Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (July 2013)
49 slides from Peoples Bancorp's investor presentation, Jul 26, 2013
Slide 1: Investor Presentation 2nd Quarter 2013
y ' Peoples@) Nasdaq: PEBO Investor Presentation 2>4 Quarter 2013
Slide 2: Harbor Statement
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 Act of
Slide 3: Overview
Overview
Slide 4: Corporate Profile
Ah’ Corporate Profil G * Financial holding company headquartered in Marietta, Ohio, — Provide a broad range of banking, insurance, and investment services * Current snapshot: — Over 125,000 client relationships & 75,000 households — Assets: $1.9 billion — Loans: $1.0 billion — Deposits: $1.4billion
Slide 5: Recent Accomplishments
Recent Accomplishments Improving bottom-line earnings — EPS increased 79% in 2012, with all-tme record earnings in Q1 — Q22013 EPS consist with linked and prior year quarters Return to positive operating leverage — Combination of revenue growth and expense management Increased loan production — Peno
Slide 6: Cleveland Bank Acquisition (Ohio Commerce Bank)
$16.5 milion or 142% of TBV at 3/31/2013 Cost savings: RYE Boo $1.0to $1.1 million (pre-tax) cos PPK meee! Completed Re S| * OCB shareholders a] * Regulatory / OCC oe closing: Transaction rationale: — Expansion into a highly affluent market — Solid commercial lending team — Cwrent SBA preferred lend
Slide 7: 2013 Outlook
2013 Outlook ; * Totalrevenue growth of 4% to 6% — Fee-basedrevenue growth simular to 2012 — Higher net interest income due to 8% to 10% loan growth + More than half due to increased consumer lending * CRE growth of 2% to 4 — Maintain revenue diversity * Maintain operating expense discipline — Total
Slide 8: Investment Rationale
Investment Ration ¢ Unique community banking model Greater revenue diversity for a community bank our size Strong community reputation and active involvement Local market teams capable of outmaneuvering larger banks More sophistication and product breadth than smaller banks ¢ Strong, growing fee-bas
Slide 9: Executive Management Team
Chuck W. Sulerzyski President and CEO Diverse financial services experience Progressive exeautive leadership Edward G. Sloane Progressive finance and accounting leadership EVP, CFO and Treasurer Extensive experience with ALM, M&A, strategic 30 planning Carol A. Schneeberger Extensive history of PEBO
Slide 10: Current Strategic Priorities
Current Strategic Priorities ‘Peo, plese) BANCORP
Slide 11: Strategic Focus and Target Ranges
Strategic Focus arget Rang 0 NPAsto total loans + OREO 3.419 1.48% 1.04% 0.70% to 1.00% Net charge-offsto average loans) 1.16% 0.12% - 0.37% 0.30% to 0.50% Loansto total assets 52.31% 51.36% 54.23% 60% to. 70% Deposits to total funding 86.19% 89.42% 86.81% 90% to 95% Annualrevenue growth - 5.04% 2.9
Slide 12: Strategic Progression
Strategic Progression Our “Levers of Success” Enhanced sales and service 2013 & Beyond discipline Invested in new talent Consumer checkingredesign New Loan Production Offices tabilize net interest margin Double-digit growth in wealth management and insurance revenue Rebranding Preserve diversity Bal
Slide 13: Current Strategic Focus
Current Strategic “The Best Commu Bank in America” Profitable Revenue Responsible Extraordinary Superior Growth Risk Management Client Experience Workforce > M&A > Our Way of Life > Broad Delivery Channels | > RightPeople / Right Job > Sales & Service Process > Asset Quality > Delight the customer >
Slide 14: Business Line Focus: Core Banking Activities
Business Line Foot Core Banking Activities Lending Activities Deposit Generation * Profitable portfolio growth — Focus onrisk versus reward — Maintain pricing discipline * Create greater diversity — Emphasis on consumer lending —C&I and small business — Targeted CRElending ¢ Process improvements — I
Slide 15: Business Line Focus: Value Added Services
Business Line Focus Value Added Services WeallsManagemen * Top-line revenue growth — Managed assets = $1.3 billion — Currently 7% of totalrevenue ¢ Adding talent across footpmnt — Organic + acquisitions — 3 advisors addedin 2012 — Currently 9 advisors; Goal=12 * Leveraging branch capabilities — Plac
Slide 16: Mergers & Acquisitions
Mergers & Acquisitions ‘Peo, plese) BANCORP
Slide 17: Our M&A Strategy
Our M&A Sirate ‘ay * Optimize our current footprint — Gam market share and improve operating efficiency — Create more density through disciplined expansion ¢ Target areas with characteristics similar to existing markets — Expand along major transportation routes — Focused on “mid-major” communities
Slide 18: Possible M&A Opportunities
LZ + Possible M&A opportunities + Wealth management 17% Comidor * High growth potential + Attractive market dynamics Footprint Development + Increase market share in all areas + Insurance & Wealth Management ¢xpansion potential — = Morgantown Potential q : is SN) - Minimal community banks . nr _ SS
Slide 19: Executing Our M&A Strategy
‘ay Executing Our Mé * Villers Investments — CompletedJune 2012 * McNelly Insurance - angle als producer in Wood — Completed April 2013 vounty, West Virgima — Employee benefits insurance - ey nullonin managed assets; practice in Jackson, Ohio 445,000 in annual revenue — Single sales producer . Caswe
Slide 20: Customers and Markets
Customers and Markets ‘Peo, plese) BANCORP
Slide 21: Competitive product comparison with peer banks
‘Huntington PEOPLES [BAN CORP| ***Commmity Banks*** City Commamity Wes- First National Trust Banco__ Federal United Bank Yes Online Account Opening Yes Yes | Yes | Yes Yes ‘Yes No No No | No [ No Online Financial Management [BSCS bens Yes ‘Yes No No No | No [ No ACH, Wires Stop Payments Yes Yes | Ye
Slide 22: Both opportunities are present in PEBO's market area
Both opportunities are p resent in PEBO’s market area z r oe 1 i wit mi Etat Hy INE) E Ty it Emery ges = Total gas, sons ot cave et psa me Marans Sle rf ase [utes — agian erase aes 1 Marcellus } op TEBE Utica undertying Marceus HB 205-2480 ¢ Key driver of stronger economic activity — Land owners acq
Slide 23: Our Brand Promise
Our Brand Promi ‘ay We will work side by side to overcome challenges and seize opportunities. We will listen and work with you. Together we will build and execute thoughtful plans and actions, blending our experience & expertise to move you toward your financial goals. Our core difference is providi
Slide 24: Improve How You Bank (new brand)
paeD te é) reopies Improve WELL sHow You HOW
Slide 25: Branch renovations
— Floor-to-ceiling renovations — Over $5 million being invested — First phase begins Q1 2013 — Using national branch design experts ey — All delivery channels “Best in Class” — Consistent look with our new brand — More engaging customer environment — Better utilization of office space — Enhanced cus
Slide 26: Expanding Our Network
Slide 27: Financial Performance
Financial Performance ‘Peo, plese) BANCORP
Slide 28: Annual Financial Highlights
Diluted EPS $0.72 $0.22 $0.34 $1.07 $1.92 Return on common equity 3.67% 1.17% 1.76% 5.61% 9.52% Return on assets 0.21% 0.28% 0.69% 1.11% Net interest margin (FTE) 3.48% 3.51% 3.43% 39% Efficiency ratio 60.14% 60.30% 68.98% 6: % Tier 1 common equity 10.17% 10.58% 11.59% 12.82% 14.06% Total capital 13
Slide 29: Quarterly Financial Highlights
a! Quarterly Finan Diluted EPS $0.47 $0.45 $0.36 $0.47 $0.46 Return on common equity 9.57% 8.86% 6.99% 9.18% 8.74% Return on assets 1.11% 1.04% 0.82% 1.06% 1.03% Net interest margin (FTE) 3.43% 3.30% 3.42% 3.12% 3.15% Efficiency ratio 69.61% 70.06% 72.99% 71.61% 71.71% Tier 1 common equity 13.92% 13
Slide 30: Key Metrics
Metric 28.57% 30.08% 28.21% 28.50% 27.19% 3.7% 1.1% 3.9% - 2.1% 1.2% 69.61% 70.06% 72.99% 71.61% 71.71% 1.49% 0.7% 3.0% -1.1% 25% 1.42% 1.34% 1.23% 1.249% 1.25% (1) Substandard loans, OREO, classifiedinvestments as a% of Tier! capital +ALLL (3) Sequential growth in average balances ~ (2) Year-over-y
Slide 31: Average Balances
Average Balances (Sin millions) 1s $ 959.6 $ 966.8 $ 995.8 $ 985.1 $ 1,009.5 662.5 677.1 665.3 680.9 683.8 1,083.4 1,093.7 1,111.0 1,133.1 1,087.8 269.3 280.2 298.2 320.0 326.0 235.2 231.9 229.4 216.5 247.7 ing value without FHLB/FRB stock 31
Slide 32: Performance versus peers
NPAs to Loans and OREO 2012 EPS Growth 2012 Fee Revenue to Avg. Assets $1-5B Peers Peoples $1-5B Peers Peoples $1-5B Peers Peoples $1-5B Peers Peoples 2.61% ¢« Strongcore operatingresults - Growing, diversifiedrevenues - Good expense control ¢ Favorable asset quality trends - Reducigproblemloans - M
Slide 33: Dividend Yield
Dividend Yield 32.8% 2.41% 2.4396 1.63% PEBO _Peers $15B PEBO __Peers $1-5B ¢ Exhibiting stronger earnings and revenue growth than peers * Asset quality nearly restored to pre-crisis levels * Capacity exists to undertake meaningful growth Target dividend payout range of 25% to 40% Source: SNL Financ
Slide 34: Nonperforming Assets to Loans + OREO
1.51% sets to Loans + OREO sancorP © 4.31% 4.31% 3.85% 4.00%) 3.79% 85%6 41% 88 2 2.30%] Al é 14 0. b.sne. 0.99% 2007 2008 2009 2010 2011 2012 Q12013.- Q22013 BPEBO @Peer Median @$1-5 Billion Median Peog Zi) Peo, +
Slide 35: Annual and Quarterly Results
Annual Results $194 $2.01 @ Earnings per common share $192 $1.74 idends declared per common share $107 $0.7 2008 2006 2007 2008 2009 2o0 2011 2012 Quarterly Results $0.63 $0.47 $0.45 $0.47 $0.46 ques $0.33, $0.36 Q22011 = 32011 = 42011 QL 2012 22012 Q32012 Q42012—Q12013. 22013 ng in 02 2011, arter-e
Slide 36: Net Interest Margin
Net Interest Marsim 5.24% 494% 489% — 4 g404 466% 4.64% 4.45% 58% 194% Q32010 Q42010 QU2011 Q22011 Q32011 Q42011 QU2012 Q22012 Q32012 Q42012 QL 2013 Q22013 —4-Earning Assets. —*—Net Interest Margin —#~Interest Bearingliab: x equivalent basis Peop —— les (a 36
Slide 37: Operating Leverage
Operating Leverag, ‘ay Year-over-Year Change in Revenue & Expenses 16.6% Total Operating Expenses 7% A 1a% 2.1% 45% 6.8% ~$.7% Total Revenue Q42010 Q12011 Q22011 Q32011 Q42011 QU2012 Q22012 Q32012 Q42012 Q12013 Q22013 rest Income, exclusive of any gains or losses. Total Revenue represents Net Intere
Slide 38: Non-interest Income
($ in thousands) (ay $30,379 $31,350 $32,097 $32,050 2007 2008 2009 $31,634 2010 $32,944 2011 $34, @Other $3,207 $3,252 $3,037 $3,594 $3,173 $3,224 $4,078 @E-Banking $3,080 $3,524 $3,882 $3,954 $4,686 $5,142 $5,955 OTrust & investment $4,258 $4,983 $5,139 $4,722 $5,348 $5,548 $6,129 G@Insurance $9,6
Slide 39: Operating Revenues and Expenses
4) = : 5 (Sin millions) Operating Revenues 351% 351% 248% We qa0%e Eee 332% 2006 2007 2008 2009 2010 2011 2012 Net interest income @Non-interest income —emNet interest margin Ex Operating Expenses 68.98% EE 5751% 57.07% 56.30% 60.1490 bee $63.5 $513 51% 53% S47 FTEs | | 559FTEs| | 546FTEs| | 537FTEs
Slide 40: Loans, Investments and Funding Sources
(Sin millions) YE 2007 = YE2008 ~= YE2009»-YE2010 © YE2011. © Q12012, 022012032012» 42012 = 012013022013 aNetLoans aTotal Investments Funding Sources 1$536.6| 581.6] [iis44s.of] [s319.2| :280.6])] [$228.2 227.1 221.7] (1$232.2| 212.1] $268.6} YE 2007 © YE2008 «= YE2009 «= YE2010.»-YE2011._ 12012-220
Slide 41: Loan Portfolio Composition
($ in thousands) 36% 36% 36% 37% 38% 38% 37% 39% sox | | 41% 41% | YE 2007 | YE 2008 | YE 2009 | YE 2010 | YE 2011 | QU 201 |B Retail] $400,482 | $397,650 | $383,326 | 882 | $356,721 TBCAT | $168,909 | $176,187 | $160,678 | $1 713 | $140,857 | $15 $174,982 | $ 184,981 [MCRE | $551,550 | $530,195 | $
Slide 42: Asset Quality
(Sin millions) Provision for Loan Losses & Net Charge-offs Nonperforming Assets 2.2506 2.2506 ——ALLL to Loare Provision for ban losses BNetcharge offs 14 $0.0) say say $a5) $21) - 12012 "022012 | 032012 42012 at2n13 022013 012012 022012032012, a42012 12013022013 OREO ——NPAsto Loane+ OREO Allowance f
Slide 43: ($ in thousands)
e ($ in thousands) YE YE YE Q2 2008 | 2 2olo | 2011 | 2012 72,766 | $376.8. | | 894 | $345
Slide 44: Appendix
Appendix
Slide 45: Non-GAAP Measures: Pre-Provision Net Revenue
Non-GAAP Measures) PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) income represents a non-GAAP financial measure commonly used to evaluate the operating performance and trends of financial services companies, including Peoples. PPNR represents the earnings capacity that can be either ret
Slide 46: Non-GAAP Measures: Pre-Provision Net Revenue
Non-GAAP Measures) PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) income represents a non-GAAP financial measure commonly used to evaluate the operating performance and trends of financial services companies, including Peoples. PPNR represents the earnings capacity that can be either ret
Slide 47: Non-GAAP Measures
ay) Non-GAAP Measures Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non- GAAP financial information since their calculation removes the impact of intangible assets acquired through acquisitions on the consolidated balance
Slide 48: Non-GAAP Measures
> Non-GAAP Measures Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non- GAAP financial information since their calculation removes the impact of intangible assets acquired through acquisitions on the consolidated balance sh
Slide 49: Peoples Bancorp
y ' Peoples@) Nasdaq: PEBO Investor Presentation 2>4 Quarter 2013