Peoples Bancorp Inc. · NASDAQ:PEBO
Peoples Bancorp — Q3 2021 Earnings Presentation
48 slides from Peoples Bancorp's earnings presentation, Oct 29, 2021
Slide 1: Peoples Bancorp 3rd Quarter 2021
Peoples @) HEM BANCORP 3RD QUARTER 2021
Slide 2: Table of Contents
2) TABLE OF CONTENTS PAGE 4 PROFILE, INVESTMENT RATIONALE, CULTURE AND STRATEGY PAGE 10 COVID-19 CREDIT IMPACT, CAPITAL & LIQUIDITY PAGE 25 Q3 & YTD 2021 FINANCIAL INSIGHTS PAGE 39 Q3 & YTD 2021 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 Ac
Slide 4: Profile, Investment Rationale, Culture and Strategy
PROFILE, INVESTMENT RATIONALE, CULTURE AND STRATEGY
Slide 5: Geographic Profile
PEBQ GEOGRAPHIC PROFILE NASDAQ: PEBO PEOPLES BANK GEOGRAPHIC FOOTPRINT PEBO SNAPSHOT AS OF SEPTEMBER 30, 2021 Loans: $4.5 billion Assets: $71 billion Deposits: $5.8 billion Market Cap: $893.5 million Assets Under Admin/Mgmt: $31 billion {) PEBO FOOTPRINT HM COUNTIES WHERE PEBO HAS TOP 3 MARKET SHARE
Slide 6: Investment Rationale
INVESTMENT RATIONALE / NASDAQ: PEBO UNIQUE COMMUNITY BANKING MODEL e Strongest deposit market share positions in more rural markets where we can affect pricing « Presence near larger cities puts us in a position to capture lending opportunities in urban markets (e.g. Cincinnati, Cleveland, Columbus,
Slide 7: Our Vision
OUR VISION Our vision is to be the BEST COMMUNITY BANK IN AMERICA ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG") MATTERS Peoples is committed to conducting its business in a manner that aligns with the core values represented by the Promise Circle. This includes how we approach Enviromental, Social an
Slide 8: External Recognition
2021 EXTERNAL RECOGNITION F NASDAQ: PEBO IN TERMS OF SBA 7(a) APPROVED DOLLARS PEOPLES BANK RANKED mastercard. TOP 5 TOP 10 DOING WELL BY DOING GOOD n0HO in TOP 15% NATIONALLY — vesTOr TE : SI MOV FOR FISCAL YEAR ENDING SEPTEMBER 30, 2021 (9 Ti THE TRUSTATE } GNI # 1 WINNER \’ AG MID-OHIO VALLEY Bes
Slide 9: Strategic Road Map
STRATEGIC ROAD MAP BEST COMMUNITY BANK IN AMERICA ¢ Commitment to Superior Shareholder Returns ¢ Great Place to Work * Clients’ 1st Choice for Banking, Investing and Insurance ¢ Meaningful Impact on Our Communities RESPONSIBLE EXTRAORDINARY PROFITABLE FIRST CLASS RISK MANAGEMENT CLIENT EXPERIENCE RE
Slide 10: COVID-19 Credit Impact, Capital & Liquidity
COVID-19 CREDIT IMPACT, CAPITAL & LIQUIDITY 10
Slide 11: Changes the Pandemic Has Had on Our Industry
THE CHANGES THAT THE PANDEMIC HAS HAD ON OUR INDUSTRY HAVE BEEN WIDESPREAD AND SWEEPING. CLIENTS COVID-19 changed the way we provide our products and services, which is now more digital Redesigned lobbies to enable social distancing One of two banks to partner with JobsOhio to allow clients to obtai
Slide 12: Credit Risk Management Process
CREDIT RISK MANAGEMENT PROCESS / NASDAQ: PEBO 12 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
Slide 13: Asset Quality
ASSET QUALITY NASDAQ: PEBO vy, OUR DELINQUENCY AND NET CHARGE-OFF TRENDS HAVE REMAINED STABLE FOR FIVE YEARS. Percentage of Loans Considered “Current” Percentage of Net Charge-Offs to Average Loans Annualized 100% 0.375% 0.250% 95% 0125% 90% 0.000% 37 238 23M9—231ZO_ 33121 63021-93021 2017 2018 2019
Slide 14: Asset Quality: NPAs / Assets
ASSET QUALITY NASDA NPAS / ASSETS BO NPAS AS A PERCENTAGE OF TOTAL ASSETS HAVE CONSISTENTLY BEEN SUPERIOR TO MIDWEST BANKS WITH $1 T0 S10 BILLION IN TOTAL ASSETS. 1.2% |— 1.0% }-— 0.8% -— 0.4% |_ 0.0% Q217 Q347 Q417 QHB Q2418 Q3418 Q418 QHI Q219 Q319 Q419 Qtr20 Q2-20 Q3-20 Q4-20 QI21 Q221 Q321 Hl S1
Slide 15: Asset Quality: NPAs
$ MILLIONS ASSET QUALITY NASDAQ: PEBO __/ NPAS AT 9/30/21 03 WERE PRIMARILY COMPOSED OF WELL-COLLATERALIZED COMMERCIAL REAL ESTATE AND RESIDENTIAL REAL ESTATE LOANS. INCREASE DURING Q3 2021 WAS MAINLY DUE TO ACQUIRED COMMERCIAL REAL ESTATE LOANS.” $30 $20 J sis $10 ssfe $o 4 QI? Q247 Q3417 Q447 QHB
Slide 16: Asset Quality: Classified and Criticized Loans
ASSET QUALITY / NASDA‘ BO 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. Lt CRITICIZED LOANS / TIER 1 CAPITAL + ALLL * CLASSIFIED LOANS / TIER 1 CAPITAL + ALLL * “In accordance with SEC reportin
Slide 17: CRE Concentration Analysis
400% 350% 300% 250% 200% 150% 100% 50% 0% CRE CONCENTRATION e CNAWSIS NA! Q: PEBO CRE EXPOSURE IS WELL BELOW SUPERVISORY CRITERIA ESTABLISHED TO IDENTIFY INSTITUTIONS WITH HEIGHTENED CRE CONCENTRATION RISK. ¢ Exposure levels also compare favorably to peer institution concentration levels. PEER BANK
Slide 18: CRE Concentration Analysis: Construction and Land
CRE CONCENTRATION AN ()_NASDA 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ALYSIS BO PEBO IS MEANINGFULLY BELOW THE AVERAGE FOR SI-10 BILLION BANKS PEER BANK SUBS - CONSTRUCTION, LAND AND LAND DEVELOPMENT LOANS / RISK-BASED CAPITAL ] 100% IS THE LEVEL CONSIDERED HEIGHTENED CONSTRUCTION, 4 LAND A
Slide 19: Loan Composition
LOAN COMPOSITION NASDAQ: PEBO LOAN COMPOSITION REFLECTS HEALTHY RISK DIVERSITY. TOTAL LOAN PORTFOLIO’ = $4.5 BILLION, TOTAL CRE PORTFOLIO” = $1.6 BILLION TOTAL C&I PORTFOLIO = $0.9 BILLION WHICH INCLUDES $136 MILLION OF PPP LOANS, <3 ~ or 9 _ “_ 8 es 1 COMMERCIAL RCAL CSTATE (CRC) 36% 1. RETAIL 119%
Slide 20: Current Expected Credit Losses Summary
CURRENT EXPECTED CREDIT LOSSES SUMMARY (NASDAQ: PEBO ECONOMIC FORECAST - KEY DRIVERS AT SEPTEMBER 30, 2021 US Unemployment Ohio Unemployment Ohio GDP a5% _— a aon sl” soe 3.38% 3.04% 303% ol anal bestia 441% age PERTINENT CREDIT STATS AS OF SEPTEMBER 30, 2021 CECL KEY ASSUMPTIONS Day 1CECL adoption
Slide 21: Reserves as a % of Loans
Reserve as a % of Loans 25 15 0.5 RESERVES T ASSETS NASDAQ: PEBO PEBO IS IN LINE WITH PEERS AS OF JUNE 30, 2021 RESERVES AS A % OF LOANS’ Median, 1.31 Average, 1.31 &o ££ © GS L& OC Sf GS Q SF s & SFE SSS XK Source: S&P Global Market Intelligence, Commercial Hank Call Keport Vata as of 6/3U/2UZ1, He
Slide 22: Acquisitions, Capital Priorities, Dividends
22 ACQUISITIONS Bank acquisitions completed in 2014 (3), 2015 (1), 2018 (1), 2019 (1) and 2021 (1) Insurance acquisitions completed in 2014 (1), 2015 (1), 2017 (2), 2020 (1), and 2021 (1) One investment acquisition was completed in 2016 One premium finance acquisition effective June 30, 2020 One equ
Slide 23: Loan-to-Deposit Ratio vs Peer Group
D D-19 AS OF JUNE 30, 2021, OUR LOAN-TO-DEPOSIT RATIO WAS LOW COMPARED TO PEER GROUP, WHICH POSITIONS US WELL FROM A LIQUIDITY PERSPECTIVE. LOANS / DEPOSITS - PEER GROUP 95% 90% UNIV. $1- $10 B AVERAGE: 83.03% 75% NOT TO SCALE 70% 65% 60% ORNS K& & & A > > & © £ OO DBL & ES EE EES EESEFEEOEEEFSEEESE
Slide 24: Cost of Deposits
T OF DEPOSITS PEBO IS BELOW THE SI - $10 BILLION BANK UNIVERSE IN TERMS OF COST OF DEPOSITS AS OF JUNE 30, 2021. TOTAL DEPOSIT COST (%) 0.45 0.40 0.35 0.32 0.30 0.25 0.24 NOT TO SCALE 0.20 0.15 0.10 0.05 & KD PG 09 YL K & OL SL KO A UK FESS OLEE EE EES EEELLEELELE EE * Includes seven basis points re
Slide 25: Q3 & YTD 2021 Financial Insights
Q3 & YTD 2021 FINANCIAL INSIGHTS (23)
Slide 26: Acquisition of North Star Leasing
26 ( ACQUISITION OF NORTH STAR LEASING NASDAQ: PEBO ACQUISITION EFFECTIVE MARCH 31, 2021 Founded in 1979 and headquartered in Burlington, VT, North Star Leasing (NSL) leases a broad range of essential equipment used by small-and medium-sized businesses across the U.S. NSL is an integrated originatio
Slide 27: Acquisition of Premier Financial Bancorp, Inc.
ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. NASDAQ: PEBO ACQUISITION EFFECTIVE AS OF SEPTEMBER 17, 2021 : { e 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. i yasDAag c
Slide 28: Financial Expectations
28 FINANCIAL EXPECTATIONS NASDA‘ BO FINANCIAL EXPECTATIONS - Q4 2021 Fourth quarter non-interest expenses, excluding non-core expenses, will range somewhere between $46 and $48 million. Net interest margin will grow and settle between 3.50% and 3.60% for the fourth quarter. Fee-based income will inc
Slide 29: Q3 & YTD 2021 Highlights & Key Impacts
A YTD 2021 HIGHLIGHTS & KEY IMPACTS NASDAQ: PEBO FINANCIAL: «Net interest income increased $2.9 million, or 7%, compared to the second quarter of 2021 and increased $7.5 million, or 21%, compared to the third quarter of 2020. e Net interest margin increased 5 basis points to 3.50% for the third quar
Slide 30: Q3 & YTD 2021 Highlights & Key Impacts
30 3 & YTD 2021 IGHLIGHTS & KEY IMPACTS NAS EBO Wallet y)) debit HEALTH SAVINGS $596.22 Available Balance ra (8, Cardless Cash [) Card Controls @ Alerts LINKED ACCOUNTS: P PayPal Add to Apple Wallet PEOPLES BANK CONTINUES TO ADD TECHNOLOGY THAT CLIENTS CARE ABOUT * Contactless debit cards « — Cardle
Slide 31: Performance
te PERFORMANCE NASDAQ: PEBO ) PEOPLES BANK HAS OUTPERFORMED THE PEER GROUP AND S&P 500 IN TERMS OF 1 YEAR TOTAL ANNUAL RETURN AS OF SEPTEMBER 30, 2021. TOTAL ANNUAL RETURN AS OF SEPTEMBER 30, 2021 CUMULATIVE TOTAL RETURN FOR THE NINE MONTHS ENDED SEPTEMBER 2021 806 TYEAR mm Peo I PEER GROUP Im Sap 5
Slide 32: Total Revenue
32 ($ THOUSANDS) TOTAL REVENUE (NASDAQ: PEBO TOTAL REVENUE OF $168 MILLION FOR FIRST NINE MONTHS OF 2021. $250,000 — $200,000 L. $150,000 -_ $50,233 $51,070 $47,441 $100,000 }— $117,816 $97,612 $50,000 | $0 FYA5 FY16, FY-7 FY-18, FY19 FY-20 YTD-21 TMB NETINTEREST INCOME MJ NON-INTEREST INCOME, EXCLU
Slide 33: Insurance & Investment Income Composition
INSURANCE & INVESTMENT NCD NE COMPOSITION NASDAQ: PEBO TOTAL INVESTMENT REVENUE INCREASED 22% COMPARED TO FIRST NINE MONTHS OF 2020. AND TOTAL INSURANCE REVENUE INCREASED 9% COMPARED TO FIRST NINE MONTHS OF 2020. TOTAL INVESTMENT REVENUE TOTAL INSURANCE REVENUE YTD 2021 YTD 2021 $12.2 MILLION $11.9
Slide 34: Expense & Efficiency Ratio
34 ($ THOUSANDS) NOT TO SCALE EXPENSE & EFFICIENCY 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 $175,000 -— $145,000 |— $115,000 | — $85,000 | — $55,000 }— $25,000 FY-7 FY18 FY
Slide 35: Improvement in Key Metrics
NOT TO SCALE IMPROVEMENT IN KEY METRICS NA! Q: PEBO 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. RETURN ON AVERAGE ASSETS
Slide 36: Total Loan Growth
36 TOTAL LOAN GROWTH $5,000 $4,000 $3,000 $2,000 $1,000 $o FY-15 FY-16 FY-17 FY-18 FY-19 *Also referred to throughout this document as “total loans" and “loans held for investment" FY-20 YTD-21 PREMIER FINANCIAL BANCORP, INC. ACQUIRED LOANS. TOTAL PPP LOANS TOTAL ACQUIRED LEASES PREMIUM FINANCE ACQU
Slide 37: Earning Asset Mix
EARNING ASSET MIX IN 2020, THE INCREASE IN TOTAL LOANS AS A PERCENTAGE OF EARNING ASSETS WAS DUE TO PPP LOANS. - 76% = An —{ 40% TOTAL EARNING ASSETS (IN SBILLIONS) SLASSV ONINYVA WLOL JO 3DVLN3DY3d FYAT FY48 Fy9 FY20 yTb-21 HMM INVESTMENTS [MM LOANS NN) INVESTMENTS % [Ml LOANS % WORKING TOGETHER. B
Slide 38: Deposit Growth
DEPOSIT GROWTH DEPOSIT BALANCES BENEFITED FROM PPP LOAN PROCEEDS, FISCAL STIMULUS FOR CONSUMERS AND COMMERCIAL CLIENTS, AND THE ACQUISITION OF PREMIER FINANCIAL BANCORP, INC. Sena — BROKERED CERTIFICATES OF DEPOSIT HBS covernmenta veposrr accounts $5,000 |— | MONEY MARKET DEPOSIT ACCOUNTS 2 $00 RETA
Slide 39: Q3 & YTD 2021 Appendix
Q) 03 & YTD 2021 APPENDIX 39
Slide 40: Non-US GAAP Measures: Pre-Provision Net Revenue
PPENDIX A NON-US GAAP MEASURES 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 non-interest income (
Slide 41: Non-US GAAP Measures: PPNR Adjusted for Non-Core Items
APPENDIX NON-US GAAP MEASURES 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 net interest income, Bank Foundation, Inc. excluding adequacy of financial syste
Slide 42: Non-US GAAP Measures: Core Non-Interest Income and Expense
22 PPENDIX A NON-US GAAP MEASURES 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 conversion revenue
Slide 43: Non-US GAAP Measures: Efficiency Ratio
APPENDIX NON-US GAAP MEASURES 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 fully tax-equ
Slide 44: Non-US GAAP Measures: Tangible Equity and Book Value
44 PPENDIX A NON-US GAAP MEASURES 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 the impact of go
Slide 45: Non-US GAAP Measures: Return on Average Assets
ENDIX APP NON-US GAAP MEASURES RETURN ON AVERAGE ASSETS AND ADJUSTED FOR NON-CORE ITEMS The return on average assets adjusted for non-core items represents an non-US GAAP financial measure since it excludes the release of the deferred tax asset valuation allowance, the impact of the Tax Cuts and Job
Slide 46: Return on Average Tangible Stockholders' Equity
46 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 assets) divided by average tangible stockhold
Slide 47: Non-US GAAP Measures: Return on Average Stockholders' Equity
ENDIX APP NON-US GAAP MEASURES RETURN ON AVERAGE STOCKHOLDERS’ EQUITY ADJUSTED FOR NON-CORE ITEMS The return on average stockholders’ equity adjusted for non-core items represents an non-US GAAP financial measure since it excludes the release of the deferred tax asset valuation allowance, the impact
Slide 48: Chuck Sulerzyski and Katie Bailey Contact Information
CHUCK SULERZYSKI President and Chief Executive Officer P: 740.374.6163 Chuck.Sulerzyski@pebo.com KATIE BAILEY Executive Vice President Chief Financial Officer and Treasurer P: 740.376.7138 Kathryn.Bailey@pebo.com ry Peoples Bancorp® is a federally registered service mark of Peoples Bancorp Inc. The