Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Investor Presentation (November 2013)
48 slides from Peoples Bancorp's investor presentation, Nov 1, 2013
Slide 1: Investor Presentation 3rd Quarter 2013
y Peoples ¢), Nasdaq: PEBO Investor Presentation 34 Quarter 2013
Slide 2: Forward-looking statements
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 1995. These forwa
Slide 3: Overview
Overview
Slide 4: Corporate Profile
Corporate Profile * 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 52.0 billion 51.2 billion — Deposits: $1.5 billion — Market capitalization
Slide 5: Recent Accomplishments
cent Accomplishmi * Improving bottomline earnings — EPS increased 79% in 2012 — Building earnings momentum during second half of 2013 * Growingrevenue while maintaining diversity — Feerevenues are 41% of total in 2013 versus 39% in 2012 — Double-digit year-over-year increases in insurance and invest
Slide 6: Ohio Commerce Bank Transaction Summary
hio Commerce Bank Transaction Summary “i ee 8/31/2013 ©) 100% cash (Oy Sree $950,000 (pre-tax) October 11, 2013 Financial impact: — Annual EPS accretion = $0.11 to $0.14 — Minimal TBV dilution — Dilution eam-hack period of 3 to 4 years — Double digit IRR a . BANCORP. Transaction rationale: — Entry i
Slide 7: Current Outlook
Current Outlook * Focused on positive operating leverage — Total revenue growth for 2014 should exceed 10% — Higher loan balances and sales production within fee-based businesses — Anticipating 2014 expense growth to be 1% to 2% less than revenue growth Disciplined operating expense management — Hig
Slide 8: Investment Rationale
Investment Rationale ¢ Unique community banking model — Greater revenue diversity for a community bank our size (over 40% fee-based) — Strong community reputation and active involvement — Local market teams capable of outmaneuvering larger banks — More sophistication and product breadth than smaller
Slide 9: Executive Management Team
Chuck W. Sulerzyski Diverse financial services experience President and CEO Progressive exeaitive leadership 88 Edward G. Sloane Progressive finance and accounting leadership EVP, CFO and Treasurer Extensive experience with ALM, M&A, strategic 30 planning Carol A. Schneeberger Extensive history of P
Slide 10: Current Strategic Priorities
Current Strategic Priorities BANCORP® /Peop plese)
Slide 11: Strategic Goals and Focus Metrics
Strategic al Focus Metrics J12 g Improve NPAsto total loans + OREO 3.41% 1.48% 0.70% to 1.00% set Tha) Net charge-offs to averageloansq) 1.16% 0.12% 0.20% to 0.40% Loansto total assets 52.31% 51.36% 55.07% 60% to 70% Deposits to total funding 86.19% 89.42% 86.16% 30% to 90% Annualrevenue growth -5.0
Slide 12: Strategic Progression: Levers of Success
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
Slide 13: Current Strategic Roadmap: The Best Community Bank in America
Current Strategic R “The Best Community 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 cust
Slide 14: Business Line Focus: Core Banking Activities
Business Line Focts) 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 —
Slide 15: Business Line Focus: Value Added Services
Business Line Foch Value Added Services WeallsManagemen * Top-line revenue growth — Managed assets = $1.4 billion — Currently 8% of totalrevenue ¢ Adding talent across footpmnt — Organic + acquisitions — 3 advisors addedin 2012 — Currently 9 advisors; Goal=12 * Leveraging branch capabilities — Placi
Slide 16: Mergers & Acquisitions
Mergers & Acquisitions /Peop plese) BANCORP®
Slide 17: Our M&A Strategy
Our M&A Strategy (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” communitie
Slide 18: Footprint Development: Growth Corridors
17% Comidor * High growth potential * Attractive market dynamics * High growth potential L777 asion + Recentlyadded new talent + Possible M&A opportunities 1-70 Expansion + Wealth management opportunities Footprint Development + Increase market share in all areas expansion potential + Insurance & We
Slide 19: Executing Our M&A Strategy
Executing Our M&AS * Villers Investments * McNelly Insurance — CompletedJune 2012 — Completed April 2013 — Single sales producer in Wood — Employee benefits msurance County, West Virgiuma practice in Jackson, Ohio — $55 mulhonin managedassets; — Single sales producer 445,000 in annual revenue — $1.4
Slide 20: Customers and Markets
Customers and Markets (Peoples
Slide 21: Delivery Channel Comparison
r ur 4 @) PEOPLES /BANCORP| [Online Channel _Yes ‘Yes Yes Yes Yes ‘Yes Yes Yes Yes Yes ‘Yes Yes Yes | Yes | Yes Yes ‘Yes Yes No Yes Yes | Yes Yes Yes | Yes | Yes ‘Yes ‘Yes No No No_| No | No No Yes Yes Yes Yes Yes yx] _No No No No No Yes Yes | Yes | Yes ‘Yes ‘Yes Yes Yes Yes__[ Yes [Yes Yes Yes | Ye
Slide 22: Utica/Marcellus Shale Opportunity
ica/ Marcellus Shale Oppormuni Both opportunities are present in PEBO’s market area zi a= AY 1 i wit mi Etat Hy Thal : mW, Emery ges = Total gas, mtons ot zZ cave et psa me * Marans Sle Mm Le MM Uta — wieeiaman PAs aes 1 Marcellus rarG at 21 HEI Utica underlying Marceus Bi 215-2400 ¢ Key driver of s
Slide 23: Our Brand Promise
Our Brand Promise € 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 24: Peoples Brand Positioning
Peoples ¢ @ reopies Improve WELL sHow You HOW (Peoples () ot BANCORP.
Slide 25: Branch Renovation Program
¢ 18 month, 5-p — Floor-to-ceiling renovations — Over $5 million being invested — First phase began Q1 2018 — Using national branch design experts — All delivery channels “Best in Class” — Consistent look with our new brand — More engaging customer environment — Better utilization of office space —
Slide 26: Stop In. We're Open.
Stop In. We're Opens
Slide 27: Financial Performance
Financial Performance BANCORP® /Peop plese)
Slide 28: Annual Financial Highlights
e» Diluted EPS $0.72 $0.22 $0.34 $1.07 $1.92 oy Return on common equity 3.67% 1.17% 1.76% 5.61% 9.52% : Return on assets 0.39% 0.21% 0.28% 0.69% 1.11% Net interest margin (FTE) 3.51% 3.48% 3.51% 3.43% 3.39% Efficiency ratio 56.30% 60.14% 60.30% 68.98% 69.55% Tier 1 common equity 10.17% 10.58% 11.59%
Slide 29: Quarterly Financial Highlights
Diluted EPS $0.45 $0.36 $0.47 $0.46 $0.23 Return on common equity 8.86% 6.99% 9.18% 8.74% 4.61% Return on assets 1.04% 0.82% 1.06% 1.03% 0.53% Net interest margin (FTE) 3.30% 3.42% 3.12% 3.15% 3.26% Efficiency ratio 70.06% 72.99% 71.61% 71.71% 72.47% Tier 1 common equity 13.86% 14.06% 14.68% 14.17%
Slide 30: Key Performance Metrics
Key Performance 1) Metric 30.08% 28.21% 28.50% 27.19% 21.99% 1.1% 3.9% -2.1% 1.2% 6.3% R 70.06% 72.99% 71.61% 71.71% 72.47% at 0.7% 3.0% -1.1% 2.5% 3.2% 1.34% 1.23% 1.24% 1.25% 1.26% (1) Substandard loans, OREO, classifiedinvestments as a of Tier! capital ¥ALLL. (3) Sequential growth in average bala
Slide 31: Average Balances
Average Balances (Sin millions) rE $ 966.8 $ 995.8 $ 985.1 $1,0095| $ 1,041.9 659.5 1,093.7 1,111.0 1,087.8 1,046.8 325.1 276.3 ing value without FHLB/FRB stock 31
Slide 32: Peer Comparison: Earnings and Asset Quality
NPAs to Loans and OREO 2012 EPS Growth 2012 Fee Revenue to Avg. Assets ¢« Strongcore operatingresults - Growing, diversifiedrevenues - Good expense control ¢ Favorable asset quality trends - Reducigproblemloans - Minimal net charge-offs - Releasingreserves « All business lines contributing Souroe: S
Slide 33: Price to Earnings and Dividend Payout vs Peers
Price to LTMEamings YTD Dividend Payout ¢ 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 FactSet Research Systems; Ma
Slide 34: Nonperforming Assets vs Peers
3.79% 3.8556 400%) 3.4196 3.3496 3.40% 8 #6 2.3036] 3 4 35 1.5 3 1.41 z 726.9894 pe 2007 2008 2009 2010 2011 @PEBO @Peer Median 3.29% 2.61: 2012) Q1. 2013 Q22013 Q3 2013 @$1-5 Billion Median Pearsincluce: BKYF, BUSE, CCNE, CHCO, CTBI, ESEF, FCBC, FCF, FCZA, FDEF, FFEC,FFKT, UNE, FRME, GABC, LNE®, PF
Slide 35: Annual and Quarterly Results
Annual Results $194 $2.01 @ Earnings per common share $192 $174 Cash dividends declared per common share $107 $0.7 2005 2006 2007 2008 2n09 2010 2 2012 Quarterly Results $0.63 $0.47 $0.45 $0.47 $0.46 $0.35 $0.33 $0.36 $0.23 Q32011 42011 Qu 2012 Q22012 32012 42012 Qu2013 22013 32013 Dividend data pre
Slide 36: Net Interest Margin
Net Interest Margi 5.24% 494% 489% 4 e104 4.66% 4.64% 3.43% 3.43% 339% 349% 41% 3.43% 3.42% 194% 177% 1.72% 114% 108% 193% 0.93% 0.89% 9.95% Q32010 Q42010 QL2011 Q22011 Q32011 Q42011 QL2012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 —#-Earning Assets. —*—Net Interest Margin —#Interest Bearingliabilit
Slide 37: Non-Interest Income
(a ($ in thousands) $34,971 $30,379 $34,350 $32,097 $32,050 $31,634 $32,944 2006 2007 2008 2009 2010 2011 Other $3,207 $3,252 $3,037 $3,594 $3,173 $3,224 $4,078 GE-Banking $3,080 $3,524 $3,882 $3,954 $4,686 $5,142 $5,955 O Trust & investment $4,258 $4,983, $5,139 $4,722 $5,348 $5,548 $6,129 @Insuran
Slide 38: Operating Revenues and Expenses
e» (Sin millions) Operating Revenues 35196 a 351% 343% Aes Sent 332% 2006 2007 2008 2009 2010 2011 2012 Net interest income BNon-interest income =mNet interest margin Operating Expenses eee 69.55% 5751% 57.07% 56.30% 60.1490 a 5 51% 53% S47 FTEs | | 559FTEs| | 546FTEs| | 537FTEs| | 534FTEs| | 513FTE
Slide 39: Loans, Investments and Funding Sources
> (Sin millions) YE 2007 YE2008 «= YE2009 YE2010 YE2011 12012 022012 032012 042012 012013022013 032013 aNetLoans aTotal Investments Funding Sources 536.6] |581.6)) [h448.0}) [5319.24] |e280.69) [4228.2] 227.1) 221.7] 232.2) [5212.1] |268.6f)) |h280.64 YE 2007 YE2008 = YE2009 YE2010 YE2011 Q12012 022
Slide 40: Loan Portfolio Composition
36% | | 36% 28% Ax | | 43% 37% | | 38% || 38% | | 38%) | 37% | | 39% | | 40% [YE 2007 |YE 2008 | YE 2009 | YE 2010 | YE 2011 | Q12012 | Q22012 | Q3 2012 | Q42012 [DRetail $400,482 $397,650 | $383,326 $353,882 |$356,720 |$356,128 | $355,287 | $386,334 | $392,703 /$ [wCar [$168,909 /$176,187 | $160,67
Slide 41: Asset Quality Trends
Teena Za Asset Quality Trends (Sin millions) ¢€ Provision for Loan Losses & Net Charge-offs Nonperforming Assets 1.88% 1.75% 2.00% 1.88% 1a ae 1.66% 160% ALLL ie Loans S18) eS 1.06% Provision for ban bsses Netcharge-off Ae $04 $05) ao”) 022012 | 032012 a42012 | 012013 | 022013 032013 $a $a.a) saa ae
Slide 42: Portfolio Trends
YE 2007 YE [ 2008, YE 2009 YE 2010 at 10% | | 11%] | 11% = late) fn A» ($ in thousands Qu eh 20. oi 2013 er | us i
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 reta
Slide 45: Non-GAAP Measures: Pre-Provision Net Revenue Quarterly
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 reta
Slide 46: Non-GAAP Measures: Tangible Common Equity
Non-GAAP Measures Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockhold: GAAPfinancial information since their calculation removes the impact of intangible assets acquired through acquisitions on the consolidated balance sheets. Management believes this informatio
Slide 47: Non-GAAP Measures: Tangible Common Equity Quarterly
Non-GAAP Measures (ay Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockhold: GAAPfinancial information since their calculation removes the impact of intangible assets acquired through acquisitions on the consolidated balance sheets. Management believes this inform
Slide 48: Peoples Bancorp
y Peoples ¢), Nasdaq: PEBO Investor Presentation 34 Quarter 2013
Peoples Bancorp — Investor Presentation (November 2013) on 6ix