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PEOPLES BANCORP INC. ANNOUNCES THIRD QUARTER 2024 RESULTS

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Peoples Bancorp Inc. (NASDAQ: PEBO) announced Q3 2024 results with a net income of $31.7 million, translating to $0.89 per diluted share. This is an increase from Q2 2024's $29.0 million ($0.82/share) but a slight decrease from Q3 2023's $31.9 million ($0.90/share). Key highlights include:

  • Net interest income rose by $2.3 million compared to the previous quarter.
  • Net interest margin improved to 4.27%.
  • Provision for credit losses increased to $6.7 million, impacting earnings by $0.15 per share.
  • Total non-interest income grew by $1.2 million, driven by higher mortgage banking income.
  • Total non-interest expense decreased by $2.7 million quarter-over-quarter.
  • Deposits increased by $185.4 million, while loans and leases decreased by $53.5 million.
  • Stockholders' equity to total assets ratio improved to 12.31%.

The Limestone Merger contributed to the financials, with acquisition-related expenses reducing significantly.

Peoples Bancorp Inc. (NASDAQ: PEBO) ha annunciato i risultati del terzo trimestre 2024 con un reddito netto di 31,7 milioni di dollari, pari a 0,89 dollari per azione totalmente diluita. Questo rappresenta un aumento rispetto ai 29,0 milioni di dollari (0,82 dollari/azione) del secondo trimestre 2024, ma una leggera diminuzione rispetto ai 31,9 milioni di dollari (0,90 dollari/azione) del terzo trimestre 2023. I principali punti salienti includono:

  • Il reddito netto da interessi è aumentato di 2,3 milioni di dollari rispetto al trimestre precedente.
  • Il margine di interesse netto è migliorato al 4,27%.
  • La provvista per perdite sui crediti è aumentata a 6,7 milioni di dollari, impattando gli utili di 0,15 dollari per azione.
  • Il reddito totale non da interessi è cresciuto di 1,2 milioni di dollari, sostenuto da un aumento del reddito da mutui.
  • La spesa totale non da interessi è diminuita di 2,7 milioni di dollari rispetto al trimestre precedente.
  • I depositi sono aumentati di 185,4 milioni di dollari, mentre prestiti e leasing sono diminuiti di 53,5 milioni di dollari.
  • Il rapporto tra il patrimonio netto degli azionisti e il totale delle attività è migliorato al 12,31%.

La fusione con Limestone ha contribuito ai risultati finanziari, con spese legate all'acquisizione che si sono ridotte significativamente.

Peoples Bancorp Inc. (NASDAQ: PEBO) anunció los resultados del tercer trimestre de 2024 con un ingreso neto de 31,7 millones de dólares, lo que equivale a 0,89 dólares por acción diluida. Esto representa un aumento con respecto a los 29,0 millones de dólares (0,82 dólares/acción) del segundo trimestre de 2024, pero una ligera disminución en comparación con los 31,9 millones de dólares (0,90 dólares/acción) del tercer trimestre de 2023. Los principales puntos destacados incluyen:

  • Los ingresos netos por intereses aumentaron en 2,3 millones de dólares en comparación con el trimestre anterior.
  • El margen de interés neto mejoró al 4,27%.
  • La provisión para pérdidas crediticias aumentó a 6,7 millones de dólares, afectando las ganancias en 0,15 dólares por acción.
  • Los ingresos totales no por intereses crecieron en 1,2 millones de dólares, impulsados por un aumento en los ingresos por hipotecas.
  • Los gastos totales no por intereses disminuyeron en 2,7 millones de dólares trimestre a trimestre.
  • Los depósitos aumentaron en 185,4 millones de dólares, mientras que los préstamos y arrendamientos disminuyeron en 53,5 millones de dólares.
  • El ratio de patrimonio de los accionistas sobre el total de activos mejoró al 12,31%.

La fusión con Limestone contribuyó a los resultados financieros, con gastos relacionados con la adquisición que se redujeron significativamente.

Peoples Bancorp Inc. (NASDAQ: PEBO)는 2024년 3분기 결과로 3,170만 달러의 순이익을 발표했으며, 이는 희석 주당 0.89달러에 해당합니다. 이는 2024년 2분기의 2,900만 달러(0.82달러/주)에서 증가한 수치이지만, 2023년 3분기의 3,190만 달러(0.90달러/주)보다 약간 감소한 수치입니다. 주요 하이라이트는 다음과 같습니다:

  • 순이자 수익은 이전 분기 대비 230만 달러 증가했습니다.
  • 순이자 마진은 4.27%로 향상되었습니다.
  • 신용 손실 충당금은 670만 달러로 증가하여 주당 0.15달러의 이익에 영향을 미쳤습니다.
  • 비이자 수익 총액은 120만 달러 증가했으며, 이는 주택 담보 대출 수익 증가에 의해 주도됩니다.
  • 비이자 총비용은 분기별로 270만 달러 감소했습니다.
  • 예금은 1억 8,540만 달러 증가했으며, 대출 및 임대는 5,350만 달러 감소했습니다.
  • 주주 지분 대 총 자산 비율이 12.31%로 향상되었습니다.

라임스톤 합병이 재무 성과에 기여했으며, 인수 관련 비용이 크게 감소했습니다.

Peoples Bancorp Inc. (NASDAQ: PEBO) a annoncé les résultats du troisième trimestre 2024 avec un revenu net de 31,7 millions de dollars, soit 0,89 dollar par action diluée. Cela représente une augmentation par rapport aux 29,0 millions de dollars (0,82 dollar/action) du deuxième trimestre 2024, mais une légère diminution par rapport aux 31,9 millions de dollars (0,90 dollar/action) du troisième trimestre 2023. Les points clés comprennent :

  • Le revenu net d'intérêts a augmenté de 2,3 millions de dollars par rapport au trimestre précédent.
  • La marge d'intérêt net s'est améliorée à 4,27 %.
  • La provision pour pertes de crédit a été portée à 6,7 millions de dollars, ce qui a impacté le résultat de 0,15 dollar par action.
  • Le revenu total hors intérêts a crû de 1,2 million de dollars, soutenu par une augmentation des revenus de prêts hypothécaires.
  • Les charges totales hors intérêts ont diminué de 2,7 millions de dollars par rapport au trimestre précédent.
  • Les dépôts ont augmenté de 185,4 millions de dollars, tandis que les prêts et les baux ont diminué de 53,5 millions de dollars.
  • Le ratio des capitaux propres des actionnaires par rapport au total des actifs s'est amélioré à 12,31 %.

La fusion avec Limestone a contribué aux résultats financiers, les dépenses liées à l'acquisition ayant considérablement diminué.

Peoples Bancorp Inc. (NASDAQ: PEBO) gab die Ergebnisse des 3. Quartals 2024 bekannt mit einem Nettogewinn von 31,7 Millionen Dollar, was 0,89 Dollar pro verwässerter Aktie entspricht. Dies ist ein Anstieg im Vergleich zu den 29,0 Millionen Dollar (0,82 Dollar/Aktie) des 2. Quartals 2024, jedoch ein leichter Rückgang im Vergleich zu den 31,9 Millionen Dollar (0,90 Dollar/Aktie) des 3. Quartals 2023. Die wichtigsten Highlights sind:

  • Die Nettozinseinnahmen stiegen im Vergleich zum vorherigen Quartal um 2,3 Millionen Dollar.
  • Die Nettozinsspanne verbesserte sich auf 4,27%.
  • Die Rückstellung für Kreditverluste erhöhte sich auf 6,7 Millionen Dollar, was die Erträge um 0,15 Dollar pro Aktie belastete.
  • Das gesamte Nichtzinsgeschäft wuchs um 1,2 Millionen Dollar, unterstützt durch höhere Einkünfte aus der Hypothekenfinanzierung.
  • Die gesamten Nichtzinsaufwendungen sanken im Vergleich zum Vorquartal um 2,7 Millionen Dollar.
  • Einlagen stiegen um 185,4 Millionen Dollar, während Kredite und Leasing um 53,5 Millionen Dollar zurückgingen.
  • Das Verhältnis von Eigenkapital der Aktionäre zu den Gesamtaktiven verbesserte sich auf 12,31%.

Die Fusion mit Limestone trug zu den Finanzen bei, da die mit der Übernahme verbundenen Kosten erheblich gesenkt wurden.

Positive
  • Net income increased to $31.7 million compared to $29.0 million in Q2 2024.
  • Net interest income rose by $2.3 million quarter-over-quarter.
  • Net interest margin improved to 4.27%.
  • Total non-interest income increased by $1.2 million.
  • Total non-interest expense decreased by $2.7 million.
  • Deposits increased by $185.4 million.
  • Stockholders' equity to total assets ratio improved to 12.31%.
Negative
  • Provision for credit losses increased to $6.7 million, impacting earnings by $0.15 per share.
  • Total loan and lease balances decreased by $53.5 million.
  • Classified loans increased by $13.1 million due to downgrades.
  • Net interest income decreased by $4.4 million year-over-year.

Insights

Peoples Bancorp Inc. reported solid Q3 2024 results, with net income of $31.7 million and EPS of $0.89, up from $29.0 million and $0.82 in Q2 2024. Key highlights include:

  • Net interest income increased 3% quarter-over-quarter to $88.9 million
  • Net interest margin improved to 4.27% from 4.18% in Q2
  • Core deposit growth of $102.1 million, excluding brokered CDs
  • Efficiency ratio improved to 55.1% from 59.2% in Q2

The bank's asset quality remained stable, with criticized loans decreasing slightly. However, classified loans increased due to two commercial relationship downgrades. The loan-to-deposit ratio improved to 84% from 87%. Overall, PEBO demonstrated resilience in a challenging environment, with improvements in key metrics and controlled expenses.

This earnings report showcases Peoples Bancorp's ability to navigate the current banking landscape effectively. The 3% increase in net interest income and 9 basis point expansion in net interest margin are particularly noteworthy given the challenging interest rate environment. The improvement in the efficiency ratio to 55.1% indicates strong cost management. However, investors should monitor the $13.1 million increase in classified loans, as it could signal potential credit quality concerns. The 0.38% annualized net charge-off rate, while described as a return to pre-pandemic levels, warrants attention in the context of economic uncertainties. The bank's focus on core deposit growth and improved loan-to-deposit ratio demonstrates a prudent approach to balance sheet management, which is important for maintaining stability and profitability in the current banking climate.

MARIETTA, Ohio, Oct. 22, 2024 /PRNewswire/ -- Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for the quarter ended September 30, 2024. Net income totaled $31.7 million for the third quarter of 2024, representing earnings per diluted common share of $0.89. In comparison, Peoples reported net income of $29.0 million, representing earnings per diluted common share of $0.82, for the second quarter of 2024 and net income of $31.9 million, representing earnings per diluted common share of $0.90, for the third quarter of 2023.

"We are very pleased with our results for the first nine months of 2024. We saw core improvements in deposit growth, net interest margin, and fee-based income," said Tyler Wilcox, President and Chief Executive Officer. "Our total stockholders' equity to total assets ratio improved to 12.31% compared to 11.68% and our tangible equity to tangible assets ratio improved to 8.25% from 7.61% compared to the prior quarter. We continue to focus on driving shareholder value through consistent financial performance."

Statement of Operations Highlights:

  • Net interest income for the third quarter of 2024 increased $2.3 million, or 3%, when compared to the linked quarter.
    • Net interest margin increased to 4.27% for the third quarter of 2024, compared to 4.18% for the linked quarter driven by higher accretion income.
  • Peoples recorded a provision for credit losses of $6.7 million for the third quarter of 2024, compared to a provision for credit losses of $5.7 million for the second quarter of 2024.
    • The provision for credit losses was driven by net charge-offs, and negatively impacted earnings per diluted common share by $0.15 for the third quarter of 2024 and $0.13 for the second quarter of 2024.
  • Total non-interest income, excluding net gains and losses, increased $1.2 million, or 5%, for the third quarter of 2024 compared to the linked quarter.
    • The increase was primarily driven by higher mortgage banking income due to higher net gains from the origination and sale of real estate loans to the secondary market.
  • Total non-interest expense for the third quarter of 2024 decreased $2.7 million compared to the linked quarter.
    • The efficiency ratio for the third quarter of 2024 was 55.1%, compared to 59.2% for the linked quarter.

Balance Sheet Highlights:

  • Period-end total loan and lease balances at September 30, 2024 decreased $53.5 million, or 3% annualized, compared to at June 30, 2024.
    • The decrease was driven by decreases in (i) construction loans, (ii) other commercial real estate loans, (iii) residential real estate loans, and (iv) commercial and industrial loans, partially offset by an increase in home equity lines of credit. The decreases were primarily driven by paydown activity.
  • Asset quality metrics remained stable during the third quarter of 2024.
    • Criticized loans decreased $2.3 million compared to June 30, 2024.
    • Classified loans increased $13.1 million and was driven by the downgrade of two commercial relationships.
    • Annualized net charge-offs were 0.38% of average total loans, representing a return to pre-pandemic levels.
  • Period-end total deposit balances at September 30, 2024 increased $185.4 million, or 3%, compared to at June 30, 2024
    • Excluding an increase in brokered certificates of deposit of $83.3 million, core deposits were up $102.1 million compared to the linked quarter, driven by an increase in retail certificates of deposits and higher governmental deposit accounts.
    • Total loan balances were 84% of total deposit balances at September 30, 2024, compared to 87% at June 30, 2024.

Impact 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 Louisville, Kentucky, and the parent company of Limestone Bank, pursuant to a definitive Agreement and Plan of Merger (the "Merger Agreement") dated October 24, 2022. Under the terms of the Merger Agreement, Limestone merged with and into Peoples, and immediately thereafter Limestone Bank merged with and into Peoples' wholly-owned subsidiary, Peoples Bank (collectively, the "Limestone Merger"), in a transaction valued at $177.9 million. Peoples recorded acquisition-related expenses, primarily related to the Limestone Merger, which included $(0.7) million, $(0.1) million and $10.7 million in other non-interest expense for the three months ended September 30, 2024, March 31, 2024, and June 30, 2023, respectively. There was no such expense for the three months ended June 30, 2024. For the nine months ended September 30, 2024, Peoples recorded acquisition-related expenses of $(0.7) million compared to $15.7 million for the nine months ended September 30, 2023.

Net Interest Income
Net interest income was $88.9 million for the third quarter of 2024 and increased $2.3 million when compared to the linked quarter. Net interest margin was 4.27% for the third quarter of 2024, compared to 4.18% for the linked quarter. The increase in net interest income and margin was primarily driven by an increase in accretion income, net of amortization, from acquisitions and higher earning asset yields, which were offset by higher borrowing costs

Net interest income for the third quarter of 2024 decreased $4.4 million, or 5%, compared to the third quarter of 2023. The decrease in net interest income compared to the third quarter of 2023 was driven by higher funding costs. Net interest margin decreased 43 basis points when compared to the third quarter of 2023, driven primarily by higher rates on deposits.

Accretion income, net of amortization expense, from acquisitions was $8.1 million for the third quarter of 2024, $5.8 million for the linked quarter and $9.5 million for the third quarter of 2023, which added 39 basis points, 28 basis points and 48 basis points, respectively, to net interest margin. The increase in accretion income for the third quarter of 2024 when compared to the linked quarter was primarily driven by higher loan and lease payoffs. The decrease in accretion income for the current quarter compared to the third quarter of 2023 was a result of lower accretion.

For the first nine months of 2024, net interest income increased $11.2 million, or 4%, compared to the first nine months of 2023, while net interest margin decreased 36 basis points to 4.24%. The increase in net interest income was driven by increases in market interest rates and an additional four months of income from the Limestone Merger. The decrease in net interest margin for the first nine months of 2024 compared to the first nine months of 2023 was primarily driven by higher borrowing costs, which offset higher earning asset yields.

Accretion income, net of amortization expense, from acquisitions was $20.3 million for the nine months ended September 30, 2024, compared to $15.8 million for the nine months ended September 30, 2023, which added 33 and 29 basis points, respectively, to net interest margin. The increase in accretion income for the first nine months of 2024 compared to the same period in 2023 was due to an additional four months in 2024 from the Limestone Merger.

Provision for Credit Losses:
The provision for credit losses was $6.7 million for the third quarter of 2024, compared to $5.7 million for the linked quarter and $4.1 million for the third quarter of 2023. The provision for credit losses for the third quarter of 2024 was mainly a result of net charge-offs. The provision for credit losses for the second quarter of 2024 was driven by (i) higher net charge-offs, (ii) an increase of reserves on individually analyzed loans and leases and (iii) loan growth. The increase in the provision for credit losses for the third quarter of 2024 compared to the third quarter of 2023, was largely attributable to an increase in the reserves for individually analyzed loans and leases and higher net charge-offs.

The provision for credit losses during the first nine months of 2024 was $18.5 million, compared to a provision for credit losses of $13.9 million for the first nine months of 2023. The provision for credit losses during the first nine months of 2024 was mainly a result of (i) higher net charge-offs, (ii) an increase in reserves on individually analyzed loans and leases, (iii) economic forecast deterioration and (iv) loan growth. The provision for credit losses during the first nine months of 2023 was driven by (i) the addition of the provision for the non-purchased credit deteriorated loans acquired in the Limestone Merger, (ii) loan growth and (iii) economic forecast deterioration, partially offset by a reduction in the reserves for individually analyzed loans and leases and the use of updated loss drivers.

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 $0.15 for the third quarter of 2024, $0.13 for the second quarter of 2024, and $0.09 for the third quarter of 2023. For the first nine months of 2024, the provision negatively impacted earnings per diluted common share by $0.42, compared to $0.33 for the first nine months of 2023.

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 third quarter of 2024 was $0.9 million, compared to a net loss of $0.8 million for the linked quarter, and a net loss of $0.3 million for the third quarter of 2023. The net loss for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023 were driven primarily by net losses on repossessed assets of $0.5 million, $0.4 million and $0.3 million, respectively.

The net loss realized during the first nine months of 2024 was $2.0 million, compared to a net loss realized of $4.3 million for the first nine months of 2023. The net loss for the first nine months of 2024 was primarily driven by $1.3 million of net losses on repossessed assets. The net loss recognized in the first nine months of 2023 was primarily driven by a $2.0 million pre-tax net loss on the sale of available-for-sale investment securities and a $1.6 million write-down of an other real estate owned ("OREO") property.

Total Non-interest Income, Excluding Net Gains and Losses:
Total non-interest income, excluding net gains and losses, for the third quarter of 2024 increased $1.2 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was primarily impacted by increases of $0.8 million in mortgage banking income and $0.7 million in lease income, partially offset by a decrease of $0.6 million in bank-owned life insurance income ("BOLI"). Total non-interest income, excluding net gains and losses, for the third quarter of 2024 was 22% of total revenue (defined as net interest income plus total non-interest income excluding net gains and losses) consistent with the second quarter of 2024.

Compared to the third quarter of 2023, total non-interest income, excluding net gains and losses, increased $2.1 million, primarily due to a $1.9 million increase in lease income, a $0.8 million increase in mortgage banking income, and a $0.6 million increase in trust and investment income, partially offset by a $0.9 million decrease in BOLI income. The increases for the third quarter of 2024, when compared to the third quarter of 2023, were primarily due to gains on early terminations on leases that paid off, higher production in mortgage banking, and an increase in trust and investment income.

For the first nine months of 2024, total non-interest income, excluding gains and losses, increased $8.7 million, or 13%, compared to the first nine months of 2023. The increase was driven by (i) a $2.0 million increase in other non-interest income, driven by operating lease income, (ii) a $1.7 million increase in trust and investment income driven by increases of assets under administration and management, (iii) a $1.4 million increase in lease income driven by gains on terminated leases, (iv) a $1.2 million increase in insurance income driven by higher contingency income and market increases for premiums, (v) a $0.9 million increase in deposit account service charge income, and (vi) a $0.9 million increase in mortgage banking income.

Total Non-interest Expense:
Total non-interest expense decreased $2.7 million for the third quarter of 2024, compared to the linked quarter. The decrease in total non-interest expense was primarily due to decreases of $2.8 million in other non-interest expense, driven by a one-time $1.3 million true-up of corporate expenses recorded in the linked quarter, and a decrease of $0.6 million in data processing and software expense. 

Compared to the third quarter of 2023, total non-interest expense decreased $5.6 million, or 8%. The decrease in total non-interest expense was primarily due to a decrease of $5.1 million in acquisition-related expenses. Excluding acquisition-related expenses, non-interest expenses decreased $0.5 million, or 1%, primarily due to a decrease of $2.7 million in other non-interest expense, partially offset by an increase of $1.1 million in data processing and software expense.

For the nine months of 2024, total non-interest expense increased $4.5 million, or 2%, compared to the first nine months of 2023. Excluding acquisition-related expenses, non-interest expenses increased $21.0 million, or 11%, primarily due to increases of $11.6 million in salaries and employee benefits costs due to additional employees added in the Limestone Merger, and $4.4 million and $2.5 million in data processing and software expense and in net occupancy and equipment expense, respectively, due to recent growth, including through acquisitions.

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


Nine Months Ended


September 30


June 30,


September 30


September 30


2024


2024


2023


2024


2023

(Dollars in thousands)

(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Non-interest expense:










Salaries and employee benefit costs

$           37,085


$           36,564


$            36,608


$       112,542


$       106,661

Data processing and software expense

6,111


6,743


6,288


18,623


15,578

Net occupancy and equipment expense

5,905


6,142


5,501


18,330


15,836

Professional fees

2,896


2,935


3,456


8,798


13,775

Amortization of other intangible assets

2,786


2,787


3,280


8,361


7,951

Electronic banking expense

1,844


1,941


1,836


5,566


5,159

Marketing expense

971


681


1,267


2,708


3,554

FDIC insurance premiums

1,241


1,251


1,260


3,678


3,525

Franchise tax expense

917


760


772


2,558


2,678

Communication expense

814


736


752


2,349


2,089

Other loan expenses

1,178


1,036


856


3,290


2,133

Other non-interest expense

4,342


7,182


9,820


16,510


19,859

  Total non-interest expense

66,090


68,758


71,696


203,313


198,798

Acquisition-related non-interest expense:










Salaries and employee benefit costs



562


16


5,708

Data processing and software expense



1,289


(18)


1,290

Net occupancy and equipment expense



2



31

Professional fees



429


(38)


5,532

Electronic banking expense




(100)


115

Marketing expense



38


10


61

Communication expense



1



1

Other loan expenses





1

Other non-interest expense

(662)



2,113


(616)


2,955

  Total acquisition-related non-interest expense

(662)



4,434


(746)


15,694

Non-interest expense excluding acquisition-related expense:










Salaries and employee benefit costs

37,085


36,564


36,046


112,526


100,953

Data processing and software expense

6,111


6,743


4,999


18,641


14,288

Net occupancy and equipment expense

5,905


6,142


5,499


18,330


15,805

Professional fees

2,896


2,935


3,027


8,836


8,243

Amortization of other intangible assets

2,786


2,787


3,280


8,361


7,951

Electronic banking expense

1,844


1,941


1,836


5,666


5,044

Marketing expense

971


681


1,229


2,698


3,493

FDIC insurance premiums

1,241


1,251


1,260


3,678


3,525

Franchise tax expense

917


760


772


2,558


2,678

Communication expense

814


736


751


2,349


2,088

Other loan expenses

1,178


1,036


856


3,290


2,132

Other non-interest expense

5,004


7,182


7,707


17,126


16,904

Total non-interest expense excluding acquisition-related expense

$           66,752


$           68,758


$            67,262


$       204,059


$       183,104











The efficiency ratio for the third quarter of 2024 was 55.1%, compared to 59.2% for the linked quarter and 58.4% for the third quarter of 2023. The efficiency ratio, adjusted for non-core items, was 55.7% for the third quarter of 2024, compared to 59.2% for the linked quarter, and 52.5% for the third quarter of 2023. The efficiency ratio and the adjusted for non-core items efficiency ratio improved compared to the linked quarter mainly as the result of a reduction in non-interest expense and an increase in net interest income. The efficiency ratio and the adjusted for non-core items efficiency ratio increased for the third quarter of 2024 compared to the third quarter of 2023 due to higher non-interest expense and lower revenue.  The efficiency ratio for the first nine months of 2024 was 57.4%, compared to 59.7% for the first nine months of 2023. The efficiency ratio improved compared to the prior year first nine months due to the decrease in acquisition-related expenses. The efficiency ratio, adjusted for non-core items, was 57.7% for the first nine months of 2024, compared to 54.2% for the first nine months of 2023. The increase in the efficiency ratio, adjusted for non-core items, for the first nine months of 2024 compared to the first nine months of 2023 was due to higher non-interest expense.  Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business. 

Income Tax Expense:
Peoples recorded income tax expense of $9.2 million with an effective tax rate of 22.5% for the third quarter of 2024, compared to income tax expense of $6.9 million with an effective tax rate of 19.1% for the linked quarter and income tax expense of $8.8 million with an effective tax rate of 21.7% for the third quarter of 2023. The increase in income tax expense when compared to the prior quarter was driven by a $1.1 million one-time benefit recognized in the second quarter of 2024 related to a prior year amended return and higher pre-tax income. The increase in income tax expense when compared to the third quarter of 2023 was primarily due to higher effective tax rate. Peoples recorded income tax expense of $24.3 million with an effective tax rate of 21.2% for the first nine months of 2024 and $22.1 million with an effective tax rate of 21.7% in the first nine months of 2023. The increase in income tax expense was driven by higher pre-tax income.

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 September 30, 2024 decreased $38.5 million when compared to at June 30, 2024, increased $32.3 million when compared to at December 31, 2023, and increased $62.1 million when compared to at September 30, 2023. The decrease in the balance when compared to at June 30, 2024, was driven by principal payment reductions. The balances of unrealized losses, net of tax, on available-for-sale investment securities recognized within accumulated other comprehensive loss were $83.7 million, $112.7 million, $104.2 million, and $148.1 million at September 30, 2024, at June 30, 2024, at December 31, 2024, and at September 30, 2023, respectively. The decrease in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period.

The held-to-maturity investment securities balance at September 30, 2024 decreased $8.3 million when compared to at June 30, 2024 and increased $10.0 million and $18.2 million when compared to at December 31, 2023 and at September 30, 2023, respectively. The decrease when compared to the linked quarter was driven by principal payments. The increase when compared to September 30, 2023 was primarily driven by purchases of higher yielding, longer duration securities booked as held-to-maturity. The balances of net unrealized losses on held-to-maturity investment securities were $57.1 million, $79.4 million, $71.6 million and $105.5 million at September 30, 2024, at June 30, 2024, at December 31, 2023, and at September 30, 2023, respectively.

The effective duration of the investment portfolio as of September 30, 2024 was approximately 5.42 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 September 30, 2024, Peoples had liquid and liquefiable assets totaling $648.7 million, which included (i) cash and cash equivalents, (ii) unpledged government and agency investment securities and (iii) unpledged non-agency investment securities that could be liquidated. At September 30, 2024, Peoples had a total borrowing capacity of $554.7 million available through the Federal Home Loan Bank ("FHLB"), the Federal Reserve Bank ("FRB"), and federal funds. Additionally, at September 30, 2024, Peoples had other contingent sources of liquidity totaling $3.4 billion. Cash and cash equivalents decreased $143.0 million when compared to December 31, 2023 due to an improvement in other inputs in our aforementioned liquidity metrics, specifically unencumbered securities, driven by the migration of deposit balances to IntraFi Cash Service accounts ("ICS"), freeing up investment securities previously held as collateral against those balances, and requiring less cash to be held on the balance sheet.

Loans and Leases:
The period-end total loan and lease balances at September 30, 2024 decreased $53.5 million, or 3% annualized, compared to at June 30, 2024. The decrease in the period-end total loan and lease balances was primarily driven by decreases of (i) $20.5 million in construction loans, (ii) $15.5 million in other commercial real estate loans, (iii) $11.8 million in residential real estate loans, and (iv) $7.9 million in commercial and industrial loans, partially offset by an increase of $5.5 million in home equity lines of credit.

The period-end total loan and lease balances at September 30, 2024 increased $112.6 million compared to at December 31, 2023, primarily driven by growth of $83.8 million in premium finance loans, $65.2 million in commercial and industrial loans, $24.4 million in home equity lines of credit, and $18.9 million in leases.

The period-end total loan and lease balances at September 30, 2024 increased $187.4 million compared to at September 30, 2023, primarily driven by organic growth in our commercial and industrial, premium finance, lease, and home equity lines of credit portfolios of $121.3 million, $97.7 million, $30.4 million, and $29.2 million, respectively.

Quarterly average total loan balances increased $61.8 million compared to the linked quarter. The increase in average total loan balances when compared to the linked quarter was primarily the result of growth of (i) $28.3 million in premium finance loans, (ii) $24.6 million in consumer indirect loans, and (iii) $24.4 million in commercial and industrial loans, partially offset by a reduction of $25.6 million in other commercial real estate loans.

Compared to the first nine months quarter of 2023, quarterly average loan balances in the current quarter increased $0.8 billion, or 15%. The increase was driven by growth in our other commercial real estate, commercial and industrial, premium finance, and lease portfolios of $395.6 million, $207.9 million, $92.7 million, and $55.9 million, respectively.

Asset Quality:
Overall, asset quality remained relatively stable through the third quarter of 2024. Delinquency trends remained stable as loans considered current comprised 98.5%, 98.8%, and 99.0% of the loan portfolio at September 30, 2024, at June 30, 2024, and at September 30, 2023, respectively. Total nonperforming assets at September 30, 2024 increased $21.1 million, or 43%, compared to at June 30, 2024, and increased $27.3 million, or 64%, compared to at September 30, 2023. The increase in nonperforming assets compared to the linked quarter was primarily due to an increase in the balance of leases,  premium finance loans, commercial and industrial loans, and residential real estate loans past due and accruing. The increase in nonperforming assets is driven by higher administrative delinquencies on Vantage leases and premium finance loans. The increase in nonperforming assets compared to at September 30, 2023, was impacted by the increase of loans past due and accruing. Nonperforming assets as a percent of total loans and OREO was 1.11% at September 30, 2024, compared to 0.77% at June 30, 2024, and 0.70% at September 30, 2023.

Criticized loans, which are those categorized as special mention, substandard or doubtful, decreased $2.3 million, or 1%, compared to at June 30, 2024, increased $2.4 million, or 1%, compared to at December 31, 2023, and increased $24.5 million, or 11%, compared to at September 30, 2023. As a percent of total loans, criticized loans were 3.79% at September 30, 2024, compared to 3.79% at June 30, 2024, 3.82% at December 31, 2023, and 3.50% at September 30, 2023. The decrease in the amount of criticized loans compared to at June 30, 2024 was primarily driven by paydowns on previously downgraded loans. Compared to at December 31, 2023 and at September 30, 2023, the increase in the amount of criticized loans was primarily driven by loan downgrades.

Classified loans, which are those categorized as substandard or doubtful, increased $13.1 million, or 11%, compared to at June 30, 2024, increased $13.2 million, or 11%,  compared to at December 31, 2023,  and increased $8.4 million, or 7%, compared to at September 30, 2023. As a percent of total loans, classified loans were 2.12% at September 30, 2024, compared to 1.90% at June 30, 2024, 1.95% at December 31, 2023, and 2.05% at September 30, 2023. The increase in classified loans compared to at June 30, 2024 was primarily driven by the downgrade of two commercial relationships. The increase in classified loans when compared to at September 30, 2023, was primarily driven by loan and lease downgrades.

Annualized net charge-offs were 0.38% of average total loans for the third quarter of 2024, compared to 0.27% for the linked quarter, and 0.15% for the third quarter of 2023. The increase relative to the linked quarter was driven by an increase in charge-offs on leases originated by our North Star Leasing business. The increase in net charge-offs during the third quarter of 2024 versus the prior year third quarter was primarily attributable to an increase in charge-offs on (i) leases originated by our North Star Leasing business, (ii) indirect consumer loans, (iii) commercial and industrial loans, and (iv) deposit account overdrafts.

At September 30, 2024, the allowance for credit losses increased $0.4 million when compared to at June 30, 2024, increased $4.6 million when compared to at December 31, 2023, and increased $3.7 million when compared to at September 30, 2023. The increase in the allowance for credit losses at September 30, 2024 when compared to at June 30, 2024 and at December 31, 2023 was primarily due to an increase in reserves for individually analyzed loans and leases. The increase in the allowance balance at September 30, 2024 when compared to September 30, 2023 was driven by an increases in reserves for individually analyzed loans and leases, as well as loan growth. The ratio of the allowance for credit losses as a percent of total loans was 1.06% at September 30, 2024, compared to 1.05% at June 30, 2024, and 1.03% at September 30, 2023. The ratio of allowance for credit losses as a percentage of non-performing loans decreased to 106.82% compared to 160.56% at June 30, 2024, and 178.23% at September 30, 2023.

Deposits:
As of September 30, 2024, period-end total deposits increased $185.4 million compared to at June 30, 2024. The increase was primarily driven by increases of (i) $83.3 million in brokered certificates of deposit, (ii) $71.3 million in retail certificates of deposit, and (iii) $57.8 million in governmental deposit accounts, partially offset by a decrease of  $19.2 million in non-interest bearing deposits. The increase in retail certificates of deposits was due to current specials being offered, while the increase in governmental deposit accounts was due to the seasonality of those balances. The increase in brokered deposits was due to the lower-cost of funding available compared to Federal Home Loan Bank ("FHLB") advances.

Compared to December 31, 2023, period-end total deposits increased $330.9 million, or 5%. The increase was primarily driven by increases of $440.7 million in retail certificates of deposit, $119.2 million in money market deposit accounts and $97.4 million in governmental deposits, partially offset by decreases of $114.2 million in non-interest bearing deposits, $79.5 million in brokered deposits, $78.4 million in interest bearing demand accounts, and $54.3 million in savings accounts.

Compared to September 30, 2023, period-end deposit balances increased $445.6 million, or 6%. The increase was primarily driven by increases of $685.4 million in retail certificates of deposit, $163.8 million in money market deposit accounts, and $62.5 million in governmental deposit accounts, offset by decreases of $122.2 million, $115.6 million, $115.2 million, and $113.0 million in savings accounts, non-interest bearing deposits, interest-bearing demand deposit accounts and brokered certificates of deposit, respectively. The increase in retail certificates of deposits was driven by special promotional rate offerings over the past year.

The percentages of retail deposit balances and commercial deposit balances of the total deposit balance at September 30, 2024 were 79% and 21%, respectively, compared to 78% and 22%, respectively, at June 30, 2024, and 79% and 21%, respectively, at September 30, 2023.

Uninsured deposits were 27%27%, and 28% of total deposits at September 30, 2024, at June 30, 2024, and at September 30, 2023, respectively. Uninsured amounts are estimated based on the portion of customer account balances that exceeded the FDIC limit of $250,000. Peoples pledges investment securities against certain governmental deposit accounts, which collateralized $714.1 million, or 36%, $748.3 million, or 38%, and $812.7 million, or 42% of the uninsured deposit balances at September 30, 2024, at June 30, 2024, and at September 30, 2023, respectively.

Average deposit balances during the third quarter of 2024 increased $29.9 million when compared to the linked quarter, and increased $331.5 million, or 5%, when compared to the third quarter of 2023. The increase in average deposit balances compared to the linked quarter was driven by increases of $122.1 million in retail certificates of deposits and $29.0 million in governmental deposits, partially offset by decreases of $72.3 million in brokered certificates of deposits and $22.7 million in interest bearing deposits. Total demand deposit accounts comprised 34%, 35% and 39% of total deposits at September 30, 2024, at June 30, 2024 and at September 30, 2023, respectively.

Stockholders' Equity:
Total stockholders' equity at September 30, 2024 increased $47.1 million, or 4%, compared to at June 30, 2024. This change was primarily driven by net income of $31.7 million and a decrease of $27.7 million in accumulated other comprehensive loss during the quarter, partially offset by dividends paid of $14.2 million. The decrease in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period.

Total stockholders' equity at September 30, 2024 increased $71.4 million, or 7%, compared to at December 31, 2023, which was due to net income of $90.3 million and a decrease of $19.1 million in accumulated other comprehensive loss in the first nine months of 2024, partially offset by dividends paid of $42.1 million.

Total stockholders' equity at September 30, 2024 increased $131.8 million, or 13%, compared to at September 30, 2023, which was due to net income of $124.1 million in the last twelve months and a decrease in other comprehensive loss of $61.3 million, partially offset by dividends paid of $56.2 million.

At September 30, 2024, the tier 1 risk-based capital ratio was 12.58%, compared to 12.53% at June 30, 2024, and 12.31% at September 30, 2023. The common equity tier 1 risk-based capital ratio was 11.79% at September 30, 2024, compared to 11.74% at June 30, 2024, and 11.57% at September 30, 2023. The total risk-based capital ratio was 13.48% at September 30, 2024, compared to 13.44% at June 30, 2024, and 13.14% at September 30, 2023. Peoples adopted the five-year transition to phase in the impact of the adoption of the current expected credit loss ("CECL") model (accounting standard) on regulatory capital ratios. Compared to at June 30, 2024, and at September 30, 2024, these ratios improved due to net income during the third quarter of 2024, partially offset by dividends paid.

At September 30, 2024, book value per common share and tangible book value per common share, which excludes goodwill and other intangible assets, were $31.65 and $20.29, respectively, compared to $30.36 and $18.91, respectively, at June 30, 2024, and $28.06 and $16.52, respectively, at September 30, 2023. The ratio of total stockholders' equity to total assets increased 63 basis points when compared to June 30, 2024. The tangible equity to tangible assets ratio, which excludes goodwill and other intangible assets, increased 64 basis points when compared to at June 30, 2024. Compared to at September 30, 2023, the total stockholders' equity to total assets ratio increased from 11.11% to 12.31%, and the tangible equity to tangible assets ratio increased from 6.85% to 8.25%. The ratios increased compared to at September 30, 2023, primarily due to net income over the last twelve months and a decrease in accumulated other comprehensive loss as a result of the changes in the market value of available-for-sale investment securities .

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 Marietta, Ohio since 1902, Peoples has established a heritage of financial stability, growth and community impact. Peoples had $9.1 billion in total assets as of September 30, 2024, and 149 locations, including 130 full-service bank branches in Ohio, West Virginia, Kentucky, Virginia, Washington D.C., and Maryland. Peoples' vision is to be the Best Community Bank in America.

Peoples is a member of the Russell 3000 index of United States ("U.S.") publicly-traded companies. Peoples offers services through Peoples Bank (which includes the divisions of Peoples Investment Services, Peoples Premium Finance and North Star Leasing), Peoples Insurance Agency, LLC, and Vantage Financial, LLC.

Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss third quarter 2024 results of operations on October 22, 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 the United States of America ("US GAAP"). Management uses these "non-US GAAP" financial measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-US GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with US GAAP, nor are they necessarily comparable to non-US GAAP performance measures that may be presented by other companies. Below is a listing of the non-US GAAP financial measures used in this news release:

  • Core non-interest expense is a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses and the 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, the 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 U.S. government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity;

(2)

the effects of inflationary pressures 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 State of Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or acquired companies to a variety of new and more stringent legal and regulatory requirements;

(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 U.S. economy generally, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, potential or imposed tariffs, uncertainties surrounding the upcoming U.S. Presidential election and potential changes in the U.S. Senate and House of Representatives, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, and changes in the relationship of the U.S. and U.S. global trading partners) and the impact these conditions may have on Peoples, Peoples' customers and Peoples' counterparties, and Peoples' assessment of the impact, which may be different than anticipated;

(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 California, Signature Bank in New York and First Republic Bank in California, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity, including Peoples' continued ability to grow deposits or maintain adequate deposit levels, and may further result in potential increased regulatory requirements, increased reputational risk and potential impacts to macroeconomic conditions;

(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 including severe weather events, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including Russia's war in Ukraine and the ongoing conflicts in the Middle East);

(27)

the potential deterioration of the U.S. economy due to financial, political or other shocks;

(28)

the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;

(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)

regulatory and legal matters, including the failure to resolve any outstanding matters on a timely basis and the potential of new regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;

(36)

Peoples' business may be adversely affected by increased political and regulatory scrutiny of corporate environmental, social and governance ("ESG") practices;

(37)

the effect of a fall in stock market prices on the asset and wealth management business; and

(38)

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 U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its September 30, 2024 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from the estimates and information contained in this news release.

PER COMMON SHARE DATA AND SELECTED RATIOS (Unaudited)



At or For the Three Months Ended


At or For the Nine Months Ended


September 30,


June 30,


September 30,


September 30,


2024


2024


2023


2024


2023

PER COMMON SHARE:










Earnings per common share:










   Basic

$       0.90


$       0.83


$       0.91


$       2.57


$        2.49

   Diluted

0.89


0.82


0.90


2.55


2.47

Cash dividends declared per common share

0.40


0.40


0.39


1.19


1.16

Book value per common share (a)

31.65


30.36


28.06


31.65


28.06

Tangible book value per common share (a)(b)

20.29


18.91


16.52


20.29


16.52

Closing price of common shares at end of period

$     30.09


$     30.00


$     25.38


$     30.09


$      25.38











SELECTED RATIOS:










Return on average stockholders' equity (c)

11.46 %


10.99 %


12.59 %


11.25 %


11.56 %

Return on average tangible equity (c)(d)

19.40 %


19.21 %


23.04 %


19.50 %


21.05 %

Return on average assets (c)

1.38 %


1.27 %


1.44 %


1.32 %


1.31 %

Return on average assets adjusted for non-core items (c)(e)

1.39 %


1.30 %


1.69 %


1.34 %


1.59 %

Efficiency ratio (f)(h)

55.10 %


59.19 %


58.38 %


57.43 %


59.69 %

Efficiency ratio adjusted for non-core items (g)(h)

55.67 %


59.19 %


52.53 %


57.65 %


54.19 %

Net interest margin (c)(h)

4.27 %


4.18 %


4.70 %


4.24 %


4.60 %

Dividend payout ratio (i)

44.74 %


48.94 %


43.26 %


46.65 %


47.70 %



(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)

Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate.

(i)

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


Nine Months Ended


September 30,


June 30,


September 30,


September 30,


2024


2024


2023


2024


2023

(Dollars in thousands, except per share data)

(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Total interest income

$            133,620


$             130,770


$            123,593


$        391,983


$         314,159

Total interest expense

44,708


44,157


30,319


129,818


63,154

Net interest income

88,912


86,613


93,274


262,165


251,005

Provision for credit losses

6,735


5,683


4,053


18,520


13,889

Net interest income after provision for credit losses

82,177


80,930


89,221


243,645


237,116











Non-interest income:










Electronic banking income

6,359


6,470


6,466


18,875


18,375

Trust and investment income

4,882


4,999


4,288


14,480


12,786

Deposit account service charges

4,520


4,339


4,516


13,082


12,192

Insurance income

4,271


4,109


4,250


14,878


13,679

Lease income

1,827


1,116


(66)


4,179


2,730

Bank owned life insurance income

460


1,037


1,375


2,997


2,924

Mortgage banking income

1,051


243


237


1,615


740

Net loss on investment securities

(74)


(353)


(7)


(428)


(2,108)

Net loss on asset disposals and other transactions

(795)


(428)


(307)


(1,564)


(2,218)

Other non-interest income

2,293


2,172


2,452


6,163


4,179

  Total non-interest income

24,794


23,704


23,204


74,277


63,279











Non-interest expense:










Salaries and employee benefit costs

37,085


36,564


36,608


112,542


106,661

Data processing and software expense

6,111


6,743


6,288


18,623


15,578

Net occupancy and equipment expense

5,905


6,142


5,501


18,330


15,836

Professional fees

2,896


2,935


3,456


8,798


13,775

Amortization of other intangible assets

2,786


2,787


3,280


8,361


7,951

Electronic banking expense

1,844


1,941


1,836


5,566


5,159

FDIC insurance expense

1,241


1,251


1,260


3,678


3,525

Other loan expenses

1,178


1,036


856


3,290


2,133

Franchise tax expense

917


760


772


2,558


2,678

Communication expense

814


736


752


2,349


2,089

Marketing expense

971


681


1,267


2,708


3,554

Other non-interest expense

4,342


7,182


9,820


16,510


19,859

  Total non-interest expense

66,090


68,758


71,696


203,313


198,798

  Income before income taxes

40,881


35,876


40,729


114,609


101,597

Income tax expense

9,197


6,869


8,847


24,334


22,059

    Net income

$              31,684


$               29,007


$              31,882


$          90,275


$           79,538

CONSOLIDATED STATEMENTS OF INCOME (Cont.)


Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 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

$              31,684


$               29,007


$              31,882


$          90,275


$           79,538

Less: Dividends paid on unvested common shares

215


218


143


576


388

Less: Undistributed loss allocated to unvested common shares

64


55


79


183


190

Net earnings allocated to common shareholders

$              31,405


$               28,734


$              31,660


$          89,516


$           78,960











Weighted-average common shares outstanding

34,793,704


34,764,489


34,818,346


34,766,281


31,771,061

Effect of potentially dilutive common shares

405,679


353,159


243,551


340,431


206,425

Total weighted-average diluted common shares outstanding

35,199,383


35,117,648


35,061,897


35,106,712


31,977,486











Earnings per common share – basic

$                  0.90


$                   0.83


$                  0.91


$              2.57


$               2.49

Earnings per common share – diluted

$                  0.89


$                   0.82


$                  0.90


$              2.55


$               2.47

Cash dividends declared per common share

$                  0.40


$                   0.40


$                  0.39


$              1.19


$               1.16











Weighted-average common shares outstanding – basic

34,793,704


34,764,489


34,818,346


34,766,281


31,771,061

Weighted-average common shares outstanding – diluted

35,199,383


35,117,648


35,061,897


35,106,712


31,977,486

Common shares outstanding at the end of period

35,538,607


35,498,977


35,395,990


35,538,607


35,395,990

 

CONSOLIDATED BALANCE SHEETS



September 30,


December 31,


2024


2023

(Dollars in thousands)

(Unaudited)



Assets




Cash and cash equivalents:




  Cash and due from banks

$            139,244


$            111,680

  Interest-bearing deposits in other banks

144,463


315,042

    Total cash and cash equivalents

283,707


426,722

Available-for-sale investment securities, at fair value (amortized cost of




 $1,189,792 at September 30, 2024 and $1,184,288 at December 31, 2023) (a)

1,080,667


1,048,322

Held-to-maturity investment securities, at amortized cost (fair value of




  $636,529 at September 30, 2024 and $612,022 at December 31, 2023) (a)

693,637


683,657

Other investment securities, at cost

55,691


63,421

    Total investment securities (a)

1,829,995


1,795,400

Loans and leases, net of deferred fees and costs (b)

6,271,839


6,159,196

Allowance for credit losses

(66,639)


(62,011)

    Net loans and leases

6,205,200


6,097,185

Loans held for sale

3,246


1,866

Bank premises and equipment, net of accumulated depreciation

105,202


103,856

Bank owned life insurance

143,065


140,554

Goodwill

362,414


362,169

Other intangible assets

41,508


50,003

Other assets

166,134


179,627

    Total assets

$         9,140,471


$         9,157,382

Liabilities




Deposits:




Non-interest-bearing

$         1,453,441


$         1,567,649

Interest-bearing

6,029,716


5,584,648

    Total deposits

7,483,157


7,152,297

Short-term borrowings

175,945


601,121

Long-term borrowings

236,824


216,241

Accrued expenses and other liabilities

119,573


134,189

    Total liabilities

$         8,015,499


$         8,103,848





Stockholders' Equity




Preferred shares, no par value, 50,000 shares authorized, no shares issued at September 30, 2024 or at
December 31, 2023


Common shares, no par value, 50,000,000 shares authorized, 36,772,459 shares issued at September 30,
2024 and 36,736,041 shares issued at December 31, 2023, including shares in treasury

865,326


865,227

Retained earnings

375,396


327,237

Accumulated other comprehensive loss, net of deferred income taxes

(82,496)


(101,590)

Treasury stock, at cost, 1,323,075 common shares at September 30, 2024 and 1,511,348 common shares
at December 31, 2023

(33,254)


(37,340)

    Total stockholders' equity

1,124,972


1,053,534

    Total liabilities and stockholders' equity

$         9,140,471


$         9,157,382





(a)

Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $0 and $236, respectively, as of September 30, 2024 and $0 and $238, respectively, as of December 31, 2023.

(b)

Also referred to throughout this document as "total loans" and "loans held for investment."

 

SELECTED FINANCIAL INFORMATION (Unaudited)



September 30,

June 30,

March 31,

December 31,

September 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

Loan Portfolio






Construction

$         320,094

$          340,601

$         314,687

$         364,019

$         374,016

Commercial real estate, other

2,180,491

2,195,979

2,243,780

2,196,957

2,189,984

Commercial and industrial

1,250,152

1,258,063

1,214,615

1,184,986

1,128,809

Premium finance

286,983

293,349

238,962

203,177

189,251

Leases

433,009

430,651

422,694

414,060

402,635

Residential real estate

777,542

789,344

781,888

791,095

791,965

Home equity lines of credit

233,109

227,608

221,079

208,675

203,940

Consumer, indirect

677,056

675,054

650,228

666,472

668,371

Consumer, direct

112,198

113,655

113,588

128,769

134,562

Deposit account overdrafts

1,205

1,067

1,306

986

857

    Total loans and leases

$      6,271,839

$       6,325,371

$      6,202,827

$      6,159,196

$      6,084,390

Total acquired loans and leases (a)

$      1,585,552

$       1,686,784

$      1,757,169

$      1,825,129

$      1,925,554

    Total originated loans and leases

$      4,686,287

$       4,638,587

$      4,445,658

$      4,334,067

$      4,158,836

Deposit Balances






Non-interest-bearing deposits (b)

$      1,453,441

$       1,472,697

$      1,468,363

$      1,567,649

$      1,569,095

Interest-bearing deposits:






  Interest-bearing demand accounts (b)

1,065,912

1,083,512

1,107,712

1,144,357

1,181,079

  Retail certificates of deposit

1,884,139

1,812,874

1,680,413

1,443,417

1,198,733

  Money market deposit accounts

894,690

869,159

859,961

775,488

730,902

  Governmental deposit accounts

824,136

766,337

825,170

726,713

761,625

  Savings accounts

864,935

880,542

901,493

919,244

987,170

  Brokered deposits

495,904

412,653

483,444

575,429

608,914

    Total interest-bearing deposits

$      6,029,716

$       5,825,077

$      5,858,193

$      5,584,648

$      5,468,423

    Total deposits

$      7,483,157

$       7,297,774

$      7,326,556

$      7,152,297

$      7,037,518

Total demand deposits (b)

$      2,519,353

$       2,556,209

$      2,576,075

$      2,712,006

$      2,750,174

Asset Quality






Nonperforming assets (NPAs):






  Loans 90+ days past due and accruing

$          27,578

$              7,592

$            7,662

$            6,716

$            9,117

  Nonaccrual loans

34,807

33,669

31,361

25,477

26,187

    Total nonperforming loans (NPLs) (f)

62,385

41,261

39,023

32,193

35,304

  Other real estate owned (OREO)

7,397

7,409

7,238

7,174

7,174

Total NPAs

$          69,782

$            48,670

$          46,261

$          39,367

$          42,478

Criticized loans (c)

$        237,627

$          239,943

$        256,565

$        235,239

$        213,156

Classified loans (d)

133,241

120,180

147,518

120,027

124,836

Allowance for credit losses as a percent of NPLs (f)

106.82 %

160.56 %

166.11 %

194.38 %

178.23 %

NPLs as a percent of total loans (f)

0.99 %

0.65 %

0.63 %

0.52 %

0.58 %

NPAs as a percent of total assets (f)

0.76 %

0.53 %

0.50 %

0.43 %

0.48 %

NPAs as a percent of total loans and OREO (f)

1.11 %

0.77 %

0.74 %

0.64 %

0.70 %

Criticized loans as a percent of total loans (c)

3.79 %

3.79 %

4.14 %

3.82 %

3.50 %

Classified loans as a percent of total loans (d)

2.12 %

1.90 %

2.38 %

1.95 %

2.05 %

Allowance for credit losses as a percent of total loans

1.06 %

1.05 %

1.05 %

1.01 %

1.03 %

Total demand deposits as a percent of total deposits (b)

33.67 %

35.03 %

35.16 %

37.92 %

39.08 %

Capital Information (e)(g)(i)






Common equity tier 1 capital ratio (h)

11.79 %

11.74 %

11.69 %

11.75 %

11.57 %

Tier 1 risk-based capital ratio

12.58 %

12.53 %

12.50 %

12.58 %

12.31 %

Total risk-based capital ratio (tier 1 and tier 2)

13.48 %

13.44 %

13.40 %

13.38 %

13.14 %

Leverage ratio

9.86 %

9.56 %

9.43 %

9.57 %

9.34 %

Common equity tier 1 capital

$         821,192

$          799,710

$         780,017

$         766,691

$         752,728

Tier 1 capital

875,800

854,050

834,089

820,495

801,010

Total capital (tier 1 and tier 2)

938,474

916,073

894,662

873,225

855,054

Total risk-weighted assets

$      6,962,652

$       6,814,149

$      6,674,114

$      6,524,577

$      6,505,779

Total stockholders' equity to total assets

12.31 %

11.68 %

11.46 %

11.50 %

11.11 %

Tangible equity to tangible assets (j)

8.25 %

7.61 %

7.37 %

7.33 %

6.85 %



(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)

September 30, 2024 data based on preliminary analysis and subject to revision.

(h)

Peoples' capital conservation buffer was 5.24% at September 30, 2024, 5.66% at June 30, 2024, 5.60% at March 31, 2024, 5.38% at December 31, 2023, 5.14% at September 30, 2023, compared to required capital conservation buffer of 2.50%

(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


Nine Months Ended


September 30,


June 30,


September 30,


September 30,


2024


2024


2023


2024


2023

(Dollars in thousands)

(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Provision for credit losses










Provision for credit losses

$           6,279


$              5,397


$            3,764


$      17,510


$     13,188

Provision for checking account overdrafts

456


286


289


1,010


701

  Total provision for credit losses

$           6,735


$              5,683


$            4,053


$      18,520


$     13,889











Net Charge-Offs










Gross charge-offs

$           6,591


$              4,607


$            2,834


$      15,072


$       6,730

Recoveries

507


374


516


1,435


1,672

  Net charge-offs

$           6,084


$              4,233


$            2,318


$      13,637


$       5,058











Net Charge-Offs (Recoveries) by Type










Construction

$                —


$                   —


$                 —


$             —


$              9

Commercial real estate, other

(100)


80


181


109


178

Commercial and industrial

258


46


196


532


(243)

Premium finance

33


51


21


130


55

Leases

3,697


2,204


737


6,959


1,641

Residential real estate

(58)


(4)


23


(65)


25

Home equity lines of credit

2


9


32


4


106

Consumer, indirect

1,634


1,450


777


4,474


2,439

Consumer, direct

143


126


81


486


213

Deposit account overdrafts

475


271


270


1,008


635

  Total net charge-offs

$           6,084


$              4,233


$            2,318


$      13,637


$       5,058











As a percent of average total loans (annualized)

0.38 %


0.27 %


0.15 %


0.29 %


0.12 %

 

SUPPLEMENTAL INFORMATION (Unaudited)



September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)

2024


2024


2024


2023


2023











Trust assets under administration and management

$         2,124,320


$          2,071,832


$           2,061,402


$          2,021,249


$         1,900,488

Brokerage assets under administration and management

1,608,368


1,567,775


1,530,954


1,473,814


1,364,372

Mortgage loans serviced for others

347,719


341,298


348,937


356,784


366,996

Employees (full-time equivalent)

1,496


1,489


1,498


1,478


1,482











 

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)



Three Months Ended


September 30, 2024


June 30, 2024


September 30, 2023

(Dollars in thousands)

Balance

Income/

Expense

Yield/ Cost


Balance

Income/

Expense

Yield/ Cost


Balance

Income/

Expense

Yield/ Cost

Assets












Short-term investments

$      57,436

$           954

6.60 %


$    178,094

$    2,502

5.65 %


$      62,609

$       801

5.08 %

Investment securities (a)(b)

1,897,701

16,397

3.46 %


1,870,372

16,144

3.45 %


1,819,248

14,116

3.10 %

Loans (b)(c):












Construction

330,779

6,654

7.87 %


328,943

6,595

7.93 %


400,396

9,983

9.76 %

Commercial real estate, other

2,049,150

37,640

7.19 %


2,074,718

36,420

6.94 %


1,965,927

34,369

6.84 %

Commercial and industrial

1,254,709

24,730

7.71 %


1,230,290

23,897

7.68 %


1,128,420

22,561

7.82 %

Premium finance

288,841

6,052

8.20 %


260,513

5,746

8.73 %


179,390

3,565

7.78 %

Leases

424,549

11,922

10.99 %


419,764

11,982

11.29 %


384,606

11,508

11.71 %

Residential real estate (d)

920,703

12,110

5.26 %


925,629

11,460

4.95 %


952,863

11,879

4.99 %

Home equity lines of credit

231,760

4,836

8.30 %


225,362

4,612

8.23 %


201,973

4,012

7.88 %

Consumer, indirect

681,002

10,372

6.06 %


656,405

9,669

5.92 %


662,462

8,774

5.25 %

Consumer, direct

120,941

2,271

7.47 %


119,048

2,095

7.08 %


139,595

2,416

6.87 %

Total loans

6,302,434

116,587

7.27 %


6,240,672

112,476

7.16 %


6,015,632

109,067

7.13 %

Allowance for credit losses

(66,154)




(64,745)




(60,724)



Net loans

6,236,280




6,175,927




5,954,908



Total earning assets

8,191,417

133,938

6.44 %


8,224,393

131,122

6.34 %


7,836,765

123,984

6.23 %













Goodwill and other intangible assets

405,022




407,864




411,229



Other assets

546,313




548,197




558,415



Total assets

$ 9,142,752




$ 9,180,454




$ 8,806,409















Liabilities and Equity












Interest-bearing deposits:












Savings accounts

$    870,914

$           227

0.10 %


$    892,465

$       222

0.10 %


$ 1,058,606

$       447

0.17 %

Governmental deposit accounts

824,918

5,960

2.87 %


795,913

5,594

2.83 %


758,409

4,012

2.10 %

Interest-bearing demand accounts

1,072,850

591

0.22 %


1,095,553

495

0.18 %


1,198,100

520

0.17 %

Money market deposit accounts

854,075

5,609

2.61 %


850,375

5,419

2.56 %


717,765

2,943

1.63 %

Retail certificates of deposit

1,865,312

20,151

4.30 %


1,743,238

18,423

4.25 %


1,043,579

7,161

2.72 %

Brokered deposits (e)

410,035

4,713

4.57 %


482,310

5,506

4.59 %


631,410

7,399

4.65 %

Total interest-bearing deposits

5,898,104

37,251

2.51 %


5,859,854

35,659

2.45 %


5,407,869

22,482

1.65 %

Short-term borrowings (e)

318,752

4,050

5.07 %


407,273

4,978

4.90 %


458,462

5,169

4.48 %

Long-term borrowings

234,779

3,407

5.75 %


234,961

3,520

5.98 %


148,234

2,668

7.19 %

Total borrowed funds

553,531

7,457

5.36 %


642,234

8,498

5.30 %


606,696

7,837

4.72 %

Total interest-bearing liabilities

6,451,635

44,708

2.76 %


6,502,088

44,157

2.73 %


6,014,565

30,319

1.96 %













Non-interest-bearing deposits

1,468,498




1,476,870




1,627,231



Other liabilities

122,861




140,042




159,755



Total liabilities

8,042,994




8,119,000




7,801,551



Stockholders' equity

1,099,758




1,061,454




1,004,858



Total liabilities and stockholders' equity

$ 9,142,752




$ 9,180,454




$ 8,806,409















Net interest income/spread (b)


$      89,230

3.68 %



$  86,965

3.61 %



$  93,665

4.27 %

Net interest margin (b)



4.27 %




4.18 %




4.70 %

 

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited) -- (Continued)



Nine Months Ended


September 30, 2024


September 30, 2023

(Dollars in thousands)

Balance

Income/

Expense

Yield/ Cost


Balance

Income/

Expense

Yield/ Cost

Assets








Short-term investments

$          125,720

$         5,377

5.71 %


$            57,271

$           1,862

4.35 %

Investment securities (a)(b)

1,867,003

47,775

3.41 %


1,827,261

40,673

2.97 %

Loans (b)(c):








Construction

333,048

19,652

7.75 %


333,895

20,437

8.07 %

Commercial real estate, other

2,066,631

111,302

7.08 %


1,671,019

82,403

6.50 %

Commercial and industrial

1,229,491

72,142

7.71 %


1,021,573

56,728

7.32 %

Premium finance

253,383

16,362

8.48 %


160,729

8,374

6.87 %

Leases

418,084

35,970

11.30 %


362,222

31,426

11.44 %

Residential real estate (d)

925,756

34,892

5.03 %


903,622

32,414

4.78 %

Home equity lines of credit

224,648

13,745

8.17 %


190,225

10,634

7.47 %

Consumer, indirect

664,610

29,322

5.89 %


651,578

23,947

4.91 %

Consumer, direct

121,359

6,465

7.12 %


125,826

6,401

6.80 %

Total loans

6,237,010

339,852

7.19 %


5,420,689

272,764

6.66 %

Allowance for credit losses

(64,052)




(55,757)



Net loans

6,172,958




5,364,932



Total earning assets

8,165,681

393,004

6.36 %


7,249,464

315,299

5.76 %









Goodwill and other intangible assets

407,858




374,924



Other assets

541,515




496,497



Total assets

$       9,115,054




$       8,120,885











Liabilities and Equity








Interest-bearing deposits:








Savings accounts

$          889,629

$            675

0.10 %


$       1,066,783

$           1,166

0.15 %

Governmental deposit accounts

795,019

16,639

2.80 %


696,359

7,408

1.42 %

Interest-bearing demand accounts

1,092,407

1,538

0.19 %


1,160,698

1,232

0.14 %

Money market deposit accounts

829,825

15,917

2.56 %


661,272

5,774

1.17 %

Retail certificates of deposit

1,730,818

54,472

4.20 %


817,512

13,120

2.15 %

Brokered  deposit (e)

486,832

16,972

4.66 %


452,574

13,846

4.09 %

Total interest-bearing deposits

5,824,530

106,213

2.44 %


4,855,198

42,546

1.17 %

Short-term borrowings (e)

371,426

13,212

4.75 %


477,826

14,940

4.18 %

Long-term borrowings

233,343

10,392

5.91 %


126,449

5,668

5.98 %

Total borrowed funds

604,769

23,604

5.20 %


604,275

20,608

4.14 %

Total interest-bearing liabilities

6,429,299

129,817

2.70 %


5,459,473

63,154

1.50 %









Non-interest-bearing deposits

1,482,318




1,607,411



Other liabilities

132,003




134,003



Total liabilities

8,043,620




7,200,887



Stockholders' equity

1,071,434




919,998



Total liabilities and stockholders' equity

$       9,115,054




$       8,120,885











Net interest income/spread (b)


$     263,187

3.66 %



$       252,145

4.26 %

Net interest margin (b)



4.24 %




4.60 %



(a)

Average balances are based on carrying value.

(b)

Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate.

(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


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

(Dollars in thousands)

2024


2024


2023


2024


2023











Core non-interest expense:










Total non-interest expense

$               66,090


$               68,758


$               71,696


$         203,313


$         198,798

Less: acquisition-related expenses

(662)



4,434


(746)


15,694

Less: pension settlement charges



2,424



2,424

Add: COVID -19 Employee Retention Credit





548

Core non-interest expense

$               66,752


$               68,758


$               64,838


$         204,059


$         181,228












Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

(Dollars in thousands)

2024


2024


2023


2024


2023











Efficiency ratio:










Total non-interest expense

$           66,090


$            68,758


$           71,696


$ 203,313


$ 198,798

Less: amortization of other intangible assets

2,786


2,787


3,280


8,361


7,951

Adjusted total non-interest expense

63,304


65,971


68,416


194,952


190,847











Total non-interest income

24,794


23,704


23,204


74,277


63,279

Less: net loss on investment securities

(74)


(353)


(7)


(428)


(2,108)

Less: net loss on asset disposals and other transactions

(795)


(428)


(307)


(1,564)


(2,218)

Total non-interest income, excluding net gains and losses

25,663


24,485


23,518


76,269


67,605











Net interest income

88,912


86,613


93,274


262,165


251,005

Add: fully tax-equivalent adjustment (a)

318


352


391


1,022


1,140

Net interest income on a fully tax-equivalent basis

89,230


86,965


93,665


263,187


252,145











Adjusted revenue

$         114,893


$          111,450


$         117,183


$ 339,456


$ 319,750











Efficiency ratio

55.10 %


59.19 %


58.38 %


57.43 %


59.69 %











Efficiency ratio adjusted for non-core items:









Core non-interest expense

$           66,752


$            68,758


$           64,838


$ 204,059


$ 181,228

Less: amortization of other intangible assets

2,786


2,787


3,280


8,361


7,951

Adjusted core non-interest expense

63,966


65,971


61,558


195,698


173,277











Adjusted revenue

$         114,893


$          111,450


$         117,183


$ 339,456


$ 319,750











Efficiency ratio adjusted for non-core items

55.67 %


59.19 %


52.53 %


57.65 %


54.19 %













(a)

Tax effect is calculated using a 21% statutory federal corporate income tax rate.

 

NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)



At or For the Three Months Ended


September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands, except per share data)

2024


2024


2024


2023


2023











Tangible equity:










Total stockholders' equity

$     1,124,972


$     1,077,833


$     1,062,002


$     1,053,534


$        993,219

Less: goodwill and other intangible assets

403,922


406,417


409,285


412,172


408,494

Tangible equity

$        721,050


$        671,416


$        652,717


$        641,362


$        584,725











Tangible assets:










Total assets

$     9,140,471


$     9,226,461


$     9,270,774


$     9,157,382


$     8,942,534

Less: goodwill and other intangible assets

403,922


406,417


409,285


412,172


408,494

Tangible assets

$     8,736,549


$     8,820,044


$     8,861,489


$     8,745,210


$     8,534,040











Tangible book value per common share:










Tangible equity

$        721,050


$        671,416


$        652,717


$        641,362


$        584,725

Common shares outstanding

35,538,607


35,498,977


35,486,234


35,314,745


35,395,990











Tangible book value per common share

$            20.29


$            18.91


$            18.39


$            18.16


$            16.52











Tangible equity to tangible assets ratio:





Tangible equity

$        721,050


$        671,416


$        652,717


$        641,362


$        584,725

Tangible assets

$     8,736,549


$     8,820,044


$     8,861,489


$     8,745,210


$     8,534,040











Tangible equity to tangible assets

8.25 %


7.61 %


7.37 %


7.33 %


6.85 %












Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

(Dollars in thousands)

2024


2024


2023


2024


2023











Pre-provision net revenue:










Income before income taxes

$               40,881


$               35,876


$               40,729


$         114,609


$         101,597

Add: provision for credit losses

6,735


5,683


4,053


18,520


13,889

Add: loss on OREO

2



1


2


1,623

Add: loss on investment securities

74


353


7


428


2,108

Add: loss on other assets

764


397


283


1,470


557

Add: loss on other transactions

28


31


23


92


38

Pre-provision net revenue

$               48,484


$               42,340


$               45,096


$         135,121


$         119,812





















 

NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)



Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

(Dollars in thousands)

2024


2024


2023


2024


2023











Annualized net income adjusted for non-core items:





Net income

$         31,684


$             29,007


$        31,882


$    90,275


$     79,538

Add: net loss on investment securities

74


353


7


428


2,108

Less: tax effect of net loss on investment securities (a)

16


74


2


90


443

Add: net loss on asset disposals and other transactions

795


428


307


1,564


2,218

Less: tax effect of net loss on asset disposals and other transactions (a)

167


90


65


328


466

Add: acquisition-related expenses

(662)



4,434


(746)


15,694

Less: tax effect of acquisition-related expenses (a)

(139)



931


(157)


3,296

Add: pension settlement charges



2,424



2,424

Less: tax effect of pension settlement charges (a)



509



509

Less: COVID -19 Employee Retention Credit





548

Add: tax effect of COVID -19 Employee Retention Credit (a)





115

Net income adjusted for non-core items

$         31,847


$             29,624


$        37,547


$    91,260


$     96,835











Days in the period

92


91


92


274


273

Days in the year

366


366


365


366


365

Annualized net income

$       126,047


$           116,666


$      126,488


$  120,586


$   106,342

Annualized net income adjusted for non-core items

$       126,696


$           119,147


$      148,964


$  121,902


$   129,468

Return on average assets:










Annualized net income

$       126,047


$           116,666


$      126,488


$  120,586


$   106,342

Total average assets

$    9,142,752


$        9,180,454


$   8,806,409


$  9,115,054


$  8,120,885

Return on average assets

1.38 %


1.27 %


1.44 %


1.32 %


1.31 %

Return on average assets adjusted for non-core items:





Annualized net income adjusted for non-core items

$       126,696


$           119,147


$      148,964


$  121,902


$   129,468

Total average assets

$    9,142,752


$        9,180,454


$   8,806,409


$  9,115,054


$  8,120,885

Return on average assets adjusted for non-core items

1.39 %


1.30 %


1.69 %


1.34 %


1.59 %



(a)

Tax effect is calculated using a 21% statutory federal corporate income tax rate.

 

NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)



For the Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

(Dollars in thousands)

2024


2024


2023


2024


2023











Annualized net income excluding amortization of other intangible assets:





Net income

$         31,684


$        29,007


$        31,882


$        90,275


$         79,538

Add: amortization of other intangible assets

2,786


2,787


3,280


8,361


7,951

Less: tax effect of amortization of other intangible assets (a)

585


585


689


1,756


1,670

Net income excluding amortization of other intangible assets

$         33,885


$        31,209


$        34,473


$        96,880


$         85,819











Days in the period

92


91


92


274


273

Days in the year

366


366


365


366


365

Annualized net income

$       126,047


$      116,666


$      126,488


$      120,586


$       106,342

Annualized net income excluding amortization of other intangible assets

$       134,803


$      125,522


$      136,768


$      129,409


$       114,740











Average tangible equity:





Total average stockholders' equity

$    1,099,758


$   1,061,454


$   1,004,858


$   1,071,434


$       919,998

Less: average goodwill and other intangible assets

405,022


407,864


411,229


407,858


374,924

Average tangible equity

$       694,736


$      653,590


$      593,629


$      663,576


$       545,074











Return on average stockholders' equity ratio:






Annualized net income

$       126,047


$      116,666


$      126,488


$      120,586


$       106,342

Average stockholders' equity

$    1,099,758


$   1,061,454


$   1,004,858


$   1,071,434


$       919,998











Return on average stockholders' equity

11.46 %


10.99 %


12.59 %


11.25 %


11.56 %







Return on average tangible equity ratio:






Annualized net income excluding amortization of other intangible assets

$       134,803


$      125,522


$      136,768


$      129,409


$       114,740

Average tangible equity

$       694,736


$      653,590


$      593,629


$      663,576


$       545,074











Return on average tangible equity

19.40 %


19.21 %


23.04 %


19.50 %


21.05 %











(a)

Tax effect is calculated using a 21% statutory federal corporate income tax rate.

 

Cision View original content:https://www.prnewswire.com/news-releases/peoples-bancorp-inc-announces-third-quarter-2024-results-302282251.html

SOURCE Peoples Bancorp Inc.

FAQ

What were Peoples Bancorp's earnings for Q3 2024?

Peoples Bancorp's net income for Q3 2024 was $31.7 million, or $0.89 per diluted share.

How did Peoples Bancorp's net interest income perform in Q3 2024?

Net interest income increased by $2.3 million compared to Q2 2024.

What was the provision for credit losses for Peoples Bancorp in Q3 2024?

The provision for credit losses was $6.7 million in Q3 2024.

How did Peoples Bancorp's non-interest income change in Q3 2024?

Total non-interest income increased by $1.2 million compared to the previous quarter.

What was the change in Peoples Bancorp's total deposits in Q3 2024?

Total deposits increased by $185.4 million in Q3 2024.

Did Peoples Bancorp's net interest margin change in Q3 2024?

Yes, the net interest margin improved to 4.27% in Q3 2024.

What was the impact of the Limestone Merger on Peoples Bancorp's Q3 2024 results?

The Limestone Merger contributed to the financials with significantly reduced acquisition-related expenses.

Peoples Bancorp Inc/OH

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