Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (November 2019)
44 slides from Peoples Bancorp's investor presentation, Nov 5, 2019
Slide 1: Investor Presentation 3rd Quarter 2019
INVESTOR PRESENTATION sso 3RD QUARTER2019 NASDAQ: PEBO
Slide 2: Slide 2
Slide 3: Safe Harbor Statement
NASDAQ: PEBO 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 Litigat
Slide 4: Profile, Investment Rationale, Culture and Strategy
PROFILE, INVESTMENT RATIONALE, CULTURE AND STRATEGY
Slide 5: Corporate Profile
CORPORATE PROFILE NASDAQ: PEBO FINANCIAL HOLDING COMPANY HEADQUARTERED IN MARIETTA, OHIO Provides a broad range of banking, insurance and investment services. CURRENT SNAPSHOT: CURRENT FOOTPRINT: Assets: $4.4 billion; Loans: $2.9 billion Demographics: Deposits: $3.4 billion Median Income: $49,944 Ma
Slide 6: Geographic Footprint
a, GEOGRAPHIC FOOTPRINT NASDAQ: PEBO PEBO GEOGRAPHIC FOOTPRINT Peoples’ footprint includes full service branches in Ohio, West Virginia and Kentucky. Indicates footprint added by the First Prestonsburg Bancshares Inc. (“First Prestonsburg") acquisition. Cincinnati caldwell Ke ow Mersele . Fematietta
Slide 7: PEBO Market Insight
PEBO MARKET INSIGHT NASDAQ: PEBO 2y PEBO MARKET INSIGHT DEPOSIT DEPOSIT MARKET RANK ($000)* SHARE (%) MARIETTA, OH 1 884,414 52.05% . aes CAMBRIDGE, OH 1 225,591 34.35% e — Strongest deposit market share positions in more WILMINGTON, OH 1 199,573 32.56% rural markets where we can affect pricing PRES
Slide 8: Investment Rationale
INVESTMENT RATIONAL NASDAQ: PEBO UNIQUE COMMUNITY BANKING MODEL e Greater revenue diversity (31% 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 «
Slide 9: We will work side by side to overcome challenges and seize opportunities
WE WILL WORK SIDE BY SIDE TO OVERCOME CHALLENGES AND SEIZE OPPORTUNITIES. WE LISTEN AND WORK WITH YOU. TOGETHER, WE WILL BUILD AND EXECUTE THOUGHTFUL PLANS AND ACTIONS, BLENDING OUR EXPERIENCE AND EXPERTISE, TO MOVE YOU TOWARD YOUR GOALS. OUR CORE DIFFERENCE IS PROVIDING YOU PEACE OF MIND, CONFIDENC
Slide 10: Strategic Road Map
STRATEGIC ROAD MAP NASDAQ: PEBO STRATEGIC ROAD MAP FOR BEST COMMUNITY BANK IN AMERICA * Commitment to Superior Shareholder Returns * Clients’ Ist Choice for Banking, Investing and Insurance + Great Place to Work + Meaningful Impact on Our Communities RESPONSIBLE RISK MANAGEMENT + Embrace Our Way of
Slide 11: Stock Performance
TOCK PERFORMANCE TYEAR 3-YEAR 5-YEAR 15% 14% 14% B% | PEBO | 1% N% Il PEER GROUP 10% 10% HME RUSSELL 2000 FINANCIAL SERVICES ore oe a I RUSSELL 2000 S&P 500 5% 4% Total Return includes impact of dividends 0% Peers include: SRCE, CHCO, CCNE, CTBI, FMNB, FISI, FCF, FDEF, THFF, FRME, GABC, HBNC, LKFN,
Slide 12: Strategic Priorities and Financial Results
STRATEGIC PRIORITIES AND FINANCIAL RESULTS 1
Slide 13: Strategic Priorities
NASDAQ: PEBO POSITIVE OPERATING LEVERAGE Expand revenue versus expense growth gap beyond 2% (PAGE 18) Focused on sustainable revenue growth (PAGE 19) Disciplined expense management (PAGE 20) Drive core efficiency ratio below 60% (PAGE 21) Preserve key metrics (PAGE 22) SUPERIOR ASSET QUALITY « Maint
Slide 14: Strategic Targets
STRATEGIC TARGETS NASDAQ: PEBO METRICS NPAs as a percent of total loans and OREO (1) YTD 12/3118 O71% YTD 9/30/19 073% 3-YEAR STATUS STRATEGIC AS OF TARGET RANGE* 9/30/19 0.70% to 1.00% IMPROVE ASSET QUALITY ADJUST BALANCE Total loans to total deposits HIGH QUALITY, DIVERSIFIED Total revenue growth
Slide 15: Financial Expectations
FINANCIAL EXPECTATIONS NASDAQ: PEBO FINANCIAL EXPECTATIONS - 2019 « Organic loan growth of 3% to 5% for the full year of 2019. « We anticipate the fourth quarter credit costs will be relatively similar to those incurred in the third quarter of 2019. e We believe net interest margin will be between 3
Slide 16: Q3 & YTD 2019 Financial Performance
b Q3 & YTD 2019 FINANCIAL PERFORMANCE
Slide 17: Q3 & YTD 2019 Highlights
v & YTD 2019 HIGHLIGHTS NASDAQ: PEBO Q3 & YTD 2019 PERFORMANCE HIGHLIGHTS e Successful close and conversion of First Prestonsburg e Return on average assets of 1.37% for the third quarter of 2019, adjusted return on average assets of 1.38% ¢ Quarterly annualized net charge-off rate of 1! basis point
Slide 18: 2019 Business Summary
2019 BUSINESS SUMMARY NASDAQ: PEBO 2019 BUSINESS SUMMARY COMMERCIAL BANKING e¢ Commercial loan swap fees have more than doubled in the first nine months of 2019 as compared to 2018 ¢ Commercial loan production was up approximately 14% compared to the first nine months of 2018 ¢ $25 million lending “
Slide 19: Adjusted Operating Leverage
ADJUSTED ite TI AE N EVERAG VERSUS THE PRIOR YEAR, ADJUSTED OPERATING LEVERAGE WAS POSITIVE FOR FISCAL YEARS 2016 THROUGH YTD-2019. 5% — 4% | 3% | 2% | “LE Za 0% FY-16 FY7 FY8 YTD-A9 Adjusted operating leverage is a non-US GAAP financial measure calculated as the difference between total revenue (wh
Slide 20: Net Interest Income and Non-Interest Income
$200,000 _ Beginning in the second quarter of 2018, Peoples aaa benefited from the $160,000 |_ acquisition of ASB Financial Corp (“ASB”). Additionally, beginning in the second quarter of gq 310,000 | 2019, Peoples benefited 2 from the acquisition of s First Prestonsburg. 3 $80,000 | — = Ze $40,000 |
Slide 21: Core Non-Interest Expense
CORE NON-INTEREST EXPENSE™ naspaa: PEBO 2) THE RECENT ESCALATION IN EXPENSES WAS DUE TO ACQUISITIONS, OUR MOVE TO A $15 MINIMUM WAGE, AND AN INCREASE IN FTE'S FOR GROWTH AND TECHNOLOGY INVESTMENTS. WE EXPECT CORE NON-INTEREST EXPENSE FOR THE FOURTH QUARTER OF 2019 10 BE BETWEEN $32 MILLION AND $33 M
Slide 22: Efficiency Ratio
EFFICIENCY RATIO pelt TEM FOR NON-CORE I ZW, _naspaa: PEBO EFFICIENCY RATIO, ADJUSTED FOR NON-CORE ITEMS, HAS IMPROVED AS A RESULT OF EXPENSE CONTROL AND REVENUE GROWTH. 70% 69% | _ 68% 67% 67.49% 66% 65% 64% 64.30% NOT TO SCALE 63% 62% 61% 61.85% ~~ | com i FY14 FYAS FY16 FY7 FYA8 YTDA9 60% “The ef
Slide 23: Key Profitability Metrics
1 Non-US GAAP financial measure. See Appendix. 2 Presented on an annualized basis.
Slide 24: Asset Quality Metrics
0.57% 0.56% 0.49% 0.48% 0.49% 0.46% 0.46% 0.45% 0.47% 0.48%
Slide 25: NPA Composition
NPA COMPOSITION NASDAQ: PEBO iA.) NPAS AT 9/30/19 WERE PRIMARILY COMPOSED OF WELL-COLLATERALIZED COMMERCIAL REAL ESTATE AND RESIDENTIAL REAL ESTATE LOANS, CONSISTENT WITH TREND NOTED IN RECENT QUARTERS. $30 $25 $20 SiS $ MILLIONS $10 $5 $0 QH6 Q216 Q316 Q416 QH7T Q2417 Q317 Q417 QHB Q218 Q3418 Q418
Slide 26: Asset Quality Trend
39.16% 29.89% 28.10% 25.60% 28.72% 22.50% 19.34% 17.23% 17.40% 13.13% 13.20% 10.78%
Slide 27: CRE Concentration
300% IS THE LEVEL CONSIDERED HEIGHTENED CRE CONCENTRATION RISK PER SUPERVISORY GUIDANCE
Slide 28: Construction and Land Concentration
100% IS THE LEVEL CONSIDERED HEIGHTENED CONSTRUCTION, LAND AND LAND DEVELOPMENT CONCENTRATION RISK PER SUPERVISORY GUIDANCE
Slide 29: Loan Composition
LOAN COMPOSITION LOAN COMPOSITION REFLECTS HEALTHY RISK DIVERSITY. NASDAQ: PEBO iA.) TOTAL LOAN PORTFOLIO’ = $2.8 BILLION TOTAL CRE PORTFOLIO” = $0.8 BILLION 1 COMMERCIAL REAL ESTATE (CRE) 291% 5 CONSUMER, INDIRECT 14.9% 1 MULTI FAMILY 9% 2 COMMERCIAL & INDUSTRIAL 21.3% 6 CONSUMER, DIRECT 2.8% 2 MIX
Slide 30: Loan Growth
$239 $130 $1,621 $2,072 $2,225 $2,357 $2,490 $2,720
Slide 31: Deposit Growth and DDAs
$3,357 $2,955 $2,730 $2,536 $2,519 $1,933 39% DDAs
Slide 32: Loans to Deposits
LOANS 10 DEPOSITS ZW, _naspaa: PEBO OUR LOAN TO DEPOSIT RATIO IS LOW COMPARED TO PEER GROUP, WHICH POSITIONS US WELL FROM A LIQUIDITY PERSPECTIVE. 92.9% 91.2% 84.2% NOT TO SCALE & x T AVERAGE z Ss a Ww = STBA SMMF NWBI UCFC FDEF SC FCF TMP CCNE SYBT LKFN SRCE HBNC CTBI UNIV. UNIV. FIS| PRK FRME FMNB
Slide 33: Investments and Earning Asset Mix
76% 73% 73% 72% 70% 69% 64% 36% 31% 30% 28% 27% 27% 24%
Slide 34: Prudent Use of Capital
OF CAPIT. NASDAQ: PEBO ACQUISITIONS ¢ Bank acquisitions completed in 2014 (3), 2015 (1), 2018 (1), and 2019 (1) e Insurance acquisitions completed in 2014 (1), 2015 (1), and 2017 (2) e One investment acquisition was completed in 2016 CAPITAL PRIORITIES ¢ Organic growth ¢ Dividends e Acquisition acti
Slide 35: Insurance & Investment Income Composition
INSURANCE & INVESTMENT INCOME COMPOSITION NASDAQ: PEBO (A) TOTAL INSURANCE REVENUE™ TOTAL INVESTMENT REVENUE FOR THE FIRST NINE MONTHS OF 2019 FOR THE FIRST NINE MONTHS OF 2019 $11.5 MILLION $9.7 MILLION* 1 P&C COMMERCIAL LINES 54.2% 1 FIDUCIARY 52.4% 2 PERFORMANCE BASED ™ 13.0% 2 BROKERAGE 31.4% 3
Slide 36: Q3 2019 Appendix: Pre-Provision Net Revenue
Q3 2019 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 n
Slide 37: Q3 2019 Appendix: PPNR Adjusted for Non-Core Items
Q3 2019 APPENDIX NON-US GAAP MEASURES NasDAQ: PEBO ZW) 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 n
Slide 38: Q3 2019 Appendix: Core Non-Interest Income and Expense
37 Q3 2019 APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO CORE NON-INTEREST INCOME Core non-interest income is a financial measure used to evaluate 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
Slide 39: Q3 2019 Appendix: Efficiency Ratio
Q3 2019 APPENDIX NON-US GAAP MEASURES NasDAQ: PEBO ZW) EFFICIENCY RATIO 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 fully tax-equivalent
Slide 40: Q3 2019 Appendix: Tangible Equity and Book Value
Q3 2019 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’ equity. Such ratios represent non-US GAAP financial measures since the calculation removes
Slide 41: (a) Tax effect is calculated using a 21% federal statutory tax rate for the
(a) Tax effect is calculated using a 21% federal statutory tax rate for the 2018 periods and 35% for the 2017 period.
Slide 42: Q3 2019 Appendix: Return on Average Tangible Equity
Q3 2019 APPENDIX NON-US GAAP MEASURES ZW) _ NASDAQ: PEBO RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY The return on average tangible stockholders’ equity ratio is a key financial measure used to monitor performance. It is calculated as net income (less after-tax impact of amortization of other in
Slide 43: (a) Tax effect is calculated using a 21% federal statutory tax rate for the
(a) Tax effect is calculated using a 21% federal statutory tax rate for thee 2019and 2019and2018 2018 periods periodsand and 35% 35% for for the the2017 2017 period. period.
Slide 44: peoplesbancorp.com
is a federally registered service mark of Peoples Bancorp Inc. The logo and are federally registered services marks of Peoples Bank. peoplesbancorp.com
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