80.17 $0.16 $0.16 $0.15 $0.15 $0.10 QL16 Q216 Q316 Qe16 QIIT Q217 QSI7 Q#I
Slide 20: CRE Concentration Analysis
CRE Concentration Analysis a Peer Bank Subs -- Construction, Land, and Land Development Loans / Risk-Based Capital WH 1005 is the tevel considered heightened construction, land and land development concentration risk per supervisory guidance Taw Mt Gwin tages Comes Beeson ZOE cauiaionae weds Te MEG
Slide 21: Financial Expectations - Q4 2018
Insurance & Investment Income Comp 7, — * Trailing Twreive Months from 9/30/18 Peoples er Total investment reves for the trailing twelve months ce nancoun € from 9/90'18=§ 12,411,110 41 Financial Expectations - Q4 2018 (ay Annualized organic loan growth of 5% to 7% Quarterly credit costs similar to
Slide 22: Appendix - GAAP Measures
Appendix ‘ Peoples @) BANCORP GAAP Measures PRE-PROVISIO: TREVE. Pre-provision net revenue (PPNR) has become a key financial measure used by state and federal bank regulatory agencies when assessing the capital adequacy of financial institutions. Pre-provision net revenue is defined as net interest
Slide 23: Non-GAAP Measures
Non-GAAP Measures ADJUSTED PRE-PROVISIO? ETREVE)D E Pre-provision net revenue (PPNR) has become a key financial measure used by state and federal bank regulatory agencies when assessing the capital adequacy of financial institutions. Adjusted pre-provision net revenue is defined as net interest inco
Slide 24: Non-GAAP Measures
Non-GAAP Measures CORE NON-INTEREST EXPENSE Core non-interest expense is a financial measure used to evaluate Peoples’ recurring expense stream. This measure is non-GAAP since it excludes the impact of system upgrade costs, acquisition-related costs, pension settlement charges, severance charges, se
Slide 25: Non-GAAP Measures
Non-GAAP Measures ADJUSTED EFFICIENCY RATIO The adjusted efficiency ratio is a key financial measure used to monitor performance. The adjusted efficiency ratio is calculated as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net intere
Slide 26: Non-GAAP Measures
Non-GAAP Measures ratio is a key finan The return on average tangible stockholders’ eq I measure used to monitor performance. It is calculated as net income (less after-tax impact of amortization of other intangible assets) divided by average tangible stockholders’ equity. This measure is non-GAAP s
Slide 27: Non-GAAP Measures
Non-GAAP Measures The adjusted return on average stockholders’ equity ratio is calculated as net income adjusted to exclude acquisition-related costs and pension settlement charges, divided by average total stockholders’ equity. This measure is non-GAAP since it excludes acquisition- related costs a
Slide 28: Non-GAAP Measures
Non-GAAP Measures ADJUSTED RETURN ON AVERAGE ASSETS The adjusted return on average assets ratio is calculated as net income adjusted to exclude acquisition-related costs and pension settlement charges, divided by average total assets. This measure is non-GAAP since it excludes acquisition-related co