MARIETTA, Ohio, July 25,
2023 /PRNewswire/ -- Peoples Bancorp Inc.
("Peoples") (Nasdaq: PEBO) today announced results for the three
and six months ended June 30, 2023. Peoples reported net
income of $21.1 million for the
second quarter of 2023, representing earnings per diluted common
share of $0.64. In comparison,
Peoples reported net income of $26.6
million, representing earnings per diluted common share of
$0.94, for the first quarter of 2023,
and net income of $24.9 million,
representing earnings per diluted common share of $0.88, for the second quarter of 2022. For the
six months ended June 30, 2023, Peoples recorded net income of
$47.7 million, or $1.56 per diluted common share, compared to
$48.5 million, or $1.72 per diluted common share, for the six
months ended June 30, 2022.
The provision for (recovery of) 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 $0.19 for the second quarter of 2023, compared to
$0.05 for the first quarter of 2023,
while the release of provision positively impacted earnings per
diluted common share by $0.02 for the
second quarter of 2022. For the first six months of 2023, the
provision negatively impacted earnings per diluted common share by
$0.25, compared to the release of
provision positively impacting earnings per diluted common share by
$0.21 for the first six months of
2022.
Non-core items, and the related tax effect of each, in net
income primarily included acquisition-related expenses. Non-core
items negatively impacted earnings per diluted common share by
$0.28 for the second quarter of 2023,
$0.07 for the first quarter of 2023,
and $0.02 for the second quarter of
2022. Non-core items negatively impacted earnings per diluted share
by $0.37 and $0.06 for the six months ended June 30, 2023
and 2022, respectively.
"We are delighted to have closed on our merger with Limestone,"
said Chuck Sulerzyski, President and
Chief Executive Officer. "We have already begun to see the results
of the merger throughout the second quarter, which have added to
our already impressive first half of 2023. We are grateful for the
dedication of all colleagues who made this acquisition possible and
remain bullish on our future together."
Completion of the Limestone Merger:
As of 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 related to the Limestone Merger which
included $10.8 million and
$11.2 million in other
non-interest expense for the second quarter and the six months
ended June 30, 2023, respectively. For the second quarter of
2023, the $10.8 million of
non-interest expense consisted of $5.2 million in salaries and employee
benefit costs, $4.8 million in
professional fees, $0.5 million in
insurance expense, $0.1 million in
electronic banking expense, and $0.2
million in various other non-interest expense line items.
For the six months ended June 30, 2023, the $11.2 million of non-interest expense consisted
of $5.2 million in salaries and
employee benefit costs, $5.1 million in professional fees,
$0.5 million in insurance expense,
$0.1 million of printing costs (which
is a component of other non-interest expense), $0.1 million in electronic banking expense, and
$0.2 million in various other
non-interest expense line items.
Investment Portfolio Restructuring:
During the first
quarter of 2023, Peoples executed the sales of $96.7 million of its lower yielding
available-for-sale investment securities for an after-tax loss of
$1.6 million. Proceeds from the
sale were used to pay down overnight borrowings. The loss on the
sale of these available-for-sale investment securities had a
nominal impact on tangible book value as such loss was previously
reflected in capital through accumulated other comprehensive loss.
The realized losses recognized due to these transactions are
projected to be earned back within the 2023 fiscal year. There were
no sales of investment securities pursuant to this restructuring
during the second quarter of 2023.
Statement of Operations Highlights:
- Net interest income for the second quarter of 2023
increased $12.0 million, or 16%,
compared to the linked quarter and increased $23.4 million, or 38%, compared to the second
quarter of 2022.
-
- Net interest margin increased 1 basis point to 4.54% for the
second quarter of 2023, compared to 4.53% for the linked quarter
and increased 70 basis points compared to 3.84% for the second
quarter of 2022.
- The increase in net interest margin for the second quarter of
2023 compared to the linked quarter was primarily driven by the
accretion on the acquired Limestone portfolio as well as increases
in market interest rates.
- The increase in net interest income for the second quarter of
2023 compared to the second quarter of 2022 was driven by increases
in market interest rates and the accretion on the acquired
Limestone portfolio.
- Peoples recorded a provision for credit losses of
$8.0 million for the second quarter
of 2023, compared to a provision for credit losses of $1.9 million for the first quarter of 2023, and a
recovery of credit losses of $0.8
million for the second quarter of 2022.
-
- The provision for credit losses in the second quarter of 2023
was due to a provision for credit losses of $9.4 million established for the non-purchased
credit deteriorated loans acquired in the Limestone Merger,
partially offset by the release of reserves on individually
analyzed loans and improvements in macro-economic conditions. The
provision for credit losses in the linked quarter was largely
attributable to a deterioration of macro-economic conditions and an
increase in charge-off activity, partially offset by a reduction in
reserves for individually analyzed loans. The recovery of credit
losses in the second quarter of 2022 was attributable to an
improvement in economic factors and loss drivers within the current
expected credit loss ("CECL") model.
- Net charge-offs were $1.2
million, or 0.09% of average total loans annualized, for the
second quarter of 2023, compared to $1.5
million, or 0.13%, for the linked quarter and $1.5 million, or 0.14%, for the second quarter of
2022.
- Total non-interest income, excluding net gains and
losses, for the second quarter of 2023 increased $1.6 million, or 8%, compared to the linked
quarter, and increased $3.3 million,
or 17%, compared to the second quarter of 2022.
-
- The increase in non-interest income, excluding gains and
losses, for the second quarter of 2023 when compared to the first
quarter of 2023 was primarily due to an increase in lease income,
mostly from Vantage Financial, LLC ("Vantage"), and increased
electronic banking income and deposit account service charge income
from the additional customers brought in from the Limestone Merger.
The increase in lease income for the second quarter of 2023 when
compared to the linked quarter was due to increases in residual
sales and month-to-month lease income.
- Total non-interest income, excluding net gains and losses, for
the first six months of 2023 was 22% of total revenue (defined as
net interest income plus total non-interest income excluding net
gains and losses).
- Total non-interest expense increased $14.1 million, or 25%, compared to the linked
quarter and increased $20.7 million,
or 42%, compared to the second quarter of 2022.
-
- The increase in total non-interest expense for the second
quarter of 2023 when compared to the linked quarter was primarily
attributable to a $10.2 million
increase in acquisition-related expenses.
- For the second quarter of 2023, the efficiency ratio was 62.7%.
When adjusted for non-core items, the efficiency ratio was 53.3%
for the second quarter of 2023.
Balance Sheet Highlights:
- Period-end total loan and lease balances at June 30, 2023 increased $1.2 billion, or 26%, compared to March 31, 2023.
-
- The increases in period-end and average total loan and lease
balances were primarily the result of loans acquired in the
Limestone Merger totaling $1.1
billion at the time of the Limestone Merger.
- Excluding the loans acquired through the Limestone Merger,
period-end loan and lease balances increased $146.4 million, primarily due to increases of (i)
$71.3 million in construction loans,
(ii) $25.3 million in commercial and
industrial loans and (iii) $23.1
million in leases.
- Asset quality metrics remained stable during the
quarter.
-
- Delinquency trends improved slightly as loans considered
current comprised 99.0% of the loan portfolio at June 30, 2023, compared to 98.8% at March 31, 2023.
- Nonperforming assets at June 30,
2023 decreased $0.9 million
compared to March 31, 2023. The decrease was primarily
attributable to reductions in nonaccrual commercial real estate
loans and other real estate owned ("OREO"), which were largely
offset by increases in nonperforming and nonaccrual leases.
- Criticized loans increased $22.4
million during the second quarter of 2023 when compared to
the end of the linked quarter. The increase was primarily driven by
criticized loans acquired in the Limestone Merger.
- Classified loans increased $18.9
million during the second quarter of 2023 when compared to
the end of the linked quarter. The increase was primarily driven by
the Limestone Merger.
- Period-end total deposit balances at June 30, 2023 increased $1.2 billion, or 20%, compared to at March 31, 2023.
-
- The increase was driven by the deposits acquired in the
Limestone Merger, which included $821.3
million of interest-bearing deposits and $261.5 million of non-interest-bearing
deposits.
- Excluding the acquired Limestone deposit balances, deposits at
June 30, 2023 increased $88.6 million, primarily due to increases of
$241.4 million in brokered
certificates of deposits and $139.2
million in retail certificates of deposit, partially offset
by decreases of $133.9 million,
$59.9 million, $50.0 million and $41.1
million in non-interest bearing deposits, savings accounts,
governmental deposit accounts, and interest-bearing demand deposit
accounts, respectively.
- The percentages of retail deposit balances and commercial
deposit balances of the total deposit balance at June 30, 2023 were 78% and 22%, respectively,
compared to 75% and 25%, respectively, at March 31, 2023.
- Total demand deposit balances were 42% and 46% of total deposit
balances at June 30, 2023 and at
March 31, 2023, respectively.
- Total loan balances were 86% of total deposit balances at
June 30, 2023 and 82% of total
deposit balances at March 31,
2023.
- At both June 30, 2023 and
March 31, 2023, 32% of our deposit
balances exceeded the FDIC insurance limit of $250,000. Peoples pledges investment securities
against certain governmental deposit accounts, which collateralized
$749.9 million, or 38%, of the
uninsured deposit balances at June 30, 2023.
Net Interest Income:
Net interest income was
$84.9 million for the second quarter
of 2023, an increase of $12.0
million, or 16%, compared to the linked quarter. The
increase in net interest income was primarily due to net interest
income provided by Limestone following the Limestone Merger and
increases in market interest rates. Net interest margin was 4.54%
for the second quarter of 2023, compared to 4.53% for the linked
quarter. The increase in net interest margin was primarily driven
by the accretion on the acquired Limestone portfolio as well as
increases in market interest rates. Also impacting the increases in
net interest income and net interest margin were 43 basis points of
improvement in loan yields due to recent increases in market
interest rates and a shift in the composition of the loan portfolio
into higher-yielding leases, and 29 basis points of improvement in
investment yields when compared to the linked quarter due to sales
of lower-yielding investment securities and securities acquired in
the Limestone Merger. Partially offsetting this benefit was a shift
in the composition of funding sources combined with an increase in
market interest rates for deposits and other funding sources.
Net interest income for the second quarter of 2023 increased
$23.4 million, or 38%, compared to
the second quarter of 2022. Net interest margin for the second
quarter of 2023 increased 70 basis points compared to 3.84% for the
second quarter of 2022. The increase in net interest income
compared to the second quarter of 2022 was driven by increases in
market interest rates, the Limestone Merger and organic growth.
Accretion income, net of amortization expense, from acquisitions
was $4.5 million for the second
quarter of 2023, $2.0 million for the
first quarter of 2023 and $3.9
million for the second quarter of 2022, which added 24 basis
points, 13 basis points and 25 basis points, respectively, to net
interest margin. The increases in accretion income for the second
quarter of 2023 when compared to the linked quarter and the second
quarter of 2022 were driven by accretion from the Limestone
Merger.
For the first six months of 2023, net interest income increased
$42.0 million, or 36%, compared to
the first six months of 2022, while net interest margin increased
90 basis points to 4.53%. The increase in net interest income was
driven by increases in market interest rates and the additional net
interest income from the Limestone Merger. Partially offsetting
this benefit was a shift in the composition of funding sources
combined with an increase in market interest rates for deposits and
other funding sources.
Accretion income, net of amortization expense, from acquisitions
was $6.5 million for the six months
ended June 30, 2023, compared to $6.7
million for the six months ended June 30, 2022, which
added 18 and 21 basis points, respectively, to net interest margin.
The decrease in accretion income for the first six months of 2023
compared to the same period in 2022 was due to more accretion in
2022 from the acquisitions of Vantage and NS Leasing, LLC ("NSL")
and the merger with Premier Financial Bancorp, Inc. ("Premier"), as
compared to accretion from the Limestone Merger.
Provision for (Recovery of) Credit Losses:
The
provision for credit losses was $8.0
million for the second quarter of 2023, compared to a
provision for credit losses of $1.9
million for the linked quarter and a recovery of credit
losses of $0.8 million for the second
quarter of 2022. The provision for credit losses in the second
quarter of 2023 was due to a provision of $9.4 million for the non-purchased credit
deteriorated loans acquired in the Limestone Merger, partially
offset by the release of reserves of $1.7
million on individually analyzed loans and a recovery of
$1.0 million due to improvements in
macro-economic conditions. The provision for credit losses in the
linked quarter was largely attributable to a deterioration of
macro-economic conditions and charge-offs, partially offset by a
reduction in reserves for individually analyzed loans. The recovery
of credit losses in the second quarter of 2022 was primarily due to
an improvement in economic factors and loss drivers within the CECL
model.
The provision for credit losses during the first six months of
2023 was $9.8 million, compared to a
recovery of credit losses of $7.6
million for the first six months of 2022. The provision for
credit losses during the first six 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 (ii) economic forecast deterioration, partially offset
by a reduction in the reserves for individually analyzed loans and
the use of updated loss drivers. The recovery of credit losses
during the first six months of 2022 was driven by improvements in
economic forecasts, coupled with loan payoffs and sales during
certain periods.
Net charge-offs for the second quarter of 2023 were $1.2 million, or 0.09% of average total loans
annualized, compared to net charge-offs of $1.5 million, or 0.13% of average total loans
annualized, for the linked quarter and net charge-offs of
$1.5 million, or 0.14% of average
total loans annualized, for the second quarter of 2022. Net
charge-offs for the first six months of 2023 were $2.7 million, or 0.11% of average total loans
annualized, compared to net charge-offs of $3.5 million, or 0.15% annualized, for the first
six months of 2022. For additional information on 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 Operations. The net loss realized
during the second quarter of 2023 was $1.8 million, compared to a net loss of
$2.2 million for the linked
quarter, and a net loss of $196,000
for the second quarter of 2022. The net loss in the second quarter
of 2023 was primarily driven by a $1.6 million write-down of an OREO property
due to a potential sale of the property. The net loss for the
linked quarter was primarily due to the $2.0 million pre-tax net loss on the sale of
the available-for-sale investment securities mentioned above.
The net loss realized during the first six months of 2023 was
$4.0 million, compared to
$193,000 for the first
six months of 2022. The net loss for the first six months of
2023 was primarily driven by the $2.0 million pre-tax net loss on the sale of
the available-for-sale investment securities mentioned above and
the $1.6 million write-down of the
OREO property mentioned above. The net loss recognized in the first
six months of 2022 was primarily driven by an adjustment to the
gain on sale of loans recognized in the fourth quarter of 2021 due
to a measurement period adjustment to the acquisition-date fair
value of Premier loans acquired that were subsequently sold.
Total Non-interest Income, Excluding Net Gains and
Losses:
Total non-interest income, excluding net gains and
losses, for the second quarter of 2023 increased $1.6 million compared to the linked quarter. The
increase in non-interest income, excluding net gains and losses,
was due to a $1.0 million increase in
electronic banking income and a $0.6
million increase in deposit account service charge income,
mostly due to the additional customers brought in from the
Limestone Merger, and a $0.6 million
increase lease income, primarily from residual sales and
month-to-month lease income.
Compared to the second quarter of 2022, non-interest income,
excluding net gains and losses, increased $3.3 million, primarily due to a
$1.0 million increase in electronic
banking income and a $0.6 million
increase in deposit account service charge income, mostly due to
the additional customers brought in from Limestone Merger, and a
$1.3 million increase in lease
income, primarily from residual sales and month-to-month lease
income.
For the first six months of 2023, total non-interest income,
excluding gains and losses, increased $4.5
million, or 11%, compared to the first six months of 2022.
The increase was driven by growth of (i) $1.6 million in lease income, primarily due to
lease fee income from Vantage, (ii) a $1.2
million increase in electronic banking income, primarily due
to the Limestone Merger and (iii) a $1.1
million increase in insurance income due to growth in the
commercial insurance line.
Total Non-interest Expense:
Total non-interest expense
for the second quarter and six months ended June 30, 2023 were
primarily impacted by the Limestone Merger, which added
$10.7 million and $11.3 million of non-interest expenses,
respectively, across various line-items within non-interest
expense. The table below summarizes the amount of
acquisition-related expenses for each line item that is a component
of non-interest expense. This information is used by Peoples to
provide information useful to investors in understanding Peoples'
operating performance and trends.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
$
38,025
|
|
$ 32,028
|
|
$
27,585
|
|
$ 70,053
|
|
$ 55,314
|
Net occupancy and
equipment expense
|
5,380
|
|
4,955
|
|
4,768
|
|
10,335
|
|
9,856
|
Professional
fees
|
7,438
|
|
2,881
|
|
2,280
|
|
10,319
|
|
5,952
|
Data processing and
software expense
|
4,728
|
|
4,562
|
|
3,033
|
|
9,290
|
|
5,949
|
Amortization of other
intangible assets
|
2,800
|
|
1,871
|
|
2,034
|
|
4,671
|
|
3,742
|
Electronic banking
expense
|
1,832
|
|
1,491
|
|
2,727
|
|
3,323
|
|
5,486
|
Marketing
expense
|
1,357
|
|
930
|
|
860
|
|
2,287
|
|
1,855
|
FDIC insurance
premiums
|
1,464
|
|
801
|
|
1,018
|
|
2,265
|
|
2,212
|
Franchise tax
expense
|
872
|
|
1,034
|
|
1,102
|
|
1,906
|
|
1,866
|
Communication
expense
|
724
|
|
613
|
|
649
|
|
1,337
|
|
1,274
|
Other loan
expenses
|
538
|
|
739
|
|
445
|
|
1,277
|
|
1,277
|
Other non-interest
expense
|
5,465
|
|
4,574
|
|
3,398
|
|
10,039
|
|
6,745
|
Total
non-interest expense
|
70,623
|
|
56,479
|
|
49,899
|
|
127,102
|
|
101,528
|
Acquisition-related
non-interest expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
5,125
|
|
21
|
|
19
|
|
5,146
|
|
29
|
Net occupancy and
equipment expense
|
20
|
|
9
|
|
1
|
|
29
|
|
29
|
Professional
fees
|
4,812
|
|
291
|
|
540
|
|
5,103
|
|
1,570
|
Data processing and
software expense
|
1
|
|
—
|
|
164
|
|
1
|
|
281
|
Electronic banking
expense
|
115
|
|
—
|
|
(94)
|
|
115
|
|
(92)
|
Marketing
expense
|
14
|
|
10
|
|
24
|
|
23
|
|
40
|
Communication
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
Other loan
expenses
|
1
|
|
—
|
|
—
|
|
1
|
|
—
|
Other non-interest
expense
|
621
|
|
220
|
|
(52)
|
|
842
|
|
117
|
Total
acquisition-related non-interest expense
|
10,709
|
|
551
|
|
602
|
|
11,260
|
|
1,975
|
Non-interest expense
excluding acquisition-
related expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
32,900
|
|
32,007
|
|
27,566
|
|
64,907
|
|
55,285
|
Net occupancy and
equipment expense
|
5,360
|
|
4,946
|
|
4,767
|
|
10,306
|
|
9,827
|
Professional
fees
|
2,626
|
|
2,590
|
|
1,740
|
|
5,216
|
|
4,382
|
Data processing and
software expense
|
4,727
|
|
4,562
|
|
2,869
|
|
9,289
|
|
5,668
|
Amortization of other
intangible assets
|
2,800
|
|
1,871
|
|
2,034
|
|
4,671
|
|
3,742
|
Electronic banking
expense
|
1,717
|
|
1,491
|
|
2,821
|
|
3,208
|
|
5,578
|
Marketing
expense
|
1,343
|
|
920
|
|
836
|
|
2,264
|
|
1,815
|
FDIC insurance
premiums
|
1,464
|
|
801
|
|
1,018
|
|
2,265
|
|
2,212
|
Franchise tax
expense
|
872
|
|
1,034
|
|
1,102
|
|
1,906
|
|
1,866
|
Communication
expense
|
724
|
|
613
|
|
649
|
|
1,337
|
|
1,273
|
Other loan
expenses
|
537
|
|
739
|
|
445
|
|
1,276
|
|
1,277
|
Other non-interest
expense
|
4,844
|
|
4,354
|
|
3,450
|
|
9,197
|
|
6,628
|
Total non-interest
expense excluding acquisition-
related expense
|
$
59,914
|
|
$ 55,928
|
|
$
49,297
|
|
$
115,842
|
|
$ 99,553
|
Total non-interest expense increased $14.1 million, or 25%, for the three months ended
June 30, 2023, compared to the linked quarter. The increase in
total non-interest expense for the second quarter of 2023 was
attributable to increases of $5.1
million and $4.5 million in
acquisition-related salaries and employee benefit costs and
professional fees, respectively, due to the Limestone Merger.
Excluding acquisition-related expenses, total non-interest expense
increased $4.0 million, primarily due
to increases of (i) $0.9 million in
the amortization of other intangible assets, (ii) $0.9 million in salaries and employee benefit
costs, both driven by the Limestone Merger, and (iii) $0.7 million in FDIC insurance expense.
Compared to the second quarter of 2022, total non-interest
expense for the second quarter of 2023 increased $20.7 million, or 42%, primarily due to an
increase of $10.1 million in
acquisition-related expenses. Excluding acquisition-related
expenses, non-interest expenses increased $10.6 million, primarily due to a $5.1 million increase in salaries and employee
benefit costs due to additional employees added in the Limestone
Merger, and a $1.9 million increase
in data processing and software expense due to recent growth,
including through acquisitions.
For the six months ended June 30, 2023, total non-interest
expense increased $25.6 million, or
25.2%, compared to the first six months of 2022, primarily due to
an increase of $9.3 million in
acquisition-related expenses. Excluding acquisition-related
expenses, non-interest expenses increased $16.3 million. This
variance was driven by increases of $9.6
million and $3.6 million in
salaries and employee benefit costs and data processing and
software expense, respectively, due to recent growth, partially
offset by a $2.4 million decrease in
electronic banking expense.
The efficiency ratio for the second quarter of 2023 was 62.7%,
compared to 57.8% for the linked quarter, and 58.8% for the second
quarter of 2022. The increases in the efficiency ratio compared to
the linked quarter and prior year quarter were primarily due to the
increases in non-interest expenses, primarily from the Limestone
Merger, which were partially offset by higher net interest income
due to increases in the market interest rates and additional
customers from Limestone. The efficiency ratio, adjusted for
non-core items, was 53.3% for the second quarter of 2023, compared
to 57.2% for the linked quarter and 58.0% for the second quarter of
2022. 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 $6.2
million with an effective tax rate of 22.6% for the second
quarter of 2023, compared to income tax expense of $7.0 million with an effective tax rate of 21.0%
for the linked quarter, and income tax expense of $6.8 million with an effective tax rate of 21.6%
for the second quarter of 2022. Income tax expense for the second
quarter of 2023 compared to the linked quarter and second quarter
of 2022, decreased due to less net income before income taxes. The
effective rate increase for the second quarter of 2022 was
primarily due to the Limestone Merger. Peoples recorded income tax
expense of $13.2 million with an
effective tax rate of 21.7% in the first six months of 2023 and
$12.8 million with an effective tax
rate of 20.9% in the first six months of 2022. The increase 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 June 30,
2023 increased $83.9 million and
$2.0 million, when compared to at
March 31, 2023, at December 31, 2022, respectively, and
decreased $134.2 million when
compared to at June 30, 2022. The changes in the balance from
March 31, 2023 and December 31, 2022 were due to
available-for-sale investment securities acquired in the Limestone
Merger. The change in the balance from June 30, 2022 was due
to a reduction in market value of available-for-sale securities
driven by the recent increases in market interest rates and the
sales of the lower-yielding available-for-sale securities mentioned
above. The balances of unrealized losses on available-for-sale
investment securities recognized within accumulated other
comprehensive loss were $121.5
million, $112.7 million,
$129.9 million and $93.6 million at June 30, 2023, at
March 31, 2023, at December 31,
2022 and at June 30, 2022, respectively.
The held-to-maturity investment securities balance at
June 30, 2023 decreased $20.1
million when compared to at March 31, 2023, and
increased $113.7 million, and
$273.2 million when compared to at
December 31, 2022 and at June 30, 2022, respectively. The
decrease when compared to at March 31, 2023 was due to calls
on five securities during the second quarter of 2023. The increases
when compared to at December 31, 2022 and at June 30,
2022 were driven by purchases of agency mortgage-backed securities,
agency collateralized mortgage obligations, and agency debentures.
Most of the securities purchased during the first quarter of 2023
were classified as held-to-maturity, which has contributed to the
reduction of available-for-sale securities as a percentage of the
bond portfolio. Management purchased these securities to increase
portfolio yield and reduce Peoples' sensitivity to falling
intermediate and long-term interest rates. The balances of
unrealized losses on held-to-maturity investment securities were
$81.1 million, $68.6 million, $80.6
million and $59.9 million at
June 30, 2023, at March 31, 2023, at December 31, 2022 and at June 30, 2022,
respectively.
The duration of the investment portfolio as of
June 30, 2023 was estimated to be 6.02 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, which is
discussed in further detail below.
Peoples maintains a number of liquid and liquefiable assets,
borrowing capacity, and other contingent sources of liquidity to
ensure the availability of funds. At June 30, 2023, Peoples'
had liquid and liquefiable assets of $501.2
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 June 30, 2023, Peoples had a borrowing capacity
of $870.5 million available through
the Federal Home Loan Bank ("FHLB"), the Federal Reserve Bank
('FRB"), and federal funds. Additionally at June 30, 2023,
Peoples had other contingent sources of liquidity totaling
$2.0 billion.
Loans and Leases:
The period-end total loan and lease
balances at June 30, 2023 increased $1.2 billion, or 26%, compared to at
March 31, 2023. The increase in the period-end loan and lease
balance was primarily driven by loans acquired in the Limestone
Merger totaling $1.1 billion at
the time of the Limestone Merger. Excluding the loans acquired
through the Limestone Merger, the period-end loan and lease balance
increased $146.4 million, or 12%
annualized, primarily due to increases of (i) $71.3 million in construction loans, (ii)
$25.3 million in commercial and
industrial loans, (iii) $23.1 million
in leases and (iv) $22.9 million in
other commercial real estate loans.
The period-end total loan and lease balance at June 30, 2023 increased $1.3 billion compared to at December 31,
2022 due to the Limestone Merger. Excluding the loans acquired in
the Limestone Merger, the period-end loan and lease balance
increased $199.0 million, or 9%
annualized, driven by increases of $80.4
million, $56.6 million,
$32.7 million, $24.9 million and $23.8
million in other commercial real estate loans, construction
loans, leases, indirect consumer loans and commercial and
industrial loans, respectively. These increases were partially
offset by a decrease of $16.3 million
in consumer residential real estate loans.
The period-end total loan and lease balance increased
$1.4 billion compared to at
June 30, 2022 due to the Limestone Merger. Excluding the loans
acquired in the Limestone Merger, the period-end loan and lease
balance increased $330.2 million, or
7% annualized, primarily due to increases of $101.0 million, $91.3
million, $63.3 million,
$58.0 million and $43.9 million in construction loans, indirect
consumer loans, leases, commercial and industrial loans and other
commercial real estate loans, respectively. These increases were
partially offset by a reduction of $36.0
million in consumer residential real estate loans.
The quarterly average loan and lease balance increased
$860.4 million, or 18%, in the second
quarter of 2023 compared to the linked quarter, mostly due to the
loans acquired in the Limestone Merger and to a lesser extent,
growth in commercial real estate loans, partially offset by a
decline in consumer residential real estate loans. Compared to the
second quarter of 2022, the quarterly average loan and lease
balances increased $997.1 million, or
22%, primarily driven by the loans acquired in the Limestone
Merger. Also impacting the increase when compared to second quarter
of 2022, was growth in commercial real estate loans and indirect
consumer loans, partially offset by a decline in consumer
residential real estate loans.
For the first six months of 2023, the average loan and lease
balance increased $621.0 million, or
14%, compared to the same period of 2022. The increase was driven
by loans acquired in the Limestone Merger, and to lesser extents,
growth in leases, indirect consumer loans and commercial real
estate loans. Partially offsetting theses increases was a decline
in the consumer residential real estate loan average balance.
Asset Quality:
Asset quality metrics remained stable
during the quarter. Total nonperforming assets decreased
$0.9 million, or 2%, compared to at
March 31, 2023, and $5.0
million, or 11%, compared to at June 30, 2022. The
decrease in nonperforming assets at June 30, 2023 compared to
at March 31, 2023 was primarily attributable to reductions in
nonaccrual commercial real estate loans and an OREO property,
largely offset by increases in nonperforming and nonaccrual leases.
The decrease from at June 30, 2022 was driven by reductions in
(i) nonaccrual commercial real estate loans, (ii) OREO and (iii)
nonperforming leases, partially offset by increases in nonaccrual
leases and commercial and industrial loans. Nonperforming assets as
a percent of total loans and OREO were 0.70% at June 30, 2023,
down from 0.90% at March 31, 2023 and 1.02% at June 30,
2022.
Criticized loans, which are those categorized as special
mention, substandard or doubtful, increased $22.4 million, $29.8
million and $39.8 million at
June 30, 2023 compared to at March 31, 2023, at
December 31, 2022 and at
June 30, 2022, respectively. As a percent of total loans,
criticized loans were 3.70% at June 30, 2023, compared to
4.18% at March 31, 2023, 4.07% at December 31, 2022 and 3.96% at June 30,
2022. The increases in the amount of criticized loans were
primarily related to criticized loans acquired in the Limestone
Merger. However criticized loans as a percent of total loans
decreased, as criticized loans made up a smaller relative portion
of the total loans acquired from Limestone.
Classified loans, which are those categorized as substandard or
doubtful, increased $18.9 million and
$22.4 million and decreased
$3.4 million compared to at
March 31, 2023, at December 31,
2022 and at June 30, 2022, respectively. As a percent
of total loans, classified loans were 1.88% at June 30, 2023,
compared to 1.96% at March 31, 2023, 1.90% at December 31, 2022 and 2.52% at June 30,
2022. The increases in classified loans compared to at
March 31, 2023 and at December 31,
2022 were primarily driven by the Limestone Merger. The
decrease in classified loans when compared to at June 30, 2022
was largely attributable to the pay-off or upgrade of classified
loans acquired from Premier; the majority of these loans were
categorized as purchased credit deteriorated loans at acquisition,
partially offset by classified loans acquired in the Limestone
Merger. Classified loans as a percent of total loans at
June 30, 2023 decreased compared to all comparative periods,
as classified loans made up a smaller portion of the total loans
acquired from Limestone.
Annualized net charge-offs were 0.09% of average total loans for
the second quarter of 2023, compared to 0.13% for the linked
quarter and 0.14% for the prior year second quarter, with the
decrease relative to the linked quarter driven by an increase in
recoveries on commercial and industrial loans during the second
quarter of 2023, partially offset by higher charge-offs on leases.
The decrease in net charge-offs during the second quarter of 2023
versus the prior year second quarter was primarily attributable to
an increase in recoveries, partially offset by increases of
charge-offs on indirect consumer loans and leases. Annualized net
charge-offs were 0.11% of average total loans for the first six
months of 2023, compared to 0.15% for the same 2022 period. The
decrease was driven by an increase of recoveries and a decrease of
charge-offs on commercial and industrial loans, partially offset by
an increase in charge-offs on indirect consumer loans.
At June 30, 2023, the allowance for credit losses was
$61.2 million, compared to
$53.3 million at March 31, 2023,
$53.2 million at December 31, 2022 and $52.3 million at June 30, 2022. The
allowance for credit losses at June 30, 2023 was impacted by
the establishment of an allowance for credit losses for loans
acquired in the Limestone Merger. The ratio of the allowance for
credit losses as a percent of total loans was 1.02% at
June 30, 2023, compared to 1.12% at March 31, 2023 and
1.14% at June 30, 2022.
Deposits:
At of June 30, 2023, period-end deposit
balances increased $1.2 billion, or
20%, compared to at March 31, 2023, primarily driven by
deposits acquired in the Limestone Merger which included
$821.3 million of
interest-bearing deposits and $261.5 million of non-interest-bearing
deposits. Excluding Limestone deposit balances, deposits at
June 30, 2023 increased $88.6 million compared to at March 31,
2023, primarily due to increases of $241.4 million in brokered certificates of
deposits, which are primarily used as a source of funding, and of
$139.2 million in retail
certificates of deposit, partially offset by decreases of
$133.9 million, $59.9 million, $50.0 million and $41.1 million in non-interest bearing
deposits, savings accounts, governmental deposit accounts, and
interest-bearing demand deposit accounts, respectively. The
decrease in governmental deposit accounts was due to the
seasonality of the balances, which are typically higher in the
first quarter and third quarter of each year.
Period-end total deposits at June 30, 2023 increased
$1.2 billion, or 22%, compared to at
December 31, 2022. The increase was primarily driven by
deposits acquired in the Limestone Merger. Excluding Limestone
deposit balances, deposits at June 30, 2023 increased
$160.1 million compared to at
December 31, 2022, primarily due to increases of $389.0 million in brokered certificates of
deposit and of $231.1 million in
retail certificates of deposit, partially offset by decreases of
$168.3 million, $103.8 million, $116.1 million and $26.6 million in non-interest bearing
deposits, savings accounts, interest-bearing demand deposit
accounts and governmental deposit accounts, respectively.
Period-end total deposits at June 30, 2023 increased
$1.0 billion, or 17%, compared to at
June 30, 2022 due to the deposits acquired in the Limestone
Merger. Excluding Limestone deposit balances, deposits at
June 30, 2023 decreased $52.1 million compared to at June 30,
2022. The decrease was primarily driven by decreases of
$240.7 million, $128.7 million, $115.3 million, $98.9 million and $73.4 million in non-interest bearing
deposits, governmental deposit accounts, savings accounts,
interest-bearing demand deposit accounts and money market deposit
accounts, respectively. Partially offsetting these decreases in
deposit balances, excluding the deposits acquired in the Limestone
Merger, were increases of $427.9 million in brokered certificates of
deposits and of $177.1 million
in retail certificates of deposit.
The percentages of retail deposit balances and commercial
deposit balances of the total deposit balance at June 30, 2023
were 78% and 22%, respectively, compared to 75% and 25%,
respectively, at March 31, 2023, 74% and 26%, respectively, at
December 31, 2022 and 73% and 27%, respectively, at
June 30, 2022.
Uninsured deposits were 32%, 32%, 33% and 35% of total deposits
at June 30, 2023, March 31, 2023, December 31, 2022
and June 30, 2022, respectively. Uninsured amounts are
estimated based on the portion of customer account balances that
met or exceeded the FDIC limit of $250,000. Peoples pledges investment
securities against certain governmental deposit accounts, which
collateralized $749.9 million, or
38%, of the uninsured deposit balances at June 30, 2023.
Average deposit balances during the second quarter of 2023
increased $863.1 million compared to
the linked quarter. Compared to the second quarter of 2022,
quarterly average deposits increased $653.9
million. These increases were driven by the deposits
acquired in the Limestone Merger. Total demand deposits
comprised 42%, 46% and 47% of total deposits at June 30, 2023,
March 31, 2023, and June 30, 2022, respectively.
Stockholders' Equity:
Total stockholders' equity at
June 30, 2023 increased by $179.4
million compared to at March 31, 2023, which was
primarily due to 6.8 million common shares issued (valued at
$177.9 million) in the Limestone
Merger and net income for the second quarter of 2023 of
$21.1 million, partially offset by an
increase in accumulated other comprehensive loss of $7.9 million and dividends paid of $13.4 million. The change in accumulated other
comprehensive loss was the result of the changes in the market
value of available-for-sale investment securities during the
period. Accumulated unrealized losses related to the
available-for-sale investment securities portfolio were
$121.5 million and $112.7 million at June 30, 2023 and at
March 31, 2023, respectively.
Total stockholders' equity at June 30, 2023 increased by
$213.6 million compared to at
December 31, 2022, which was
primarily due to common shares issued in the Limestone Merger, net
income for the first six months of 2023 of $47.7 million and a decrease in accumulated other
comprehensive loss of $8.2 million,
partially offset by dividends paid of $24.1
million. Accumulated unrealized losses related to the
available-for-sale investment securities portfolio were
$129.9 million at December 31, 2022.
Total stockholders' equity at June 30, 2023 increased
$212.1 million compared to at
June 30, 2022, which was primarily due to common shares issued
in the Limestone Merger and net income of $100.5 million in the last twelve months,
partially offset by dividends paid of $45.6
million and an increase in accumulated other comprehensive
loss of $25.6 million. The increase
in accumulated other comprehensive loss was the result of an
increase of $27.8 million in
unrealized losses related to the available-for-sale investment
securities portfolio from June 30, 2022 to June 30, 2023.
Accumulated unrealized losses related to the available-for-sale
investment securities portfolio were $93.6
million at June 30, 2022.
At June 30, 2023, the tier 1 risk-based capital ratio was
12.10%, compared to 12.49% at March 31, 2023, and 11.91% at
June 30, 2022. The common equity tier 1 risk-based capital
ratio was 11.36% at June 30, 2023, compared to 12.22% at
March 31, 2023, and 11.62% at June 30, 2022. The total
risk-based capital ratio was 12.92% at June 30, 2023, compared
to 13.35% at March 31, 2023, and 12.81% at June 30, 2022.
Peoples adopted the five-year transition to phase in the impact of
the adoption of CECL, effective January 1,
2020, on regulatory capital ratios. Compared to at
March 31, 2023 these capital ratios decreased due to the
impact of the Limestone Merger, partially offset by net income
during the second quarter of 2023. Compared to at June 30,
2022, the tier 1 risk-based capital ratio and the total risk-based
capital ratio improved due to higher net income, partially offset
by the impact of the Limestone Merger and dividends paid. The
common equity tier 1 risk-based capital ratio at June 30, 2023
decreased compared to at June 30,
2022 due to the common shares issued in the Limestone
Merger.
Book value per common share and tangible book value per common
share, which excludes goodwill and other intangible assets, were
$28.24 and $16.56, respectively, at June 30, 2023,
compared to $28.77 and $17.37, respectively, at March 31, 2023, and
$27.81 and $16.21, respectively, at June 30, 2022.
The ratio of total stockholders' equity to total assets was
11.37% at June 30, 2023, compared to
11.21% at March 31, 2023, 10.90% at
December 31, 2022 and 10.81% at
June 30, 2022. The ratio increased
from June 30, 2022 due primarily to
additional common shares issued in the Limestone Merger as well as
net income over the last twelve months. The tangible equity to
tangible assets ratio, which excludes goodwill and other intangible
assets, was 7.00% at June 30, 2023,
compared to 7.08%, 6.67% and 6.60% at March
31, 2023, December 31, 2022
and June 30, 2022, respectively. The
ratio decreased compared to at March 31,
2023 due to an increase in accumulated other comprehensive
loss. The ratio increased compared to at December 31, 2022 and June
30, 2022 primarily due to net income over the last twelve
months, partially offset by an increase in accumulated other
comprehensive loss.
Peoples Bancorp Inc. ("Peoples", Nasdaq: PEBO) is a diversified
financial services holding company that makes available a complete
line of banking, trust and investment, insurance, premium financing
and equipment leasing solutions through its subsidiaries. Peoples
has been headquartered in Marietta,
Ohio since 1902. Peoples had $8.8 billion in total assets as of
June 30, 2023, and 150 locations, including 129 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 Limestone Bank, 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
second quarter 2023 results of operations on July 25, 2023 at
11:00 a.m., Eastern Daylight 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 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 in accordance with
accounting principles generally accepted in the U.S. ("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.
Peoples also uses the non-US GAAP financial measures for
calculating incentive compensation. 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,
COVID-19-related expenses and COVID-19 Employee Retention Credits
received.
- The efficiency ratio is calculated as total non-interest
expense (less amortization of other intangible assets) as a
percentage of fully tax-equivalent net interest income plus total
non-interest income, excluding net gains and losses. This ratio is
a non-US GAAP financial measure since it excludes amortization of
other intangible assets and all gains and losses included in
earnings, and uses fully tax-equivalent net interest income.
- The efficiency ratio adjusted for non-core items is calculated
as core non-interest expense (less amortization of other intangible
assets) as a percentage of fully tax-equivalent net interest income
plus total non-interest income, excluding net gains and losses.
This ratio is a non-US GAAP financial measure since it excludes the
impact of acquisition-related expenses, COVID-19-related expenses,
COVID-19 Employee Retention Credits received 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,
COVID-19-related expenses, and COVID-19 Employee Retention Credits
received) 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, acquisition-related expenses, COVID-19-related
expenses and COVID-19 Employee Retention Credits received.
- 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 risks and uncertainties include, but are not
limited to:
(1)
|
ongoing increasing
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;
|
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(2)
|
the effects of
inflationary pressures and the impact of rising interest rates on
borrowers' liquidity and ability to repay;
|
|
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(3)
|
the success, impact,
and timing of the implementation of Peoples' business strategies
and Peoples' ability to manage strategic initiatives, including the
ongoing increasing interest rate policies of the Federal Reserve
Board, the completion and successful integration of planned
acquisitions, including the recently-completed acquisition of
Vantage and the Limestone Merger, and the expansion of commercial
and consumer lending activities;
|
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(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;
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(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
one or more acquired companies to a variety of new and more
stringent legal and regulatory requirements which adversely affect
their respective businesses;
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(6)
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potential adverse
impacts as a result of the Inflation Reduction Act of 2022, which
may negatively impact Peoples' operations and financial
results;
|
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(7)
|
the effects of easing
restrictions on participants in the financial services
industry;
|
|
|
(8)
|
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, ineffective management of the U.S. federal budget or
debt, potential or imposed tariffs, 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;
|
|
|
(9)
|
Peoples may issue
equity securities in connection with future acquisitions, which
could cause ownership and economic dilution to Peoples' current
shareholders;
|
|
|
(10)
|
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 adversely impact the amount of interest income
generated;
|
|
|
(11)
|
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;
|
|
|
(12)
|
future credit quality
and performance, including expectations regarding future credit
losses and the allowance for credit losses;
|
|
|
(13)
|
changes in accounting
standards, policies, estimates or procedures may adversely affect
Peoples' reported financial condition or results of
operations;
|
|
|
(14)
|
the impact of
assumptions, estimates and inputs used within models, which may
vary materially from actual outcomes, including under the CECL
model;
|
|
|
(15)
|
the replacement of the
London Interbank Offered Rate ("LIBOR") with other reference rates
which may result in increased expenses and litigation, and
adversely impact the effectiveness of hedging
strategies;
|
|
|
(16)
|
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;
|
|
|
(17)
|
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;
|
|
|
(18)
|
Peoples' ability to
receive dividends from Peoples' subsidiaries;
|
|
|
(19)
|
Peoples' ability to
maintain required capital levels and adequate sources of funding
and liquidity;
|
|
|
(20)
|
the impact of larger or
similar-sized financial institutions encountering problems, such as
the recent closures 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
potential increased regulatory requirements, and increased
reputational risk and potential impacts to macroeconomic
conditions;
|
|
|
(21)
|
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;
|
|
|
(22)
|
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;
|
|
|
(23)
|
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;
|
|
|
(24)
|
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;
|
|
|
(25)
|
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;
|
|
|
(26)
|
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;
|
|
|
(27)
|
the impact on Peoples'
businesses, personnel, facilities, or systems, of losses related to
acts of fraud, theft, misappropriation or violence;
|
|
|
(28)
|
the impact on Peoples'
businesses, as well as on the risks described above, of various
domestic or international widespread natural or other disasters,
pandemics, cybersecurity attacks, system failures, civil unrest,
military or terrorist activities or international
conflicts;
|
|
|
(29)
|
the potential further
deterioration of the U.S. economy due to financial, political or
other shocks;
|
|
|
(30)
|
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;
|
|
|
(31)
|
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;
|
|
|
(32)
|
risks and uncertainties
associated with Peoples' entry into new geographic markets and
risks resulting from Peoples' inexperience in these new geographic
markets;
|
|
|
(33)
|
Peoples' ability to
integrate the Limestone Merger, which may be unsuccessful, or may
be more difficult, time-consuming or costly than
expected;
|
|
|
(34)
|
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;
|
|
|
(35)
|
changes in laws or
regulations imposed by Peoples' regulators impacting Peoples'
capital actions, including dividend payments and share
repurchases;
|
|
|
(36)
|
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;
|
|
|
(37)
|
Peoples' business may
be adversely affected by increased political and regulatory
scrutiny of corporate environmental, social and governance ("ESG")
practices;
|
|
|
(38)
|
the effect of a fall in
stock market prices on the asset and wealth management
business;
|
|
|
(39)
|
in light of the recent
bank failures, Peoples' continued ability to grow deposits or
maintain adequate deposit levels may be adversely impacted, and
Peoples may experience an unexpected outflow of uninsured deposits,
which may require Peoples to sell investment securities at a loss;
and
|
|
|
(40)
|
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, 2022. 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 US GAAP, Peoples is required to evaluate the
impact of subsequent events through the issuance date of Peoples'
June 30, 2023 consolidated financial
statements as part of Peoples' 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 that which is contained in
this news release.
PER COMMON SHARE
DATA AND SELECTED RATIOS (Unaudited)
|
|
|
At or For the Three
Months Ended
|
|
At or For the Six
Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.64
|
|
$
0.95
|
|
$
0.89
|
|
$
1.57
|
|
$
1.73
|
Diluted
|
0.64
|
|
0.94
|
|
0.88
|
|
1.56
|
|
1.72
|
Cash dividends declared
per common share
|
0.39
|
|
0.38
|
|
0.38
|
|
0.77
|
|
0.74
|
Book value per common
share (a)
|
28.24
|
|
28.77
|
|
27.81
|
|
28.24
|
|
27.81
|
Tangible book value per
common share (a)(b)
|
16.56
|
|
17.37
|
|
16.21
|
|
16.56
|
|
16.21
|
Closing price of common
shares at end of period (a)
|
$
26.55
|
|
$
25.75
|
|
$
26.60
|
|
$
26.55
|
|
$
26.60
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS:
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity (c)
|
8.89 %
|
|
13.44 %
|
|
12.61 %
|
|
10.96 %
|
|
12.02 %
|
Return on average
tangible equity (c)(d)
|
16.56 %
|
|
23.89 %
|
|
22.99 %
|
|
19.90 %
|
|
20.90 %
|
Return on average
assets (c)
|
1.01 %
|
|
1.49 %
|
|
1.40 %
|
|
1.23 %
|
|
1.38 %
|
Return on average
assets adjusted for non-core items (c)(e)
|
1.47 %
|
|
1.61 %
|
|
1.44 %
|
|
1.53 %
|
|
1.43 %
|
Efficiency ratio
(f)
|
62.71 %
|
|
57.78 %
|
|
58.76 %
|
|
60.41 %
|
|
62.60 %
|
Efficiency ratio
adjusted for non-core items (g)(i)
|
53.32 %
|
|
57.19 %
|
|
57.98 %
|
|
55.13 %
|
|
61.25 %
|
Pre-provision net
revenue to total average assets (c)(h)
|
1.78 %
|
|
2.11 %
|
|
1.75 %
|
|
1.93 %
|
|
1.53 %
|
Net interest margin
(c)
|
4.54 %
|
|
4.53 %
|
|
3.84 %
|
|
4.53 %
|
|
3.63 %
|
Dividend payout ratio
(j)
|
63.62 %
|
|
40.38 %
|
|
43.22 %
|
|
50.67 %
|
|
43.19 %
|
|
|
(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, COVID-19-related
expenses and COVID-19 Employee Retention Credits received.
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 all
gains and losses, acquisition-related expenses, COVID-19-related
expenses and COVID-19 Employee Retention Credits received included
in earnings, and uses fully tax-equivalent net interest income.
Additional information regarding the calculation of this ratio is
included at the end of this news release under the caption of
"Non-US GAAP Financial Measures (Unaudited)."
|
(h)
|
Pre-provision net
revenue is defined as net interest income plus total non-interest
income (excluding all gains and losses) minus total non-interest
expense. This measure represents a non-US GAAP financial measure
since it excludes the provision for (recovery of) credit losses and
all gains and losses included in net income. This measure is a key
metric used by federal bank regulatory agencies in their evaluation
of capital adequacy for financial institutions. Additional
information regarding the calculation of this ratio is included at
the end of this news release under the caption of "Non-US GAAP
Financial Measures (Unaudited)."
|
(i)
|
Information presented
on a fully tax-equivalent basis, using a 23.6% blended corporate
income tax rate for June 30, 2023, and a 23.3% blended corporate
income tax rate for March 31, 2023 and June 30, 2023.
|
(j)
|
This ratio is
calculated based on dividends declared during the period divided by
net income for the period.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands, except per share data)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Total interest
income
|
$
106,417
|
|
$
84,149
|
|
$
65,056
|
|
$
190,566
|
|
$
122,481
|
Total interest
expense
|
21,564
|
|
11,271
|
|
3,588
|
|
32,835
|
|
6,703
|
Net interest
income
|
84,853
|
|
72,878
|
|
61,468
|
|
157,731
|
|
115,778
|
Provision for (recovery
of) credit losses
|
7,983
|
|
1,853
|
|
(780)
|
|
9,836
|
|
(7,587)
|
Net interest income
after provision for (recovery of)
credit losses
|
76,870
|
|
71,025
|
|
62,248
|
|
147,895
|
|
123,365
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
Electronic banking
income
|
6,466
|
|
5,443
|
|
5,419
|
|
11,909
|
|
10,672
|
Insurance
income
|
4,004
|
|
5,425
|
|
3,646
|
|
9,429
|
|
8,377
|
Trust and investment
income
|
4,414
|
|
4,084
|
|
4,246
|
|
8,498
|
|
8,522
|
Deposit account service
charges
|
4,153
|
|
3,523
|
|
3,558
|
|
7,676
|
|
6,984
|
Lease income
|
1,719
|
|
1,077
|
|
431
|
|
2,796
|
|
1,206
|
Bank owned life
insurance income
|
842
|
|
707
|
|
797
|
|
1,549
|
|
1,228
|
Mortgage banking
income
|
189
|
|
314
|
|
352
|
|
503
|
|
788
|
Net loss on asset
disposals and other transactions
|
(1,665)
|
|
(246)
|
|
(152)
|
|
(1,911)
|
|
(279)
|
Net (loss) gain on
investment securities
|
(166)
|
|
(1,935)
|
|
(44)
|
|
(2,101)
|
|
86
|
Other non-interest
income
|
1,059
|
|
668
|
|
1,133
|
|
1,727
|
|
1,852
|
Total
non-interest income
|
21,015
|
|
19,060
|
|
19,386
|
|
40,075
|
|
39,436
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
38,025
|
|
32,028
|
|
27,585
|
|
70,053
|
|
55,314
|
Net occupancy and
equipment expense
|
5,380
|
|
4,955
|
|
4,768
|
|
10,335
|
|
9,856
|
Professional
fees
|
7,438
|
|
2,881
|
|
2,280
|
|
10,319
|
|
5,952
|
Data processing and
software expense
|
4,728
|
|
4,562
|
|
3,033
|
|
9,290
|
|
5,949
|
Amortization of other
intangible assets
|
2,800
|
|
1,871
|
|
2,034
|
|
4,671
|
|
3,742
|
Electronic banking
expense
|
1,832
|
|
1,491
|
|
2,727
|
|
3,323
|
|
5,486
|
Marketing
expense
|
1,357
|
|
930
|
|
860
|
|
2,287
|
|
1,855
|
FDIC insurance
premiums
|
1,464
|
|
801
|
|
1,018
|
|
2,265
|
|
2,212
|
Franchise tax
expense
|
872
|
|
1,034
|
|
1,102
|
|
1,906
|
|
1,866
|
Communication
expense
|
724
|
|
613
|
|
649
|
|
1,337
|
|
1,274
|
Other loan
expenses
|
538
|
|
739
|
|
445
|
|
1,277
|
|
1,277
|
Other non-interest
expense
|
5,465
|
|
4,574
|
|
3,398
|
|
10,039
|
|
6,745
|
Total
non-interest expense
|
70,623
|
|
56,479
|
|
49,899
|
|
127,102
|
|
101,528
|
Income before income
taxes
|
27,262
|
|
33,606
|
|
31,735
|
|
60,868
|
|
61,273
|
Income tax
expense
|
6,166
|
|
7,046
|
|
6,847
|
|
13,212
|
|
12,808
|
Net
income
|
$
21,096
|
|
$
26,560
|
|
$
24,888
|
|
$
47,656
|
|
$
48,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE
DATA:
|
|
|
|
|
|
|
|
|
|
Net income available to
common shareholders
|
$
21,096
|
|
$
26,560
|
|
$
24,888
|
|
$
47,656
|
|
$
48,465
|
Less: Dividends paid on
unvested common shares
|
144
|
|
102
|
|
102
|
|
246
|
|
150
|
Less: Undistributed
loss allocated to unvested common
shares
|
13
|
|
34
|
|
19
|
|
45
|
|
40
|
Net earnings
allocated to common shareholders
|
$
20,939
|
|
$
26,424
|
|
$
24,767
|
|
$
47,365
|
|
$
48,275
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding
|
32,526,962
|
|
27,891,760
|
|
27,919,133
|
|
30,222,165
|
|
27,962,405
|
Effect of potentially
dilutive common shares
|
123,014
|
|
130,119
|
|
142,603
|
|
92,339
|
|
78,740
|
Total
weighted-average diluted common shares
outstanding
|
32,649,976
|
|
28,021,879
|
|
28,061,736
|
|
30,314,504
|
|
28,041,145
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
0.64
|
|
$
0.95
|
|
$
0.89
|
|
$
1.57
|
|
$
1.73
|
Earnings per common
share – diluted
|
$
0.64
|
|
$
0.94
|
|
$
0.88
|
|
$
1.56
|
|
$
1.72
|
Cash dividends declared
per common share
|
$
0.39
|
|
$
0.38
|
|
$
0.38
|
|
$
0.77
|
|
$
0.74
|
Weighted-average common
shares outstanding – basic
|
32,526,962
|
|
27,891,760
|
|
27,919,133
|
|
30,222,165
|
|
27,962,405
|
Weighted-average common
shares outstanding – diluted
|
32,649,976
|
|
28,021,879
|
|
28,061,736
|
|
30,314,504
|
|
28,041,145
|
Common shares
outstanding at end of period
|
35,374,916
|
|
28,488,158
|
|
28,290,115
|
|
35,374,916
|
|
28,290,115
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
June
30,
|
|
December
31,
|
|
2023
|
|
2022
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
Cash and due
from banks
|
$
92,114
|
|
$
94,679
|
Interest-bearing
deposits in other banks
|
56,368
|
|
59,343
|
Total cash and cash equivalents
|
148,482
|
|
154,022
|
Available-for-sale
investment securities, at fair value (amortized cost of $1,292,331
at June 30, 2023 and
$1,300,719 at December 31, 2022)
(a)
|
1,133,439
|
|
1,131,399
|
Held-to-maturity
investment securities, at amortized cost (fair value of $594,268 at
June 30, 2023 and $478,509
at December 31, 2022) (a)
|
673,925
|
|
560,212
|
Other investment
securities
|
63,579
|
|
51,609
|
Total investment securities (a)
|
1,870,943
|
|
1,743,220
|
Loans and leases, net
of deferred fees and costs (b)
|
5,974,596
|
|
4,707,150
|
Allowance for credit
losses
|
(61,211)
|
|
(53,162)
|
Net
loans and leases
|
5,913,385
|
|
4,653,988
|
Loans held for
sale
|
3,218
|
|
2,140
|
Bank premises and
equipment, net of accumulated depreciation
|
103,924
|
|
82,934
|
Bank owned life
insurance
|
138,181
|
|
105,292
|
Goodwill
|
356,397
|
|
292,397
|
Other intangible
assets
|
56,775
|
|
33,932
|
Other assets
|
195,330
|
|
139,379
|
Total assets
|
$
8,786,635
|
|
$
7,207,304
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest-bearing
|
$
1,682,634
|
|
$
1,589,402
|
Interest-bearing
|
5,277,235
|
|
4,127,539
|
Total deposits
|
6,959,869
|
|
5,716,941
|
Short-term
borrowings
|
569,935
|
|
500,138
|
Long-term
borrowings
|
123,579
|
|
101,093
|
Accrued expenses and
other liabilities
|
134,345
|
|
103,804
|
Total liabilities
|
7,787,728
|
|
6,421,976
|
Stockholders'
equity
|
|
|
|
Preferred shares, no
par value, 50,000 shares authorized, no shares issued at
June 30, 2023 or at December 31,
2022
|
—
|
|
—
|
Common shares, no par
value, 50,000,000 shares authorized, 36,711,075 shares issued at
June 30, 2023 and
29,857,920 shares issued at December 31,
2022, including shares held in treasury
|
862,960
|
|
686,450
|
Retained
earnings
|
289,445
|
|
265,936
|
Accumulated other
comprehensive loss, net of deferred income taxes
|
(118,920)
|
|
(127,136)
|
Treasury stock, at
cost, 1,415,639 shares at June 30, 2023 and 1,643,461 shares
at December 31, 2022
|
(34,578)
|
|
(39,922)
|
Total stockholders' equity
|
998,907
|
|
$
785,328
|
Total liabilities and stockholders' equity
|
$
8,786,635
|
|
$
7,207,304
|
|
|
(a)
|
Available-for-sale
investment securities and held-to-maturity investment securities
are presented net of allowance for credit losses of $241 at each of
June 30, 2023 and December 31, 2022.
|
(b)
|
Also referred to
throughout this document as "total loans" and "loans held for
investment."
|
SELECTED FINANCIAL
INFORMATION (Unaudited)
|
|
|
June
30,
|
March
31,
|
December
31,
|
September
30,
|
June
30,
|
(Dollars in
thousands)
|
2023
|
2023
|
2022
|
2022
|
2022
|
Loan
Portfolio
|
|
|
|
|
|
Construction
|
$
418,741
|
$
232,296
|
$
246,941
|
$
215,621
|
$
202,588
|
Commercial real estate,
other
|
2,071,514
|
1,481,062
|
1,423,518
|
1,423,479
|
1,460,023
|
Commercial and
industrial
|
1,160,310
|
891,139
|
892,634
|
877,472
|
858,452
|
Premium
finance
|
162,357
|
158,263
|
159,197
|
167,682
|
152,237
|
Leases
|
377,791
|
354,641
|
345,131
|
312,847
|
314,522
|
Residential real
estate
|
791,442
|
712,602
|
723,360
|
733,361
|
743,005
|
Home equity lines of
credit
|
199,221
|
174,383
|
177,858
|
174,525
|
169,335
|
Consumer,
indirect
|
654,371
|
647,177
|
629,426
|
592,309
|
563,088
|
Consumer,
direct
|
138,019
|
107,406
|
108,363
|
113,314
|
111,804
|
Deposit account
overdrafts
|
830
|
749
|
722
|
597
|
851
|
Total loans and leases
|
$
5,974,596
|
$
4,759,718
|
$ 4,707,150
|
$ 4,611,207
|
$ 4,575,905
|
Total acquired loans
and leases (a)
|
$
2,032,505
|
$
1,024,739
|
$ 1,108,728
|
$ 1,186,069
|
$ 1,304,633
|
Total originated loans and leases
|
$
3,942,091
|
$
3,734,979
|
$ 3,598,422
|
$ 3,425,138
|
$ 3,271,272
|
Deposit
Balances
|
|
|
|
|
|
Non-interest-bearing
deposits (b)
|
$
1,682,634
|
$
1,555,064
|
$ 1,589,402
|
$ 1,635,953
|
$ 1,661,865
|
Interest-bearing
deposits:
|
|
|
|
|
|
Interest-bearing
demand accounts (b)
|
1,225,646
|
1,085,169
|
1,160,182
|
1,162,012
|
1,143,010
|
Retail
certificates of deposit
|
950,783
|
622,091
|
530,236
|
544,741
|
584,259
|
Money market
deposit accounts
|
718,633
|
579,106
|
617,029
|
624,708
|
645,242
|
Governmental
deposit accounts
|
705,596
|
649,303
|
625,965
|
734,734
|
728,057
|
Savings
accounts
|
1,116,622
|
1,024,638
|
1,068,547
|
1,077,383
|
1,080,053
|
Brokered
deposits
|
559,955
|
273,156
|
125,580
|
86,089
|
86,739
|
Total interest-bearing deposits
|
$
5,277,235
|
$
4,233,463
|
$ 4,127,539
|
$ 4,229,667
|
$ 4,267,360
|
Total deposits
|
$
6,959,869
|
$
5,788,527
|
$ 5,716,941
|
$ 5,865,620
|
$ 5,929,225
|
Total demand deposits
(b)
|
$
2,908,280
|
$
2,640,233
|
$ 2,749,584
|
$ 2,797,965
|
$ 2,804,875
|
Asset
Quality
|
|
|
|
|
|
Nonperforming assets
(NPAs): (c)
|
|
|
|
|
|
Loans 90+ days
past due and accruing
|
$
5,924
|
$
4,014
|
$
4,842
|
$
8,424
|
$
8,236
|
Nonaccrual
loans
|
28,796
|
29,980
|
31,473
|
27,831
|
29,488
|
Total nonperforming loans (NPLs) (c)
|
34,720
|
33,994
|
36,315
|
36,255
|
37,724
|
Other real
estate owned (OREO)
|
7,166
|
8,778
|
8,895
|
8,840
|
9,210
|
Total NPAs
(c)
|
$
41,886
|
$
42,772
|
$
45,210
|
$
45,095
|
$
46,934
|
Criticized loans
(d)
|
$
221,170
|
$
198,812
|
$
191,355
|
$
164,775
|
$
181,395
|
Classified loans
(e)
|
112,045
|
93,168
|
89,604
|
94,848
|
115,483
|
Allowance for credit
losses as a percent of NPLs (c)
|
176.30 %
|
156.80 %
|
146.39 %
|
145.82 %
|
138.76 %
|
NPLs as a percent of
total loans (c)
|
0.58 %
|
0.71 %
|
0.77 %
|
0.79 %
|
0.82 %
|
NPAs as a percent of
total assets (c)
|
0.48 %
|
0.58 %
|
0.63 %
|
0.64 %
|
0.64 %
|
NPAs as a percent of
total loans and OREO (c)
|
0.70 %
|
0.90 %
|
0.96 %
|
0.98 %
|
1.02 %
|
Criticized loans as a
percent of total loans (d)
|
3.70 %
|
4.18 %
|
4.07 %
|
3.57 %
|
3.96 %
|
Classified loans as a
percent of total loans (e)
|
1.88 %
|
1.96 %
|
1.90 %
|
2.06 %
|
2.52 %
|
Allowance for credit
losses as a percent of total loans
|
1.02 %
|
1.12 %
|
1.13 %
|
1.15 %
|
1.14 %
|
Total demand deposits
as a percent of total deposits (b)
|
41.79 %
|
45.61 %
|
48.10 %
|
47.70 %
|
47.31 %
|
Capital Information
(f)(g)(h)(i)
|
|
|
|
|
|
Common equity tier 1
risk-based capital ratio
|
11.36 %
|
12.22 %
|
11.92 %
|
11.80 %
|
11.62 %
|
Tier 1 risk-based
capital ratio
|
12.10 %
|
12.49 %
|
12.19 %
|
12.08 %
|
11.91 %
|
Total risk-based
capital ratio (tier 1 and tier 2)
|
12.92 %
|
13.35 %
|
13.06 %
|
12.98 %
|
12.81 %
|
Tier 1 leverage
ratio
|
9.64 %
|
9.02 %
|
8.92 %
|
8.64 %
|
8.38 %
|
Common equity tier 1
capital
|
$
728,892
|
$
624,292
|
$
604,566
|
$
584,880
|
$
564,708
|
Tier 1
capital
|
776,753
|
638,116
|
618,354
|
598,633
|
578,425
|
Total capital (tier 1
and tier 2)
|
828,910
|
682,477
|
662,421
|
643,189
|
622,516
|
Total risk-weighted
assets
|
$
6,417,511
|
$ 5,110,318
|
$ 5,071,240
|
$ 4,955,627
|
$ 4,857,818
|
Total stockholders'
equity to total assets
|
11.37 %
|
11.21 %
|
10.90 %
|
10.86 %
|
10.81 %
|
Tangible equity to
tangible assets (j)
|
7.00 %
|
7.08 %
|
6.67 %
|
6.47 %
|
6.60 %
|
|
|
(a)
|
Includes all loans and
leases acquired and purchased in 2012 and thereafter.
|
(b)
|
The sum of
non-interest-bearing deposits and interest-bearing deposits is
considered total demand deposits.
|
(c)
|
Nonperforming loans and
leases include loans 90+ days past due and accruing, renegotiated
loans and nonaccrual loans. Nonperforming assets include
nonperforming loans and leases, and OREO.
|
(d)
|
Includes loans and
leases categorized as a special mention, substandard, or
doubtful.
|
(e)
|
Includes loans and
leases categorized as substandard or doubtful.
|
(f)
|
Data presented as of
the end of the period indicated.
|
(g)
|
June 30, 2023 data
based on preliminary analysis and subject to revision.
|
(h)
|
Peoples' capital
conservation buffer was 4.92% at June 30, 2023, 5.35% at March 31,
2023, 5.06% at December 31, 2022, 4.98% at September 30, 2022 and
4.81% at June 30, 2022, 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, effective January 1, 2020, 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 (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Provision for
(recovery of) credit losses
|
|
|
|
|
|
|
|
|
|
Provision for (recovery
of) other credit losses
|
$
7,751
|
|
$
1,673
|
|
$
(1,135)
|
|
$
9,424
|
|
$
(8,141)
|
Provision for checking
account overdraft credit losses
|
232
|
|
180
|
|
355
|
|
412
|
|
554
|
Total provision
for (recovery of) credit losses
|
$
7,983
|
|
$
1,853
|
|
$
(780)
|
|
$
9,836
|
|
$
(7,587)
|
|
|
|
|
|
|
|
|
|
|
Net
charge-offs
|
|
|
|
|
|
|
|
|
|
Gross
charge-offs
|
$
2,041
|
|
$
1,855
|
|
$
1,951
|
|
$
3,896
|
|
$ 4,284
|
Recoveries
|
845
|
|
311
|
|
410
|
|
1,156
|
|
833
|
Net
charge-offs
|
$
1,196
|
|
$
1,544
|
|
$
1,541
|
|
$
2,740
|
|
$ 3,451
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(recoveries) by type
|
|
|
|
|
|
|
|
|
|
Construction
|
$
—
|
|
$
9
|
|
$
—
|
|
$
9
|
|
$
—
|
Commercial real estate,
other
|
$
(9)
|
|
$
6
|
|
$
(154)
|
|
$
(3)
|
|
$
75
|
Commercial and
industrial
|
(440)
|
|
1
|
|
418
|
|
(439)
|
|
877
|
Premium
finance
|
20
|
|
14
|
|
22
|
|
34
|
|
36
|
Leases
|
515
|
|
389
|
|
429
|
|
904
|
|
726
|
Residential real
estate
|
(10)
|
|
12
|
|
33
|
|
2
|
|
328
|
Home equity lines of
credit
|
55
|
|
19
|
|
25
|
|
74
|
|
12
|
Consumer,
indirect
|
812
|
|
850
|
|
366
|
|
1,662
|
|
665
|
Consumer,
direct
|
43
|
|
89
|
|
49
|
|
132
|
|
174
|
Deposit account
overdrafts
|
210
|
|
155
|
|
353
|
|
365
|
|
558
|
Total net
charge-offs
|
$
1,196
|
|
$
1,544
|
|
$
1,541
|
|
$
2,740
|
|
$ 3,451
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs as a
percent of average total loans (annualized)
|
0.09 %
|
|
0.13 %
|
|
0.14 %
|
|
0.11 %
|
|
0.15 %
|
SUPPLEMENTAL
INFORMATION (Unaudited)
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2022
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Trust assets under
administration and
management
|
$
1,931,789
|
|
$
1,803,887
|
|
$
1,764,639
|
|
$
1,682,334
|
|
$
1,731,454
|
Brokerage assets under
administration and
management
|
1,379,309
|
|
1,318,300
|
|
1,211,868
|
|
1,127,831
|
|
1,068,261
|
Mortgage loans serviced
for others
|
$
375,882
|
|
$
384,005
|
|
$
392,364
|
|
$
400,736
|
|
$
410,007
|
Employees (full-time
equivalent)
|
1,500
|
|
1,286
|
|
1,267
|
|
1,244
|
|
1,261
|
CONSOLIDATED AVERAGE
BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)
|
|
|
Three Months
Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
(Dollars in
thousands)
|
Average
Balance
|
Income/ Expense
|
Yield/
Cost
|
|
Average
Balance
|
Income/ Expense
|
Yield/
Cost
|
|
Average
Balance
|
Income/ Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
investments
|
$
58,245
|
$
673
|
4.63 %
|
|
$ 35,223
|
$ 388
|
4.47 %
|
|
$
182,456
|
$ 299
|
0.66 %
|
Investment securities
(a)(b)
|
1,873,944
|
14,294
|
3.05 %
|
|
1,788,254
|
12,347
|
2.76 %
|
|
1,708,759
|
8,358
|
1.96 %
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
358,732
|
6,491
|
7.16 %
|
|
239,492
|
3,963
|
6.62 %
|
|
209,822
|
2,216
|
4.18 %
|
Commercial real estate,
other
|
1,735,466
|
28,240
|
6.44 %
|
|
1,333,062
|
19,794
|
5.94 %
|
|
1,353,201
|
15,599
|
4.56 %
|
Commercial and
industrial
|
1,069,529
|
19,569
|
7.24 %
|
|
877,391
|
14,610
|
6.66 %
|
|
864,023
|
8,715
|
3.99 %
|
Premium
finance
|
154,557
|
2,659
|
6.81 %
|
|
147,895
|
2,150
|
5.81 %
|
|
143,898
|
1,778
|
4.89 %
|
Leases
|
359,016
|
10,275
|
11.32 %
|
|
342,583
|
9,643
|
11.26 %
|
|
288,360
|
10,541
|
14.46 %
|
Residential real estate
(d)
|
921,012
|
10,818
|
4.70 %
|
|
839,822
|
9,717
|
4.63 %
|
|
888,809
|
9,326
|
4.20 %
|
Home equity lines of
credit
|
191,915
|
3,656
|
7.64 %
|
|
176,327
|
2,966
|
6.82 %
|
|
167,935
|
1,748
|
4.17 %
|
Consumer,
indirect
|
651,669
|
7,942
|
4.89 %
|
|
640,359
|
7,231
|
4.58 %
|
|
541,135
|
5,243
|
3.89 %
|
Consumer,
direct
|
123,899
|
2,246
|
7.27 %
|
|
108,488
|
1,739
|
6.50 %
|
|
111,541
|
1,647
|
5.92 %
|
Total loans and
leases
|
5,565,795
|
91,896
|
6.55 %
|
|
4,705,419
|
71,813
|
6.12 %
|
|
4,568,724
|
56,813
|
4.94 %
|
Allowance for credit
losses
|
(53,427)
|
|
|
|
(52,669)
|
|
|
|
(54,148)
|
|
|
Net loans and
leases
|
5,512,368
|
|
|
|
4,652,750
|
|
|
|
4,514,576
|
|
|
Total earning
assets
|
7,444,557
|
106,863
|
5.70 %
|
|
6,476,227
|
84,548
|
5.23 %
|
|
6,405,791
|
65,470
|
4.06 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other
intangible assets
|
387,055
|
|
|
|
325,545
|
|
|
|
329,243
|
|
|
Other assets
|
511,271
|
|
|
|
420,692
|
|
|
|
386,629
|
|
|
Total assets
|
$
8,342,883
|
|
|
|
$ 7,222,464
|
|
|
|
$ 7,121,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
1,095,713
|
$
583
|
0.21 %
|
|
$ 1,044,392
|
$ 136
|
0.05 %
|
|
$ 1,076,028
|
$
45
|
0.02 %
|
Governmental deposit
accounts
|
693,725
|
2,330
|
1.35 %
|
|
637,959
|
1,066
|
0.68 %
|
|
704,632
|
471
|
0.27 %
|
Interest-bearing demand
accounts
|
1,178,614
|
532
|
0.18 %
|
|
1,103,966
|
180
|
0.07 %
|
|
1,177,751
|
115
|
0.04 %
|
Money market deposit
accounts
|
679,123
|
2,006
|
1.18 %
|
|
583,574
|
825
|
0.57 %
|
|
641,066
|
104
|
0.07 %
|
Retail certificates of
deposit
|
825,155
|
4,209
|
2.05 %
|
|
576,645
|
1,750
|
1.23 %
|
|
602,225
|
747
|
0.50 %
|
Brokered deposits
(e)
|
480,640
|
4,743
|
3.96 %
|
|
224,325
|
1,704
|
3.08 %
|
|
87,006
|
532
|
2.45 %
|
Total interest-bearing
deposits
|
4,952,970
|
14,403
|
1.17 %
|
|
4,170,861
|
5,661
|
0.55 %
|
|
4,288,708
|
2,014
|
0.19 %
|
Short-term borrowings
(e)
|
493,561
|
5,314
|
4.32 %
|
|
471,426
|
4,457
|
3.83 %
|
|
150,435
|
261
|
0.70 %
|
Long-term
borrowings
|
132,091
|
1,847
|
5.56 %
|
|
98,477
|
1,153
|
4.69 %
|
|
152,595
|
1,313
|
3.44 %
|
Total borrowed
funds
|
625,652
|
7,161
|
4.58 %
|
|
569,903
|
5,610
|
3.98 %
|
|
303,030
|
1,574
|
2.08 %
|
Total interest-bearing
liabilities
|
5,578,622
|
21,564
|
1.55 %
|
|
4,740,764
|
11,271
|
0.96 %
|
|
4,591,738
|
3,588
|
0.31 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
1,637,671
|
|
|
|
1,556,636
|
|
|
|
1,648,067
|
|
|
Accrued expenses and
other liabilities
|
175,152
|
|
|
|
123,599
|
|
|
|
90,457
|
|
|
Total
liabilities
|
7,391,445
|
|
|
|
6,420,999
|
|
|
|
6,330,262
|
|
|
Stockholders'
equity
|
951,438
|
|
|
|
801,465
|
|
|
|
791,401
|
|
|
Total liabilities and
stockholders' equity
|
$
8,342,883
|
|
|
|
$ 7,222,464
|
|
|
|
$ 7,121,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
85,299
|
4.15 %
|
|
|
$
73,277
|
4.27 %
|
|
|
$
61,882
|
3.75 %
|
Net interest margin
(b)
|
|
|
4.54 %
|
|
|
|
4.53 %
|
|
|
|
3.84 %
|
|
Six Months
Ended
|
|
June 30,
2023
|
|
June 30,
2022
|
(Dollars in
thousands)
|
Average
Balance
|
Income/ Expense
|
Yield/
Cost
|
|
Average
Balance
|
Income/ Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
Short-term
investments
|
$
47,008
|
$
1,061
|
4.55 %
|
|
$
256,864
|
$
459
|
0.36 %
|
Investment securities
(a)(b)
|
1,831,335
|
26,641
|
2.91 %
|
|
1,689,676
|
15,771
|
1.87 %
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
Construction
|
300,270
|
10,454
|
6.92 %
|
|
217,705
|
4,371
|
3.99 %
|
Commercial real estate,
other
|
1,538,771
|
48,034
|
6.21 %
|
|
1,357,792
|
30,381
|
4.45 %
|
Commercial and
industrial
|
975,633
|
34,179
|
6.97 %
|
|
876,242
|
16,738
|
3.80 %
|
Premium
finance
|
151,244
|
4,809
|
6.32 %
|
|
138,359
|
2,942
|
4.23 %
|
Leases
|
350,845
|
19,918
|
11.29 %
|
|
225,667
|
16,643
|
14.67 %
|
Residential real estate
(d)
|
881,514
|
20,535
|
4.66 %
|
|
901,201
|
19,092
|
4.24 %
|
Home equity lines of
credit
|
184,337
|
6,622
|
7.24 %
|
|
165,649
|
3,360
|
4.09 %
|
Consumer,
indirect
|
646,045
|
15,173
|
4.74 %
|
|
532,501
|
10,288
|
3.90 %
|
Consumer,
direct
|
116,377
|
3,985
|
6.91 %
|
|
108,934
|
3,242
|
6.00 %
|
Total loans and
leases
|
5,145,036
|
163,709
|
6.35 %
|
|
4,524,050
|
107,057
|
4.72 %
|
Allowance for credit
losses
|
(53,052)
|
|
|
|
(58,026)
|
|
|
Net loans and
leases
|
5,091,984
|
|
|
|
4,466,024
|
|
|
Total earning
assets
|
6,970,327
|
191,411
|
5.48 %
|
|
6,412,564
|
123,287
|
3.84 %
|
|
|
|
|
|
|
|
|
Goodwill and other
intangible assets
|
356,470
|
|
|
|
316,753
|
|
|
Other assets
|
465,782
|
|
|
|
364,911
|
|
|
Total assets
|
$
7,792,579
|
|
|
|
$
7,094,228
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
Savings
accounts
|
$
1,071,174
|
$
719
|
0.14 %
|
|
$
1,063,490
|
$
79
|
0.01 %
|
Governmental deposit
accounts
|
666,683
|
3,396
|
1.03 %
|
|
687,620
|
919
|
0.27 %
|
Interest-bearing demand
accounts
|
1,142,648
|
712
|
0.13 %
|
|
1,174,526
|
207
|
0.04 %
|
Money market deposit
accounts
|
632,561
|
2,831
|
0.90 %
|
|
645,644
|
201
|
0.06 %
|
Retail certificates of
deposit
|
702,809
|
5,959
|
1.71 %
|
|
614,533
|
1,617
|
0.53 %
|
Brokered deposits
(e)
|
353,760
|
6,447
|
3.68 %
|
|
89,256
|
1,044
|
2.36 %
|
Total interest-bearing
deposits
|
4,569,635
|
20,064
|
0.89 %
|
|
4,275,069
|
4,067
|
0.19 %
|
Short-term borrowings
(e)
|
482,643
|
9,771
|
4.08 %
|
|
152,380
|
599
|
0.79 %
|
Long-term
borrowings
|
115,375
|
3,000
|
5.24 %
|
|
140,912
|
2,037
|
2.90 %
|
Total borrowed
funds
|
598,018
|
12,771
|
4.30 %
|
|
293,292
|
2,636
|
1.80 %
|
Total interest-bearing
liabilities
|
5,167,653
|
32,835
|
1.28 %
|
|
4,568,361
|
6,703
|
0.29 %
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
1,598,985
|
|
|
|
1,627,480
|
|
|
Accrued expenses and
other liabilities
|
149,075
|
|
|
|
85,431
|
|
|
Total
liabilities
|
6,915,713
|
|
|
|
6,281,272
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
876,866
|
|
|
|
812,956
|
|
|
Total liabilities and
stockholders' equity
|
$
7,792,579
|
|
|
|
$
7,094,228
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$ 158,576
|
4.20 %
|
|
|
$
116,584
|
3.55 %
|
Net interest margin
(b)
|
|
|
4.53 %
|
|
|
|
3.63 %
|
|
|
(a)
|
Average balances are
based on carrying value.
|
(b)
|
Interest income and
yields are presented on a fully tax-equivalent basis, using a 23.6%
blended corporate income tax rate at June 30, 2023 and a 23.3%
blended corporate income tax rate at March 31, 2023 and at June 30,
2023.
|
(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 brokered deposits and interest
expense on short-term FHLB advances (included in short-term
borrowings) for all periods presented.
|
NON-U.S. GAAP
FINANCIAL MEASURES (Unaudited)
|
|
The following non-U.S.
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. Peoples also
uses the non-
U.S. GAAP financial measures for calculating incentive
compensation. The following tables summarize the non-U.S. GAAP
financial
measures derived from amounts reported in Peoples' consolidated
financial statements:
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Core non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
70,623
|
|
$
56,479
|
|
$
49,899
|
|
$
127,102
|
|
$
101,528
|
Less:
acquisition-related expenses
|
10,709
|
|
551
|
|
602
|
|
11,260
|
|
1,975
|
Less: COVID-19-related
expenses
|
—
|
|
—
|
|
29
|
|
—
|
|
123
|
Add: COVID -19 Employee
Retention Credit
|
548
|
|
—
|
|
—
|
|
548
|
|
—
|
Core non-interest
expense
|
$
60,462
|
|
$
55,928
|
|
$
49,268
|
|
$
116,390
|
|
$
99,430
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
70,623
|
|
$
56,479
|
|
49,899
|
|
127,102
|
|
101,528
|
Less: amortization of
other intangible assets
|
2,800
|
|
1,871
|
|
2,034
|
|
4,671
|
|
3,742
|
Adjusted non-interest
expense
|
$
67,823
|
|
$
54,608
|
|
$
47,865
|
|
$ 122,431
|
|
$
97,786
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
income
|
$
21,015
|
|
$
19,060
|
|
$
19,386
|
|
$
40,075
|
|
$
39,436
|
Less: net (loss) gain
on investment securities
|
(166)
|
|
(1,935)
|
|
(44)
|
|
(2,101)
|
|
86
|
Less: net loss on asset
disposals and other transactions
|
(1,665)
|
|
(246)
|
|
(152)
|
|
(1,911)
|
|
(279)
|
Total non-interest
income, excluding net gains and losses
|
$
22,846
|
|
$
21,241
|
|
$
19,582
|
|
$
44,087
|
|
$
39,629
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
84,853
|
|
$
72,878
|
|
$
61,468
|
|
$ 157,731
|
|
$ 115,778
|
Add: fully
tax-equivalent adjustment (a)
|
446
|
|
399
|
|
414
|
|
845
|
|
806
|
Net interest income on
a fully tax-equivalent basis
|
$
85,299
|
|
$
73,277
|
|
$
61,882
|
|
$ 158,576
|
|
$ 116,584
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
108,145
|
|
$
94,518
|
|
$
81,464
|
|
$ 202,663
|
|
$ 156,213
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
62.71 %
|
|
57.78 %
|
|
58.76 %
|
|
60.41 %
|
|
62.60 %
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core items:
|
|
|
|
|
|
|
|
|
Core non-interest
expense
|
$
60,462
|
|
$
55,928
|
|
$
49,268
|
|
$ 116,390
|
|
$
99,430
|
Less: amortization of
other intangible assets
|
2,800
|
|
1,871
|
|
2,034
|
|
4,671
|
|
3,742
|
Adjusted core
non-interest expense
|
$
57,662
|
|
$
54,057
|
|
$
47,234
|
|
$ 111,719
|
|
$
95,688
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
108,145
|
|
$
94,518
|
|
$
81,464
|
|
$ 202,663
|
|
$ 156,213
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core items
|
53.32 %
|
|
57.19 %
|
|
57.98 %
|
|
55.13 %
|
|
61.25 %
|
|
(a) Tax effect is
calculated using a 23.6% blended corporate income tax rate at June
30, 2023 and a 23.3% blended corporate income tax rate at March 31,
2023 and June 30, 2022.
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
(Dollars in
thousands, except per share data)
|
June
30,
|
March
31,
|
December
31,
|
September
30,
|
June
30,
|
2023
|
2023
|
2022
|
2022
|
2022
|
|
|
|
|
|
|
Tangible
equity:
|
|
|
|
|
|
Total stockholders'
equity
|
$
998,907
|
$
819,543
|
$
785,328
|
$
760,511
|
$
786,824
|
Less: goodwill and
other intangible assets
|
413,172
|
324,562
|
326,329
|
328,428
|
328,132
|
Tangible
equity
|
$
585,735
|
$
494,981
|
$
458,999
|
$
432,083
|
$
458,692
|
|
|
|
|
|
|
Tangible
assets:
|
|
|
|
|
|
Total assets
|
$
8,786,635
|
$
7,311,520
|
$ 7,207,304
|
$
7,005,854
|
$
7,278,292
|
Less: goodwill and
other intangible assets
|
413,172
|
324,562
|
326,329
|
328,428
|
328,132
|
Tangible
assets
|
$
8,373,463
|
$
6,986,958
|
$ 6,880,975
|
$
6,677,426
|
$
6,950,160
|
|
|
|
|
|
|
Tangible book value
per common share:
|
|
|
|
|
|
Tangible
equity
|
$
585,735
|
$
494,981
|
$
458,999
|
$
432,083
|
$
458,692
|
Common shares
outstanding
|
35,374,916
|
28,488,158
|
28,287,837
|
28,278,078
|
28,290,115
|
|
|
|
|
|
|
Tangible book value per
common share
|
$
16.56
|
$
17.37
|
$
16.23
|
$
15.28
|
$
16.21
|
|
|
|
|
|
|
Tangible equity to
tangible assets ratio:
|
|
|
Tangible
equity
|
$
585,735
|
$
494,981
|
$
458,999
|
$
432,083
|
$
458,692
|
Tangible
assets
|
$
8,373,463
|
$
6,986,958
|
$ 6,880,975
|
$
6,677,426
|
$
6,950,160
|
|
|
|
|
|
|
Tangible equity to
tangible assets ratio
|
7.00 %
|
7.08 %
|
6.67 %
|
6.47 %
|
6.60 %
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands, except per share data)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue:
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
27,262
|
|
$
33,606
|
|
$
31,735
|
|
$
60,868
|
|
$
61,273
|
Add: provision for
credit losses
|
7,983
|
|
1,853
|
|
—
|
|
9,836
|
|
—
|
Add: loss on
OREO
|
1,612
|
|
10
|
|
32
|
|
1,622
|
|
33
|
Add: loss on investment
securities
|
166
|
|
1,935
|
|
44
|
|
2,101
|
|
44
|
Add: loss on other
assets
|
45
|
|
229
|
|
119
|
|
274
|
|
141
|
Add: net loss on other
transactions
|
8
|
|
7
|
|
—
|
|
15
|
|
104
|
Less: recovery of
credit losses
|
—
|
|
—
|
|
780
|
|
—
|
|
7,587
|
Less: gain on
investment securities
|
—
|
|
—
|
|
—
|
|
—
|
|
130
|
Pre-provision net
revenue
|
$
37,076
|
|
$
37,640
|
|
$
31,150
|
|
$
74,716
|
|
$
53,878
|
Total average
assets
|
$ 8,342,883
|
|
$
7,222,464
|
|
$ 7,121,663
|
|
$
7,792,579
|
|
$
7,094,228
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue to total average assets
(annualized)
|
1.78 %
|
|
2.11 %
|
|
1.75 %
|
|
1.93 %
|
|
1.53 %
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – diluted
|
32,649,976
|
|
28,021,879
|
|
28,061,736
|
|
30,314,504
|
|
28,041,145
|
Pre-provision net
revenue per common share – diluted
|
$1.13
|
|
$1.34
|
|
$1.11
|
|
$2.45
|
|
$1.91
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Annualized net
income adjusted for non-core items:
|
|
|
|
|
Net income
|
$
21,096
|
|
$
26,560
|
|
$
24,888
|
|
$
47,656
|
|
$ 48,465
|
Add: loss on investment
securities
|
166
|
|
1,935
|
|
44
|
|
2,101
|
|
—
|
Less: tax effect of
loss on investment securities (a)
|
35
|
|
406
|
|
9
|
|
441
|
|
—
|
Less: gain on
investment securities
|
—
|
|
—
|
|
—
|
|
—
|
|
86
|
Add: tax effect of net
gain on investment securities (a)
|
—
|
|
—
|
|
—
|
|
—
|
|
18
|
Add: net loss on asset
disposals and other transactions
|
1,665
|
|
246
|
|
152
|
|
1,911
|
|
279
|
Less: tax effect of net
loss on asset disposals and other transactions
(a)
|
349
|
|
52
|
|
32
|
|
401
|
|
59
|
Add:
acquisition-related expenses
|
10,709
|
|
551
|
|
602
|
|
11,260
|
|
1,975
|
Less: tax effect of
acquisition-related expenses (a)
|
2,249
|
|
116
|
|
126
|
|
2,365
|
|
415
|
Add: COVID-19-related
expenses
|
—
|
|
—
|
|
29
|
|
—
|
|
123
|
Less: tax effect of
COVID-19-related expenses (a)
|
—
|
|
—
|
|
6
|
|
—
|
|
26
|
Less: COVID -19
Employee Retention Credit
|
548
|
|
—
|
|
—
|
|
548
|
|
—
|
Add: tax effect of
COVID -19 Employee Retention Credit
|
115
|
|
—
|
|
—
|
|
115
|
|
—
|
Net income adjusted for
non-core items (after tax)
|
$
30,570
|
|
$
28,718
|
|
$
25,542
|
|
$
59,288
|
|
$ 50,274
|
|
|
|
|
|
|
|
|
|
|
Days in the
period
|
91
|
|
90
|
|
91
|
|
181
|
|
181
|
Days in the
year
|
365
|
|
365
|
|
365
|
|
365
|
|
365
|
Annualized net
income
|
$
84,616
|
|
$ 107,716
|
|
$
99,825
|
|
$
96,102
|
|
$ 97,733
|
Annualized net income
adjusted for non-core items (after tax)
|
$
122,616
|
|
$ 116,467
|
|
$
102,449
|
|
$
119,559
|
|
$
101,381
|
Return on average
assets:
|
|
|
|
|
|
|
|
|
|
Annualized net
income
|
$
84,616
|
|
$ 107,716
|
|
$
99,825
|
|
$
96,102
|
|
$ 97,733
|
Total average
assets
|
$
8,342,883
|
|
$
7,222,464
|
|
$
7,121,663
|
|
$
7,792,579
|
|
$
7,094,228
|
Return on average
assets
|
1.01 %
|
|
1.49 %
|
|
1.40 %
|
|
1.23 %
|
|
1.38 %
|
Return on average
assets adjusted for non-core items:
|
|
|
|
|
Annualized net income
adjusted for non-core items (after tax)
|
$
122,616
|
|
$ 116,467
|
|
$
102,449
|
|
$
119,559
|
|
$
101,381
|
Total average
assets
|
$
8,342,883
|
|
$
7,222,464
|
|
$
7,121,663
|
|
$
7,792,579
|
|
$
7,094,228
|
Return on average
assets adjusted for non-core items
|
1.47 %
|
|
1.61 %
|
|
1.44 %
|
|
1.53 %
|
|
1.43 %
|
|
(a) Tax effect is
calculated using a 21% statutory federal corporate income tax
rate.
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
|
Three Months
Ended
|
|
At or For the Six
Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Annualized net
income excluding amortization of other intangible
assets:
|
Net income
|
$
21,096
|
|
$
26,560
|
|
$
24,888
|
|
$ 47,656
|
|
$ 48,465
|
Add: amortization of
other intangible assets
|
2,800
|
|
1,871
|
|
2,034
|
|
4,671
|
|
3,742
|
Less: tax effect of
amortization of other intangible assets (a)
|
588
|
|
393
|
|
427
|
|
981
|
|
786
|
Net income excluding
amortization of other intangible assets (after
tax)
|
$
23,308
|
|
$
28,038
|
|
$
26,495
|
|
$ 51,346
|
|
$ 51,421
|
|
|
|
|
|
|
|
|
|
|
Days in the
period
|
91
|
|
90
|
|
91
|
|
181
|
|
181
|
Days in the
year
|
365
|
|
365
|
|
365
|
|
365
|
|
365
|
Annualized net
income
|
$
84,616
|
|
$
107,716
|
|
$
99,825
|
|
$ 96,102
|
|
$ 97,733
|
Annualized net income
excluding amortization of other intangible
assets (after tax)
|
$
93,488
|
|
$
113,710
|
|
$ 106,271
|
|
$
103,543
|
|
$
103,694
|
|
|
|
|
|
|
|
|
|
|
Average tangible
equity:
|
Total average
stockholders' equity
|
$ 951,438
|
|
$
801,465
|
|
$ 791,401
|
|
$
876,866
|
|
$
812,956
|
Less: average goodwill
and other intangible assets
|
387,055
|
|
325,545
|
|
329,243
|
|
356,470
|
|
316,753
|
Average tangible
equity
|
$ 564,383
|
|
$
475,920
|
|
$ 462,158
|
|
$
520,396
|
|
$
496,203
|
|
|
|
|
|
|
|
|
|
|
Return on total
average stockholders' equity ratio:
|
|
|
|
|
Annualized net
income
|
$
84,616
|
|
$
107,716
|
|
$
99,825
|
|
$ 96,102
|
|
$ 97,733
|
Total average
stockholders' equity
|
$ 951,438
|
|
$
801,465
|
|
$ 791,401
|
|
$
876,866
|
|
$
812,956
|
|
|
|
|
|
|
|
|
|
|
Return on total average
stockholders' equity ratio
|
8.89 %
|
|
13.44 %
|
|
12.61 %
|
|
10.96 %
|
|
12.02 %
|
|
|
|
|
|
Return on average
tangible equity ratio:
|
|
|
|
|
Annualized net income
excluding amortization of other intangible
assets (after tax)
|
$
93,488
|
|
$
113,710
|
|
$ 106,271
|
|
$
103,543
|
|
$
103,694
|
Average tangible
equity
|
$ 564,383
|
|
$
475,920
|
|
$ 462,158
|
|
$
520,396
|
|
$
496,203
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible equity ratio
|
16.56 %
|
|
23.89 %
|
|
22.99 %
|
|
19.90 %
|
|
20.90 %
|
|
(a) Tax effect is
calculated using a 21% statutory federal corporate income tax
rate.
|
View original
content:https://www.prnewswire.com/news-releases/peoples-bancorp-inc-announces-second-quarter-2023-results-301884486.html
SOURCE Peoples Bancorp Inc.