Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q4 2022 Earnings Presentation
44 slides from Peoples Bancorp's earnings presentation, Jan 24, 2023
Slide 1: Investor Presentation 4th Quarter 2022
INVESTOR PRESENTATION 4th QUARTER 2022
Slide 2: Table of Contents
WORKING TABLE OF CONTENTS TOGETHER PAGE 5 PROFILE, INVESTMENT RATIONALE, CULTURE AND STRATEGY BUILDING PAGE 11 CREDIT, CAPITAL & LIQUIDITY SUCCESS PAGE 23 Q4 & FY 2022 FINANCIAL INSIGHTS PAGE 35 Q4 & FY 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: Working Together Building Success
WORKING TOGETHER BUILDING SUCCESS 4
Slide 5: Profile, Investment Rationale, Culture & Strategy
PROFILE, INVESTMENT RATIONALE, CULTURE & STRATEGY 5
Slide 6: Geographic Profile
PEBO GEOGRAPHIC PROFILE NASDAQ: PEBO PEOPLES BANK GEOGRAPHIC FOOTPRINT PEBO SNAPSHOT AS OF DECEMBER 31, 2022 CURRENT PEBO FOOTPRINT Loans: $4.7 billion COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* CLEVELAND Assets: $7.2 billion COUNTIES WHERE PEBO HAS OVER $100 MILLION OF Deposits: $5.7 billion OH DE
Slide 7: Investment Rationale
INVESTMENT RATIONALE NASDAQ: PEBO 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. OHIO KENTUCKY WEST VI • Presence near larger cities puts us in a position
Slide 8: Corporate Culture
CORPORATE CULTURE 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 associates, our commu
Slide 9: 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 10: External Recognition
EXTERNAL RECOGNITION NASDAQ: PEBO DOING WELL BY DOING GOOD 2022 AWARD Peoples Bank is one of only 30 companies that have Peoples Bank has been recognized between 1,000 and 2,499 employees for 2 consecutive years.. to be recognized in our industry in 2022. 2022 COMMUNITY AWARDS IN TERMS OF SBA 7(a) A
Slide 11: Credit, Capital & Liquidity
NASDAQ: PEBO CREDIT, CAPITAL & LIQUIDITY 11
Slide 12: Cost of Deposits
COST OF DEPOSITS NASDAQ: PEBO PEBO IS BELOW THE $1 - $10 BILLION Total Deposit BANK UNIVERSE Cost IN TERMS (%)OF DEPOSITS AS OF SEPTEMBER 30, 2022 OF COST 120% PEER GROUP - TOTAL DEPOSIT COST (%) 100% 80% 60% UNIV. $1- $10 B AVERAGE: 0.37% 40% 20% 0.16% 0% FMNB CCNE FFBC PEBO PRK PFC HBNC CTBI LKFN
Slide 13: 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 PEER GROUP - LOANS / DEPOSITS 115% 105% 95% NOT TO SCALE 85% UNIV. $1- $10 B AVERAGE: 84.65% 78.61% 75% 65% 55% Source: S&P Global Market Intelligence
Slide 14: Net Interest Margin
NET INTEREST MARGIN NASDAQ: PEBO BEST IN CLASS NET INTEREST MARGIN LARGELY DUE TO STRONG DEPOSIT FRANCHISE 5.00% PEER GROUP - NET INTEREST MARGIN 4.19% 4.00% UNIV. $1- $10 B AVERAGE: 3.63% 3.00% 2.00% 1.00% 0.00% Source: S&P Global Market Intelligence, as of 9/30/2022. Peer financial institutions ar
Slide 15: 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 16: Asset Quality
ASSET QUALITY NASDAQ: PEBO OUR DELINQUENCY AND NET CHARGE-OFF TRENDS HAVE REMAINED STABLE FOR SIX YEARS Percentage of Loans Considered “Current” Percentage of Net Charge-Offs to Average Loans Percentage of Loans considered Current Charge Offs Annualized 100% 0.375% 99.1% 98.6% 98.8% 98.6% 98.5% 98.5
Slide 17: Asset Quality: NPAs
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO NPA Composition THE INCREASE IN NPAS IN Q3 2021 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 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 *The acco
Slide 18: 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% 29.11% 28.76%
Slide 19: CRE Concentration Analysis
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO NASDAQ: PEBO CRE EXPOSURE IS WELL BELOW SUPERVISORY CRITERIA ESTABLISHED TO IDENTIFY INSTITUTIONS Peer WITH -HEIGHTENED Bank Subs CRE LoansCRE CONCENTRATION / Risk-Based RISK Capital 400% PEER GROUP – CRE LOANS / RISK-BASED CAPITAL 350% 300% 300% IS THE LEVEL
Slide 20: CRE Concentration Analysis: Construction and Land
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO PEBO Peer Bank IS MEANINGFULLY Subs BELOW -- Construction, THE AVERAGE Land, and LandFOR $1-10 BILLION BANKS Development Loans / Risk- Based Capital PEER GROUP – CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL 110% 100% 100% IS THE LEVEL CON
Slide 21: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO NASDAQ: PEBO C&IC hart LOAN COMPOSITION REFLECTS DIVERSIFIED RISK PROFILE n Comp Loa TOTAL LOAN PORTFOLIO = $4.7 BILLION osition TOTAL C&I PORTFOLIO = $0.9 BILLION, WHICH INCLUDES PPP LOANS Lo an Portf olio (Exc luding De posit Ov erdrafts 9 10 ) 1 FOOD SERVICES 24% 8 C
Slide 22: 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 23: Q4 & FY 2022 Financial Insights
Q4 & FY 2022 FINANCIAL INSIGHTS 23
Slide 24: Q4 & FY 2022 Highlights & Key Impacts
Q4 & FY 2022 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO FINANCIAL: • Peoples reported net income of $26.9 million for the fourth quarter of 2022, representing earnings per diluted common share of $0.95. In comparison, Peoples recognized earnings per diluted common share of $0.92 for the third quarter of
Slide 25: Financial Expectations 2023
FINANCIAL EXPECTATIONS NASDAQ: PEBO NASDAQ: PEBO 2023 NET INTEREST MARGIN EXPECT TO BE BETWEEN 4.50% - 4.65% LOAN GROWTH ANTICIPATE 25-30% IN LOAN GROWTH, INCLUDING LIMESTONE BALANCES FEE-BASED EXPECT FEE BASED INCOME TO BE LOW DOUBLE DIGITS IN GROWTH INCOME CREDIT COSTS EXPECT AN INCREASE OF ABOUT
Slide 26: 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 December 31, 2022, Limestone had, on a consolidated basis, $1.5 billion in total assets, which i
Slide 27: Stock Performance
STOCK PERFORMANCE NASDAQ: PEBO NASDAQ: PEBO 80% 70% BANKING SECTOR PERFORMANCE HAS LAGGED S&P 500 IN TERMS OF 3 & 5 YEAR TOTAL ANNUAL RETURN 60% 50% 40% TOTAL ANNUAL RETURN AS OF DECEMBER 31, 2022 PEBO 30% PEER GROUP S&P 500 20% 10% 9% 8% Total Return includes impact of dividends. 3% 3% Peers includ
Slide 28: Total Revenue
TOTAL REVENUE NASDAQ: PEBO TOTAL REVENUE OF $333 MILLION FOR 2022 $350,000 Peoples benefited from the $79,513 acquisition of ASB Financial Corp. $300,000 in the second quarter of 2018, the acquisition of First Prestonsburg $250,000 Bancshares Inc. in the second quarter $253,442 of 2019, the acquisit
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 FY 2022 FY 2022 n ra *$16.4 euneveR tMILLION *eun$15.7 eveR ec
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. INCREASED NET INCOME IN
Slide 32: Total Loan Growth
TOTAL LOAN GROWTH NASDAQ: PEBO Total Loan Growth TOTAL LOANS* WERE $4.7 BILLION AS OF DECEMBER 31, 2022 $5,000 PREMIER FINANCIAL BANCORP, INC. ACQUIRED LOANS $4,000 TOTAL PPP LOANS TOTAL ACQUIRED LEASES $3,000 PREMIUM FINANCE ACQUIRED LOANS FIRST PRESTONSBURG ACQUIRED LOANS ASB ACQUIRED LOANS $2,000
Slide 33: Deposit Growth
DEPOSIT GROWTH NASDAQ: PEBO NASDAQ: PEBO Deposit Growth 48% OF DEPOSIT BALANCES IN 2022 WERE DEMAND DEPOSIT ACCOUNTS (DDAS), INCLUDING $1.6 BILLION OF NON-INTEREST BEARING DDAS $6,500 $5,862 $5,717 BROKERED CERTIFICATES OF DEPOSIT $5,200 GOVERNMENTAL DEPOSIT ACCOUNTS MONEY MARKET DEPOSIT ACCOUNTS RE
Slide 34: More Than Just a Bank
MORE THAN JUST A BANK NASDAQ: PEBO LOCATIONS IN OHIO, WEST VIRGINIA, KENTUCKY, VIRGINIA, WASHINGTON D.C. AND MARYLAND. Recognized by Newsweek as one 17th largest bank owned insurance of America’s Best Banks 2023. company in the United States. NATIONWIDE SPECIALTY FINANCE DIVISIONS When combining Nor
Slide 35: Q4 & FY 2022 Appendix
Q4 & FY 2022 APPENDIX 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: 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
($ 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 $ APPENDIX 46,255 $ 53,695 $ 34,767,000 47,555 101,292 NON-US GAAP MEASURES Add: amortization of other intangible assets 4,077 4,030 3,516 3,338 3,359 3,223 4,775 7,763 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