Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q3 2024 Earnings Presentation
44 slides from Peoples Bancorp's earnings presentation, Oct 22, 2024
Slide 1: Working Together. Building Success. Investor Presentation 3rd Quarter 2024
20 WORKING TOGETHER. BUILDING SUCCESS. 24 INVESTOR PRESENTATION I 3rd QUARTER
Slide 2: Table of Contents
WORKING TABLE OF CONTENTS TOGETHER PAGE 4 PROFILE, CULTURE, STRATEGY & INVESTMENT RATIONALE BUILDING PAGE 12 BUILT ON A SOLID FOUNDATION SUCCESS PAGE 26 Q3 2024 FINANCIAL INSIGHTS PAGE 35 Q3 2024 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: Profile, Culture, Strategy & Investment Rationale
PROFILE, CULTURE, STRATEGY & INVESTMENT RATIONALE 4
Slide 5: Geographic Profile
PEBO GEOGRAPHIC PROFILE NASDAQ: PEBO NASDAQ: PEBO PEBO SNAPSHOT AS OF SEPTEMBER 30, 2024 PEOPLES BANK GEOGRAPHIC FOOTPRINT Loans: $6.3 billion CURRENT PEBO FOOTPRINT COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* Assets: $9.1 billion COUNTIES WHERE PEBO HAS OVER $100 MILLION OF DEPOSITS AND IS NOT IN T
Slide 6: Corporate Culture
CORPORATE CULTURE NASDAQ: PEBO OUR VISION Our vision is to be the BEST COMMUNITY BANK IN AMERICA for our employees, clients, shareholders, and local communities. OUR CORE VALUES Our actions are guided by our core values represented by the Promise Circle, which embodies how we do business and our nev
Slide 7: 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 8: Preparation for Crossing $10 Billion
PREPARATION CROSSING $10 BILLION NASDAQ: PEBO SINCE 2016, WE HAVE BEEN PROACTIVELY PREPARING TO CROSS $10 BILLION IN ASSETS AND BEYOND Core System Conversion 2016 Upgraded to Microsoft 365 for all associates Implemented best-in-class Revamped online and Customer Relationship Cloud native business mo
Slide 9: Leading Edge Products, Technology and Capabilities
LEADING EDGE PRODUCTS, TECHNOLOGY AND CAPABILITIES NASDAQ: PEBO NASDAQ: PEBO CREDIT CARD SOLUTIONS COMMERCIAL CAPABILITIES FRAUD PREVENTION TOOLS Purchasing card, ghost card, Remote deposit capture, sweep Positive pay, reverse positive pay, virtual card, credit cards for accounts and more debit card
Slide 10: Investment Rationale
INVESTMENT RATIONALE NASDAQ: PEBO UNIQUE COMMUNITY BANKING MODEL • Strongest deposit market share positions in rural markets where we can affect pricing. Top 3 market share in 35 counties across three states. • Presence near larger cities puts us in a position to capture lending opportunities in urb
Slide 11: External Recognition
EXTERNAL RECOGNITION NASDAQ: PEBO NASDAQ: PEBO THREE YEARS IN A ROW MENTAL WELLBEING ® WORKING TOGETHER. BUILDING SUCCESS. 11
Slide 12: Built on a Solid Foundation: Capital, Credit and Liquidity
BUILT ON A SOLID FOUNDATION CAPITAL, CREDIT AND LIQUIDITY 12
Slide 13: Cost of Deposits
COST OF DEPOSITS NASDAQ: PEBO NASDAQ: PEBO PEBO IS BELOW THE $1 - $10 BILLION BANK UNIVERSE IN TERMS OF COST OF DEPOSITS AS OF JUNE 30, 2024 PEER GROUP - TOTAL DEPOSIT COST (%) PEERGROUP - TOTALDEPOSITCOST(%) 3.50% 3.00% 2.50% UNIV. $1-$10 B AVERAGE: 2.16% 1.94% 2.00% 1.50% 1.00% 0.50% 0.00% SYBT SA
Slide 14: Loan-to-Deposit Ratio
LOAN-TO-DEPOSIT RATIO NASDAQ: PEBO PEBO IS BELOW THE AVERAGE OF THE PEER GROUP IN TERMS OF LOAN-TO-DEPOSIT RATIO DATA AS OF JUNE 30, 2024 PEER GROUP - LOAN-TO-DEPOSIT RATIO PEERGROUP - LOANS / DEPOSITS 120% 100% UNIV. UNIV. $1-$10 $1-$10 B AVERAGE: BAverage: 90% 90% 87% 80% 60% 40% 20% 0% SYBT SASR
Slide 15: Net Interest Margin
NET INTEREST MARGIN NASDAQ: PEBO NASDAQ: PEBO NEAR BEST IN CLASS NET INTEREST MARGIN LARGELY DUE TO STRONG DEPOSIT FRANCHISE DATA AS OF JUNE 30, 2024 PEER GROUP - NET INTEREST MARGIN PEERGROUP- NET INTERESTMARGIN 5.00% 4.50% 4.20% 4.00% 3.50% UNIV. $1-$10 UNIV. $1-$10 B B Average: AVERAGE:3.21% 3.21
Slide 16: Return on Average Assets
RETURN ON AVERAGE ASSETS NASDAQ: PEBO PEOPLES ADJUSTED ROAA OVER THE LAST 3 YEARS 1.75 Return on Average Assets (ROAA) 1.33 1.50 1.47 1.43 1.41 1.32 1.30 1.32 1.25 1.30 1.31 1.27 1.22 1.13 1.12 1.00 1.02 0.87 0.95 0.95 0.86 0.86 0.84 0.75 FY2021 FY2022 FY2023 Q1 2024 Q2 2024 Avg. $1-$10 Billion Univ
Slide 17: 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 18: Asset Quality: NPAs
ASSET QUALITY NASDAQ: PEBO NPAS AS A PERCENT OF TOTAL ASSETS HAVE REMAINED UNDER 0.80% NONPERFORMING ASSETS (NPAs) AND NPA PERCENT OF TOTAL ASSETS NONPERFORMING ASSETS (NPAs) AND NPA PERCENT OF TOTAL ASSETS $100 1.00% $80 0.80% NPA’S IN $ MILLIONS $60 0.60% $40 0.40% $20 0.20% $0 0.00% FY-20 FY-21 F
Slide 19: Asset Quality: Criticized and Classified Loans
ASSET QUALITY NASDAQ: PEBO NASDAQ: PEBO CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED CRITICIZED AND CLASSIFIED LOANS CRITICIZED AND CLASSIFIED LOANS 40% 29.11% 29.54% 30% 28.50% 26.66% 26.07% 25.21% 20% 16.40% 16.41% 13.60% 14.14% 13.34% 13.08% * In accordance w
Slide 20: CRE Concentration Analysis
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO CRE EXPOSURE IS WELL BELOW SUPERVISORY CRITERIA ESTABLISHED TO IDENTIFY INSTITUTIONS WITH HEIGHTENED CRE CONCENTRATION RISK DATA AS OF JUNE 30, 2024 PEER GROUP – CRE LOANS / RISK-BASED CAPITAL PEERGROUP- CRELOANS / RISK-BASED CAPITAL 400% 350% 300% IS THE LEVE
Slide 21: CRE Concentration Analysis: Construction and Land
CRE CONCENTRATION ANALYSIS NASDAQ: PEBO NASDAQ: PEBO PEBO IS MEANINGFULLY BELOW THE AVERAGE FOR $1-10 BILLION BANKS DATA AS OF JUNE 30, 2024 PEER GROUP - CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL PEERGROUP - CONSTRUCTION, LAND AND DEVELOPMENTLOANS / RISK- BASED CAPITAL 140%
Slide 22: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO LOAN COMPOSITION REFLECTS DIVERSIFIED RISK PROFILE TOTAL LOAN PORTFOLIO COMMERICAL LOAN PORTFOLIO TOTAL LOAN PORTFOLIO = $6.3 BILLION COMMERCIAL LOAN PORTFOLIO = $3.8 BILLION 1 COMMERCIAL 1 COMMERCIAL REAL ESTATE 2 CONSUMER 2 COMMERCIAL & INDUSTRIAL 9% 11% 3 SPECIALTY F
Slide 23: Loan Composition: C&I and CRE
LOAN COMPOSITION NASDAQ: PEBO NASDAQ: PEBO TOTAL CRE LOAN PORTFOLIO= $2.2 BILLION TOTAL C&I PORTFOLIO* = $1.3 BILLION TOTAL CRE PORTFOLIO* = $2.2 BILLION TOTAL CRE LOAN PORTFOLIO* = $2.2 BILLION FOOD SERVICES 1 FOOD SERVICES RETAIL TRADE 1 APARTMENT 2 RETAIL TRADE RETAIL 2 APARTMENT CONTRACTORS 18%
Slide 24: Prudent Use of Capital
PRUDENT USE OF CAPITAL NASDAQ: PEBO SHARE ACQUISITION ORGANIC GROWTH DIVIDENDS REPURCHASES ACTIVITIES • In 2024, expect between • 8 consecutive years of • Repurchased shares in • Acquisitions completed 4% and 6% loan growth increasing dividends 2020, 2022 ($7.4 million), since 2011: compared to 2023
Slide 25: Investment Rationale: Strength in the Current Environment
INVESTMENT RATIONALE NASDAQ: PEBO NASDAQ: PEBO STRENGTH IN THE CURRENT ENVIRONMENT (AS OF SEPTEMBER 30, 2024) DEPOSITS CREDIT • Average retail customer deposit relationship: $25,000 • NPAs of 0.76% as a percentage of total assets • Median retail customer deposit relationship: $2,500 • 98.5% of loan
Slide 26: Q3 2024 Financial Insights
Q3 2024 FINANCIAL INSIGHTS 26
Slide 27: Q3 2024 Highlights & Key Impacts
Q3 2024 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO NASDAQ: PEBO RETURN ON AVERAGE ASSETS 1.38% NET INTEREST MARGIN 4.27% NET INCOME $32 MILLION OR $0.89 PER DILUTED COMMON SHARE NET CHARGE-OFFS 0.38% OF AVERAGE TOTAL LOANS EFFICIENCY RATIO 55% LOAN TO DEPOSIT RATIO 84% ® WORKING TOGETHER. BUILDING SUCCES
Slide 28: Total Revenue
TOTAL REVENUE NASDAQ: PEBO RECORD TOTAL REVENUE IN 2023 RECORD TOTAL REVENUE IN 2023 $500,000 $93,950 $400,000 $79,513 $339,374 $76,269 $300,000 $253,442 $262,165 $69,254 $200,000 $64,330 $172,553 $138,923 $100,000 $0 FY-20 FY-21 FY-22 FY-23 YTD-24 NETINTERESTINCOME NON-INTERESTINCOME, EXCLUDING GAI
Slide 29: Non-Interest Revenue Composition
NON-INTEREST REVENUE COMPOSITION NASDAQ: PEBO NASDAQ: PEBO REVENUE SOURCES OF OUR FEE BASED BUSINESSES NON-INTEREST INCOME 4 YTD 2024 TOTAL INVESTMENT REVENUE TOTAL INSURANCE REVENUE YTD 2024 YTD 2024 $14.5 MILLION NON-INTEREST INCOME YTD 2024 $14.9 MILLION 1 FIDUCIARY 1 PROPERTY & CASUALTY 2 BROKER
Slide 30: Expense & Efficiency Ratio
EXPENSE & EFFICIENCY RATIO NASDAQ: PEBO THE RECENT ESCALATION IN EXPENSES WAS DUE OUR EFFICIENCY RATIO HAS BEEN UNDER TO ACQUISITIONS, AN INCREASE IN FTE DUE TO 60% SINCE 2022. GROWTH, AND TECHNOLOGY INVESTMENTS. CORE NON-INTEREST EFFICIENCY RATIO ADJUSTED EXPENSE* FOR NON-CORE ITEMS* EFFICENCY RATI
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. INCREASED NET INCOME IN 2022 AND 2023 WERE DUE TO INCREASES IN MARKET INTEREST RATES AND THE PREMIER, VANTAGE, AND LIMESTONE ACQUISITIONS. RETURN ON AVERAGE ASSETS RETURN ON AVER
Slide 32: Total Loan Growth
TOTAL LOAN GROWTH NASDAQ: PEBO TOTAL LOANS* WERE $6.3 BILLION AS OF SEPTEMBER 30, 2024 TOTAL LOANS* AS OF SEPTEMBER 30, 2024 $7,000 LIMESTONE LIMESTONEACQUIRED LOANS ACQUIRED LOANS PREMIERFINANCIAL PREMIER FINANCIAL BANCORP, INC. BANCORP, INC, ACQUIREDLOANS ACQUIRED LOANS ($ MILLIONS) TOTAL PPP LOAN
Slide 33: Deposit Growth
DEPOSIT GROWTH NASDAQ: PEBO NASDAQ: PEBO 34% OF DEPOSIT BALANCES AT THIRD QUARTER END 2024 WERE DEMAND DEPOSIT ACCOUNTS (DDAS), INCLUDING $1.5 BILLION OF NON-INTEREST BEARING DDAS DEPOSIT BALANCES AS OF SEPTEMBER 30, 2024 $8,000 $6,000 BROKERED CERTIFICATES OF DEPOSIT GOVERNMENTAL DEPOSIT ACCOUNTS B
Slide 34: 2024-2025 Financial Expectations
2024-2025 FINANCIAL EXPECTATIONS NASDAQ: PEBO 2024 2025 ANTICIPATE A STABILIZATION BETWEEN 4.00% AND 4.20% ASSUMING NET INTEREST EXPECT TO BE BETWEEN 4.00% AND 4.10% ASSUMING 50 BASIS POINT 50 BASIS POINT REDUCTION IN RATES FROM FEDERAL RESERVE IN REDUCTION BY THE FEDERAL RESERVE DURING THE FOURTH Q
Slide 35: Q3 2024 Appendix
NASDAQ: PEBO NASDAQ: PEBO Q3 2024 APPENDIX ® WORKING TOGETHER. BUILDING SUCCESS. 35
Slide 36: Appendix: Non-US GAAP Measures
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 37: 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 38: Appendix: Tangible Equity and 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 39: 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 40: Appendix: Return on Average Tangible Equity
APPENDIX NON-US GAAP MEASURES 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 intangible asset
Slide 41: Appendix: Non-US GAAP Measures
($ in Thousands) FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 FY-23 YTD-24 Annualized net income Add: amortization of other intangible assets $ 38,471 $ 3,516 46,255 $ 3,338 53,695 $ 3,359 APPENDIX 34,767 $ 3,223 47,555 $ 4,775 101,292 $ 7,763 113,363 $ 11,222 120,586 8,361 NON-US GAAP MEASURES Less: tax eff
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Slide 44: Contact: Tyler Wilcox and Katie Bailey
TYLER WILCOX President and Chief Executive Officer 740.373.7737 Tyler.Wilcox@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 arched ribb