Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (May 2012)
42 slides from Peoples Bancorp's investor presentation, May 9, 2012
Slide 1: Investor Presentation
Peoples pores. investor Fresentatic Chuck Sulerzyski Ed Sloane President and Chief Executive Officer Chief Financial Officer and Treasurer
Slide 2: Safe Harbor Statement
| eon Bancorp Safe Harbor Statement Statements in this presentation which are not historical are “forward-looking statements” within the meaning of Section 27A of the Seaurities Act of 1933, as amended, Section 21E of the Seanrities Exchange Act of 1934, as amended, and the Private Securities Litiga
Slide 3: Key Discussion Points
Bancorp Key Discussion Points ¢ Strategic Priorities « Recent Performance ¢ Corporate Profile ¢ Mergers & Acquisitions « Appendix
Slide 4: Strategic Priorities
Strategic Priorities
Slide 5: Strategic Progression
Mpcorres Strategic Progression Our path to “top performer” status FIX IT zs CLEAN LEVERS OF BUILD IT Dicoool Working Together, Building Success.
Slide 6: Levers of Success
send Bancorp Levers of Success Asset quality - Renewed emphasis on credit basics and pricing disaplhne - Aggressive resolution of problem loans - Attention to portfolio management Revenue growth - Emphasis on fee-based revenues over net interest income - Greater sales discipline and management - Mea
Slide 7: Current Initiatives
V} [Aree conend Current Initiatives ¢ Increase revenue generation across all business lines - Double-digit growth in insurance and wealth management - Stabilize net interest income through loan growth ¢ Enhance sales and service discipline - Internally developed sales training program delivered in Q
Slide 8: Strategic Objectives
Wpoores Strategic Objectives ¢ Redeploy resources as revenue grows - Invest in areaswith growth potential - Committed to growingrevenue faster than expenses - Lower operating expensesin 2012 versus 2011 absentM&A ¢ Maintain balance sheet discipline - Improve asset yield through profitable loan produ
Slide 9: Strategic Targets
Strategic Targets Metrics Actual Actual Actual 5-Year Focus 2010 2011 Q12012 Target Range Improve NPAsto total loans + OREO 4.64% 3.41% 2.25% 0.80% to 1.00% Eeaeitiigas Net charge-offsto averageloansa) 2.66% 1.16% 0.14% 0.502% to 1.00% Adjust Balance Loans to total assets 52.27% 52.31% 52.28% 60% to
Slide 10: Recent Performance
Recent Performance
Slide 11: 1st Quarter 2012
1st Quarter 2012 ¢ Achieved all-time record earnings - Strong core operating: results ¢ Favorable asset quality trends - 3496 reduction in nonperforming assets - Additional reserve release ¢ Improving revenue stream — Strong fee-based revenue — Net interest income still under pressure Asset Quality
Slide 12: Recent Financial Summary
Mf, Rotor Recent Financial Summary 1Q pXe) 3Q 4Q 1Q 2011 2011 2011 2011 2012 Diluted EPS 1.13 bi $0.63 Return on common equity 12.90% Financial Ney Meme Return on assets 1.48% Net interest margin (FTE) 3.41% Efficiency ratio 65.21% 65.47% Tier 1 common equity 11.72% 12.05% 12.40% 12.82% 13.82% Capit
Slide 13: Stock Performance
Stock Performance BPeoples Bancorp GSPX 500 Index BNASDAQ Bank Index GPeer Group Peer Group data is comprised of the 22 publicly-traded financial instintion holding companies morefully defined in Peoples’ definitive proxy materials for the 2012 Annual Mesting of Shareholders. Total r en indudes thei
Slide 14: Key Performance Drivers
y ) /s Peoples Bancorp Key Performance Drivers Q12011 = Q22011 Q82011 Q42011 Q1 2012 Classified Assets Ratio (1) Revenue Growth 2) Efficiency Ratio Loan Growth 3) Pre-Provision Net Revenue to Average Assets (4) (1) Substandard loans, OREO, classifiedinvestments as a% of Tier! capital +ALLL (2) Year-
Slide 15: Balance Sheet Focus
Balance Sheet Focus Average Balances Q12011 Q22011 Q82011 Q42011 Q1 2012 ($ in millions) Total Investments (1) Interest-Bearing Retail Deposits Non-Interest-Bearing Retail Deposits Wholesale Funding value without FHLB/FRB stock
Slide 16: Asset Quality Trends
[sees sguad Asset Quality Trends $200.8 $186.6 $186. $171.7 $154.3 $153.3 Pere $122.2 S| —— (8 in millions) 3Q10 4Q10 1QU 2Q 3Q 4Qu 1912 HE 30-89DaysPastDue | $14,250 $8,651 $9,898 $7,078 $7,582 $10,400 $10,309 m= NonperformingLoans| $37,218 $40,479 $32,229 $31,421 $32,959 $30,060 $20,527 HEE Watch
Slide 17: 2012 Outlook
Mpcopies 2012 Outlook ¢ Asset quality returning to normal - Willremain prudent with allowance for loan losses ¢ Revenue will grow faster than expenses - Top-lne revenue growth driven by stronger fee-based revenues - Operating expenses lower than 2011 absent M&A activity - Targeting efficiency ratio
Slide 18: Corporate Profile
Corporate Profile
Slide 19: Corporate Profile
Corporate Profile ¢ Financial holding company headquartered in Marietta, Ohio. - Provide a broad range of banking, insurance, and investment services ¢ Current snapshot: - Assets: $1.8 billion - Loans: $944:million ~ Deposits: $1 million ~ Market capitalization: $200 million - Over 125,000 client re
Slide 20: Utica/Marcellus Shale Opportunity
Mpanrore Utica/ Marcellus Shale Opportunity Utica Marcellus Utica underlying Marcellus Peoples Bancorp’s current market area overlaps portions of both shale opportunities
Slide 21: Our Philosophy
Our Pilosonby ¢ Focus on customers first ¢Community banking model - Offer broad array of financial services - Parity in products and delivery channels - Maintain community-minded approach - More nimble and responsive to market - Build long-Jastingrelationships needs ¢ Pursue disciplined growth - Pos
Slide 22: Executive Management Team
aye copies Banco. Executive Management Team Joined Officer Title Age | Peoples Chuck W. Sulerzyski _| President and Chief Executive Officer 54 2011 Edward G. Sloane EVP, Chief Financial Officer and. 51 2008 ‘Treasurer Carol A. Schneeberger |EVP, Chief Administrative Officer 55 1977 Daniel K. McGill
Slide 23: Winning the Checking Account Challenge
send Winning the Checking Account Challenge ¢ Total fee income increased 6.5% year-over-year in Q1 2012 - Both service charge and other income related to delivery channels ¢ Redesigned consumer checking product line in 2011 - Elimmated “free checking” but provide ability to avoid fees - Maintamed ac
Slide 24: Mobile Banking Comparison
[Bin Pay-Specific to Mobile /Phone/iPad/Andriod Apps NA. Yes FF indicates Peoples has advantage over Community Bank group | ff Pf &
Slide 25: Focus on Business Lines: Sales and Service Discipline
Peoples ; f Wpoorres Focus on Business Lines Sales and Service Discipline Defin M Re ; the Tramu a Coach and Go; Con: ¢ Leadership sales and coaching training started in December 2011 ¢ Frontline training completed in Q1 2012 ¢ All managers trained in coaching and sales management disciplines ¢ All
Slide 26: Mergers & Acquisitions
Mergers & Acquisitions
Slide 27: Our Strategy
send Bancorp Our Strategy ¢ Optimize our current footprint - Gain market share and improve operating efficiency - Create more density through disciphned expansion ¢ Target areas with characteristics similar to existing markets - Expand along major transportation routes - Focused on “Mid-major” commu
Slide 28: I-77 Expansion
i 1-77 Expansion Central Ohio :. a a ee ‘ = * Possible M&A opportimities Hae eo Patel ¢ Wealth management + Recentlyadded new talent J Foot expansion int Devel potential ent + Increase market share in all areas Eresile + Insurance & Wealth Management opportunities Lancaster Morgantown Potential * Mi
Slide 29: Appendix
Appendix
Slide 30: Quarterly Results
$194 Beas 2004 2005, 2006 2007 Earnings per common share 2009 2010 2011 Quarterly Results $0.63 $0.35 $0.33 $0.26 $0.13 BE = i $0.10 i $0.10 i $0.11 i $0.11 i QL2011 Q22011 Q32011 Q42011 Q12012 Dividend data presented above reflects amounts declared with respect to earnings for the quarterly period
Slide 31: Net Interest Margin
Peoples Bancorp) Net Interest Margin 8 5.24% 5.24% 3.52% 3.49% SEO 3.49% 3.43% 3.43% 3.39% 3.41% —_———___— —34 : ee 2.09% 2.04% 194% QL 2010 Q2 2010 Q32010 Q4 2010 QL2011 = Q220111.—Q3 2011 Q42011 Qi 2012 —#- Earning Assets —e—Net Interest Margin — Interest Bearingliabilities Presented on a fully-ta
Slide 32: Operating Leverage
Operating Leverage ear Change in Revenue & Expenses 16.6% 7.9%, Total Operating Expenses 2.9% 2.9% : 5 2.7% 6.8% 71% ~$.7% Total Revenue Q42009 Q12010 Q22010 Q32010 Q42010 QU2011 Q22011 Q32011 Q42011 Q12012 Total Revenue represents Net Interest Income plus Non-interest Income, exclusive of any gains
Slide 33: Non-Interest Income
Non-Interest Income $31,350 $32,097 $32,050 $31,634 ($ in thousands) $32,944 lela 2006 2007 2008 2009 2010 2011 Other $3,288 $3,385 $3,037 $3,504 $3,173 $3,224 OE-Banking $3,080 $3,882 $4,686 Trust & investment $5,139 $4,722 $5,348 Binsurance $9,902 $9,300) $8,346 Deposit servicecharges| $10,215 $10
Slide 34: Revenue & Expense Trends
Revenue & Expense Trends (Sin millions) Operating Revenues 351% Ses 351% 343% aan 332% 2007 2008 2009 Net interest income 2011 —e=Efficiency ratio Salary & Benefits Other operating expense FDIC expense FTEs ‘ull-time equivalent employees 34
Slide 35: Balance Sheet Trends
Peoples Bancorp Balance Sheet Trends (Sin millions) Earning Assets $1,105.2. $1,081.1 $1,0248 1004.7 $988.9 $923.6 $915.0 $925.6 = $9148 $922.9 2007 2008 2009 = 12010 022010032010 042010 012011 022011 032011 042011 012012 Net Loans Total Investments, Funding Sources 2007 2008 2009 = 12010022010 0320
Slide 36: Loan Composition
Loan Composition (Sin thousands) 2006 =| 2007 =| 2008 2009 =| «2010 | 2011S | 1.2012 GRetail) $419,868 | $363,363 | $368,983 $356,682 | $353,882 | $356,720 | $356,128 OC&I | $191,847 | $171,937 | $178,834 $159,915 | $153,192 | $140,857 | $150,431 OCRE | [ $453,123 | $437,544
Slide 37: Asset Quality Trends
Peoples Bancorg Asset Quality Trends 4.64% 2.7996 042010 012011 022011032011 Ane eae $05) 042010 ai2011 022011 32011 o4z011 "a1 2012 "Provisionforloanloses ONetcharge-off $2.1) ants ‘DOREO MAH Lean ORES Allowance for Loan Losses Classified Assets 103.69% 59.95% ee 41.91% 48.02% $268 $25.2 $25.2 aazo
Slide 38: Deposit Composition
copes Bancorp’ Deposit Composition 2006 | 2007 | 2008 2009 | 2010 | 2011 | QU2012 [GChecking & Savings) $376,229 | $372,766 | $376,845 | $437,623 | $427,912 | $484,453 | $534,272 gPaplle nts | $78,900 | $101,039 | $105,714 | $112,074 | $122,444 | $122,916 | $161,798 |oOMMDs | $134,387 | $153,299 | $
Slide 39: Non-GAAP Measures
[vee Sia Non-GAAP Measures Pre-provision net revenue (PPNR) incomerepresents 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 order to b
Slide 40: Non-GAAP Measures
[eee nin Non-GAAP Measures Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non-GAAPfinan cial information since their calculation removes the imp act of intangible assets acquired through acquisitions on the consolidated bal
Slide 41: Non-GAAP Measures
Peoples Bancorp Non-GAAP Measures Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. uch ratios represent non-GAAP financial information since their calculation removes the impact of intangible assets acquired through acquisitions on the consolidate
Slide 42: Investor Presentation
Peoples pores. investor Fresentatic Chuck Sulerzyski Ed Sloane President and Chief Executive Officer Chief Financial Officer and Treasurer