Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (November 2016)
38 slides from Peoples Bancorp's investor presentation, Nov 7, 2016
Slide 1: Investor Presentation 3rd Quarter 2016
y Peoples ¢), Nasdaq: PEBO Investor Presentation 34 Quarter 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement ‘ay 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 21 of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform
Slide 3: Agenda
¢ Profile and Investment Rationale ¢ 34 Quarter 2016 Performance * Strategy ¢ 2016-2017 Performance Outlook ¢ Appendix
Slide 4: Profile and Investment Rationale
Profile and Investment Rationale BANCORP® /Peop plese)
Slide 5: Corporate Profile
© Corporate Profile * Financial holding company headquartered in Marietta, Ohio, — Provide a broad range of banking, insurance, and investment services * Current snapshot: — Assets: $3.4 billion; Loans: $2.2 billion — Deposits: $2.6 billion — Market capitalization: $450 million — Assets Under Manage
Slide 6: Investment Rationale
Investment Rationale * Unique community banking model — Greater revenue diversity for a community bank our size (34% fee-based) — Strong community reputation and active involvement — Local market teams capable of outmaneuvering larger banks — More sophistication and product breadth than smaller bank
Slide 7: 3rd Quarter 2016 Performance
3'4 Quarter 2016 Performance /Peop plese) BANCORP®
Slide 8: Third consecutive quarter delivering earnings of $8 million or more
Third consecutive quarter delivering earnings of $8 million or more, adjusting for expenses associated with the system upgrade Annualized loan growth of 8% with strong performance in both Indirectand Commercial & Industrial Lending Generated positive operating leverage in all three comparisons Expen
Slide 9: Metrics
Metrics Investment securities $ 844,248 § 855,326 $ (11.078) $ 878,180 $ (33,932) Gross loans 2,169,208 2,128,700 40.418 2.050245 118.963 Allowance for loan Losses 8.219) (17,838) 81) 23,331) 5,112 Balance Sheet SAipaaaual 2,150,989 2,110,952 40.037 2.026914 124.075 STE) Total assets 3,363,585 3,333
Slide 10: Operating Expenses
© Operating Expenses Five consecutive quarters of well-controlled expenses (4.8%) dedinein core expenses from2Q15to 3Q-16 7 + ; t 2Q-15 8Q-15 4Q-15 1Q-16 2Q-16 8Q-16 m= Core Non-Interest Expenses * m= Non-Core Non-Intere st Expenses * * Non-GAAP financial meamre, See Appendix. oS ooo Peoples () o BA
Slide 11: Core Efficiency
Core Efficiency ‘ay Efficiency has improved as a result of expense control and revenue growth First Quarter Fire Following Quarter 73.00% ‘Acquistion Following of Ohio Heritage Acquisition Bancorp of NB&T* 71.00% 69.0036 67.0036 65.0036 63,0096 (8.59) CAGR 61.0036 GFSY/2014 9SO/IOIE 19/51/2014 F/S1/
Slide 12: Pre-Provision Net Revenue Growth
Pre-Provision Net Revenue Groyail ‘ay 3° Quarter Total PPNRis Up 13% Over Prior Year 13% growth 9/30/2015 12/31/2015 3/31/2016 6/30/2016 9/30/2016 m PPNR* (Excl, Performance-based Commissions) mPerformance-based Commissions * Non-GAAP financial meamre, See Appendix 7 Peoples ‘a 12 BANCORP.
Slide 13: Originated loans up 19% over prior year quarter
a) Originated loans were up 19% overthe prior year quarter, and 14% since year-end 1996 growth 9/30/2015 12/31/2015 3/31/2016 6/30/2016 9/30/2016 Originated Loans ™ Acquired Loans 7 Peoples O 13 BANCORP.
Slide 14: Asset Quality
Asset Quality Criticized and Classified loan levels remain reasonably stable 32.296 (percent) 17.5% B/BlfQ015G/B0/201S.OFBO/BOIS LB MIS =—«-B/B12016. 6/80/2016. (9/30/2016 eteCriticized Loans / Tier | Capital+ ALLL * eamimClassified Loans / Tier 1 Capital + ALLL * * In accordance with SEC reparting
Slide 15: Direct credit exposure to energy industry clients remains low
Direct credit exposure to energy industry clients remains low at 1.3% of total commitments, and exposure to large relationships is less than 8% of total commitments % of Total Credit Commitments $ % of Total Credit Commitments $ Energy Industry Exposure Large Relationship Exposure (Oil/Gas/Coal) (Re
Slide 16: CRE exposure is well below supervisory criteria
CRE exposure is well below supervisory criteria established to identify institutions with heightened CRE concentration risk — Exposure levels also compare favorably to peerimstitution concentration levels
Slide 17: Residential Real Estate
Residential ‘RealEstate 25.19% ‘Data as of September 30, 2016
Slide 18: ** Approxinmtely 909% auribuuble to P&C Commercial Lines
** Approxinmtely 909% auribuuble to P&C Commercial Lines * Trailing Twelve Months from 9/80/16 CORPS 18
Slide 19: Business Highlights
Business Highlights € * Commercial Banking — Average deposits are up $46 million or 8% from September 2015 — Strong loan pipeline with $75 million im scheduled fundings remaming in 2016 — YTD noninterest mcome is up 43% over 2015, driven by swap fees — $20 million lending “house lint” although legal
Slide 20: Slide 20
Slide 21: Strategic Road
Strategic Road (a * GreatPlace to Work Our Way of Life Asset Quality Compliance / Regulatory Operational Risk Information Security Change Management Execution Risk Reputational Risk Commitmentto Superior Shareholder Returns . “Best Community Bankin America” Great Place to Bank + Meaningful Impacton
Slide 22: Strategic Priorities
tratesic Priontie © * Primary emphasis on revenue growth Positive . @peniin ¢ Disciplined expense management te 5 ¢ Expand revenue vs. expense growth gap beyond 2% jE MS ENS © Target core efficiency ratio below 65% y . < Superior * Balance growth with prudent credit practices Asset ¢ Improve diversi
Slide 23: Strategic Targets
Strategic large Improve Asset Quality QE 9/30/16 QE 6/30/16 5-Year Strategic Target Range * Adjust Balance Sheet Mix High Quality, D: Total revenue growth (1) Strong Capital Position Operating Leverage Execute on Strategies NPAs to total loans + OREO 1.11% 1.04% 0.70% to 1.00% Net charge-offs to ave
Slide 24: Strategic Capabilities
Strategic Cap: Bil Pay (Online Account Opening Oniine Loan Applications Online Financial Management ACH, Wires Stop Payments Positive Pay Tax Services [Tent Alert [Bal Pay Specific to Mobile Phone iPad/Android Apps /Amazon Kindle App [Test Banking [Mobile Deposit Capabilities Emaployer-Loaded PayCar
Slide 25: 2016 - 2017 Performance Outlook
2016 - 2017 Performance Outlook BANCORP® /Peop plese)
Slide 26: 2016 - 2017 Outlook
016 - 2017 Outloo Maintain or improve core efficiency ratio Continue driving organic loan growth Sustain net interest margin Return to top-quartile asset quality (expected net charge-off levels) 2016 Adjusted efficiency ratio in 659 range Preliminary 2017 Efficiency ratio < 65% Pointto-point loan Po
Slide 27: Other Outlook Considerations
Other Outlook Consideration * Complete core banking system platform upgrade in 4" quarter 2016 — Upgradingto a best-in-class third party platform — Will provide enhanced product offerings and capabilities for our clients, support future growth and improve operational efficiencies ¢ Continue executin
Slide 28: Appendix
Appendix
Slide 29: Quarterly Financial Metrics
Quarterly Financial 3Q 4Q 1Q 2Q 3Q Metrics 2015 2015 2016 2016 2016 Diluted EPS $0.22 $0.14 $0.44 80.44 $0.43, Return on common equity 3.89% 2.42% 7.59% 7.45% —_7.07%| yer Return on assets 0.51% 0.32% 0.98% 0.97% 0.93% AMM Pre-provision net revenue to assets) 140% 1.31% 1.54% 1.48% 1.53% PS TSS Not
Slide 30: Key Drivers of Shareholder Value
Key Drivers of Shareh LTMRevenue Growtl NPAstoLoans and OREO Gromh largely attributable toNB&T acquisition LTM Fee Revenue to Dividend Yield Average Assets PEBO Peers $1-5B PEBO Peers $1-5B Pears include: SRCE, CHCO, CONE, CBU, CTI, FFKT.FHNE, FIs), FOEF.FFBC, THFF,FRME, GABC, HENC. LKFN, SFG. PRK,
Slide 31: Non-GAAP Measures
Non-GAAP Measures PRE-PROVISION NET REVENUE Pre-provision net revenue (PPNR) 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 retained in
Slide 32: Non-GAAP Measures
Non-GAAP Measures EFFICIENCY RATIO The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This measure
Slide 33: Non-GAAP Measures
Non-GAAP Measures EFFICIENCY RATIO The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This measure
Slide 34: Non-GAAP Measures
Non-GAAP Measures CORE Nt <PEN} INTEREST Core non-interest expenses are non-GAAP since they exclude the impact of acquisition related costs, pension settlement charges, severance charges, search firma fees and legal settlement charges. (Sin Thousands) Q22014 —Q32014—Q42014_——QL2015_——_—Q2- 2015 Tota
Slide 35: Non-GAAP Measures
Non-GAAP Measures The adjusted efficiency ratio is a key financial measure used to monitor performance. The adjusted efficiency ratio is calculated as core non-inter est expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This
Slide 36: Non-GAAP Measures
Non-GAAP Measures ‘ay The adjusted efficiency ratio is a key financial measure used to monitor performance. The adjusted efficiency ratio is calculated as core non-inter est expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. T
Slide 37: Tangible common equity ratios
Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non-GAAP financial information since the calculations exclude the impact of intangible assets acquired through acquisitions on both total stockholders’ equity and total assets,
Slide 38: Peoples Bancorp
y Peoples ¢), Nasdaq: PEBO Investor Presentation 34 Quarter 2016
Peoples Bancorp — Investor Presentation (November 2016) on 6ix