Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (June 2013)
49 slides from Peoples Bancorp's investor presentation, Jun 19, 2013
Slide 1: Investor Presentation 1st Quarter 2013
Peoples ¢ ay reop! NCORP Nasdaq: PEBO Investor Presentation 1* Quarter 2013 Chuck Sulerzyski Ed Sloane \ Chief Executive Officer Chief Financial Otticer and Treasurer
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 : $981 million — Deposits: $1.5 billion — Mark
Slide 5: Recent Accomplishments
Recent Accomplishments ‘ay ¢ Eamnings increased 79% in 2012 — Achieved all-time record earnings im 1st quarter ¢ Return to positive operating leverage — Combination of revenue growth and expense management * Increased loan production — Period-end balance grew 5% during 2012 ¢ Asset quality nearly re
Slide 6: 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 7: 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 8: 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 29 planning Carol A. Schneeberger Extensive history of PEBO
Slide 9: Current Strategic Priorities
Current Strategic Priorities ‘Peo, plese) BANCORP
Slide 10: Strategic Focus and Target Ranges
Strategic Focus arget Rang 0 NPAsto total loans + OREO 3.419 1.48% 1.28% 0.70% to 1.00% Net charge-offsto average loans) 1.16% 0.12% —- 0.29% 0.30% to 0.50% Loansto total assets 52.31% 51.36% 50.58% 60% to 70% Deposits to total funding 86.19% 89.42% 90.56% 90% to 95% Annualrevenue growth - 5.04% 2.9
Slide 11: 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 12: Current Strategic Priorities: The Best Community Bank in America
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 13: 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 14: 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 15: Mergers & Acquisitions
Mergers & Acquisitions ‘Peo, plese) BANCORP
Slide 16: 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 17: 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 18: Executing Our M&A Strategy
a) Executing Our M&cASSi * Villers Investments — Completed June 2012 . rig ito 4 be -gromengs 013 — Single sales producer in — womlp Sted ADM ae. Wood County, West Virginia _ Employ ee betes "Ohi alice’ - aa million in managed assets; A anes Ie J ae eahae C m0 $445,000 m annual revenue — pIlgle sale
Slide 19: Customers and Markets
Customers and Markets ‘Peo, plese) BANCORP
Slide 20: Competitive Product Comparison
PNC ‘Huntington PEOPLES [BAN CORP| National **Conmmnity Banks*** Gty Commmity Wes- First Trust Banco Federal United Bank BillPay Electronic Statements Yes Yes | Yes | Yes Yes ‘Yes Yes No Yes_| Yes | Yes Online Account Opening Yes Yes | Yes | Yes Yes Yes No No No | No [ No Online Financial Management
Slide 21: 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 22: 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 23: Rebranding
paeD te reopies Improve WELL sHow You HOW
Slide 24: Floor-to-ceiling 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 25: Expanding Our Network
Slide 26: Financial Performance
Financial Performance ‘Peo, plese) BANCORP
Slide 27: Annual Financial Performance
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 28: Quarterly Financial Performance
Quarte I Pinan Diluted EPS $0.63 $0.47 $0.45 $0.36 $0.47 Return on common equity 12.90% 9.57% 8.86% 6.99% 9.18% Return on assets 1.48% 1.11% 1.04% 0.82% 1.06% Net interest margin (FTE) 3.41% 3.43% 3.30% 3.42% 3.12% Efficiency ratio 65.47% 69.61% 70.06% 72.99% 71.61% Tier 1 common equity 13.82% 13.92
Slide 29: Key Metrics
Metric 40.44% 30.13% 32.03% 26.87% 29.09% 2.9% 3.7% 1.1% 3.9% -2.1% 65.47% 69.61% 70.06% 72.99% 71.61% - 0.25 1.49% 0.7% 3.0% -1.1% 1.67% 1.42% 1.349% 1.23% 1.249% (1) Substandard loans, OREO, classifiedinvestments as a% of Tier! capital +ALLL (3) Sequential growth in average balances ~ (2) Year-ove
Slide 30: Average Balances
Average Balances (Sin millions) 1s $ 946.2 $ 959.6 $ 966.8 $ 995.8 $ 985.1 664.8 662.5 677.1 665.3 680.9 1,060.2 1,083.4 1,093.7 1,111.0 1,133.1 247.5 269.3 280.2 298.2 320.0 272.1 235.2 231.9 229.4 216.5 ing value without FHLB/FRB stock = 30
Slide 31: Peer Comparison
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 2.58% ¢« Strongcore operatingresults - Growing, diversifiedrevenues - Good expense control ¢ Favorable asset quality trends - Reducigproblemloans - M
Slide 32: Price to Earnings, Dividend Payout and Yield vs Peers
Price to LTMEamings YTD Dividend Payout Dividend Yield 2.71% 2.71% ¢ 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 Financial and F
Slide 33: Return on Assets
1.40% — - 1.07%, 12 1.06% a 3.79% 0.90% .87% 0.98% 2007 2008 2009 2010 2011 2012 Q1 2013 BPEBO @Peer Median @$1-5 Billion Median 33 sancorP ©
Slide 34: Annual and Quarterly Results
Annual Results $194 $2.01 @ Earnings per common share $192 $1.74 ends 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 $0.35 $0.33 $0.36 $0.26 Q2 2011 Q3 2011 Q42011 Q12012 Q2 2012 Q3 2012 42012 Q12013 Dividend data presented above
Slide 35: Net Interest Margin
Net Interest Marsim 5.24% 194% 177% 1.72% 114% 108% 103 gape, Q32010 Q42010 Q12011 Q22011 Q32011 «Q42011 ~— QL2012 —&-EFarning Assets —*—Net Interest Margin —@Interest Bearingliabi x equivalent basis Peop —— les (a 35
Slide 36: Operating Leverage
Operating Leverag, ‘ay Year-over-Year Change in Revenue & Expenses 16.6% Total Operating Expenses 10.5% 7.8% 6.6% 2.1% a S90 “a Total Revenue Q42010 QU2011 Q22011 Q32011 Q42011 QU12012 Q22012 Q32012 Q42012 Q12013 Total Revenue represents Net Interest Income plus No Peoples¢@) 46 BANCORP. rest Income
Slide 37: Non-Interest Income ($ in thousands)
($ 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 38: 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 39: Earning Assets and Funding Sources
(Sin millions) Earning Assets 32 $1081.1 tus $1,024.8. esa) $9148 $922.9 $935.4 $970.2 $9674 $963.1 YE 2007 YE 2008 YE2009 = YE2010 © YE 2011, 012012 022012 032012 04 2012 012013 aNetLoans aTotal Investments Funding Sources $536.6 $581.6 $448.0 $319.2 $280.6 $228.2 $227.1 $221.7 $232.2 $212.1 YE 200
Slide 40: Loan Portfolio Composition
($ in thousands) 39% 41% [YE 2007 YE 2008 | YE 2009 YE 2010 | YE 2011 | Q12012 | Q22012 | Q32012 | Q42012 Q12013 |DRetail] $400,482 | $397,650) $383,326 | $353,882 | $356,720 | $356,128 $355,287 | $386,334 | $392,703 | $400,097 lac ‘&I_ | $168,909 | $176,187 | $160,678 | $153,713 | $140,857 | $150,4
Slide 41: Asset Quality
aly (Sin millions) Provision for Loan Losses & Net Charge-offs Nonperforming Assets 3416 253% 1.88% ——ALLLio Loans 178% Provision for ban bosses BNetcharge offs 5) $a.ay $0.0) $q.ly $2.1) 042011 01201222012 03201242012 012013 042011 012012 022012032012 042012012013 OREO ——NPAsto Loane+ OREO Allowanc
Slide 42: Deposit Composition
(ay ($ in thousands) Pe es ie Ea 4496 4296 37% 3396 31% 31% 30% 27% 2496 Deposit Composition (YE2007 [YE 2008 | YE 2009 | YE 2010 | YE 2011 | Q22012 (932012 [.Q42012 | Q12013] Public Funds $ 3 MMDs ($153, 299 $213, 498) $263, 253] ‘9289, 65 $268, 410 | ‘324 9 608 $254, 702] $288, 404) [8288.538 Reta
Slide 43: Appendix
Appendix
Slide 44: 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 45: Non-GAAP Measures: Pre-Provision Net Revenue (Quarterly)
ION 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 retained in order to build capit
Slide 46: 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 47: 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 48: Peoples Bancorp 1st Quarter 2013
Peoples ¢ ay reop! NCORP Nasdaq: PEBO Investor Presentation 1* Quarter 2013 Chuck Sulerzyski Ed Sloane \ Chief Executive Officer Chief Financial Otticer and Treasurer
Slide 49: 1st Quarter 2013 Earnings Release
1st Quarter 2013 Earnings Release ‘Peo, plese) BANCORP