PEOPLES BANCORP INC. ANNOUNCES SECOND QUARTER 2024 RESULTS
Peoples Bancorp Inc. (NASDAQ: PEBO) announced its Q2 2024 results, reporting net income of $29.0 million and earnings per diluted share of $0.82. This compares to $29.6 million in Q1 2024 and $21.1 million in Q2 2023. Net interest income remained stable, while net interest margin decreased to 4.18%. The provision for credit losses was $5.7 million, down from $6.1 million in Q1 2024. Non-interest income dropped by $1.6 million due to lower insurance income, and non-interest expenses rose slightly by $0.3 million.
Notably, total loans and leases increased by $122.5 million, driven by growth in various loan categories. Asset quality remained stable with improved delinquency trends. Total deposits decreased by $28.8 million, but core deposits rose by $42.0 million. The company also completed its $177.9 million merger with Limestone Bancorp, which contributed to financial results.
Looking ahead, Peoples Bancorp remains focused on maintaining stable credit metrics and managing expenses while pursuing growth opportunities.
- Net income of $29.0 million in Q2 2024, up from $21.1 million in Q2 2023.
- Increase in total loans and leases by $122.5 million for Q2 2024.
- Completion of the $177.9 million merger with Limestone Bancorp.
- Core deposits up by $42.0 million compared to the linked quarter.
- Decrease in net interest margin to 4.18% for Q2 2024.
- Provision for credit losses of $5.7 million impacting earnings per share by $0.13.
- Drop in total non-interest income by $1.6 million.
- Increase in non-interest expenses by $0.3 million.
Insights
The financial results from Peoples Bancorp for the second quarter of 2024 show a mixed performance. Although net income is slightly down from the previous quarter, the year-over-year improvement is notable. The net income of $29.0 million and earnings per share of $0.82 for this quarter reflect strong underlying business performance and operational efficiencies.
One significant aspect is the stable credit metrics and reduced provision for credit losses, which indicates a healthier loan portfolio and better risk management. However, the decrease in net interest margin to 4.18% from 4.26% in the previous quarter suggests some pressure from higher funding costs. The market interest rate environment and the effect of higher borrowing costs need to be closely monitored as they can impact future profitability.
The completion of the Limestone Merger has positively contributed to the growth in net interest income, but the impact of acquisition-related expenses diminishing should be carefully watched for how it reflects on overall operational efficiency.
Overall, while there are positive indicators like loan growth and stable asset quality, the slight decline in net interest margin and non-interest income might present challenges. The focus on managing non-interest expenses and improving the efficiency ratio will be important for sustained growth.
From a market perspective, the recognition from Newsweek as one of America's Best Regional Banks and Greatest Workplaces adds a positive sentiment to Peoples Bancorp’s brand image and investor confidence. Such accolades can enhance customer loyalty and attract new business, indirectly supporting revenue growth.
The 8% annualized increase in total loan balances from March to June 2024 indicates robust demand for the bank's lending products. This growth, particularly in premium finance loans and commercial and industrial loans, reflects well on the bank's ability to capture market opportunities in these segments.
However, the decrease in deposit balances by $28.8 million could raise some concerns about liquidity management. While the core deposits are up, the reliance on brokered certificates of deposit needs scrutiny as it can influence funding stability. Maintaining a balanced growth between loans and deposits will be vital to ensuring long-term financial health.
The market should also pay attention to the bank's efficiency measures, reflected in the slight increase in the efficiency ratio to 59.2% from 58.1% in the linked quarter. Efficient cost management amid growth will be a critical factor for the bank's scalability and market positioning.
The increase in data processing and software expenses by $1.0 million in this quarter highlights Peoples Bancorp’s commitment to technological advancements. Investment in recent technology projects is a strategic move to enhance operational efficiency, customer experience and competitive edge in the banking sector.
Such investments often signal a forward-thinking approach, preparing the bank for digital transformation trends and potentially new revenue streams through digital banking solutions. However, the consequent rise in expenses must be justified by tangible improvements in service delivery and operational efficiency.
The integration of Limestone Bank systems, post-merger, will also be a key area to watch. Smoothly merging technology platforms and data systems is critical to realizing the full benefits of such acquisitions and avoiding customer disruption.
Overall, while increased tech spending is a positive sign of modernization, continuous monitoring of its impact on cost and performance will be crucial. Investors should look for further details on tech project outcomes and how they contribute to the bank’s strategic goals.
"We are pleased with our results for the quarter, in particular our loan growth and continued stable credit metrics. Additionally, we are very honored to be recognized by Newsweek for being awarded one of America's Best Regional Banks and one of America's Greatest Workplaces, one of only five banks being recognized for both awards," said Tyler Wilcox, President and Chief Executive Officer. "We continue to focus on creating a top tier workplace while producing solid and consistent performance."
Statement of Operations Highlights:
- Net interest income for the second quarter of 2024 was relatively consistent when compared to the linked quarter, with higher interest income offset by higher funding costs.
- Net interest margin decreased to
4.18% for the second quarter of 2024, compared to4.26% for the linked quarter driven by lower accretion income.
- Net interest margin decreased to
- Peoples recorded a provision for credit losses of
for the second quarter of 2024, compared to a provision for credit losses of$5.7 million for the first quarter of 2024.$6.1 million - The provision for credit losses negatively impacted earnings per diluted common share by
for the second quarter of 2024 and$0.13 for the first quarter of 2024.$0.14
- The provision for credit losses negatively impacted earnings per diluted common share by
- Total non-interest income, excluding net gains and losses, decreased
, or$1.6 million 6% , for the second quarter of 2024 compared to the linked quarter.- The decrease was primarily driven by lower insurance income due to annual contingency income recognized in the first quarter of each year.
- Total non-interest expense for the second quarter of 2024 increased
compared to the linked quarter.$0.3 million - The efficiency ratio for the second quarter of 2024 was
59.2% , compared to58.1% for the linked quarter.
- The efficiency ratio for the second quarter of 2024 was
Balance Sheet Highlights:
- Period-end total loan and lease balances at June 30, 2024 increased
, or$122.5 million 8% annualized, compared to at March 31, 2024.- The increase was driven by growth in (i) premium finance loans, (ii) commercial and industrial loans, (iii) constructions loans, and (iv) consumer indirect loans, partially offset by a decrease in other commercial real estate loans.
- Asset quality metrics remained stable during the second quarter of 2024.
- Delinquency trends improved compared to March 31, 2024.
- Criticized and classified loans both decreased and were driven by the paydowns of previously downgraded commercial and industrial relationships.
- Annualized net charge-offs were
0.27% of average total loans, representing a return to pre-pandemic levels.
- Period-end total deposit balances at June 30, 2024 decreased
compared to at March 31, 2024$28.8 million - Excluding a decrease in brokered certificates of deposit of
, core deposits were up$70.8 million compared to the linked quarter, driven by an increase in retail certificates of deposits and higher money market deposit accounts.$42.0 million - Total loan balances were
87% of total deposit balances at June 30, 2024, compared to85% at March 31, 2024.
- Excluding a decrease in brokered certificates of deposit of
Completion of the Limestone Merger:
As of the close of business on April 30, 2023, Peoples completed its previously announced merger with Limestone Bancorp, Inc. ("Limestone"), a bank holding company headquartered in
Net Interest Income
Net interest income was
Net interest income for the second quarter of 2024 increased
Accretion income, net of amortization expense, from acquisitions was
For the first six months of 2024, net interest income increased
Accretion income, net of amortization expense, from acquisitions was
Provision for Credit Losses:
The provision for credit losses was
The provision for credit losses during the first six months of 2024 was
The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management's quarterly estimates. The provision for credit losses negatively impacted earnings per diluted common share by
For additional information on net charge-offs, credit trends and the allowance for credit losses, see the "Asset Quality" section below.
Net Gains and Losses:
Net gains and losses include gains and losses on investment securities, asset disposals and other transactions, which are included in total non-interest income on the Consolidated Statements of Income. The net loss for the second quarter of 2024 was
The net loss realized during the first six months of 2024 was
Total Non-interest Income, Excluding Net Gains and Losses:
Total non-interest income, excluding net gains and losses, for the second quarter of 2024 decreased
Compared to the second quarter of 2023, total non-interest income, excluding net gains and losses, increased
For the first six months of 2024, total non-interest income, excluding gains and losses, increased
Total Non-interest Expense:
Total non-interest expense increased
Compared to the second quarter of 2023, total non-interest expense decreased
For the six months of 2024, total non-interest expense increased
The table below summarizes the amount of acquisition-related expenses for each line item that is a component of non-interest expense. Acquisition-related expenses are considered a non-core non-interest expense by Peoples. This information is used by Peoples to provide information useful to investors in understanding Peoples' operating performance and trends.
Three Months Ended | Six Months Ended | ||||||||
June 30 | March 31 | June 30 | June 30 | ||||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
(Dollars in thousands) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
Non-interest expense: | |||||||||
Salaries and employee benefit costs | $ 36,564 | $ 38,893 | $ 38,025 | $ 75,457 | $ 70,053 | ||||
Data processing and software expense | 6,743 | 5,769 | 4,728 | 12,512 | 9,290 | ||||
Net occupancy and equipment expense | 6,142 | 6,283 | 5,380 | 12,425 | 10,335 | ||||
Professional fees | 2,935 | 2,967 | 7,438 | 5,902 | 10,319 | ||||
Amortization of other intangible assets | 2,787 | 2,788 | 2,800 | 5,575 | 4,671 | ||||
Electronic banking expense | 1,941 | 1,781 | 1,832 | 3,722 | 3,323 | ||||
Marketing expense | 681 | 1,056 | 1,357 | 1,737 | 2,287 | ||||
FDIC insurance premiums | 1,251 | 1,186 | 1,464 | 2,437 | 2,265 | ||||
Franchise tax expense | 760 | 881 | 872 | 1,641 | 1,906 | ||||
Communication expense | 736 | 799 | 724 | 1,535 | 1,337 | ||||
Other loan expenses | 1,036 | 1,076 | 538 | 2,112 | 1,277 | ||||
Other non-interest expense | 7,182 | 4,986 | 5,465 | 12,168 | 10,039 | ||||
Total non-interest expense | 68,758 | 68,465 | 70,623 | 137,223 | 127,102 | ||||
Acquisition-related non-interest expense: | |||||||||
Salaries and employee benefit costs | — | 16 | 5,125 | 16 | 5,146 | ||||
Data processing and software expense | — | (18) | 1 | (18) | 1 | ||||
Net occupancy and equipment expense | — | — | 20 | — | 29 | ||||
Professional fees | — | (38) | 4,812 | (38) | 5,103 | ||||
Electronic banking expense | — | (100) | 115 | (100) | 115 | ||||
Marketing expense | — | 10 | 13 | 10 | 23 | ||||
Other loan expenses | — | — | 1 | — | 1 | ||||
Other non-interest expense | — | 46 | 622 | 46 | 842 | ||||
Total acquisition-related non-interest expense | — | (84) | 10,709 | (84) | 11,260 | ||||
Non-interest expense excluding acquisition-related expense: | |||||||||
Salaries and employee benefit costs | 36,564 | 38,877 | 32,900 | 75,441 | 64,907 | ||||
Data processing and software expense | 6,743 | 5,787 | 4,727 | 12,530 | 9,289 | ||||
Net occupancy and equipment expense | 6,142 | 6,283 | 5,360 | 12,425 | 10,306 | ||||
Professional fees | 2,935 | 3,005 | 2,626 | 5,940 | 5,216 | ||||
Amortization of other intangible assets | 2,787 | 2,788 | 2,800 | 5,575 | 4,671 | ||||
Electronic banking expense | 1,941 | 1,881 | 1,717 | 3,822 | 3,208 | ||||
Marketing expense | 681 | 1,046 | 1,344 | 1,727 | 2,264 | ||||
FDIC insurance premiums | 1,251 | 1,186 | 1,464 | 2,437 | 2,265 | ||||
Franchise tax expense | 760 | 881 | 872 | 1,641 | 1,906 | ||||
Communication expense | 736 | 799 | 724 | 1,535 | 1,337 | ||||
Other loan expenses | 1,036 | 1,076 | 537 | 2,112 | 1,276 | ||||
Other non-interest expense | 7,182 | 4,940 | 4,843 | 12,122 | 9,197 | ||||
Total non-interest expense excluding acquisition-related expense | $ 68,758 | $ 68,549 | $ 59,914 | $ 137,307 | $ 115,842 | ||||
The efficiency ratio for the second quarter of 2024 was
Income Tax Expense:
Peoples recorded income tax expense of
Investment Securities and Liquidity:
Peoples' investment portfolio primarily consists of available-for-sale investment securities reported at fair value and held-to-maturity investment securities reported at amortized cost. The available-for-sale investment securities balance at June 30, 2024 increased
The held-to-maturity investment securities balance at June 30, 2024 decreased
The effective duration of the investment portfolio as of June 30, 2024 was estimated to be 5.26 years. The duration of Peoples' investments is managed as part of its Asset Liability Management program, and has the potential to impact both liquidity and capital, as mismatches in duration may require a liquidation of investment securities at market prices to meet funding needs. These assets are one component of Peoples' liquidity profile.
Peoples maintains a number of liquid and liquefiable assets, borrowing capacity, and other sources of liquidity to ensure the availability of funds. At June 30, 2024, Peoples had liquid and liquefiable assets totaling
Loans and Leases:
The period-end total loan and lease balances at June 30, 2024 increased
The period-end total loan and lease balances at June 30, 2024 increased
The period-end total loan and lease balances at June 30, 2024 increased
Quarterly average total loan balances increased
Compared to the second quarter of 2023, quarterly average loan balances in the current quarter increased
Asset Quality:
Overall, asset quality remained relatively stable through the second quarter of 2024. Delinquency trends remained stable as loans considered current comprised
Criticized loans, which are those categorized as special mention, substandard or doubtful, decreased
Classified loans, which are those categorized as substandard or doubtful, decreased
Annualized net charge-offs were
At June 30, 2024, the allowance for credit losses increased
Deposits:
As of June 30, 2024, period-end total deposits decreased
Compared to December 31, 2023, period-end total deposits increased
Compared to June 30, 2023, period-end deposit balances increased
The percentages of retail deposit balances and commercial deposit balances of the total deposit balance at June 30, 2024 were
Uninsured deposits were
Average deposit balances during the second quarter of 2024 increased
Stockholders' Equity:
Total stockholders' equity at June 30, 2024 increased
Total stockholders' equity at June 30, 2024 increased
Total stockholders' equity at June 30, 2024 increased
At June 30, 2024, the tier 1 risk-based capital ratio was
At June 30, 2024, book value per common share and tangible book value per common share, which excludes goodwill and other intangible assets, were
Peoples Bancorp Inc. ("Peoples", Nasdaq: PEBO) is a diversified financial services holding company and makes available a complete line of banking, trust and investment, insurance and premium financing solutions through its subsidiaries. Headquartered in
Peoples is a member of the Russell 3000 index of
Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss second quarter 2024 results of operations on July 23, 2024, at 11:00 a.m., Eastern Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285. A simultaneous webcast of the conference call audio and earnings conference call presentation will be available online via the "Investor Relations" section of Peoples' website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the "Investor Relations" section for one year.
Use of Non-US GAAP Financial Measures:
This news release contains financial information and performance measures determined by methods other than those in accordance with accounting principles generally accepted in
- Core non-interest expense is a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses and COVID-19 employee retention credit.
- The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income, excluding net gains and losses. This ratio is a non-US GAAP financial measure since it excludes amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.
- The efficiency ratio adjusted for non-core items is calculated as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income, excluding net gains and losses. This ratio is a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses, COVID-19 employee retention credit, and the amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.
- Tangible assets, tangible equity, the tangible equity to tangible assets ratio and tangible book value per common share are non-US GAAP financial measures since they exclude the impact of goodwill and other intangible assets acquired through acquisitions on both total stockholders' equity and total assets.
- Total non-interest income, excluding net gains and losses, is a non-US GAAP financial measure since it excludes all gains and losses included in earnings.
- Pre-provision net revenue is defined as net interest income plus total non-interest income, excluding net gains and losses, minus total non-interest expense. This measure is a non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in net income.
- Return on average assets adjusted for non-core items is calculated as annualized net income (less the after-tax impact of all gains and losses, acquisition-related expenses, and COVID-19 employee retention credit divided by average assets. This measure is a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses and acquisition-related expenses.
- Return on average tangible equity is calculated as annualized net income (less the after-tax impact of amortization of other intangible assets) divided by average tangible equity. This measure is a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from net income and the impact of average goodwill and other average intangible assets acquired through acquisitions on average stockholders' equity.
A reconciliation of these non-US GAAP financial measures to the most directly comparable US GAAP financial measures is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."
Safe Harbor Statement:
Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, 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 forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate," "estimate," "may," "feel," "expect," "believe," "plan," "will," "will likely," "would," "should," "could," "project," "goal," "target," "potential," "seek," "intend," "continue," "remain," and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to:
(1) | the effects of interest rate policies, changes in the interest rate environment due to economic conditions and/or the fiscal and monetary policy measures undertaken by the |
(2) | the effects of inflationary pressures and the impact of rising interest rates on borrowers' liquidity and ability to repay; |
(3) | the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the interest rate policies of the Federal Reserve Board, the completion and successful integration of acquisitions, and the expansion of commercial and consumer lending activities; |
(4) | competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, which can in turn impact Peoples' credit spreads, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals; |
(5) | uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies in the |
(6) | the effects of easing restrictions on participants in the financial services industry; |
(7) | current and future local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, supply-demand imbalances affecting local real estate prices, high unemployment rates in the local or regional economies in which Peoples operates and/or the |
(8) | Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders; |
(9) | changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties' performance and creditworthiness generally, which may be less favorable than expected in light of recent inflationary pressures and continued elevated interest rates, and may adversely impact the amount of interest income generated; |
(10) | Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral; |
(11) | future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses; |
(12) | changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations; |
(13) | the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model; |
(14) | adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities; |
(15) | the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors; |
(16) | Peoples' ability to receive dividends from Peoples' subsidiaries; |
(17) | Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity; |
(18) | the impact of larger or similar-sized financial institutions encountering problems, such as the failure in 2024 of Republic First Bank, and closures in 2023 of Silicon Valley Bank in |
(19) | Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss; |
(20) | any misappropriation of the confidential information which Peoples possesses could have an adverse impact on Peoples' business and could result in regulatory actions, litigation and other adverse effects; |
(21) | Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples' primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands; |
(22) | operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and Peoples' subsidiaries are highly dependent; |
(23) | changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated; |
(24) | the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business; |
(25) | the impact on Peoples' businesses, personnel, facilities or systems of losses related to acts of fraud, theft, misappropriation or violence; |
(26) | the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including |
(27) | the potential deterioration of the |
(28) | the potential influence on the |
(29) | the impact on Peoples' businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples' intellectual property; |
(30) | risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets; |
(31) | Peoples' ability to integrate the Limestone Merger, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected; |
(32) | the risk that expected revenue synergies and cost savings from the Limestone Merger may not be fully realized or realized within the expected time frame; |
(33) | changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases; |
(34) | the vulnerability of Peoples' network and online banking portals, and the systems of parties with whom Peoples contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; |
(35) | Peoples' business may be adversely affected by increased political and regulatory scrutiny of corporate environmental, social and governance ("ESG") practices; |
(36) | the effect of a fall in stock market prices on the asset and wealth management business; and |
(37) | other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website - www.peoplesbancorp.com under the "Investor Relations" section. |
As required by
PER COMMON SHARE DATA AND SELECTED RATIOS (Unaudited) | |||||||||
At or For the Three Months Ended | At or For the Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
PER COMMON SHARE: | |||||||||
Earnings per common share: | |||||||||
Basic | $ 0.83 | $ 0.85 | $ 0.64 | $ 1.67 | $ 1.57 | ||||
Diluted | 0.82 | 0.84 | 0.64 | 1.66 | 1.56 | ||||
Cash dividends declared per common share | 0.40 | 0.39 | 0.39 | 0.79 | 0.77 | ||||
Book value per common share (a) | 30.36 | 29.93 | 28.24 | 30.36 | 28.24 | ||||
Tangible book value per common share (a)(b) | 18.91 | 18.39 | 16.56 | 18.91 | 16.56 | ||||
Closing price of common shares at end of period | $ 30.00 | $ 29.61 | $ 26.55 | $ 30.00 | $ 26.55 | ||||
SELECTED RATIOS: | |||||||||
Return on average stockholders' equity (c) | 10.99 % | 11.30 % | 8.89 % | 11.15 % | 10.96 % | ||||
Return on average tangible equity (c)(d) | 19.21 % | 19.91 % | 16.56 % | 19.55 % | 19.90 % | ||||
Return on average assets (c) | 1.27 % | 1.32 % | 1.01 % | 1.29 % | 1.23 % | ||||
Return on average assets adjusted for non-core items (c)(e) | 1.30 % | 1.33 % | 1.47 % | 1.31 % | 1.53 % | ||||
Efficiency ratio (f)(i) | 59.19 % | 58.06 % | 62.75 % | 58.62 % | 60.44 % | ||||
Efficiency ratio adjusted for non-core items (g)(i) | 59.19 % | 58.14 % | 53.35 % | 58.66 % | 55.15 % | ||||
Pre-provision net revenue to total average assets (c)(h) | 1.85 % | 1.97 % | 1.78 % | 1.91 % | 1.93 % | ||||
Net interest margin (c)(i) | 4.18 % | 4.26 % | 4.54 % | 4.22 % | 4.54 % | ||||
Dividend payout ratio (j) | 48.94 % | 46.46 % | 63.62 % | 47.69 % | 50.67 % |
(a) | Data presented as of the end of the period indicated. |
(b) | Tangible book value per common share represents a non-US GAAP financial measure since it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." |
(c) | Ratios are presented on an annualized basis. |
(d) | Return on average tangible equity represents a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from net income and it excludes the balance sheet impact of average goodwill and other intangible assets acquired through acquisitions on average stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." |
(e) | Return on average assets adjusted for non-core items represents a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses, acquisition-related expenses, and COVID-19 employee retention credit. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." |
(f) | The efficiency ratio is defined as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income (excluding all gains and losses). This ratio represents a non-US GAAP financial measure since it excludes amortization of other intangible assets, and all gains and losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." |
(g) | The efficiency ratio adjusted for non-core items is defined as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income (excluding all gains and losses). This ratio represents a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses, COVID-19 employee retention credit, and all gains and losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." |
(h) | Pre-provision net revenue is defined as net interest income plus total non-interest income (excluding all gains and losses) minus total non-interest expense. This measure represents a non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in net income. This measure is a key metric used by federal bank regulatory agencies in their evaluation of capital adequacy for financial institutions. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." |
(i) | Interest income and yields are presented on a fully tax-equivalent basis, using a |
(j) | This ratio is calculated based on dividends declared during the period divided by net income for the period. |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
(Dollars in thousands, except per share data) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
Total interest income | $ 130,770 | $ 127,593 | $ 106,417 | $ 258,363 | $ 190,566 | ||||
Total interest expense | 44,157 | 40,953 | 21,564 | 85,110 | 32,835 | ||||
Net interest income | 86,613 | 86,640 | 84,853 | 173,253 | 157,731 | ||||
Provision for credit losses | 5,683 | 6,102 | 7,983 | 11,785 | 9,836 | ||||
Net interest income after provision for credit losses | 80,930 | 80,538 | 76,870 | 161,468 | 147,895 | ||||
Non-interest income: | |||||||||
Electronic banking income | 6,470 | 6,046 | 6,466 | 12,516 | 11,909 | ||||
Trust and investment income | 4,999 | 4,599 | 4,414 | 9,598 | 8,498 | ||||
Deposit account service charges | 4,339 | 4,223 | 4,153 | 8,562 | 7,676 | ||||
Insurance income | 4,109 | 6,498 | 4,004 | 10,607 | 9,429 | ||||
Lease income | 1,116 | 1,236 | 1,719 | 2,352 | 2,796 | ||||
Bank owned life insurance income | 1,037 | 1,500 | 842 | 2,537 | 1,549 | ||||
Mortgage banking income | 243 | 321 | 189 | 564 | 503 | ||||
Net loss on investment securities | (353) | (1) | (166) | (354) | (2,101) | ||||
Net loss on asset disposals and other transactions | (428) | (341) | (1,665) | (769) | (1,911) | ||||
Other non-interest income | 2,172 | 1,698 | 1,059 | 3,870 | 1,727 | ||||
Total non-interest income | 23,704 | 25,779 | 21,015 | 49,483 | 40,075 | ||||
Non-interest expense: | |||||||||
Salaries and employee benefit costs | 36,564 | 38,893 | 38,025 | 75,457 | 70,053 | ||||
Data processing and software expense | 6,743 | 5,769 | 4,728 | 12,512 | 9,290 | ||||
Net occupancy and equipment expense | 6,142 | 6,283 | 5,380 | 12,425 | 10,335 | ||||
Professional fees | 2,935 | 2,967 | 7,438 | 5,902 | 10,319 | ||||
Amortization of other intangible assets | 2,787 | 2,788 | 2,800 | 5,575 | 4,671 | ||||
Electronic banking expense | 1,941 | 1,781 | 1,832 | 3,722 | 3,323 | ||||
FDIC insurance expense | 1,251 | 1,186 | 1,464 | 2,437 | 2,265 | ||||
Other loan expenses | 1,036 | 1,076 | 538 | 2,112 | 1,277 | ||||
Franchise tax expense | 760 | 881 | 872 | 1,641 | 1,906 | ||||
Communication expense | 736 | 799 | 724 | 1,535 | 1,337 | ||||
Marketing expense | 681 | 1,056 | 1,357 | 1,737 | 2,287 | ||||
Other non-interest expense | 7,182 | 4,986 | 5,465 | 12,168 | 10,039 | ||||
Total non-interest expense | 68,758 | 68,465 | 70,623 | 137,223 | 127,102 | ||||
Income before income taxes | 35,876 | 37,852 | 27,262 | 73,728 | 60,868 | ||||
Income tax expense | 6,869 | 8,268 | 6,166 | 15,137 | 13,212 | ||||
Net income | $ 29,007 | $ 29,584 | $ 21,096 | $ 58,591 | $ 47,656 | ||||
CONSOLIDATED STATEMENTS OF INCOME (Cont.) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
(Dollars in thousands, except per share data) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
PER COMMON SHARE DATA: | |||||||||
Net income available to common shareholders | $ 29,007 | $ 29,584 | $ 21,096 | $ 58,591 | $ 47,656 | ||||
Less: Dividends paid on unvested common shares | 218 | 143 | 144 | 361 | 246 | ||||
Less: Undistributed loss allocated to unvested common shares | 55 | 64 | 13 | 119 | 45 | ||||
Net earnings allocated to common shareholders | $ 28,734 | $ 29,377 | $ 20,939 | $ 58,111 | $ 47,365 | ||||
Weighted-average common shares outstanding | 34,764,489 | 34,740,349 | 32,526,962 | 34,752,419 | 30,222,165 | ||||
Effect of potentially dilutive common shares | 353,159 | 311,461 | 123,014 | 319,131 | 92,339 | ||||
Total weighted-average diluted common shares outstanding | 35,117,648 | 35,051,810 | 32,649,976 | 35,071,550 | 30,314,504 | ||||
Earnings per common share – basic | $ 0.83 | $ 0.85 | $ 0.64 | $ 1.67 | $ 1.57 | ||||
Earnings per common share – diluted | $ 0.82 | $ 0.84 | $ 0.64 | $ 1.66 | $ 1.56 | ||||
Cash dividends declared per common share | $ 0.40 | $ 0.39 | $ 0.39 | $ 0.79 | $ 0.77 | ||||
Weighted-average common shares outstanding – basic | 34,764,489 | 34,740,349 | 32,526,962 | 34,752,419 | 30,222,165 | ||||
Weighted-average common shares outstanding – diluted | 35,117,648 | 35,051,810 | 32,649,976 | 35,071,550 | 30,314,504 | ||||
Common shares outstanding at the end of period | 35,498,977 | 35,486,234 | 35,374,916 | 35,498,977 | 35,374,916 |
CONSOLIDATED BALANCE SHEETS | |||
June 30, | December 31, | ||
2024 | 2023 | ||
(Dollars in thousands) | (Unaudited) | ||
Assets | |||
Cash and cash equivalents: | |||
Cash and due from banks | $ 119,981 | $ 111,680 | |
Interest-bearing deposits in other banks | 115,890 | 315,042 | |
Total cash and cash equivalents | 235,871 | 426,722 | |
Available-for-sale investment securities, at fair value (amortized cost of | |||
| 1,119,139 | 1,048,322 | |
Held-to-maturity investment securities, at amortized cost (fair value of | |||
| 701,984 | 683,657 | |
Other investment securities, at cost | 62,742 | 63,421 | |
Total investment securities (a) | 1,883,865 | 1,795,400 | |
Loans and leases, net of deferred fees and costs (b) | 6,325,371 | 6,159,196 | |
Allowance for credit losses | (66,247) | (62,011) | |
Net loans and leases | 6,259,124 | 6,097,185 | |
Loans held for sale | 3,832 | 1,866 | |
Bank premises and equipment, net of accumulated depreciation | 106,589 | 103,856 | |
Bank owned life insurance | 142,605 | 140,554 | |
Goodwill | 362,169 | 362,169 | |
Other intangible assets | 44,248 | 50,003 | |
Other assets | 188,158 | 179,627 | |
Total assets | $ 9,226,461 | $ 9,157,382 | |
Liabilities | |||
Deposits: | |||
Non-interest-bearing | $ 1,472,697 | $ 1,567,649 | |
Interest-bearing | 5,825,077 | 5,584,648 | |
Total deposits | 7,297,774 | 7,152,297 | |
Short-term borrowings | 482,733 | 601,121 | |
Long-term borrowings | 234,257 | 216,241 | |
Accrued expenses and other liabilities | 133,864 | 134,189 | |
Total liabilities | $ 8,148,628 | $ 8,103,848 | |
Stockholders' Equity | |||
Preferred shares, no par value, 50,000 shares authorized, no shares issued at June 30, 2024 or | — | — | |
Common shares, no par value, 50,000,000 shares authorized, 36,760,516 shares issued at | 863,975 | 865,227 | |
Retained earnings | 357,886 | 327,237 | |
Accumulated other comprehensive loss, net of deferred income taxes | (110,193) | (101,590) | |
Treasury stock, at cost, 1,347,476 common shares at June 30, 2024 and 1,511,348 common | (33,835) | (37,340) | |
Total stockholders' equity | 1,077,833 | 1,053,534 | |
Total liabilities and stockholders' equity | $ 9,226,461 | $ 9,157,382 | |
(a) | Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of |
(b) | Also referred to throughout this document as "total loans" and "loans held for investment." |
SELECTED FINANCIAL INFORMATION (Unaudited) | |||||
June 30, | March 31, | December 31, | September 30, | June 30, | |
(Dollars in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Loan Portfolio | |||||
Construction | $ 340,601 | $ 314,687 | $ 364,019 | $ 374,016 | $ 418,741 |
Commercial real estate, other | 2,195,979 | 2,243,780 | 2,196,957 | 2,189,984 | 2,071,514 |
Commercial and industrial | 1,258,063 | 1,214,615 | 1,184,986 | 1,128,809 | 1,160,310 |
Premium finance | 293,349 | 238,962 | 203,177 | 189,251 | 162,357 |
Leases | 430,651 | 422,694 | 414,060 | 402,635 | 377,791 |
Residential real estate | 789,344 | 781,888 | 791,095 | 791,965 | 791,442 |
Home equity lines of credit | 227,608 | 221,079 | 208,675 | 203,940 | 199,221 |
Consumer, indirect | 675,054 | 650,228 | 666,472 | 668,371 | 654,371 |
Consumer, direct | 113,655 | 113,588 | 128,769 | 134,562 | 138,019 |
Deposit account overdrafts | 1,067 | 1,306 | 986 | 857 | 830 |
Total loans and leases | $ 6,325,371 | $ 6,202,827 | $ 6,159,196 | $ 6,084,390 | $ 5,974,596 |
Total acquired loans and leases (a) | $ 1,686,784 | $ 1,757,169 | $ 1,825,129 | $ 1,925,554 | $ 2,032,505 |
Total originated loans and leases | $ 4,638,587 | $ 4,445,658 | $ 4,334,067 | $ 4,158,836 | $ 3,942,091 |
Deposit Balances | |||||
Non-interest-bearing deposits (b) | $ 1,472,697 | $ 1,468,363 | $ 1,567,649 | $ 1,569,095 | $ 1,682,634 |
Interest-bearing deposits: | |||||
Interest-bearing demand accounts (b) | 1,083,512 | 1,107,712 | 1,144,357 | 1,181,079 | 1,225,646 |
Retail certificates of deposit | 1,812,874 | 1,680,413 | 1,443,417 | 1,198,733 | 950,783 |
Money market deposit accounts | 869,159 | 859,961 | 775,488 | 730,902 | 718,633 |
Governmental deposit accounts | 766,337 | 825,170 | 726,713 | 761,625 | 705,596 |
Savings accounts | 880,542 | 901,493 | 919,244 | 987,170 | 1,116,622 |
Brokered deposits | 412,653 | 483,444 | 575,429 | 608,914 | 559,955 |
Total interest-bearing deposits | $ 5,825,077 | $ 5,858,193 | $ 5,584,648 | $ 5,468,423 | $ 5,277,235 |
Total deposits | $ 7,297,774 | $ 7,326,556 | $ 7,152,297 | $ 7,037,518 | $ 6,959,869 |
Total demand deposits (b) | $ 2,556,209 | $ 2,576,075 | $ 2,712,006 | $ 2,750,174 | $ 2,908,280 |
Asset Quality | |||||
Nonperforming assets (NPAs): | |||||
Loans 90+ days past due and accruing | $ 7,592 | $ 7,662 | $ 6,716 | $ 9,117 | $ 5,924 |
Nonaccrual loans | 33,669 | 31,361 | 25,477 | 26,187 | 28,796 |
Total nonperforming loans (NPLs) (f) | 41,261 | 39,023 | 32,193 | 35,304 | 34,720 |
Other real estate owned (OREO) | 7,409 | 7,238 | 7,174 | 7,174 | 7,166 |
Total NPAs | $ 48,670 | $ 46,261 | $ 39,367 | $ 42,478 | $ 41,886 |
Criticized loans (c) | $ 239,943 | $ 256,565 | $ 235,239 | $ 213,156 | $ 219,885 |
Classified loans (d) | 120,180 | 147,518 | 120,027 | 124,836 | 110,972 |
Allowance for credit losses as a percent of NPLs (f) | 160.56 % | 166.11 % | 194.38 % | 178.23 % | 176.30 % |
NPLs as a percent of total loans (f) | 0.65 % | 0.63 % | 0.52 % | 0.58 % | 0.58 % |
NPAs as a percent of total assets (f) | 0.53 % | 0.50 % | 0.43 % | 0.48 % | 0.48 % |
NPAs as a percent of total loans and OREO (f) | 0.77 % | 0.74 % | 0.64 % | 0.70 % | 0.70 % |
Criticized loans as a percent of total loans (c) | 3.79 % | 4.14 % | 3.82 % | 3.50 % | 3.68 % |
Classified loans as a percent of total loans (d) | 1.90 % | 2.38 % | 1.95 % | 2.05 % | 1.86 % |
Allowance for credit losses as a percent of total loans | 1.05 % | 1.05 % | 1.01 % | 1.03 % | 1.02 % |
Total demand deposits as a percent of total deposits (b) | 35.03 % | 35.16 % | 37.92 % | 39.08 % | 41.79 % |
Capital Information (e)(g)(i) | |||||
Common equity tier 1 capital ratio (h) | 11.76 % | 11.69 % | 11.75 % | 11.57 % | 11.36 % |
Tier 1 risk-based capital ratio | 12.55 % | 12.50 % | 12.58 % | 12.31 % | 12.10 % |
Total risk-based capital ratio (tier 1 and tier 2) | 13.47 % | 13.40 % | 13.38 % | 13.14 % | 12.92 % |
Leverage ratio | 9.65 % | 9.43 % | 9.57 % | 9.34 % | 9.64 % |
Common equity tier 1 capital | $ 799,710 | $ 780,017 | $ 766,691 | $ 752,728 | $ 728,892 |
Tier 1 capital | 854,050 | 834,089 | 820,495 | 801,010 | 776,753 |
Total capital (tier 1 and tier 2) | 916,073 | 894,662 | 873,225 | 855,054 | 828,910 |
Total risk-weighted assets | $ 6,802,528 | $ 6,674,114 | $ 6,524,577 | $ 6,505,779 | $ 6,417,511 |
Total stockholders' equity to total assets | 11.68 % | 11.46 % | 11.50 % | 11.11 % | 11.37 % |
Tangible equity to tangible assets (j) | 7.61 % | 7.37 % | 7.33 % | 6.85 % | 7.00 % |
(a) | Includes all loans and leases acquired and purchased in 2012 and thereafter. |
(b) | The sum of non-interest-bearing deposits and interest-bearing demand accounts is considered total demand deposits. |
(c) | Includes loans categorized as special mention, substandard, or doubtful. |
(d) | Includes loans categorized as substandard or doubtful. |
(e) | Data presented as of the end of the period indicated. |
(f) | Nonperforming loans include loans 90+ days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and OREO. |
(g) | June 30, 2024 data based on preliminary analysis and subject to revision. |
(h) | Peoples' capital conservation buffer was |
(i) | Peoples has adopted the five-year transition to phase in the impact of the adoption of CECL on regulatory capital ratios. |
(j) | This ratio represents a non-US GAAP financial measure since it excludes the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." |
PROVISION FOR (RECOVERY OF) CREDIT LOSSES INFORMATION | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
(Dollars in thousands) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
Provision for credit losses | |||||||||
Provision for credit losses | $ 5,397 | $ 5,834 | $ 7,751 | $ 11,231 | $ 9,424 | ||||
Provision for checking account overdrafts | 286 | 268 | 232 | 554 | 412 | ||||
Total provision for credit losses | $ 5,683 | $ 6,102 | $ 7,983 | $ 11,785 | $ 9,836 | ||||
Net Charge-Offs | |||||||||
Gross charge-offs | $ 4,607 | $ 3,874 | $ 2,041 | $ 8,481 | $ 3,896 | ||||
Recoveries | 374 | 554 | 845 | 928 | 1,156 | ||||
Net charge-offs | $ 4,233 | $ 3,320 | $ 1,196 | $ 7,553 | $ 2,740 | ||||
Net Charge-Offs (Recoveries) by Type | |||||||||
Construction | $ — | $ — | $ — | $ — | $ 9 | ||||
Commercial real estate, other | 80 | 129 | (9) | 209 | (3) | ||||
Commercial and industrial | 46 | 228 | (440) | 274 | (439) | ||||
Premium finance | 51 | 46 | 20 | 97 | 34 | ||||
Leases | 2,204 | 1,058 | 515 | 3,262 | 904 | ||||
Residential real estate | (4) | (3) | (10) | (7) | 2 | ||||
Home equity lines of credit | 9 | (7) | 55 | 2 | 74 | ||||
Consumer, indirect | 1,450 | 1,390 | 812 | 2,840 | 1,662 | ||||
Consumer, direct | 126 | 217 | 43 | 343 | 132 | ||||
Deposit account overdrafts | 271 | 262 | 210 | 533 | 365 | ||||
Total net charge-offs | $ 4,233 | $ 3,320 | $ 1,196 | $ 7,553 | $ 2,740 | ||||
As a percent of average total loans (annualized) | 0.27 % | 0.22 % | 0.09 % | 0.24 % | 0.11 % |
SUPPLEMENTAL INFORMATION (Unaudited) | |||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||
(Dollars in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 | ||||
Trust assets under administration and management | $ 2,071,832 | $ 2,061,402 | $ 2,021,249 | $ 1,900,488 | $ 1,931,789 | ||||
Brokerage assets under administration and | 1,567,775 | 1,530,954 | 1,473,814 | 1,364,372 | 1,379,309 | ||||
Mortgage loans serviced for others | 341,298 | 348,937 | 356,784 | 366,996 | 375,882 | ||||
Employees (full-time equivalent) | 1,489 | 1,498 | 1,478 | 1,482 | 1,500 | ||||
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||
(Dollars in thousands) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | ||
Assets | |||||||||||
Short-term investments | $ 178,094 | $ 2,502 | 5.65 % | $ 142,381 | $ 1,922 | 5.43 % | $ 58,245 | $ 673 | 4.64 % | ||
Investment securities (a)(b) | 1,870,372 | 16,144 | 3.45 % | 1,832,599 | 15,234 | 3.33 % | 1,873,944 | 14,240 | 3.04 % | ||
Loans (b)(c): | |||||||||||
Construction | 328,943 | 6,595 | 7.93 % | 339,448 | 6,404 | 7.46 % | 358,732 | 6,491 | 7.16 % | ||
Commercial real estate, other | 2,074,718 | 36,420 | 6.94 % | 2,076,219 | 37,242 | 7.10 % | 1,735,466 | 28,240 | 6.44 % | ||
Commercial and industrial | 1,230,290 | 23,897 | 7.68 % | 1,203,196 | 23,515 | 7.73 % | 1,069,529 | 19,561 | 7.24 % | ||
Premium finance | 260,513 | 5,746 | 8.73 % | 210,405 | 4,564 | 8.58 % | 154,557 | 2,659 | 6.81 % | ||
Leases | 419,764 | 11,982 | 11.29 % | 409,870 | 12,067 | 11.65 % | 359,016 | 10,276 | 11.32 % | ||
Residential real estate (d) | 925,629 | 11,460 | 4.95 % | 930,989 | 11,322 | 4.86 % | 921,012 | 10,818 | 4.70 % | ||
Home equity lines of credit | 225,362 | 4,612 | 8.23 % | 216,743 | 4,297 | 7.97 % | 191,915 | 3,656 | 7.64 % | ||
Consumer, indirect | 656,405 | 9,669 | 5.92 % | 656,244 | 9,281 | 5.69 % | 651,669 | 7,943 | 4.89 % | ||
Consumer, direct | 119,048 | 2,095 | 7.08 % | 124,091 | 2,098 | 6.80 % | 123,899 | 2,247 | 7.27 % | ||
Total loans | 6,240,672 | 112,476 | 7.16 % | 6,167,205 | 110,790 | 7.13 % | 5,565,795 | 91,891 | 6.55 % | ||
Allowance for credit losses | (64,745) | (61,236) | (53,427) | ||||||||
Net loans | 6,175,927 | 6,105,969 | 5,512,368 | ||||||||
Total earning assets | 8,224,393 | 131,122 | 6.34 % | 8,080,949 | 127,946 | 6.29 % | 7,444,557 | 106,804 | 5.70 % | ||
Goodwill and other intangible assets | 407,864 | 410,719 | 387,055 | ||||||||
Other assets | 548,197 | 529,983 | 511,271 | ||||||||
Total assets | |||||||||||
Liabilities and Equity | |||||||||||
Interest-bearing deposits: | |||||||||||
Savings accounts | $ 892,465 | $ 222 | 0.10 % | $ 905,713 | $ 226 | 0.10 % | $ 583 | 0.21 % | |||
Governmental deposit accounts | 795,913 | 5,594 | 2.83 % | 763,899 | 5,085 | 2.68 % | 693,725 | 2,330 | 1.35 % | ||
Interest-bearing demand accounts | 1,095,553 | 495 | 0.18 % | 1,109,033 | 452 | 0.16 % | 1,178,614 | 532 | 0.18 % | ||
Money market deposit accounts | 850,375 | 5,419 | 2.56 % | 784,759 | 4,888 | 2.51 % | 679,123 | 2,006 | 1.18 % | ||
Retail certificates of deposit | 1,743,238 | 18,423 | 4.25 % | 1,582,426 | 15,900 | 4.04 % | 825,155 | 4,209 | 2.05 % | ||
Brokered deposits (e) | 482,310 | 5,506 | 4.59 % | 568,996 | 6,753 | 4.77 % | 480,640 | 4,744 | 3.96 % | ||
Total interest-bearing deposits | 5,859,854 | 35,659 | 2.45 % | 5,714,826 | 33,304 | 2.34 % | 4,952,970 | 14,404 | 1.17 % | ||
Short-term borrowings (e) | 407,273 | 4,978 | 4.90 % | 388,830 | 4,184 | 4.31 % | 493,561 | 5,314 | 4.32 % | ||
Long-term borrowings | 234,961 | 3,520 | 5.98 % | 230,274 | 3,466 | 6.01 % | 132,091 | 1,847 | 5.56 % | ||
Total borrowed funds | 642,234 | 8,498 | 5.30 % | 619,104 | 7,650 | 4.94 % | 625,652 | 7,161 | 4.58 % | ||
Total interest-bearing liabilities | 6,502,088 | 44,157 | 2.73 % | 6,333,930 | 40,954 | 2.60 % | 5,578,622 | 21,565 | 1.55 % | ||
Non-interest-bearing deposits | 1,476,870 | 1,501,738 | 1,637,671 | ||||||||
Other liabilities | 140,042 | 133,202 | 175,152 | ||||||||
Total liabilities | 8,119,000 | 7,968,870 | 7,391,445 | ||||||||
Stockholders' equity | 1,061,454 | 1,052,781 | 951,438 | ||||||||
Total liabilities and stockholders' equity | |||||||||||
Net interest income/spread (b) | $ 86,965 | 3.61 % | $ 86,992 | 3.69 % | $ 85,239 | 4.15 % | |||||
Net interest margin (b) | 4.18 % | 4.26 % | 4.54 % |
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited) -- (Continued) | |||||||
Six Months Ended | |||||||
June 30, 2024 | June 30, 2023 | ||||||
(Dollars in thousands) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | |
Assets | |||||||
Short-term investments | $ 160,238 | $ 4,424 | 5.55 % | $ 47,008 | $ 1,062 | 4.55 % | |
Investment securities (a)(b) | 1,851,485 | 31,378 | 3.39 % | 1,831,335 | 26,547 | 2.90 % | |
Loans (b)(c): | |||||||
Construction | 334,196 | 12,998 | 7.69 % | 300,270 | 10,454 | 6.92 % | |
Commercial real estate, other | 2,075,468 | 73,662 | 7.02 % | 1,538,771 | 48,034 | 6.21 % | |
Commercial and industrial | 1,216,743 | 47,412 | 7.71 % | 975,633 | 34,165 | 6.96 % | |
Premium finance | 235,459 | 10,310 | 8.66 % | 151,244 | 4,809 | 6.32 % | |
Leases | 414,817 | 24,049 | 11.47 % | 350,845 | 19,919 | 11.29 % | |
Residential real estate (d) | 928,309 | 22,782 | 4.91 % | 881,514 | 20,535 | 4.66 % | |
Home equity lines of credit | 221,053 | 8,909 | 8.10 % | 184,337 | 6,622 | 7.24 % | |
Consumer, indirect | 656,324 | 18,950 | 5.81 % | 646,045 | 15,173 | 4.74 % | |
Consumer, direct | 121,569 | 4,194 | 6.94 % | 116,377 | 3,985 | 6.91 % | |
Total loans | 6,203,938 | 223,266 | 7.14 % | 5,145,036 | 163,696 | 6.35 % | |
Allowance for credit losses | (62,990) | (53,052) | |||||
Net loans | 6,140,948 | 5,091,984 | |||||
Total earning assets | 8,152,671 | 259,068 | 6.32 % | 6,970,327 | 191,305 | 5.49 % | |
Goodwill and other intangible assets | 409,292 | 356,470 | |||||
Other assets | 539,089 | 465,782 | |||||
Total assets | $ 9,101,052 | $ 7,792,579 | |||||
Liabilities and Equity | |||||||
Interest-bearing deposits: | |||||||
Savings accounts | $ 899,089 | $ 448 | 0.10 % | $ 1,071,174 | $ 719 | 0.14 % | |
Governmental deposit accounts | 779,906 | 10,679 | 2.75 % | 666,683 | 3,396 | 1.03 % | |
Interest-bearing demand accounts | 1,102,293 | 947 | 0.17 % | 1,142,648 | 712 | 0.13 % | |
Money market deposit accounts | 817,567 | 10,307 | 2.54 % | 632,561 | 2,831 | 0.90 % | |
Retail certificates of deposit | 1,662,832 | 34,323 | 4.15 % | 702,809 | 5,959 | 1.71 % | |
Brokered deposit (e) | 525,653 | 12,259 | 4.69 % | 353,760 | 6,447 | 3.68 % | |
Total interest-bearing deposits | 5,787,340 | 68,963 | 2.40 % | 4,569,635 | 20,064 | 0.89 % | |
Short-term borrowings (e) | 398,052 | 9,162 | 4.62 % | 482,643 | 9,772 | 4.08 % | |
Long-term borrowings | 232,617 | 6,985 | 5.99 % | 115,375 | 3,000 | 5.19 % | |
Total borrowed funds | 630,669 | 16,147 | 5.12 % | 598,018 | 12,772 | 4.30 % | |
Total interest-bearing liabilities | 6,418,009 | 85,110 | 2.66 % | 5,167,653 | 32,836 | 1.28 % | |
Non-interest-bearing deposits | 1,489,304 | 1,598,985 | |||||
Other liabilities | 136,622 | 149,075 | |||||
Total liabilities | 8,043,935 | 6,915,713 | |||||
Stockholders' equity | 1,057,117 | 876,866 | |||||
Total liabilities and stockholders' equity | $ 9,101,052 | $ 7,792,579 | |||||
Net interest income/spread (b) | $ 173,958 | 3.66 % | $ 158,469 | 4.21 % | |||
Net interest margin (b) | 4.22 % | 4.54 % |
(a) | Average balances are based on carrying value. |
(b) | Interest income and yields are presented on a fully tax-equivalent basis, using a |
(c) | Average balances include nonaccrual and impaired loans. Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status. Loan fees included in interest income were immaterial for all periods presented. |
(d) | Loans held for sale are included in the average loan balance listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income. |
(e) | Interest related to interest rate swap transactions is included, as appropriate to the transaction, in interest expense on short-term FHLB advances and interest expense on brokered deposits for the periods presented in which FHLB advances and brokered deposits were being utilized. |
NON-US GAAP FINANCIAL MEASURES (Unaudited) |
The following non-US GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. The following tables summarize the non-US GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements: |
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
(Dollars in thousands) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||
Core non-interest expense: | |||||||||
Total non-interest expense | $ 68,758 | $ 68,465 | $ 70,623 | $ 137,223 | $ 127,102 | ||||
Less: acquisition-related expenses | — | (84) | 10,709 | (84) | 11,260 | ||||
Add: COVID -19 Employee Retention Credit | — | — | 548 | — | 548 | ||||
Core non-interest expense | $ 68,758 | $ 68,549 | $ 60,462 | $ 137,307 | $ 116,390 | ||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
(Dollars in thousands) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||
Efficiency ratio: | |||||||||
Total non-interest expense | $ 68,758 | $ 68,465 | $ 70,623 | ||||||
Less: amortization of other intangible assets | 2,787 | 2,788 | 2,800 | 5,575 | 4,671 | ||||
Adjusted total non-interest expense | 65,971 | 65,677 | 67,823 | 131,648 | 122,431 | ||||
Total non-interest income | 23,704 | 25,779 | 21,015 | 49,483 | 40,075 | ||||
Less: net loss on investment securities | (353) | (1) | (166) | (354) | (2,101) | ||||
Less: net loss on asset disposals and other transactions | (428) | (341) | (1,665) | (769) | (1,911) | ||||
Total non-interest income, excluding net gains and losses | 24,485 | 26,121 | 22,846 | 50,606 | 44,087 | ||||
Net interest income | 86,613 | 86,640 | 84,853 | 173,253 | 157,731 | ||||
Add: fully tax-equivalent adjustment (a) | 352 | 352 | 386 | 705 | 738 | ||||
Net interest income on a fully tax-equivalent basis | 86,965 | 86,992 | 85,239 | 173,958 | 158,469 | ||||
Adjusted revenue | $ 111,450 | $ 113,113 | $ 108,085 | ||||||
Efficiency ratio | 59.19 % | 58.06 % | 62.75 % | 58.62 % | 60.44 % | ||||
Efficiency ratio adjusted for non-core items: | |||||||||
Core non-interest expense | $ 68,758 | $ 68,549 | $ 60,462 | ||||||
Less: amortization of other intangible assets | 2,787 | 2,788 | 2,800 | 5,575 | 4,671 | ||||
Adjusted core non-interest expense | 65,971 | 65,761 | 57,662 | 131,732 | 111,719 | ||||
Adjusted revenue | $ 111,450 | $ 113,113 | $ 108,085 | ||||||
Efficiency ratio adjusted for non-core items | 59.19 % | 58.14 % | 53.35 % | 58.66 % | 55.15 % | ||||
(a) | Tax effect is calculated using a |
NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued) | |||||||||
At or For the Three Months Ended | |||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||
(Dollars in thousands, except per share data) | 2024 | 2024 | 2023 | 2023 | 2023 | ||||
Tangible equity: | |||||||||
Total stockholders' equity | $ 1,077,833 | $ 1,062,002 | $ 1,053,534 | $ 993,219 | $ 998,907 | ||||
Less: goodwill and other intangible assets | 406,417 | 409,285 | 412,172 | 408,494 | 413,172 | ||||
Tangible equity | $ 671,416 | $ 652,717 | $ 641,362 | $ 584,725 | $ 585,735 | ||||
Tangible assets: | |||||||||
Total assets | $ 9,226,461 | $ 9,270,774 | $ 9,157,382 | $ 8,942,534 | $ 8,786,635 | ||||
Less: goodwill and other intangible assets | 406,417 | 409,285 | 412,172 | 408,494 | 413,172 | ||||
Tangible assets | $ 8,820,044 | $ 8,861,489 | $ 8,745,210 | $ 8,534,040 | $ 8,373,463 | ||||
Tangible book value per common share: | |||||||||
Tangible equity | $ 671,416 | $ 652,717 | $ 641,362 | $ 584,725 | $ 585,735 | ||||
Common shares outstanding | 35,498,977 | 35,486,234 | 35,314,745 | 35,395,990 | 35,374,916 | ||||
Tangible book value per common share | $ 18.91 | $ 18.39 | $ 18.16 | $ 16.52 | $ 16.56 | ||||
Tangible equity to tangible assets ratio: | |||||||||
Tangible equity | $ 671,416 | $ 652,717 | $ 641,362 | $ 584,725 | $ 585,735 | ||||
Tangible assets | $ 8,820,044 | $ 8,861,489 | $ 8,745,210 | $ 8,534,040 | $ 8,373,463 | ||||
Tangible equity to tangible assets | 7.61 % | 7.37 % | 7.33 % | 6.85 % | 7.00 % | ||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
(Dollars in thousands) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||
Pre-provision net revenue: | |||||||||
Income before income taxes | $ 35,876 | $ 37,852 | $ 27,262 | $ 73,728 | $ 60,868 | ||||
Add: provision for credit losses | 5,683 | 6,102 | 7,983 | 11,785 | 9,836 | ||||
Add: loss on OREO | — | — | 1,612 | — | 1,622 | ||||
Add: loss on investment securities | 353 | 1 | 166 | 354 | 2,101 | ||||
Add: loss on other assets | 397 | 309 | 45 | 706 | 274 | ||||
Add: loss on other transactions | 31 | 32 | 8 | 63 | 15 | ||||
Pre-provision net revenue | $ 42,340 | $ 44,296 | $ 37,076 | $ 86,636 | $ 74,716 | ||||
Total average assets | 9,180,454 | 9,021,651 | 8,342,883 | 9,101,052 | 7,792,579 | ||||
Pre-provision net revenue to total average assets (annualized) | 1.85 % | 1.97 % | 1.78 % | 1.91 % | 1.93 % | ||||
Weighted-average common shares outstanding – diluted | 35,117,648 | 35,051,810 | 32,649,976 | 35,071,550 | 30,314,504 | ||||
Pre-provision net revenue per common share – diluted | $ 1.21 | $ 1.26 | $ 1.13 | $ 2.45 | $ 2.45 |
NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
(Dollars in thousands) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||
Annualized net income adjusted for non-core items: | |||||||||
Net income | $ 29,007 | $ 29,584 | $ 21,096 | $ 58,591 | $ 47,656 | ||||
Add: net loss on investment securities | 353 | 1 | 166 | 354 | 2,101 | ||||
Less: tax effect of net loss on investment securities (a) | 74 | — | 35 | 74 | 441 | ||||
Add: net loss on asset disposals and other transactions | 428 | 341 | 1,665 | 769 | 1,911 | ||||
Less: tax effect of net loss on asset disposals and other transactions (a) | 90 | 72 | 349 | 161 | 401 | ||||
Add: acquisition-related expenses | — | (84) | 10,709 | (84) | 11,260 | ||||
Less: tax effect of acquisition-related expenses (a) | — | (18) | 2,249 | (18) | 2,365 | ||||
Less: COVID -19 Employee Retention Credit | — | — | 548 | — | 548 | ||||
Add: tax effect of COVID -19 Employee Retention Credit (a) | — | — | 115 | — | 115 | ||||
Net income adjusted for non-core items | $ 29,624 | $ 29,788 | $ 30,570 | $ 59,413 | $ 59,288 | ||||
Days in the period | 91 | 91 | 91 | 182 | 181 | ||||
Days in the year | 366 | 366 | 365 | 366 | 365 | ||||
Annualized net income | $ 116,666 | $ 118,986 | $ 84,616 | $ 117,826 | $ 96,102 | ||||
Annualized net income adjusted for non-core items | $ 119,147 | $ 119,807 | $ 122,616 | $ 119,479 | $ 119,559 | ||||
Return on average assets: | |||||||||
Annualized net income | $ 116,666 | $ 118,986 | $ 84,616 | $ 117,826 | $ 96,102 | ||||
Total average assets | $ 9,180,454 | $ 9,021,651 | $ 8,342,883 | $ 9,101,052 | $ 7,792,579 | ||||
Return on average assets | 1.27 % | 1.32 % | 1.01 % | 1.29 % | 1.23 % | ||||
Return on average assets adjusted for non-core items: | |||||||||
Annualized net income adjusted for non-core items | $ 119,147 | $ 119,807 | $ 122,616 | $ 119,479 | $ 119,559 | ||||
Total average assets | $ 9,180,454 | $ 9,021,651 | $ 8,342,883 | $ 9,101,052 | $ 7,792,579 | ||||
Return on average assets adjusted for non-core items | 1.30 % | 1.33 % | 1.47 % | 1.31 % | 1.53 % |
(a) | Tax effect is calculated using a |
NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued) | |||||||||
For the Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | June 30, | ||||||
(Dollars in thousands) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||
Annualized net income excluding amortization of other intangible assets: | |||||||||
Net income | $ 29,007 | $ 29,584 | $ 21,096 | $ 58,591 | $ 47,656 | ||||
Add: amortization of other intangible assets | 2,787 | 2,788 | 2,800 | 5,575 | 4,671 | ||||
Less: tax effect of amortization of other intangible assets (a) | 585 | 585 | 588 | 1,171 | 981 | ||||
Net income excluding amortization of other intangible assets | $ 31,209 | $ 31,787 | $ 23,308 | $ 62,995 | $ 51,346 | ||||
Days in the period | 91 | 91 | 91 | 182 | 181 | ||||
Days in the year | 366 | 366 | 365 | 366 | 365 | ||||
Annualized net income | $ 116,666 | $ 118,986 | $ 84,616 | $ 117,826 | $ 96,102 | ||||
Annualized net income excluding amortization of other intangible assets | $ 125,522 | $ 127,847 | $ 93,488 | $ 126,682 | $ 103,543 | ||||
Average tangible equity: | |||||||||
Total average stockholders' equity | $ 1,061,454 | $ 1,052,781 | $ 951,438 | $ 1,057,117 | $ 876,866 | ||||
Less: average goodwill and other intangible assets | 407,864 | 410,719 | 387,055 | 409,292 | 356,470 | ||||
Average tangible equity | $ 653,590 | $ 642,062 | $ 564,383 | $ 647,825 | $ 520,396 | ||||
Return on average stockholders' equity ratio: | |||||||||
Annualized net income | $ 116,666 | $ 118,986 | $ 84,616 | $ 117,826 | $ 96,102 | ||||
Average stockholders' equity | $ 1,061,454 | $ 1,052,781 | $ 951,438 | $ 1,057,117 | $ 876,866 | ||||
Return on average stockholders' equity | 10.99 % | 11.30 % | 8.89 % | 11.15 % | 10.96 % | ||||
Return on average tangible equity ratio: | |||||||||
Annualized net income excluding amortization of other intangible assets | $ 125,522 | $ 127,847 | $ 93,488 | $ 126,682 | $ 103,543 | ||||
Average tangible equity | $ 653,590 | $ 642,062 | $ 564,383 | $ 647,825 | $ 520,396 | ||||
Return on average tangible equity | 19.21 % | 19.91 % | 16.56 % | 19.55 % | 19.90 % | ||||
(a) | Tax effect is calculated using a |
View original content:https://www.prnewswire.com/news-releases/peoples-bancorp-inc-announces-second-quarter-2024-results-302203123.html
SOURCE Peoples Bancorp Inc.
FAQ
What were the Q2 2024 earnings for Peoples Bancorp (PEBO)?
How did Peoples Bancorp's net interest margin change in Q2 2024?
What was the provision for credit losses for Peoples Bancorp in Q2 2024?
How much did Peoples Bancorp's total loans and leases increase in Q2 2024?