Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q1 2022 Earnings Presentation
40 slides from Peoples Bancorp's earnings presentation, May 9, 2022
Slide 1: Investor Presentation 1st Quarter 2022
ey Sy ! qt 1 BN if 2008 Peop ples (Q) 1902 INVESTOR PRESENTATION 2022 1ST QUARTER 2022
Slide 2: Table of Contents
2) TABLE OF CONTENTS PAGE 4 PROFILE, INVESTMENT RATIONALE, CULTURE AND STRATEGY PAGE 10 CREDIT, CAPITAL & LIQUIDITY PAGE 21 Q12022 FINANCIAL INSIGHTS PAGE 35 12022 APPENDIX
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 A
Slide 4: Profile, Investment Rationale, Culture & Strategy
(@) PROFILE, INVESTMENT RATIONALE, CULTURE & STRATEGY
Slide 5: Geographic Profile
ae GEOGRAPHIC PROFIL NASDAQ: PEBO =< ty, PEOPLES BANK GEOGRAPHIC FOOTPRINT PEBO SNAPSHOT AS OF MARCH 31, 2022 ie FEDORA Loans: $4.5 bilion MMM COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE* Assets: $7.2 billion MMM COUNTIES WHERE PEBO HAS OVER S100 MILLION OF Deposits: $6.0 billion DEPOSITS AND IS NOT
Slide 6: Rationale
RATIONALE UNIQUE COMMUNITY BANKING MODEL Strongest deposit market share positions in more rural markets where we can affect pricing. Top 3 market share in 32 counties across three states. Presence near larger cities puts us in a position to capture lending opportunities in urban markets (e.g. Cincin
Slide 7: Our Vision
OUR VISION Our vision is to be the BEST COMMUNITY BANK IN AMERICA OUR CORE VALUES Our actions are guided by our core values represented by the Promise Circle, which embodies how we do business and our never ending pursuit of creative value for our associates, our communities, our clients, and our sh
Slide 8: Road Map
ag AD MAP (NASDAQ: PEBO Peoples BANK * Commitment to Superior Shareholder Returns * Great Place to Work * Clients’ First Choice for Financial Services * Meaningful Impact on Our Communities BEST COMMUNITY BANK IN AMER: exhg exh RESPONSIBLI + Everyone isa Risk Manager + Treat The Client Like Family *
Slide 9: Forbes Best-in-State Banks and Best Banks to Work For
Forbes BEST-IN-STATE Best Banks to Work For Over 4,900 Banks Eligible nationally to make Forbes list of on American Bankers Best Banks to Peoples Bank was one of only 16 banks | Peoples Bank was one of 90 banks Best-In-State Banks in 2 or more states. Work For list, which is top 2% of all banks. IN
Slide 10: Credit, Capital & Liquidity
(@) CREDIT, CAPITAL & LIQUIDITY 10
Slide 11: Loans & Leases Portfolio Composition
LOANS & LEASES’ PORTFOLIO COMPOSITION « Robust concentration management process focused on portfolio risk diversification « Relationship based lending + Commercial Real Estate (CRE) and Commercial & Industrial (C&l) are balanced with Consumer + CRE financing generally for "A" tier developers only +
Slide 12: Asset Quality
[ 12 ASSET QUALITY ty, NASDAQ: PEBO OUR DELINQUENCY AND NET CHARGE-OFF TRENDS HAVE REMAINED STABLE FOR FIVE YEARS Percentage of Loans Considered “Current” 100% 98.6% 95% 90% 207 2018 2019 2021 Percentage of Net Charge-Offs to Average Loans Annualized 0.37% 0.25% . ii il a 013% 6 I 005% o Ea 2017 201
Slide 13: NPAs as a Percentage of Total Assets
NPAS AS A PERCENTAGE OF TOTAL ASSETS NPAS HAVE CONTINUED TO DECREASE SINCE HAVE CONSISTENTLY BEEN SUPERIOR TO MIDWEST THE INCREASE IN Q3 2021, WHICH WAS MAINLY BANKS WITH $1 TO $10 BILLION IN TOTAL ASSETS DUE TO ACQUIRED LOANS* 075% 0.25% 0.00% $60 [— 095% $50 [~ S $40 [~ 2 2 sso LL 2 2 € g szo |. s
Slide 14: Asset Quality: Classified and Criticized Loans
ASSET QUALITY CLASSIFIED AND CRITICIZED LOANS AS A PERCENTAGE OF TIER 1 CAPITAL ARE WELL MANAGED. INCREASE IN Q3 DUE TO ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. 50% B CRITICIZED LOANS / 45% TIER 1 CAPITAL + ALLL * 40% 3572% a 35% CLASSIFIED LOANS / TIER CAPITAL + ALLL* 30% 2810% 25.61% 25% 212
Slide 15: RE Concentration Analysis
RE CONCENTRATION RECO CONALYSIS 350% 300% 250% 200% 150% 100% 50% 0% CRE EXPOSURE IS WELL BELOW SUPERVISORY CRITERIA ESTABLISHED TO IDENTIFY INSTITUTIONS WITH HEIGHTENED CRE CONCENTRATION RISK PEER BANK SUBS - CRE LOANS / RISK-BASED CAPITAL 300% IS THE LEVEL CONSIDERED HEIGHTENED CRE CONCENTRATION R
Slide 16: RE Concentration Analysis
RE CONCENTRATION ANALYSIS ty, NASDAQ: PEBO PEBO IS MEANINGFULLY BELOW THE AVERAGE FOR S1-10 BILLION BANKS PEER BANK SUBS - CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL 110% 100% 90% 100% IS THE LEVEL CONSIDERED HEIGHTENED CONSTRUCTION, LAND AND LAND DEVELOPMENT CONCENTRATION RI
Slide 17: Loan Composition
LOAN COMPOSITION LOAN COMPOSITION REFLECTS HEALTHY RISK DIVERSITY TOTAL LOAN PORTFOLIO* = $45 BILLION : Se TOTAL C&I PORTFOLIO = $09 BILLION WHICH INCLUDES $42 MILLION OF PPP LOANS TOTAL CRE PORTFOLIO** = $15 BILLION WHICH INCLUDES PPP LOANS 1 COMMERCIAL REAL ESTATE (CRE) 32% 1 RETAIL 13% 7 WAREHOUS
Slide 18: Capital Priorities
18 oe NPE ty, NASDAQ: PEBO CAPITAL PRIORITIES * Organic growth «Dividends * Share repurchases * Acquisition activities DIVIDENDS * 7 years of increasing dividends. Dividend paid increased from $0.15 per share for Q1 2016 to $0.38 in the most recent quarter * Consistently evaluate dividend and adjust
Slide 19: Deposit Franchise
DEPOSIT FRANCHISE NASDAQ: PEBO LOW LOAN TO DEPOSIT RATIO PROVIDES LOW COST LIQUIDITY TO FUND FUTURE GROWTH LOANS / DEPOSITS - PEER GROUP 76.44% UNIV. $1- $10 B AVERAGE: 76.43% UUM. SSS & & Sg SEOSS SS S ge KEES ee) Ss RS wes & ee & NOT TO SCALE a z ‘Source: S&P Global Market intelligence, as of 12/3
Slide 20: Cost of Deposits vs. $1-$10 Billion Bank Universe
20 PEBO IS BELOW THE SI - $10 BILLION BANK UNIVERSE IN TERMS OF COST OF DEPOSITS AS OF DECEMBER 31, 2021 TOTAL DEPOSIT COST (%) 050% 0.40% 0.30% FLEE EP ECE EP EE OSE LOS ERVEEEEP LEE OSC ve OSE ors LP LLOL ELE LE OFS EE ° S axe Source: SEP Global Market Inteligence, as of 12/31/2021, Peer financial
Slide 21: Q1 2022 Financial Insights
Q) 12022 FINANCIAL INSIGHTS
Slide 22: Acquisition of Premier Financial Bancorp, Inc.
22 ACQUISITION OF - PREMIER FINANCIAL BANCORP, INC y 1 ACQUISITION EFFECTIVE AS OF SEPTEMBER 17, 2021 Premier Financial Bancorp, Inc. (Nasdaq: PFBI) was headquartered in Huntington, WV and was the holding company for Citizens Deposit Bank and Trust, Inc. and Premier Bank, Inc. Operated 46 branches a
Slide 23: Vantage Financial Acquisition
VANTAGE Fi NAN, ACQUISITION EFFECTIVE MARCH 7, 2022 « Vantage Financial (“Vantage”) was a privately held, mid-ticket, national equipment finance company based in Excelsior, Minnesota. The company originates leases primarily for mission critical IT equipment across a wide array of industries includin
Slide 24: Financial Expectations
FINANCIAL EXPECTATIONS &(y_ NASDAQ: PEBO LOAN GROWTH » 5% T0 7%, EXCLUDING PPP LOANS & VANTAGE FEE-BASED INCOME » 25% TO 30% GROWTH COMPARED TO 2021 STABILIZES AS THE ECONOMY POTENTIALLY CREDIT COSTS » COMES OUT OF THE PANDEMIC : QUARTERLY TOTAL $50 MILLION TO $52 MILLION NON-INTEREST EXPENSE » FOR
Slide 25: 2022 Highlights & Key Impacts
1 2022 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO FINANCIAL: © Net interest income decreased $427,000, or 1%, compared to the linked quarter of 2021. Net interest margin was 3.41% for the first quarter of 2022. * Total non-interest income, excluding net gains and losses, increased 8% compared to the link
Slide 26: Highlights & Key Impacts: Technology
26 RIGHLIGHTS & KEY IMPACTS Wallet Peoples Q ») cenit $596.22 Available Balance . Te (s} Cardiess cash 5 card Controls @ Aterts = et Add to Apple Wallet Mot PEOPLES BANK CONTINUES TO ADD TECHNOLOGY THAT CLIENTS CARE ABOUT * Contactless debit cards * — Cardless cash (ability to use ATM via mobile app
Slide 27: Performance
PERFORMANCE NASDAQ: PEBO. Uy BANK PERFORMANCE HAS LAGGED S&P 500 IN TERMS OF 1, 3 & 5 YEAR TOTAL ANNUAL RETURN TOTAL ANNUAL RETURN AS OF MARCH 31, 2022 1% 1696 ie ™ 5% om % om —= my TYEAR S-YEAR S-YEAR CUMULATIVE TOTAL RETURN FOR THE THREE MONTHS ENDED MARCH 31, 2022 mr I reer crouP HS? 500 Total Re
Slide 28: Revenue
($ THOUSANDS) a REVENUE NASDAQ: PEBO $250,000 $200,000 $150,000 $100,000 $50,000 so TOTAL REVENUE OF $74 MILLION FOR Q1 2022 $129.12 $013,377 $172,395 $138,923 FYI6 FYa7 FYB IME NET INTEREST INCOME FYA9 FY-20 FY21 [Ml NON-INTEREST INCOME, EXCLUDING GAINS AND LOSSES YTD-22 Peoples benefited from the
Slide 29: Total Investment Revenue and Total Insurance Revenue
TOTAL INVESTMENT REVENUE TOTAL INSURANCE REVENUE 12022 012022 $4.3 MILLION $4.7 MILLION 1 FIDUCIARY 46% 1 P&C COMMERCIAL LINES 46% 2 BROKERAGE 39% 2 PERFORMANCE BASED 28% 3 EMPLOYEE BENEFITS 15% 3 P&C PERSONAL LINES 14% 4 LIFE & HEALTH 10% 5 OTHER2%
Slide 30: Core Non-Interest Expense and Efficiency Ratio
($ THOUSANDS) NOT TO SCALE 30 Ww $200,000 $160,000 $120,000 $80,000 $40,000 $0 Eee & FFICIENCY RATIO NASDAQ: PEBO THE RECENT ESCALATION IN EXPENSES WAS DUE TO ACQUISITIONS, AND AN INCREASE IN FTE'S FOR GROWTH AND TECHNOLOGY INVESTMENTS CORE NON-INTEREST EXPENSE* FY FYA9 FY-20 FY¥-21 HM CORE NON-INTE
Slide 31: Improvement in Key Metrics
IMPROVEMENT IN KEY METRICS NASDAQ: PEBO = “‘\y, WE HAVE MADE STEADY PROGRESS ON THESE METRICS OVER THE RECENT YEARS. THE PROVISION FOR CREDIT LOSSES, INTEREST RATE ENVIRONMENT, AND OTHER ECONOMIC IMPACTS OF COVID-19 SIGNIFICANTLY IMPACTED THESE METRICS IN 2020 AND 2021 SIRES ESL SFES SEES ame oe 2.0
Slide 32: Loan Growth
YY AN GROWTH ty, NASDAQ: PEBO $5,000 $4,000 $3,000 $2,000 $1,000 $0 32 TOTAL LOANS’ WERE $4.5 BILLION AS OF MARCH 31 2022, WHICH INCLUDED $42 MILLION IN PPP LOANS IML PREMIER FINANCIAL BANCORP, INC. ‘ACQUIRED LOANS (TOTAL PPP LOANS (TOTAL ACOUIRED LEASES IM PREMIUM FINANCE ACQUIRED LOANS (Ml FIRST P
Slide 33: Earning Asset Mix
EARNING ASSET MIX NASDAQ: PEBO 4 IN 2020, THE INCREASE IN TOTAL LOANS AS A PERCENTAGE OF EARNING ASSETS WAS DUE TO PPP LOANS 80% 70% 60% 50% TOTAL EARNING ASSETS (IN SBILLIONS) 40% SLASSV ONINYVS IWLOL JO 3OVLNIDN3d 30% 20% Far FAs Frag FY20 Fyai yip2e TMB INVESTMENTS = LOANS =) INVESTMENTS % {MIB L
Slide 34: Deposit Growth
DEPOSIT GROWTH <(y_ NASDAQ: PEBO DEPOSIT BALANCES BENEFITED FROM PPP LOAN PROCEEDS, FISCAL STIMULUS FOR CONSUMERS AND COMMERCIAL CLIENTS, AND THE ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. oad $6,002 $5,862 is ‘BROKERED CERTIFICATES OF DEPOSIT HBB covernmentaL veposir accounts $5,200 |_ HBB woe
Slide 35: 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 36: Appendix: Efficiency Ratio and Adjusted for Non-Core Items
36 APPENDIX NON S 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
Slide 37: Appendix: Return on Average Assets Adjusted for Non-Core Items
APPENDIX 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 Cuts
Slide 38: Appendix: Return on Average Tangible Stockholders' Equity
APPENDIX NON US GAAP MEASURES NASDAQ: PEBO RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY The return on average assets adjusted for non-core items represents a non-US GAAP financial measure since it excludes the release ofthe deferred tax asset valuation allowance, the impact of the Tax Cuts and Jo
Slide 39: Appendix: Return on Average Stockholders' Equity Adjusted for Non-Core Items
APPENDIX NON-US GAAP MEASURES NASDAQ: PEBO RETURN ON AVERAGE STOCKHOLDERS’ EQUITY ADJUSTED FOR NON-CORE ITEMS The return on average stockholders’ equity adjusted for non-core items represents a non-US GAAP financial measure since it excludes the release of the deferred tax asset valuation allowance,
Slide 40: Contact
Peoples (Q) BANK CHUCK SULERZYSKI President and Chief Executive Officer 740.374.6163 Chuck.Sulerzyski@pebo.com KATIE BAILEY Executive Vice President Chief Financial Officer and Treasurer 740.376.7138 Kathryn.Bailey@pebo.com