MARIETTA, Ohio, Jan. 23,
2024 /PRNewswire/ -- Peoples Bancorp Inc. ("Peoples")
(NASDAQ: PEBO) today announced results for the quarter and year
ended December 31, 2023. Net income
totaled $33.8 million for the fourth
quarter of 2023, representing earnings per diluted common share of
$0.96. In comparison, Peoples
reported net income of $31.9 million,
representing earnings per diluted common share of $0.90, for the third quarter of 2023 and net
income of $26.8 million representing
earnings per diluted common share of $0.95, for the fourth quarter of 2022. For the
full year, net income was $113.4
million in 2023 versus $101.3
million in 2022, representing earnings per diluted common
share of $3.44 and $3.60, respectively.
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 $0.03 for the fourth quarter of 2023,
$0.09 for the third quarter of 2023,
and $0.06 for the fourth quarter of
2022. For the full year of 2023, the provision for credit losses
negatively impacted earnings per diluted common share by
$0.35, compared to a recovery of
credit losses that positively impacted earnings per diluted common
share by $0.10 for the full year of
2022.
Non-core items, and the related tax effect of each, in net
income primarily included acquisition-related expenses and a
$2.4 million pension settlement
charge recognized in the third quarter of 2023. Non-core items
negatively impacted diluted earnings per common share by
$0.08 for the fourth quarter of 2023,
by $0.16 for the third quarter of
2023, and by $0.03 for the fourth
quarter of 2022. Non-core items negatively impacted earnings per
diluted common share by $0.59 and
$0.11 for the full years of 2023 and
2022, respectively.
"2023 was the second consecutive year of record net income for
Peoples," said Chuck Sulerzyski,
President and Chief Executive Officer. "Our diversified mix of
business continues to demonstrate our ability to perform at a high
level, regardless of the operating or rate environments."
Pension Plan Termination:
During the third quarter of
2023, Peoples terminated its pension plan by settling the remaining
benefit obligation of $7.7 million.
The pension plan had been closed to new entrants since January 1, 2010. Peoples recorded a settlement
charge of $2.4 million in the third
quarter of 2023 in relation to the termination of the pension plan.
No expense was recorded by Peoples in the fourth quarter of 2023,
and Peoples does not anticipate further expenses related to the
pension plan termination.
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
primarily related to the Limestone Merger, which included
$1.3 million and $17.0 million in other non-interest expense for
the fourth quarter and the full year of 2023, respectively. For the
fourth quarter of 2023, the $1.3
million of acquisition-related non-interest expense
consisted of $0.6 million in data
processing and software expense, $0.5
million in professional fees, and $0.2 million in various other non-interest
expense line items. For the full year of 2023, the $17.0 million of acquisition-related non-interest
expense primarily consisted of $6.1
million in professional fees, $5.8
million in salaries and employee benefit costs, $2.9 million in other non-interest expense,
$1.9 million in data processing and
software expense, and $0.3 million in
various other non-interest expense line items. The other
non-interest expenses included $1.8 million of early contract
termination fees on Limestone contracts driven by the system
conversions, which took place in the third quarter of 2023.
Investment Portfolio Restructuring:
During the first
quarter of 2023, Peoples executed sales of $96.7 million of lower yielding
available-for-sale investment securities for an after-tax loss of
$1.6 million. Proceeds from
sales were used to pay down overnight borrowings. During the fourth
quarter of 2023, Peoples executed the sales of an additional
$36.5 million of lower yielding
available-for-sale investment securities for an after-tax loss of
$1.3 million. Proceeds from the
sales were used to purchase higher yielding agency investment
securities.
The loss on the sales 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 the first
quarter transactions were earned back within the 2023 fiscal year,
and the realized losses recognized due to the fourth quarter
transactions are expected to be earned back within 14 months.
Statement of Operations Highlights:
- Net interest income for the fourth quarter of 2023
decreased $4.9 million, or 5%,
compared to the linked quarter and increased $17.8 million, or 25%, compared to the fourth
quarter of 2022.
- Net interest margin decreased 27 basis points to 4.44% for the
fourth quarter of 2023, compared to the linked quarter, and was
flat compared to the fourth quarter of 2022. The decrease in net
interest margin when compared to the linked quarter was primarily
driven by increases in interest expenses on interest-bearing
deposits. The linked quarter was also impacted by a true-up of
$1.9 million to the preliminary
Limestone-related accretion, which added to net interest
income.
- The decrease in net interest income for the fourth quarter of
2023 when compared to the linked quarter was due to the increase in
interest expenses and accretion true-up in the linked quarter
mentioned above.
- Peoples recorded a provision for credit losses of
$1.3 million for the fourth quarter
of 2023, compared to a provision for credit losses of $4.1 million for the third quarter of 2023, and
$2.3 million for the fourth quarter
of 2022.
- The decrease in the provision for credit losses for the fourth
quarter of 2023 compared to the linked quarter was due primarily to
an improvement of macro-economic conditions used within the current
expected credit loss ("CECL") model and the release of reserves on
individually analyzed loans, partially offset by an increase in
charge-off activity.
- Net charge-offs were $3.5
million, or 0.23% of average total loans, annualized, for
the fourth quarter of 2023, compared to $2.3
million, or 0.15% of average total loans, annualized, for
the linked quarter and $2.1 million,
or 0.18% of average total loans, annualized, for the fourth quarter
of 2022.
- For the full year of 2023, net charge-offs were $8.5 million, or 0.15% of average total loans, up
from $7.3 million, or 0.16% of
average total loans, for 2022.
- Total non-interest income, excluding net gains and
losses, increased $2.8 million, or
12%, for the fourth quarter of 2023 compared to the linked quarter,
and increased $6.8 million, or 35%,
compared to the fourth quarter of 2022.
- The increase in total non-interest income, excluding gains and
losses, for the fourth quarter of 2023, compared to the third
quarter of 2023 was largely driven by an increase in lease income,
primarily from an increase in net gains on lease terminations,
partially offset by a decrease in other non-interest income.
- Total non-interest income, excluding net gains and losses, for
the full year 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 for the fourth quarter of 2023
decreased $4.0 million, or 6%,
compared to the linked quarter and increased $14.3 million, or 27%, compared to the fourth
quarter of 2022.
- The decrease in total non-interest expense for the fourth
quarter of 2023 when compared to the linked quarter was primarily
attributable to decreases in acquisition-related expenses as well
as expenses recognized in the linked quarter in relation to the
pension plan termination.
- The efficiency ratio was 56.0% for the fourth quarter of 2023.
When adjusted for non-core expenses, the efficiency ratio was 54.8%
for the fourth quarter of 2023.
Balance Sheet Highlights:
- Period-end total loan and lease balances at December 31, 2023 increased $74.8 million, or 5% annualized, compared to at
September 30, 2023.
- The increases in period-end and average total loan and lease
balances were primarily the result of growth in (i) commercial and
industrial loans, (ii) premium finance loans, and (iii) leases,
partially offset by reductions in construction loans and direct and
indirect consumer loans.
- Asset quality metrics remained stable during the fourth
quarter of 2023.
- Delinquency trends remained relatively stable as loans
considered current comprised 98.6% of the loan portfolio at
December 31, 2023, compared to 99.0%
at September 30, 2023.
- Nonperforming assets at December 31,
2023 decreased $3.4 million
when compared to at September 30,
2023, primarily driven by a decrease in loans 90 days or
more past due and accruing.
- Criticized loans increased $22.1
million during the fourth quarter of 2023. The increase was
primarily driven by downgrades of commercial real estate
relationships.
- Classified loans decreased $4.8
million during the fourth quarter of 2023, driven by loan
pay-offs.
- Period-end total deposit balances at December 31, 2023 increased $114.8 million, or 2%, compared to at
September 30, 2023.
- The increase was primarily driven by increases in retail
certificate of deposit accounts and money market deposit accounts
partially offset by reductions in (i) savings accounts, (ii)
interest-bearing demand deposit accounts, (iii) governmental
deposit accounts, and (iv) brokered certificates of deposit
accounts
- Total demand deposit balances were 38%, 39% and 48% of total
deposits at December 31, 2023, at
September 30, 2023 and at
December 31, 2022, respectively.
- The percentages of retail deposit balances and commercial
deposit balances of the total deposit balance at December 31, 2023 were 80% and 20%, respectively,
compared to 79% and 21%, respectively, at September 30, 2023.
- Total loan balances were 86% of total deposit balances at
December 31, 2023 and at September 30, 2023.
- Deposit balances that exceeded the Federal Deposit Insurance
Corporation ("FDIC") insurance limit of $250,000 were 31% of total deposits at both
December 31, 2023 and September 30, 2023. Peoples pledges investment
securities against certain governmental deposit accounts, which
collateralized $788.7 million, or
40%, of the uninsured deposit balances at December 31, 2023.
Net Interest Income
Net interest income was
$88.4 million for the fourth quarter
of 2023, a decrease of $4.9 million,
or 5%, compared to the linked quarter. Net interest margin was
4.44% for the fourth quarter of 2023, compared to 4.71% for the
linked quarter. The decreases in net interest income and net
interest margin were primarily driven by an increase in interest
expenses on deposits partially offset by improved loan and
investment yields when compared to the linked quarter. The linked
quarter was also impacted by a true-up of $1.9 million to the preliminary Limestone-related
accretion, which added to net interest income.
Net interest income for the fourth quarter of 2023 increased
$17.8 million, or 25%, compared to
the fourth quarter of 2022. The increase in net interest income
compared to the fourth quarter of 2022 was driven by increases in
market interest rates, the Limestone Merger, and organic growth.
Net interest margin was flat when compared to the fourth quarter of
2022, as the increase in total interest income was offset primarily
by an increase in interest expenses on deposits.
Accretion income, net of amortization expense, from acquisitions
was $9.3 million for the fourth
quarter of 2023, $9.5 million for the
third quarter of 2023 and $2.2
million for the fourth quarter of 2022, which added 47 basis
points, 52 basis points and 14 basis points, respectively, to net
interest margin. The decrease in accretion income for the fourth
quarter of 2023 when compared to the linked quarter was driven by a
third quarter 2023 true-up to the preliminary Limestone-related
accretion. The increase in accretion income for the current quarter
compared to the fourth quarter of 2022 was a result of the
accretion from the Limestone Merger.
Net interest income increased $85.9 million, or 34%, for 2023 compared to
2022, and net interest margin increased 59 basis points to 4.56%.
The increase in net interest income for 2023 was driven by
increases in market interest rates, the additional net interest
income from the Limestone Merger, and improvement in investment
yields. Partially offsetting these benefits was an increase in
interest expense resulting from 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 $25.2 million for 2023 and
$11.6 million for 2022, which
added 34 basis points and 19 basis points to net interest margin
for the full years of 2023 and 2022, respectively. The increase in
accretion income for the full year of 2023 compared to the same
2022 period was due to higher accretion recognized in 2023,
primarily from the Limestone Merger, than was recognized in 2022
from prior acquisitions.
Provision for (Recovery of) Credit Losses:
The
provision for credit losses was $1.3 million for the fourth quarter of 2023,
compared to $4.1 million for the
linked quarter and $2.3 million
for the fourth quarter of 2022. The decrease in the provision for
credit losses for the fourth quarter of 2023 compared to the linked
quarter was due primarily to an improvement of macro-economic
conditions used within the CECL model, and the release of reserves
on individually analyzed loans, partially offset by an increase in
charge-off activity. The provision for credit losses for the fourth
quarter of 2022 was largely attributable to a deterioration of
macro-economic conditions and an increase in charge-off activity,
partially offset by a release of reserves on individually analyzed
loans.
For the full year of 2023, the provision for credit losses was
$15.2 million, compared to a recovery
of credit losses of $3.5 million for
2022. The provision for credit losses during 2023 was driven by (i)
the addition of the provision for the non-purchased credit
deteriorated loans acquired in the Limestone Merger, (ii) loan
growth and (iii) an increase in charge-offs, partially offset by a
release of reserves on individually analyzed loans and the use of
updated loss drivers. The recovery of credit losses during 2022 was
primarily due to the impact of economic forecast improvement in the
CECL model, coupled with loan pay-offs during certain periods.
Net charge-offs for the fourth quarter of 2023 were $3.5 million, or 0.23% annualized, of average
total loans, compared to $2.3
million, or 0.15% annualized, of average total loans, for
the linked quarter and $2.1 million,
or 0.18% annualized, of average total loans, for the fourth quarter
of 2022. Net charge-offs for the full year of 2023 were
$8.5 million, or 0.15%, of average
total loans, compared to $7.3
million, or 0.16% of average total loans, for the full year
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 Income. Net loss for the fourth
quarter of 2023 was $2.2 million, compared to net loss of
$0.3 million for the linked
quarter, and net loss of $0.5 million in the fourth quarter of 2022.
The net loss for the fourth quarter of 2023 was primarily due to
the $1.7 million pre-tax net
loss ($1.3 million after-tax) on the
sales of available-for-sale investment securities mentioned above
during the fourth quarter of 2023. The net loss for the linked
quarter was due to $0.3 million of
net losses on repossessed assets. The fourth quarter of 2022 net
loss was due to $0.3 million of net
losses on repossessed assets and $0.2
million of net losses on sales of investment securities.
For the full year of 2023, net loss was $6.5 million compared to net loss of
$0.7 million in 2022. The
increase in net loss for the full year of 2023 when compared to the
same period of 2022 was primarily driven by the $3.6 million pre-tax ($2.9 million after-tax) net loss on the sales of
available-for-sale investment securities during the first and
fourth quarters of 2023, as mentioned above, and a $1.6 million write-down of an other real
estate owned ("OREO") property during the second quarter of 2023.
The net loss during 2022 was driven by $0.3
million of net losses on repossessed assets, $0.2 million of net losses on other transactions,
and $0.1 million of net losses on
OREO.
Total Non-interest Income, Excluding Net Gains and
Losses:
Total non-interest income, excluding net gains and
losses, for the fourth quarter of 2023 increased $2.8 million compared to the linked quarter. The
increase in non-interest income, excluding net gains and losses,
was primarily impacted by increases of $2.9
million and $0.4 million in
lease income and electronic banking income, respectively. The
increase in lease income was due to a large lease buyout in the
fourth quarter of 2023, while the increase in electronic banking
income was due to an increase in customer activity. Partially
offsetting the increases was a $0.5
million decrease in other non-interest income.
Compared to the fourth quarter of 2022, total non-interest
income, excluding net gains and losses, increased $6.8 million for the fourth quarter of 2023,
primarily due to (i) a $1.7 million
increase in electronic banking income, (ii) a $1.5 million increase in lease income, (iii) a
$0.7 million increase in deposit
account service charges, (iv) a $0.6
million increase in insurance income, and (v) a $0.5 million increase in bank owned life
insurance income. Insurance income increased due to new business
and market increases for premiums. The other increases for the
fourth quarter of 2023, when compared to the fourth quarter of
2022, were primarily due to the additional customers brought in
from the Limestone Merger.
For the full year of 2023, total non-interest income, excluding
net gains and losses, increased $14.4
million compared to 2022. The increase was driven by (i) a
$4.1 million increase in electronic
banking income, (ii) a $2.3 million
increase in insurance income primarily due to growth in the
property and casualty insurance line, (iii) a $2.1 million increase in deposit account service
charges, (iv) a $1.5 million increase
in bank owned life insurance income, and (v) a $2.7 million increase in other non-interest
income. Insurance income increased due to new business and market
increases for premiums. The increase in other non-interest income
was due to an increase in operating lease income, which was
partially offset by operating lease expense recognized in other
non-interest expense. The other increases for the full year of
2023, when compared to the full year of 2022, were primarily due to
the additional customers brought in from the Limestone Merger.
Total Non-interest Expense:
Total non-interest
expenses for the fourth quarter and for the year ended
December 31, 2023, were impacted by the Limestone Merger and
acquisition-related non-interest expenses, which added $1.3 million and $17.0 million, respectively, across various
line-items within non-interest expense. During the fourth
quarter of 2023, the acquisition-related expenses recognized were
primarily attributable to professional fees attributable to the
Limestone Merger and system conversion costs. For the third quarter
of 2023, the acquisition-related expenses recognized were primarily
driven by early contract termination fees, system conversion costs,
salaries and employee benefit costs, and professional fees related
to the Limestone Merger.
The table below summarizes the amount of acquisition-related
expenses for each line item that is a component of non-interest
expense. Acquisition-related expenses are considered a non-core
non-interest expense by Peoples. This information is used by
Peoples to provide information useful to investors in understanding
Peoples' operating performance and trends.
|
Three Months
Ended
|
|
Twelve months
ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(Dollars in
thousands)
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
$
37,370
|
|
$
36,608
|
|
$
28,758
|
|
$
144,031
|
|
$
112,690
|
Data processing and
software expense
|
6,029
|
|
6,288
|
|
5,013
|
|
21,607
|
|
14,241
|
Net occupancy and
equipment expense
|
5,532
|
|
5,501
|
|
4,847
|
|
21,368
|
|
19,516
|
Professional
fees
|
3,266
|
|
3,456
|
|
3,310
|
|
17,041
|
|
12,094
|
Amortization of other
intangible assets
|
3,271
|
|
3,280
|
|
1,998
|
|
11,222
|
|
7,763
|
Electronic banking
expense
|
1,991
|
|
1,836
|
|
1,097
|
|
7,150
|
|
9,231
|
Marketing
expense
|
1,463
|
|
1,267
|
|
737
|
|
5,017
|
|
3,728
|
FDIC insurance
premiums
|
1,260
|
|
1,260
|
|
781
|
|
4,785
|
|
3,702
|
Franchise tax
expense
|
862
|
|
772
|
|
546
|
|
3,540
|
|
3,487
|
Communication
expense
|
745
|
|
752
|
|
611
|
|
2,834
|
|
2,484
|
Other loan
expenses
|
726
|
|
856
|
|
947
|
|
2,859
|
|
2,735
|
Other non-interest
expense
|
5,174
|
|
9,820
|
|
4,721
|
|
25,033
|
|
15,476
|
Total
non-interest expense
|
67,689
|
|
71,696
|
|
53,366
|
|
266,487
|
|
207,147
|
Acquisition-related
non-interest expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
119
|
|
562
|
|
—
|
|
5,827
|
|
29
|
Data processing and
software expense
|
560
|
|
1,289
|
|
—
|
|
1,850
|
|
410
|
Net occupancy and
equipment expense
|
78
|
|
2
|
|
15
|
|
109
|
|
50
|
Professional
fees
|
530
|
|
429
|
|
616
|
|
6,062
|
|
2,407
|
Electronic banking
expense
|
—
|
|
—
|
|
—
|
|
115
|
|
(92)
|
Marketing
expense
|
20
|
|
38
|
|
5
|
|
81
|
|
51
|
Communication
expense
|
—
|
|
1
|
|
1
|
|
1
|
|
2
|
Other loan
expenses
|
1
|
|
—
|
|
(4)
|
|
2
|
|
(4)
|
Other non-interest
expense
|
(32)
|
|
2,113
|
|
69
|
|
2,923
|
|
163
|
Total
acquisition-related non-interest expense
|
1,276
|
|
4,434
|
|
702
|
|
16,970
|
|
3,016
|
Non-interest expense
excluding acquisition-related expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
37,251
|
|
36,046
|
|
28,758
|
|
138,204
|
|
112,661
|
Data processing and
software expense
|
5,469
|
|
4,999
|
|
5,013
|
|
19,757
|
|
13,831
|
Net occupancy and
equipment expense
|
5,454
|
|
5,499
|
|
4,832
|
|
21,259
|
|
19,466
|
Professional
fees
|
2,736
|
|
3,027
|
|
2,694
|
|
10,979
|
|
9,687
|
Amortization of other
intangible assets
|
3,271
|
|
3,280
|
|
1,998
|
|
11,222
|
|
7,763
|
Electronic banking
expense
|
1,991
|
|
1,836
|
|
1,097
|
|
7,035
|
|
9,323
|
Marketing
expense
|
1,443
|
|
1,229
|
|
732
|
|
4,936
|
|
3,677
|
FDIC insurance
premiums
|
1,260
|
|
1,260
|
|
781
|
|
4,785
|
|
3,702
|
Franchise tax
expense
|
862
|
|
772
|
|
546
|
|
3,540
|
|
3,487
|
Communication
expense
|
745
|
|
751
|
|
610
|
|
2,833
|
|
2,482
|
Other loan
expenses
|
725
|
|
856
|
|
951
|
|
2,857
|
|
2,739
|
Other non-interest
expense
|
5,206
|
|
7,707
|
|
4,652
|
|
22,110
|
|
15,313
|
Total non-interest
expense excluding acquisition-related expense
|
$
66,413
|
|
$
67,262
|
|
$
52,664
|
|
$
249,517
|
|
$
204,131
|
|
|
|
|
|
|
|
|
|
|
Total non-interest expense decreased $4.0
million, or 6%, for the fourth quarter of 2023, compared to
the linked quarter. Excluding acquisition-related expense, total
non-interest expense decreased $0.8
million, or 1%, primarily due to decreases of $2.5 million in other non-interest expense and
$0.3 million in professional fees.
The decrease in other non-interest expense was due to expenses
recognized in the linked quarter in relation to the pension plan
termination as well a $0.3 million
decrease in operating lease depreciation expenses. Partially
offsetting the decreases in total non-interest expense, excluding
acquisition expenses, were increases of $1.2
million in salaries and employee benefit costs and
$0.5 million in data processing and
software expense. The increase in salaries and employee benefit
costs was due to incentive compensation recognized during the
fourth quarter of 2023, and the increase in data processing and
software expense was primarily due to growth.
Compared to the fourth quarter of 2022, total non-interest
expense increased $14.3 million, or
27%. Excluding acquisition-related expenses, non-interest expenses
increased $13.7 million, or 26%, due
to increases in all non-interest expense line items except for
other loan expenses, which decreased $0.2
million. The increases were impacted by total non-interest
expenses attributable to the Limestone Merger, excluding
acquisition-related expense. A majority of the remaining variance,
excluding acquisition-related expense, was due to the increased
expenses associated with the increased size of the company
following the Limestone Merger. The increase in other non-interest
expenses was primarily due to the previously discussed pension plan
settlement charges and a $0.6 million
increase in operating lease depreciation expenses.
For the full year of 2023, total non-interest expense increased
$59.3 million, or 29%, compared to
2022. Excluding acquisition-related expenses, non-interest expenses
increased $45.4 million, or 22%, due
to increases in all non-interest expense line items except for
electronic banking expense, which decreased $2.3 million when compared to 2022. The increases
were primarily driven by non-interest expenses, excluding
acquisition-related expenses, attributable to the Limestone Merger,
as well as organic growth. The increase in other non-interest
expense was also driven by the previously discussed pension plan
settlement charges and a $1.7 million
increase in operating lease depreciation expenses. Electronic
banking expense decreased when compared to 2022 due to reduced
costs for Peoples' online banking platform and a reclassification
of those costs relative to the prior period to data processing and
software expense.
The efficiency ratio for the fourth quarter of 2023 was 56.0%,
compared to 58.4% for the linked quarter and 56.7% for the fourth
quarter of 2022. The efficiency ratio improved compared to the
linked quarter mainly as the result of a decrease in total
non-interest expenses and an increase in non-interest income,
partially offset by a decrease in net interest income, primarily
due to higher interest expenses in the fourth quarter of 2023. The
improvement in the efficiency ratio compared to the prior year
quarter was primarily due to higher net interest income due to
increases in market interest rates and the additional customers
from the Limestone Merger, which was mostly offset by the increase
in non-interest expense. The efficiency ratio, adjusted for
non-core items, was 54.9% for the fourth quarter of 2023, compared
to 52.5% for the linked quarter, and 55.9% for the fourth quarter
of 2022. For the full year of 2023, the efficiency ratio was 58.7%,
compared to 59.6% for 2022. Adjusted for non-core items, the
efficiency ratio for the full year of 2023 was 54.4%, compared to
58.6% for 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 $9.7
million with an effective tax rate of 22.3% for the fourth
quarter of 2023, compared to income tax expense of $8.8 million with an effective tax rate of 21.7%
for the linked quarter and income tax expense of $7.1 million with an effective tax rate of 21.0%
for the fourth quarter of 2022. The increase in income tax expense
when compared to the fourth quarter of 2022 was primarily due to
higher pre-tax income.
Peoples recognized income tax expense of $31.8 million with an effective tax rate of 21.9%
for the full year of 2023, compared to $27.3
million with an effective tax rate 21.3% for the full year
of 2022. The increase was driven by higher pre-tax income and a
higher effective tax rate primarily due to apportionment in
additional states due to recent acquisitions.
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
December 31, 2023, increased $29.7
million when compared to at September 30, 2023, and
decreased $83.1 million when compared
to at December 31, 2022. The increase in the balance when
compared to at September 30, 2023, was due to an increase in
market value of available-for-sale investment securities after a
decline in market interest rates for those securities during the
fourth quarter of 2023. The decrease in the balance when compared
to at December 31, 2022, was due to a reduction in market
value of available-for-sale investment securities driven by
increases in market interest rates when compared to at
December 31, 2022, and the sales of the lower-yielding
available-for-sale securities during the first and fourth quarters
of 2023 as mentioned above. The balances of unrealized losses, net
of tax, on available-for-sale investment securities recognized
within accumulated other comprehensive loss were $104.2 million, $148.1
million, and $129.9 million at
December 31, 2023, at September 30, 2023, and at
December 31, 2022, respectively.
The held-to-maturity investment securities balance at
December 31, 2023, increased $8.2
million and $123.4 million
when compared to at September 30, 2023, and at
December 31, 2022, respectively. The increases when compared
to prior periods were driven by purchases of agency mortgage-backed
securities, agency collateralized mortgage obligations, and agency
debentures. Most of the securities purchased during 2023 were
classified as held-to-maturity, which has contributed to the
reduction of available-for-sale investment 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 net unrealized losses on held-to-maturity
investment securities were $71.6
million, $105.5 million, and
$81.7 million at December 31,
2023, at September 30, 2023, and at December 31, 2022,
respectively.
The duration of the investment portfolio as of December 31,
2023, was estimated to be 5.53 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 December 31, 2023,
Peoples had liquid and liquefiable assets totaling $616.6 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 December 31, 2023, Peoples had a
borrowing capacity of $665.9 million
available through the Federal Home Loan Bank ("FHLB"), the Federal
Reserve Bank ("FRB"), and federal funds. Additionally at
December 31, 2023, Peoples had other contingent sources of
liquidity totaling $2.1 billion.
Loans and Leases:
The period-end total loan and lease
balances at December 31, 2023, increased $74.8 million, or 5% annualized, compared to at
September 30, 2023. The increase in the period-end total loan
and lease balances was primarily driven by increases of (i)
$54.6 million in commercial and
industrial loans, (ii) $13.9 million
in premium finance loans, (iii) $11.4
million in leases, and (iv) $7.0
million in other commercial real estate loans, partially
offset by reductions of $10.0 million
in construction loans and $4.2
million in direct consumer loans.
The period-end total loan and lease balances at
December 31, 2023, increased $1.5
billion, compared to at December 31, 2022, primarily
due to the Limestone Merger. Excluding the loans acquired in the
Limestone Merger, the period-end loan and lease balance increased
$472.2 million, or 10%, driven
by increases of $203.6 million,
$76.6 million, $68.9 million, $44.0
million, $37.9 million, and
$37.0 million in other commercial
real estate loans, commercial and industrial loans, leases, premium
finance loans, construction loans, and indirect consumer loans,
respectively.
Quarterly average total loan balances increased $78.6 million compared to the linked quarter. The
increase in average total loan balances when compared to the linked
quarter was primarily the result of growth of (i) $48.9 million in other commercial real estate
loans (ii) $16.4 million in
commercial and industrial loans, (iii) $15.7
million in leases, (iv) $10.5
million in premium finance loans, and (v) $9.6 million in indirect consumer loans,
partially offset by reductions of $13.2
million in commercial real estate construction loans and
$11.8 million in residential real
estate loans.
Compared to the fourth quarter of 2022, quarterly average loan
balances in the current quarter increased $1.4 billion, or 31%. The increase was driven by
loans acquired in the Limestone Merger, and to lesser extents,
growth in other commercial real estate loans, commercial and
industrial loans, leases, premium finance loans, construction
loans, and indirect consumer loans.
Asset Quality:
Overall, asset quality remained stable
through the fourth quarter of 2023. Total nonperforming assets at
December 31, 2023, decreased $3.4
million, or 8%, compared to at September 30, 2023, and
decreased $6.1 million, or 14%,
compared to at December 31, 2022. The decrease in
nonperforming assets compared to the linked quarter was primarily
due to a decrease in the balance of loans and leases 90 days or
more past due. The decrease in nonperforming assets compared to at
December 31, 2022, was also impacted by reductions in
nonaccrual commercial real estate loans and OREO. Nonperforming
assets as a percent of total loans and OREO was 0.63% at
December 31, 2023, down from 0.70% at September 30, 2023,
and 0.96% at December 31, 2022.
Criticized loans, which are those categorized as special
mention, substandard or doubtful, increased $22.1 million, or 10%, compared to at
September 30, 2023, and increased $43.9
million, or 23%, compared to at December 31, 2022. As a
percent of total loans, criticized loans were 3.82% at
December 31, 2023, compared to 3.50% at September 30,
2023, and 4.07% at December 31, 2022. The increase in the
amount of criticized loans compared to at September 30, 2023
was primarily driven by downgrades of commercial real estate loans.
Compared to December 31, 2022, the increase in the amount of
criticized loans was primarily driven by the acquisition of
criticized loans 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 in the
Limestone Merger.
Classified loans, which are those categorized as substandard or
doubtful, decreased $4.8 million, or
4%, compared to at September 30, 2023, and increased
$30.4 million, or 34%, compared to at
December 31, 2022. As a percent of total loans, classified
loans were 1.95% at December 31, 2023, compared to 2.05% at
September 30, 2023, and 1.90% at December 31, 2022. The
decrease in classified loans compared to at September 30,
2023, was driven by classified loan pay-offs. The increase in
classified loans when compared to at December 31, 2022, was
primarily driven by the acquisition of classified loans in the
Limestone Merger.
Annualized net charge-offs were 0.23% of average total loans for
the fourth quarter of 2023, compared to 0.15% for the linked
quarter, and 0.18% for the fourth quarter of 2022. The increase
relative to the linked quarter was driven by an increase in
charge-offs on (i) leases, (ii) commercial and industrial loans,
and (iii) indirect consumer loans, partially offset by increases in
recoveries on other commercial real estate and residential real
estate loans, during the fourth quarter of 2023. The increase in
net charge-offs during the fourth quarter of 2023 versus the prior
year fourth quarter was primarily attributable to an increase in
charge-offs on (i) leases, (ii) commercial industrial loans, and
(iii) indirect consumer loans, partially offset by increases in
recoveries on other commercial real estate and residential real
estate loans, during the fourth quarter of 2023. Net charge-offs
were 0.15% of average total loans for 2023, compared to 0.16% for
2022.
At December 31, 2023, the allowance for credit losses
decreased $0.9 million when compared
to at September 30, 2023, and increased $8.8 million when compared to at
December 31, 2022. The ratio of the allowance for credit
losses as a percent of total loans decreased to 1.01% at
December 31, 2023, compared to 1.03% at September 30,
2023, and 1.13% at December 31, 2022.
Deposits:
As of December 31, 2023, period-end
total deposits increased $114.8
million, or 2%, compared to at September 30, 2023. The
increase was primarily driven by increases of $244.7 million in retail certificate of deposit
accounts and $44.6 million in money
market deposit accounts partially offset by reductions of (i)
$67.9 million in savings accounts,
(ii) $36.7 million in
interest-bearing demand deposit accounts, (iii) $34.9 million in governmental deposit accounts,
and (iv) $33.5 million in brokered
certificates of deposit accounts. The decrease in governmental
deposit accounts is a typical seasonal trend that occurs during the
fourth quarter of each year.
Compared to December 31, 2022, period-end deposit balances
increased $1.4 billion, or 25%. The
increase was primarily driven by deposits acquired in the Limestone
Merger. Excluding Limestone deposit balances, total deposits at
December 31, 2023 increased $483.2
million, or 8%, compared to at December 31, 2022,
primarily due to increases of $669.3
million in retail certificates of deposit and $449.8 million in brokered certificates of
deposit, partially offset by decreases of $228.9 million, $224.7
million, and $192.9 million in
non-interest bearing deposits, savings accounts, and
interest-bearing demand deposit accounts, respectively.
The percentages of retail deposit balances and commercial
deposit balances of the total deposit balance at December 31,
2023 were 80% and 20%, respectively, compared to 79% and 21%,
respectively, at September 30, 2023, and 74% and 26%,
respectively, at December 31, 2022.
Uninsured deposits were 31%, 31%, and 33% of total deposits at
December 31, 2023, at September 30, 2023, and at
December 31, 2022, respectively. Uninsured amounts are
estimated based on the portion of customer account balances that
exceeded the FDIC limit of $250,000.
Peoples pledges investment securities against certain governmental
deposit accounts, which collateralized $788.7 million, or 40%, $812.7 million, or 42%, and $651.2 million, or 36% of the uninsured deposit
balances at December 31, 2023, at September 30, 2023, and
at December 31, 2022, respectively.
Average deposit balances during the fourth quarter of 2023
increased $33.6 million when compared
to the linked quarter, and increased $1.3
billion, or 22%, when compared to the fourth quarter of
2022. For the full year of 2023, average deposit balances grew
$740.6 million, or 13%, driven by
deposits acquired in the Limestone Merger. Total demand deposit
accounts comprised 38%, 39% and 48% of total deposits at
December 31, 2023, at September 30, 2023 and at
December 31, 2022, respectively.
Stockholders' Equity:
Total stockholders' equity at
December 31, 2023, increased $60.3
million, or 6%, compared to at September 30, 2023. This
change was primarily driven by a $42.2 million decrease in accumulated other
comprehensive loss and net income of $33.8 million during the quarter, partially
offset by dividends paid of $14.1
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.
Total stockholders' equity at December 31, 2023, increased
$268.2 million, or 34%, compared to
at December 31, 2022, which was due to (i) the issuance of 6.8
million common shares (valued at $177.9
million) in the Limestone Merger, (ii) net income of
$113.4 million for the full year
of 2023, and (iii) a decrease in other comprehensive loss of
$25.5 million, partially offset by
dividends paid of $52.1 million and
share repurchases of $3.0
million.
At December 31, 2023, the tier 1 risk-based capital ratio
was 12.65%, compared to 12.31% at September 30, 2023, and
12.19% at December 31, 2022. The common equity tier 1
risk-based capital ratio was 11.82% at December 31, 2023,
compared to 11.57% at September 30, 2023, and 11.92% at
December 31, 2022. The total risk-based capital ratio was
13.46% at December 31, 2023, compared to 13.14% at
September 30, 2023, and 13.06% at December 31, 2022.
Peoples adopted the five-year transition to phase in the impact of
the adoption of CECL on regulatory capital ratios. Compared to at
September 30, 2023, these ratios improved due to higher net
income. When compared to at December 31, 2022, the tier 1
risk-based capital and the total risk-based capital ratios 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 December 31, 2023 decreased
compared to at December 31, 2022 due
to the common shares issued in the Limestone Merger.
At December 31, 2023, book value
per common share and tangible book value per common share, which
excludes goodwill and other intangible assets, were $29.83 and $18.16,
respectively, compared to $28.06 and
$16.52, respectively, at September 30, 2023, and $27.76 and $16.23,
respectively, at December 31, 2022.
The ratio of total stockholders' equity to total assets increased
40 basis points when compared to September
30, 2023. The tangible equity to tangible assets ratio,
which excludes goodwill and other intangible assets, increased 48
basis points when compared to at September
30, 2023, due primarily to the changes in equity noted
above. Compared to at December 31,
2022, the total stockholders' equity to total assets ratio
increased from 10.90% to 11.50%, and the tangible equity to
tangible assets ratio increased from 6.67% to 7.33%.
Peoples Bancorp Inc. ("Peoples", Nasdaq: PEBO) is a
diversified financial services holding company and makes available
a complete line of banking, trust and investment, insurance and
premium financing solutions through its subsidiaries. Headquartered
in Marietta, Ohio since 1902,
Peoples has established a heritage of financial stability, growth
and community impact. Peoples had $9.2
billion in total assets as of December 31, 2023, and
150 locations, including 133 full-service bank branches in
Ohio, West Virginia, Kentucky, Virginia, Washington
D.C., and Maryland.
Peoples' vision is to be the Best Community Bank in America.
Peoples is a member of the Russell 3000 index of United States ("U.S.") publicly-traded
companies. Peoples offers services through Peoples Bank (which
includes the divisions of Peoples Investment Services, Peoples
Premium Finance and North Star Leasing), Peoples Insurance Agency,
LLC, and Vantage Financial, LLC.
Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss
fourth quarter and full year 2023 results of operations on
January 23, 2024, at 11:00 a.m.,
Eastern Time, with members of Peoples' executive management
participating. Analysts, media and individual investors are invited
to participate in the conference call by calling (866) 890-9285. A
simultaneous webcast of the conference call audio will be available
online via the "Investor Relations" section of Peoples' website,
www.peoplesbancorp.com. Participants are encouraged to call or sign
in at least 15 minutes prior to the scheduled conference call time
to ensure participation and, if required, to download and install
the necessary software. A replay of the call will be available on
Peoples' website in the "Investor Relations" section for one
year.
Use of Non-US GAAP Financial Measures:
This news release contains financial information and performance
measures determined by methods other than those in accordance with
accounting principles generally accepted in the United States of America ("US GAAP").
Management uses these "non-US GAAP" financial measures in its
analysis of Peoples' performance and the efficiency of its
operations. Management believes that these non-US GAAP financial
measures provide a greater understanding of ongoing operations and
enhance comparability of results with prior periods and peers.
These disclosures should not be viewed as substitutes for financial
measures determined in accordance with US GAAP, nor are they
necessarily comparable to non-US GAAP performance measures that may
be presented by other companies. Below is a listing of the non-US
GAAP financial measures used in this news release:
- Core non-interest expense is a non-US GAAP financial measure
since it excludes the impact of acquisition-related expenses,
pension settlement charges, 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, pension settlement charges,
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, pension
settlement charges, 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, pension settlement charges, 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 factors include, but are not limited to:
(1)
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the effects of interest
rate policies, changes in the interest rate environment due to
economic conditions and/or the fiscal and monetary policy measures
undertaken by the U.S. government and the Federal Reserve Board,
including changes in the Federal Funds Target Rate, in response to
such economic conditions, which may adversely impact interest
rates, the interest rate yield curve, interest margins, loan demand
and interest rate sensitivity;
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(2)
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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 acquisitions,
including the Limestone Merger that closed in April 2023, and the
expansion of commercial and consumer lending activities;
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(4)
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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)
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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;
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(6)
|
the effects of easing
restrictions on participants in the financial services
industry;
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(7)
|
current and future
local, regional, national and international economic conditions
(including the impact of persistent inflation, supply chain issues
or labor shortages, supply-demand imbalances affecting local real
estate prices, high unemployment rates in the local or regional
economies in which Peoples operates and/or the U.S. economy
generally, an increasing federal government budget deficit, the
failure of the federal government to raise the federal debt
ceiling, potential or imposed tariffs, 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;
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(8)
|
Peoples may issue
equity securities in connection with future acquisitions, which
could cause ownership and economic dilution to Peoples' current
shareholders;
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(9)
|
changes in prepayment
speeds, loan originations, levels of nonperforming assets,
delinquent loans, charge-offs, and customer and other
counterparties' performance and creditworthiness generally, which
may be less favorable than expected in light of recent inflationary
pressures and continued elevated interest rates, and may adversely
impact the amount of interest income generated;
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(10)
|
Peoples may have more
credit risk and higher credit losses to the extent there are loan
concentrations by location or industry of borrowers or
collateral;
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(11)
|
future credit quality
and performance, including expectations regarding future credit
losses and the allowance for credit losses;
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(12)
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changes in accounting
standards, policies, estimates or procedures may adversely affect
Peoples' reported financial condition or results of
operations;
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(13)
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the impact of
assumptions, estimates and inputs used within models, which may
vary materially from actual outcomes, including under the CECL
model;
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(14)
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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;
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(15)
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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;
|
|
|
(16)
|
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;
|
|
|
(17)
|
Peoples' ability to
receive dividends from Peoples' subsidiaries;
|
|
|
(18)
|
Peoples' ability to
maintain required capital levels and adequate sources of funding
and liquidity;
|
|
|
(19)
|
the impact of larger or
similar-sized financial institutions encountering problems, such as
the closures in 2023 of Silicon Valley Bank in California,
Signature Bank in New York and First Republic Bank in California,
which may adversely affect the banking industry and/or Peoples'
business generation and retention, funding and liquidity, including
Peoples' continued ability to grow deposits or maintain adequate
deposit levels, and may further result in potential increased
regulatory requirements, increased reputational risk and potential
impacts to macroeconomic conditions;
|
|
|
(20)
|
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;
|
|
|
(21)
|
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;
|
|
|
(22)
|
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;
|
|
|
(23)
|
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;
|
|
|
(24)
|
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;
|
|
|
(25)
|
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;
|
|
|
(26)
|
the impact on Peoples'
businesses, personnel, facilities or systems of losses related to
acts of fraud, theft, misappropriation or violence;
|
|
|
(27)
|
the impact on Peoples'
businesses, as well as on the risks described above, of various
domestic or international widespread natural or other disasters,
pandemics, cybersecurity attacks, system failures, civil unrest,
military or terrorist activities or international conflicts
(including Russia's war in Ukraine and the recent conflicts
involving Israel and Hamas);
|
|
|
(28)
|
the potential further
deterioration of the U.S. economy due to financial, political or
other shocks;
|
|
|
(29)
|
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;
|
|
|
(30)
|
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;
|
|
|
(31)
|
risks and uncertainties
associated with Peoples' entry into new geographic markets and
risks resulting from Peoples' inexperience in these new geographic
markets;
|
|
|
(32)
|
Peoples' ability to
integrate the Limestone Merger, which may be unsuccessful, or may
be more difficult, time-consuming or costly than
expected;
|
|
|
(33)
|
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;
|
|
|
(34)
|
changes in laws or
regulations imposed by Peoples' regulators impacting Peoples'
capital actions, including dividend payments and share
repurchases;
|
|
|
(35)
|
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;
|
|
|
(36)
|
Peoples' business may
be adversely affected by increased political and regulatory
scrutiny of corporate environmental, social and governance ("ESG")
practices;
|
|
|
(37)
|
the effect of a fall in
stock market prices on the asset and wealth management business;
and
|
|
|
(38)
|
other risk factors
relating to the banking industry or Peoples as detailed from time
to time in Peoples' reports filed with the Securities and Exchange
Commission (the "SEC"), including those risk factors included in
the disclosures under the heading "ITEM 1A. RISK FACTORS" of
Peoples' Annual Report on Form 10-K for the fiscal year ended
December 31, 2022, and under the heading "ITEM 1A. RISK FACTORS" in
Part II of Peoples' Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 2023, June 30, 2023, and
September 30, 2023. Peoples encourages readers of this news release
to understand forward-looking statements to be strategic objectives
rather than absolute targets of future performance. Peoples
undertakes no obligation to update these forward-looking statements
to reflect events or circumstances after the date of this news
release or to reflect the occurrence of unanticipated events,
except as required by applicable legal requirements. Copies of
documents filed with the SEC are available free of charge at the
SEC's website at http://www.sec.gov and/or from Peoples' website -
www.peoplesbancorp.com under the "Investor Relations"
section.
|
As required by U.S. GAAP, Peoples is required to evaluate the
impact of subsequent events through the issuance date of its
December 31, 2023 consolidated financial statements as part of
its Annual Report on Form 10-K 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 Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.97
|
|
$
0.91
|
|
$
0.96
|
|
$
3.46
|
|
$
3.61
|
Diluted
|
0.96
|
|
0.90
|
|
0.95
|
|
3.44
|
|
3.60
|
Cash dividends declared
per common share
|
0.39
|
|
0.39
|
|
0.38
|
|
1.55
|
|
1.50
|
Book value per common
share (a)
|
29.83
|
|
28.06
|
|
27.76
|
|
29.83
|
|
27.76
|
Tangible book value per
common share (a)(b)
|
18.16
|
|
16.52
|
|
16.23
|
|
18.16
|
|
16.23
|
Closing price of common
shares at end of period
|
$
33.76
|
|
$
25.38
|
|
$
28.25
|
|
$
33.76
|
|
$
28.25
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS:
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity (c)
|
13.39 %
|
|
12.59 %
|
|
13.86 %
|
|
12.05 %
|
|
12.69 %
|
Return on average
tangible equity (c)(d)
|
24.45 %
|
|
23.04 %
|
|
25.56 %
|
|
21.96 %
|
|
22.60 %
|
Return on average
assets (c)
|
1.52 %
|
|
1.44 %
|
|
1.51 %
|
|
1.37 %
|
|
1.43 %
|
Return on average
assets adjusted for non-core items (c)(e)
|
1.64 %
|
|
1.69 %
|
|
1.56 %
|
|
1.61 %
|
|
1.47 %
|
Efficiency ratio
(f)(i)
|
55.95 %
|
|
58.36 %
|
|
56.74 %
|
|
58.68 %
|
|
59.59 %
|
Efficiency ratio
adjusted for non-core items (g)(i)
|
54.85 %
|
|
52.51 %
|
|
55.91 %
|
|
54.35 %
|
|
58.59 %
|
Pre-provision net
revenue to total average assets (c)(h)
|
2.11 %
|
|
2.03 %
|
|
2.06 %
|
|
2.01 %
|
|
1.77 %
|
Net interest margin
(c)(i)
|
4.44 %
|
|
4.71 %
|
|
4.44 %
|
|
4.56 %
|
|
3.97 %
|
Dividend payout ratio
(j)
|
41.75 %
|
|
43.26 %
|
|
40.02 %
|
|
45.93 %
|
|
41.89 %
|
|
|
(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, pension settlement
charges, 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
acquisition-related expenses, pension settlement charges,
COVID-19-related expenses, COVID-19 Employee Retention Credits
received, and all gains and losses included in earnings, and uses
fully tax-equivalent net interest income. Additional information
regarding the calculation of this ratio is included at the end of
this news release under the caption of "Non-US GAAP Financial
Measures (Unaudited)."
|
(h)
|
Pre-provision net
revenue is defined as net interest income plus total non-interest
income (excluding all gains and losses) minus total non-interest
expense. This measure represents a non-US GAAP financial measure
since it excludes the provision for (recovery of) credit losses and
all gains and losses included in net income. This measure is a key
metric used by federal bank regulatory agencies in their evaluation
of capital adequacy for financial institutions. Additional
information regarding the calculation of this ratio is included at
the end of this news release under the caption of "Non-US GAAP
Financial Measures (Unaudited)."
|
(i)
|
Information presented
on a fully tax-equivalent basis, using a 23.3% blended
corporate income tax rate for all periods presented.
|
(j)
|
This ratio is
calculated based on dividends declared during the period divided by
net income for the period.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(Dollars in
thousands, except per share data)
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Total interest
income
|
$
125,244
|
|
$
123,593
|
|
$
76,202
|
|
$
439,403
|
|
$
269,554
|
Total interest
expense
|
36,875
|
|
30,319
|
|
5,589
|
|
100,029
|
|
16,112
|
Net interest
income
|
88,369
|
|
93,274
|
|
70,613
|
|
339,374
|
|
253,442
|
Provision for (recovery
of) credit losses
|
1,285
|
|
4,053
|
|
2,301
|
|
15,174
|
|
(3,510)
|
Net interest income
after provision for (recovery of) credit losses
|
87,084
|
|
89,221
|
|
68,312
|
|
324,200
|
|
256,952
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
Electronic banking
income
|
6,835
|
|
6,466
|
|
5,161
|
|
25,210
|
|
21,094
|
Insurance
income
|
4,337
|
|
4,250
|
|
3,732
|
|
18,016
|
|
15,727
|
Trust and investment
income
|
4,374
|
|
4,288
|
|
3,915
|
|
17,160
|
|
16,391
|
Deposit account service
charges
|
4,490
|
|
4,516
|
|
3,766
|
|
16,682
|
|
14,583
|
Lease income
(loss)
|
2,822
|
|
(66)
|
|
1,336
|
|
5,552
|
|
4,267
|
Bank owned life
insurance income
|
1,227
|
|
1,375
|
|
702
|
|
4,151
|
|
2,624
|
Mortgage banking
income
|
338
|
|
237
|
|
281
|
|
1,078
|
|
1,397
|
Net loss on asset
disposals and other transactions
|
(619)
|
|
(307)
|
|
(302)
|
|
(2,837)
|
|
(616)
|
Net loss on investment
securities
|
(1,592)
|
|
(7)
|
|
(168)
|
|
(3,700)
|
|
(61)
|
Other non-interest
income
|
1,922
|
|
2,452
|
|
611
|
|
6,101
|
|
3,430
|
Total
non-interest income
|
24,134
|
|
23,204
|
|
19,034
|
|
87,413
|
|
78,836
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
37,370
|
|
36,608
|
|
28,758
|
|
144,031
|
|
112,690
|
Data processing and
software expense
|
6,029
|
|
6,288
|
|
5,013
|
|
21,607
|
|
14,241
|
Net occupancy and
equipment expense
|
5,532
|
|
5,501
|
|
4,847
|
|
21,368
|
|
19,516
|
Professional
fees
|
3,266
|
|
3,456
|
|
3,310
|
|
17,041
|
|
12,094
|
Amortization of other
intangible assets
|
3,271
|
|
3,280
|
|
1,998
|
|
11,222
|
|
7,763
|
Electronic banking
expense
|
1,991
|
|
1,836
|
|
1,097
|
|
7,150
|
|
9,231
|
Marketing
expense
|
1,463
|
|
1,267
|
|
737
|
|
5,017
|
|
3,728
|
FDIC insurance
expense
|
1,260
|
|
1,260
|
|
781
|
|
4,785
|
|
3,702
|
Franchise tax
expense
|
862
|
|
772
|
|
546
|
|
3,540
|
|
3,487
|
Other loan
expenses
|
726
|
|
856
|
|
947
|
|
2,859
|
|
2,735
|
Communication
expense
|
745
|
|
752
|
|
611
|
|
2,834
|
|
2,484
|
Other non-interest
expense
|
5,174
|
|
9,820
|
|
4,721
|
|
25,033
|
|
15,476
|
Total
non-interest expense
|
67,689
|
|
71,696
|
|
53,366
|
|
266,487
|
|
207,147
|
Income before
income taxes
|
43,529
|
|
40,729
|
|
33,980
|
|
145,126
|
|
128,641
|
Income tax
expense
|
9,704
|
|
8,847
|
|
7,131
|
|
31,763
|
|
27,349
|
Net
income
|
$
33,825
|
|
$
31,882
|
|
$
26,849
|
|
$
113,363
|
|
$
101,292
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE
DATA:
|
|
|
|
|
|
|
|
|
|
Net income available to
common shareholders
|
$
33,825
|
|
$
31,882
|
|
$
26,849
|
|
$
113,363
|
|
$
101,292
|
Less: Dividends paid on
unvested common shares
|
143
|
|
143
|
|
102
|
|
531
|
|
354
|
Less: Undistributed
loss allocated to unvested common shares
|
79
|
|
79
|
|
30
|
|
269
|
|
96
|
Net earnings allocated
to common shareholders
|
$
33,603
|
|
$
31,660
|
|
$
26,717
|
|
$
112,563
|
|
$
100,842
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding
|
34,794,313
|
|
34,818,346
|
|
27,843,203
|
|
32,533,086
|
|
27,908,022
|
Effect of potentially
dilutive common shares
|
295,512
|
|
243,551
|
|
138,453
|
|
227,722
|
|
91,580
|
Total weighted-average
diluted common shares outstanding
|
35,089,825
|
|
35,061,897
|
|
27,981,656
|
|
32,760,808
|
|
27,999,602
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
0.97
|
|
$
0.91
|
|
$
0.96
|
|
$
3.46
|
|
$
3.61
|
Earnings per common
share – diluted
|
$
0.96
|
|
$
0.90
|
|
$
0.95
|
|
$
3.44
|
|
$
3.60
|
Cash dividends declared
per common share
|
$
0.39
|
|
$
0.39
|
|
$
0.38
|
|
$
1.55
|
|
$
1.50
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – basic
|
34,794,313
|
|
34,818,346
|
|
27,843,203
|
|
32,533,086
|
|
27,908,022
|
Weighted-average common
shares outstanding – diluted
|
35,089,825
|
|
35,061,897
|
|
27,981,656
|
|
32,760,808
|
|
27,999,602
|
Common shares
outstanding at the end of period
|
35,314,745
|
|
35,395,990
|
|
28,287,837
|
|
35,314,745
|
|
28,287,837
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
December
31,
|
|
2023
|
|
2022
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
Cash and due
from banks
|
$
111,680
|
|
$
94,679
|
Interest-bearing
deposits in other banks
|
315,042
|
|
59,343
|
Total cash and cash equivalents
|
426,722
|
|
154,022
|
Available-for-sale
investment securities, at fair value (amortized cost of
|
|
|
|
$1,184,288 at
December 31, 2023 and $1,300,719 at December 31, 2022)
(a)
|
1,048,322
|
|
1,131,399
|
Held-to-maturity
investment securities, at amortized cost (fair value of
|
|
|
|
$612,022 at
December 31, 2023 and $478,509 at December 31, 2022)
(a)
|
683,657
|
|
560,212
|
Other investment
securities, at cost
|
63,421
|
|
51,609
|
Total investment securities (a)
|
1,795,400
|
|
1,743,220
|
Loans and leases, net
of deferred fees and costs (b)
|
6,159,196
|
|
4,707,150
|
Allowance for credit
losses
|
(62,011)
|
|
(53,162)
|
Net
loans and leases
|
6,097,185
|
|
4,653,988
|
Loans held for
sale
|
1,866
|
|
2,140
|
Bank premises and
equipment, net of accumulated depreciation
|
103,856
|
|
82,934
|
Bank owned life
insurance
|
140,554
|
|
105,292
|
Goodwill
|
362,169
|
|
292,397
|
Other intangible
assets
|
50,003
|
|
33,932
|
Other assets
|
179,627
|
|
139,379
|
Total assets
|
$
9,157,382
|
|
$
7,207,304
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest-bearing
|
$
1,567,649
|
|
$
1,589,402
|
Interest-bearing
|
5,584,648
|
|
4,127,539
|
Total deposits
|
7,152,297
|
|
5,716,941
|
Short-term
borrowings
|
601,121
|
|
500,138
|
Long-term
borrowings
|
216,241
|
|
101,093
|
Accrued expenses and
other liabilities
|
134,189
|
|
103,804
|
Total liabilities
|
$
8,103,848
|
|
$
6,421,976
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Preferred shares, no
par value, 50,000 shares authorized, no shares issued at
December 31, 2023 and
December 31, 2022
|
—
|
|
—
|
Common shares, no par
value, 50,000,000 shares authorized, 36,736,041 shares issued at
December 31,
2023 and 29,857,920 shares issued at
December 31, 2022, including shares in treasury
|
865,227
|
|
686,450
|
Retained
earnings
|
327,237
|
|
265,936
|
Accumulated other
comprehensive loss, net of deferred income taxes
|
(101,590)
|
|
(127,136)
|
Treasury stock, at
cost, 1,511,348 common shares at December 31, 2023 and
1,643,461 common shares at
December 31, 2022
|
(37,340)
|
|
(39,922)
|
Total stockholders' equity
|
1,053,534
|
|
785,328
|
Total liabilities and stockholders' equity
|
$
9,157,382
|
|
$
7,207,304
|
|
|
|
|
(a)
|
Available-for-sale
investment securities and held-to-maturity investment securities
are presented net of allowance for credit losses of $0 and $238,
respectively, as of December 31, 2023 and $0 and $241,
respectively, as of December 31, 2022.
|
(b)
|
Also referred to
throughout this document as "total loans" and "loans held for
investment."
|
SELECTED FINANCIAL
INFORMATION (Unaudited)
|
|
|
December
31,
|
September
30,
|
June
30,
|
March
31,
|
December
31,
|
(Dollars in
thousands)
|
2023
|
2023
|
2023
|
2023
|
2022
|
Loan
Portfolio
|
|
|
|
|
|
Construction
|
$
364,019
|
$
374,016
|
$
418,741
|
$
232,296
|
$
246,941
|
Commercial real estate,
other
|
2,196,957
|
2,189,984
|
2,071,514
|
1,481,062
|
1,423,518
|
Commercial and
industrial
|
1,183,423
|
1,128,809
|
1,160,310
|
891,139
|
892,634
|
Premium
finance
|
203,177
|
189,251
|
162,357
|
158,263
|
159,197
|
Leases
|
414,060
|
402,635
|
377,791
|
354,641
|
345,131
|
Residential real
estate
|
791,095
|
791,965
|
791,442
|
712,602
|
723,360
|
Home equity lines of
credit
|
208,675
|
203,940
|
199,221
|
174,383
|
177,858
|
Consumer,
indirect
|
666,472
|
668,371
|
654,371
|
647,177
|
629,426
|
Consumer,
direct
|
130,332
|
134,562
|
138,019
|
107,406
|
108,363
|
Deposit account
overdrafts
|
986
|
857
|
830
|
749
|
722
|
Total loans and leases
|
$
6,159,196
|
$
6,084,390
|
$ 5,974,596
|
$ 4,759,718
|
$ 4,707,150
|
Total acquired loans
and leases (a)
|
$
1,827,730
|
$
1,925,554
|
$ 2,032,505
|
$ 1,024,739
|
$ 1,108,728
|
Total originated loans and leases
|
$
4,331,466
|
$
4,158,836
|
$ 3,942,091
|
$ 3,734,979
|
$ 3,598,422
|
Deposit
Balances
|
|
|
|
|
|
Non-interest-bearing
deposits (b)
|
$
1,567,649
|
$
1,569,095
|
$ 1,682,634
|
$ 1,555,064
|
$ 1,589,402
|
Interest-bearing
deposits:
|
|
|
|
|
|
Interest-bearing
demand accounts (b)
|
1,144,357
|
1,181,079
|
1,225,646
|
1,085,169
|
1,160,182
|
Retail
certificates of deposit
|
1,443,417
|
1,198,733
|
950,783
|
622,091
|
530,236
|
Money market
deposit accounts
|
775,488
|
730,902
|
718,633
|
579,106
|
617,029
|
Governmental
deposit accounts
|
726,713
|
761,625
|
705,596
|
649,303
|
625,965
|
Savings
accounts
|
919,244
|
987,170
|
1,116,622
|
1,024,638
|
1,068,547
|
Brokered
deposits
|
575,429
|
608,914
|
559,955
|
273,156
|
125,580
|
Total interest-bearing deposits
|
$
5,584,648
|
$
5,468,423
|
$ 5,277,235
|
$ 4,233,463
|
$ 4,127,539
|
Total deposits
|
$
7,152,297
|
$
7,037,518
|
$ 6,959,869
|
$ 5,788,527
|
$ 5,716,941
|
Total demand deposits
(b)
|
$
2,712,006
|
$
2,750,174
|
$ 2,908,280
|
$ 2,640,233
|
$ 2,749,584
|
Asset
Quality
|
|
|
|
|
|
Nonperforming assets
(NPAs):
|
|
|
|
|
|
Loans 90+ days
past due and accruing
|
$
6,673
|
$
9,117
|
$
5,924
|
$
4,014
|
$
4,842
|
Nonaccrual
loans
|
25,229
|
26,187
|
28,796
|
29,980
|
31,473
|
Total nonperforming loans (NPLs) (f)
|
31,902
|
35,304
|
34,720
|
33,994
|
36,315
|
Other real
estate owned (OREO)
|
7,174
|
7,174
|
7,166
|
8,778
|
8,895
|
Total NPAs
|
$
39,076
|
$
42,478
|
$
41,886
|
$
42,772
|
$
45,210
|
Criticized loans
(c)
|
$
235,239
|
$
213,156
|
$
219,885
|
$
198,812
|
$
191,355
|
Classified loans
(d)
|
120,027
|
124,836
|
110,972
|
93,168
|
89,604
|
Allowance for credit
losses as a percent of NPLs (f)
|
194.38 %
|
178.23 %
|
176.30 %
|
156.80 %
|
146.39 %
|
NPLs as a percent of
total loans (f)
|
0.52 %
|
0.58 %
|
0.58 %
|
0.71 %
|
0.77 %
|
NPAs as a percent of
total assets (f)
|
0.43 %
|
0.48 %
|
0.48 %
|
0.58 %
|
0.63 %
|
NPAs as a percent of
total loans and OREO (f)
|
0.63 %
|
0.70 %
|
0.70 %
|
0.90 %
|
0.96 %
|
Criticized loans as a
percent of total loans (c)
|
3.82 %
|
3.50 %
|
3.68 %
|
4.18 %
|
4.07 %
|
Classified loans as a
percent of total loans (d)
|
1.95 %
|
2.05 %
|
1.86 %
|
1.96 %
|
1.90 %
|
Allowance for credit
losses as a percent of total loans
|
1.01 %
|
1.03 %
|
1.02 %
|
1.12 %
|
1.13 %
|
Total demand deposits
as a percent of total deposits (b)
|
37.92 %
|
39.08 %
|
41.79 %
|
45.61 %
|
48.10 %
|
Capital Information
(e)(g)(i)
|
|
|
|
|
|
Common equity tier 1
capital ratio (h)
|
11.82 %
|
11.57 %
|
11.36 %
|
12.22 %
|
11.92 %
|
Tier 1 risk-based
capital ratio
|
12.65 %
|
12.31 %
|
12.10 %
|
12.49 %
|
12.19 %
|
Total risk-based
capital ratio (tier 1 and tier 2)
|
13.46 %
|
13.14 %
|
12.92 %
|
13.35 %
|
13.06 %
|
Leverage
ratio
|
9.57 %
|
9.34 %
|
9.64 %
|
9.02 %
|
8.92 %
|
Common equity tier 1
capital
|
$
766,691
|
$
752,728
|
$
728,892
|
$
624,292
|
$
604,566
|
Tier 1
capital
|
820,495
|
801,010
|
776,753
|
638,116
|
618,354
|
Total capital (tier 1
and tier 2)
|
873,225
|
855,054
|
828,910
|
682,477
|
662,421
|
Total risk-weighted
assets
|
$
6,486,886
|
$
6,505,779
|
$ 6,417,511
|
$ 5,110,318
|
$ 5,071,240
|
Total stockholders'
equity to total assets
|
11.50 %
|
11.11 %
|
11.37 %
|
11.21 %
|
10.90 %
|
Tangible equity to
tangible assets (j)
|
7.33 %
|
6.85 %
|
7.00 %
|
7.08 %
|
6.67 %
|
|
|
(a)
|
Includes all loans and
leases acquired and purchased in 2012 and thereafter.
|
(b)
|
The sum of
non-interest-bearing deposits and interest-bearing demand accounts
is considered total demand deposits.
|
(c)
|
Includes loans
categorized as special mention, substandard, or
doubtful.
|
(d)
|
ncludes loans
categorized as substandard or doubtful.
|
(e)
|
Data presented as of
the end of the period indicated.
|
(f)
|
Nonperforming loans
include loans 90+ days past due and accruing, renegotiated loans
and nonaccrual loans. Nonperforming assets include nonperforming
loans and OREO.
|
(g)
|
December 31,
2023 data based on preliminary analysis and subject to
revision.
|
(h)
|
Peoples' capital
conservation buffer was 5.46% at December 31, 2023, 5.14% at
September 30, 2023, 4.92% at June 30, 2023, 5.35% at March 31,
2023, and 5.06% at December 31, 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
on regulatory capital ratios.
|
(j)
|
This ratio represents a
non-US GAAP financial measure since it excludes the balance sheet
impact of intangible assets acquired through acquisitions on both
total stockholders' equity and total assets. Additional information
regarding the calculation of this ratio is included at the end of
this news release under the caption of "Non-US GAAP Financial
Measures (Unaudited)."
|
PROVISION FOR
(RECOVERY OF) CREDIT LOSSES INFORMATION
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(Dollars in
thousands)
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Provision for
(recovery of) credit losses
|
|
|
|
|
|
|
|
|
|
Provision for (recovery
of) credit losses
|
$
1,048
|
|
$
3,764
|
|
$
2,023
|
|
$
14,236
|
|
$ (4,560)
|
Provision for checking
account overdrafts
|
237
|
|
289
|
|
278
|
|
938
|
|
1,050
|
Total provision
for (recovery of) credit losses
|
$
1,285
|
|
$
4,053
|
|
$
2,301
|
|
$
15,174
|
|
$ (3,510)
|
|
|
|
|
|
|
|
|
|
|
Net
Charge-Offs
|
|
|
|
|
|
|
|
|
|
Gross
charge-offs
|
$
4,750
|
|
$
2,834
|
|
$
2,481
|
|
$
11,480
|
|
$
8,755
|
Recoveries
|
1,261
|
|
516
|
|
348
|
|
2,933
|
|
1,483
|
Net
charge-offs
|
$
3,489
|
|
$
2,318
|
|
$
2,133
|
|
$
8,547
|
|
$
7,272
|
|
|
|
|
|
|
|
|
|
|
Net Charge-Offs
(Recoveries) by Type
|
|
|
|
|
|
|
|
|
|
Construction
|
$
—
|
|
$
—
|
|
$
16
|
|
$
9
|
|
$
16
|
Commercial real estate,
other
|
$
(529)
|
|
181
|
|
99
|
|
(351)
|
|
192
|
Commercial and
industrial
|
542
|
|
196
|
|
(16)
|
|
299
|
|
894
|
Premium
finance
|
43
|
|
21
|
|
38
|
|
98
|
|
111
|
Leases
|
1,994
|
|
737
|
|
807
|
|
3,635
|
|
2,165
|
Residential real
estate
|
(47)
|
|
23
|
|
124
|
|
(22)
|
|
584
|
Home equity lines of
credit
|
3
|
|
32
|
|
26
|
|
109
|
|
43
|
Consumer,
indirect
|
1,104
|
|
777
|
|
711
|
|
3,543
|
|
1,905
|
Consumer,
direct
|
130
|
|
81
|
|
70
|
|
343
|
|
316
|
Deposit account
overdrafts
|
249
|
|
270
|
|
258
|
|
884
|
|
1,046
|
Total net
charge-offs
|
$
3,489
|
|
$
2,318
|
|
$
2,133
|
|
$
8,547
|
|
$
7,272
|
|
|
|
|
|
|
|
|
|
|
As a percent of average
total loans (annualized)
|
0.23 %
|
|
0.15 %
|
|
0.18 %
|
|
0.15 %
|
|
0.16 %
|
SUPPLEMENTAL
INFORMATION (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Trust assets under
administration and management
|
$
2,021,249
|
|
$
1,900,488
|
|
$
1,931,789
|
|
$
1,803,887
|
|
$
1,764,639
|
Brokerage assets under
administration and management
|
1,473,814
|
|
1,364,372
|
|
1,379,309
|
|
1,318,300
|
|
1,211,868
|
Mortgage loans serviced
for others
|
356,784
|
|
366,996
|
|
375,882
|
|
384,005
|
|
392,364
|
Employees (full-time
equivalent)
|
1,478
|
|
1,482
|
|
1,500
|
|
1,286
|
|
1,267
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED AVERAGE
BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)
|
|
|
Three Months
Ended
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
(Dollars in
thousands)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
investments
|
$
58,037
|
$
901
|
6.16 %
|
|
$ 51,335
|
$ 801
|
6.19 %
|
|
$ 44,421
|
$ 404
|
3.61 %
|
Investment securities
(a)(b)
|
1,768,033
|
14,309
|
3.24 %
|
|
1,819,248
|
14,161
|
3.11 %
|
|
1,652,742
|
9,741
|
2.35 %
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
387,147
|
7,396
|
7.48 %
|
|
400,396
|
9,983
|
9.76 %
|
|
234,233
|
3,596
|
6.01 %
|
Commercial real estate,
other
|
2,014,824
|
38,076
|
7.39 %
|
|
1,965,927
|
34,370
|
6.84 %
|
|
1,293,500
|
18,431
|
5.58 %
|
Commercial and
industrial
|
1,144,857
|
22,728
|
7.77 %
|
|
1,128,420
|
22,571
|
7.83 %
|
|
885,111
|
13,455
|
5.95 %
|
Premium
finance
|
189,882
|
3,781
|
7.79 %
|
|
179,390
|
3,565
|
7.78 %
|
|
161,382
|
1,898
|
4.60 %
|
Leases
|
400,258
|
11,505
|
11.25 %
|
|
384,606
|
11,507
|
11.71 %
|
|
325,113
|
8,448
|
10.17 %
|
Residential real estate
(d)
|
941,102
|
11,233
|
4.77 %
|
|
952,863
|
11,878
|
4.99 %
|
|
853,354
|
9,321
|
4.37 %
|
Home equity lines of
credit
|
206,847
|
4,088
|
7.84 %
|
|
201,973
|
4,012
|
7.88 %
|
|
177,778
|
2,723
|
6.08 %
|
Consumer,
indirect
|
672,042
|
9,316
|
5.50 %
|
|
662,462
|
8,774
|
5.25 %
|
|
612,696
|
6,834
|
4.43 %
|
Consumer,
direct
|
137,258
|
2,325
|
6.72 %
|
|
139,595
|
2,416
|
6.87 %
|
|
113,045
|
1,763
|
6.19 %
|
Total loans
|
6,094,217
|
110,448
|
7.12 %
|
|
6,015,632
|
109,076
|
7.13 %
|
|
4,656,212
|
66,469
|
5.62 %
|
Allowance for credit
losses
|
(62,241)
|
|
|
|
(60,724)
|
|
|
|
(52,253)
|
|
|
Net loans
|
6,031,976
|
|
|
|
5,954,908
|
|
|
|
4,603,959
|
|
|
Total earning
assets
|
7,858,046
|
125,658
|
6.30 %
|
|
7,825,491
|
124,038
|
6.24 %
|
|
6,301,122
|
76,614
|
4.79 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other
intangible assets
|
411,616
|
|
|
|
411,229
|
|
|
|
327,377
|
|
|
Other assets
|
556,993
|
|
|
|
569,689
|
|
|
|
438,694
|
|
|
Total assets
|
$
8,826,655
|
|
|
|
$ 8,806,409
|
|
|
|
$ 7,067,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
939,549
|
$
228
|
0.10 %
|
|
$ 1,058,606
|
$ 447
|
0.17 %
|
|
$ 1,069,646
|
$ 138
|
0.05 %
|
Governmental deposit
accounts
|
750,030
|
4,844
|
2.56 %
|
|
758,409
|
4,012
|
2.10 %
|
|
688,815
|
710
|
0.41 %
|
Interest-bearing demand
accounts
|
1,145,841
|
373
|
0.13 %
|
|
1,198,100
|
520
|
0.17 %
|
|
1,152,709
|
186
|
0.06 %
|
Money market deposit
accounts
|
751,503
|
4,212
|
2.22 %
|
|
717,765
|
2,943
|
1.63 %
|
|
615,460
|
522
|
0.34 %
|
Retail certificates of
deposit
|
1,336,440
|
12,079
|
3.59 %
|
|
1,043,579
|
7,161
|
2.72 %
|
|
534,145
|
717
|
0.53 %
|
Brokered deposits
(e)
|
575,203
|
7,865
|
5.42 %
|
|
631,410
|
7,399
|
4.65 %
|
|
87,934
|
515
|
2.32 %
|
Total interest-bearing
deposits
|
5,498,566
|
29,601
|
2.14 %
|
|
5,407,869
|
22,482
|
1.65 %
|
|
4,148,709
|
2,788
|
0.27 %
|
Short-term borrowings
(e)
|
412,923
|
4,781
|
4.60 %
|
|
458,462
|
5,169
|
4.48 %
|
|
278,188
|
1,669
|
2.38 %
|
Long-term
borrowings
|
194,558
|
2,493
|
5.11 %
|
|
148,234
|
2,668
|
7.10 %
|
|
101,596
|
1,132
|
4.45 %
|
Total borrowed
funds
|
607,481
|
7,274
|
4.76 %
|
|
606,696
|
7,837
|
5.12 %
|
|
379,784
|
2,801
|
2.93 %
|
Total interest-bearing
liabilities
|
6,106,047
|
36,875
|
2.40 %
|
|
6,014,565
|
30,319
|
2.00 %
|
|
4,528,493
|
5,589
|
0.49 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
1,570,110
|
|
|
|
1,627,231
|
|
|
|
1,639,580
|
|
|
Other
liabilities
|
147,983
|
|
|
|
159,755
|
|
|
|
130,470
|
|
|
Total
liabilities
|
7,824,140
|
|
|
|
7,801,551
|
|
|
|
6,298,543
|
|
|
Stockholders'
equity
|
1,002,515
|
|
|
|
1,004,858
|
|
|
|
768,650
|
|
|
Total liabilities and
stockholders' equity
|
$
8,826,655
|
|
|
|
$ 8,806,409
|
|
|
|
$ 7,067,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
88,783
|
3.90 %
|
|
|
$
93,719
|
4.24 %
|
|
|
$
71,025
|
4.30 %
|
Net interest margin
(b)
|
|
|
4.44 %
|
|
|
|
4.71 %
|
|
|
|
4.44 %
|
CONSOLIDATED AVERAGE
BALANCE SHEETS AND NET INTEREST INCOME (Unaudited) --
(Continued)
|
|
|
Year
Ended
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
(Dollars in
thousands)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Assets
|
|
|
|
|
|
|
|
|
Short-term
investments
|
$
57,464
|
$
2,763
|
4.81 %
|
|
$ 178,781
|
$
1,710
|
0.96 %
|
|
Investment securities
(a)(b)
|
1,812,331
|
55,112
|
3.04 %
|
|
1,680,647
|
34,535
|
2.05 %
|
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
|
Construction
|
347,317
|
27,833
|
7.90 %
|
|
223,197
|
10,732
|
4.74 %
|
|
Commercial real estate,
other
|
1,757,676
|
120,479
|
6.76 %
|
|
1,327,064
|
65,405
|
4.86 %
|
|
Commercial and
industrial
|
1,052,647
|
79,475
|
7.45 %
|
|
875,754
|
41,358
|
4.66 %
|
|
Premium
finance
|
168,077
|
12,155
|
7.13 %
|
|
150,135
|
6,789
|
4.46 %
|
|
Leases
|
371,809
|
42,931
|
11.39 %
|
|
271,349
|
34,720
|
12.62 %
|
|
Residential real estate
(d)
|
913,069
|
43,647
|
4.78 %
|
|
881,136
|
37,851
|
4.30 %
|
|
Home equity lines of
credit
|
194,415
|
14,722
|
7.57 %
|
|
170,567
|
8,300
|
4.87 %
|
|
Consumer,
indirect
|
656,736
|
33,263
|
5.06 %
|
|
563,887
|
23,029
|
4.08 %
|
|
Consumer,
direct
|
128,707
|
8,726
|
6.78 %
|
|
111,148
|
6,769
|
6.09 %
|
|
Total loans
|
5,590,453
|
383,231
|
6.79 %
|
|
4,574,237
|
234,953
|
5.09 %
|
|
Allowance for credit
losses
|
(57,391)
|
|
|
|
(55,233)
|
|
|
|
Net loans
|
5,533,062
|
|
|
|
4,519,004
|
|
|
|
Total earning
assets
|
7,402,857
|
441,106
|
5.91 %
|
|
6,378,432
|
271,198
|
4.22 %
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other
intangible assets
|
384,172
|
|
|
|
322,639
|
|
|
|
Other assets
|
511,748
|
|
|
|
393,636
|
|
|
|
Total assets
|
$
8,298,777
|
|
|
|
$
7,094,707
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
1,034,713
|
$
1,394
|
0.13 %
|
|
$
1,069,097
|
$
356
|
0.03 %
|
|
Governmental deposit
accounts
|
709,887
|
12,252
|
1.73 %
|
|
701,587
|
2,172
|
0.31 %
|
|
Interest-bearing demand
accounts
|
1,156,953
|
1,605
|
0.14 %
|
|
1,165,106
|
583
|
0.05 %
|
|
Money market deposit
accounts
|
684,015
|
9,986
|
1.46 %
|
|
632,364
|
1,015
|
0.16 %
|
|
Retail certificates of
deposit
|
948,310
|
25,198
|
2.66 %
|
|
580,660
|
2,978
|
0.51 %
|
|
Brokered deposit
(e)
|
483,483
|
21,712
|
4.49 %
|
|
88,234
|
2,067
|
2.34 %
|
|
Total interest-bearing
deposits
|
5,017,361
|
72,147
|
1.44 %
|
|
4,237,048
|
9,171
|
0.22 %
|
|
Short-term borrowings
(e)
|
461,467
|
19,722
|
4.27 %
|
|
196,790
|
2,661
|
1.35 %
|
|
Long-term
borrowings
|
143,616
|
8,160
|
5.68 %
|
|
123,685
|
4,280
|
3.46 %
|
|
Total borrowed
funds
|
605,083
|
27,882
|
4.59 %
|
|
320,475
|
6,941
|
2.15 %
|
|
Total interest-bearing
liabilities
|
5,622,444
|
100,029
|
1.78 %
|
|
4,557,523
|
16,112
|
0.35 %
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
1,598,009
|
|
|
|
1,637,690
|
|
|
|
Other
liabilities
|
137,527
|
|
|
|
101,510
|
|
|
|
Total
liabilities
|
7,357,980
|
|
|
|
6,296,723
|
|
|
|
Stockholders'
equity
|
940,797
|
|
|
|
797,984
|
|
|
|
Total liabilities and
stockholders' equity
|
$
8,298,777
|
|
|
|
$
7,094,707
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
341,077
|
4.13 %
|
|
|
$
255,086
|
3.87 %
|
|
Net interest margin
(b)
|
|
|
4.56 %
|
|
|
|
3.97 %
|
|
|
|
(a)
|
Average balances are
based on carrying value.
|
(b)
|
Interest income and
yields are presented on a fully tax-equivalent basis, using a 23.3%
blended corporate income tax rate for all periods
presented.
|
(c)
|
Average balances
include nonaccrual and impaired loans. Interest income includes
interest earned and received on nonaccrual loans prior to the loans
being placed on nonaccrual status. Loan fees included in interest
income were immaterial for all periods presented.
|
(d)
|
Loans held for sale are
included in the average loan balance listed. Related interest
income on loans originated for sale prior to the loan being sold is
included in loan interest income.
|
(e)
|
Interest related to
interest rate swap transactions is included, as appropriate to the
transaction, in interest expense on short-term FHLB advances and
interest expense on brokered deposits for the periods presented in
which FHLB advances and brokered deposits were being
utilized.
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited)
|
|
The following non-US
GAAP financial measures used by Peoples provide information useful
to investors in understanding Peoples' operating performance and
trends, and facilitate comparisons with the performance of Peoples'
peers. The following tables summarize the non-US GAAP financial
measures derived from amounts reported in Peoples' consolidated
financial statements:
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Core non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
67,689
|
|
$
71,696
|
|
$
53,366
|
|
$
266,487
|
|
$
207,147
|
Less:
acquisition-related expenses
|
1,276
|
|
4,434
|
|
702
|
|
16,970
|
|
3,016
|
Less: pension
settlement charges
|
—
|
|
2,424
|
|
46
|
|
2,424
|
|
185
|
Less: COVID-19-related
expenses
|
—
|
|
—
|
|
2
|
|
—
|
|
134
|
Add: COVID -19 Employee
Retention Credit
|
—
|
|
—
|
|
—
|
|
548
|
|
—
|
Core non-interest
expense
|
$
66,413
|
|
$
64,838
|
|
$
52,616
|
|
$
247,641
|
|
$
203,812
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
67,689
|
|
$
71,696
|
|
$
53,366
|
|
$ 266,487
|
|
$ 207,147
|
Less: amortization of
other intangible assets
|
3,271
|
|
3,280
|
|
1,998
|
|
11,222
|
|
7,763
|
Adjusted total
non-interest expense
|
64,418
|
|
68,416
|
|
51,368
|
|
255,265
|
|
199,384
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
income
|
24,134
|
|
23,204
|
|
19,034
|
|
87,413
|
|
78,836
|
Less: net loss on
investment securities
|
(1,592)
|
|
(7)
|
|
(168)
|
|
(3,700)
|
|
(61)
|
Less: net loss on asset
disposals and other transactions
|
(619)
|
|
(307)
|
|
(302)
|
|
(2,837)
|
|
(616)
|
Total non-interest
income, excluding net gains and losses
|
26,345
|
|
23,518
|
|
19,504
|
|
93,950
|
|
79,513
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
88,369
|
|
93,274
|
|
70,613
|
|
339,374
|
|
253,442
|
Add: fully
tax-equivalent adjustment (a)
|
414
|
|
445
|
|
412
|
|
1,703
|
|
1,644
|
Net interest income on
a fully tax-equivalent basis
|
88,783
|
|
93,719
|
|
71,025
|
|
341,077
|
|
255,086
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
115,128
|
|
$
117,237
|
|
$
90,529
|
|
$ 435,027
|
|
$ 334,599
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
55.95 %
|
|
58.36 %
|
|
56.74 %
|
|
58.68 %
|
|
59.59 %
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core items:
|
|
|
|
|
|
|
|
|
Core non-interest
expense
|
$
66,413
|
|
$
64,838
|
|
$
52,616
|
|
$ 247,641
|
|
$ 203,812
|
Less: amortization of
other intangible assets
|
3,271
|
|
3,280
|
|
1,998
|
|
11,222
|
|
7,763
|
Adjusted core
non-interest expense
|
63,142
|
|
61,558
|
|
50,618
|
|
236,419
|
|
196,049
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
115,128
|
|
$
117,237
|
|
$
90,529
|
|
$ 435,027
|
|
$ 334,599
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core items
|
54.85 %
|
|
52.51 %
|
|
55.91 %
|
|
54.35 %
|
|
58.59 %
|
|
|
|
|
|
|
|
|
|
|
(a) Tax effect is
calculated using a 23.3% blended corporate income tax rate for all
periods presented.
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
|
At or For the Three
Months Ended
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
(Dollars in
thousands, except per share data)
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Tangible
equity:
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
$ 1,053,534
|
|
$
993,219
|
|
$
998,907
|
|
$
819,543
|
|
$
785,328
|
Less: goodwill and
other intangible assets
|
412,172
|
|
408,494
|
|
413,172
|
|
324,562
|
|
326,329
|
Tangible
equity
|
$
641,362
|
|
$
584,725
|
|
$
585,735
|
|
$
494,981
|
|
$
458,999
|
|
|
|
|
|
|
|
|
|
|
Tangible
assets:
|
|
|
|
|
|
|
|
|
|
Total assets
|
$ 9,157,382
|
|
$ 8,942,534
|
|
$ 8,786,635
|
|
$ 7,311,520
|
|
$ 7,207,304
|
Less: goodwill and
other intangible assets
|
412,172
|
|
408,494
|
|
413,172
|
|
324,562
|
|
326,329
|
Tangible
assets
|
$ 8,745,210
|
|
$ 8,534,040
|
|
$ 8,373,463
|
|
$ 6,986,958
|
|
$ 6,880,975
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share:
|
|
|
|
|
|
|
|
|
|
Tangible
equity
|
$
641,362
|
|
$
584,725
|
|
$
585,735
|
|
$
494,981
|
|
$
458,999
|
Common shares
outstanding
|
35,314,745
|
|
35,395,990
|
|
35,374,916
|
|
28,488,158
|
|
28,287,837
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per
common share
|
$
18.16
|
|
$
16.52
|
|
$
16.56
|
|
$
17.37
|
|
$
16.23
|
|
|
|
|
|
|
|
|
|
|
Tangible equity to
tangible assets ratio:
|
|
|
|
|
Tangible
equity
|
$
641,362
|
|
$
584,725
|
|
$
585,735
|
|
$
494,981
|
|
$
458,999
|
Tangible
assets
|
$ 8,745,210
|
|
$ 8,534,040
|
|
$ 8,373,463
|
|
$ 6,986,958
|
|
$ 6,880,975
|
|
|
|
|
|
|
|
|
|
|
Tangible equity to
tangible assets
|
7.33 %
|
|
6.85 %
|
|
7.00 %
|
|
7.08 %
|
|
6.67 %
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue:
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
43,529
|
|
$
40,729
|
|
$
33,980
|
|
$ 145,126
|
|
$ 128,641
|
Add: provision for
credit losses
|
1,285
|
|
4,053
|
|
2,301
|
|
15,174
|
|
—
|
Add: loss on
OREO
|
—
|
|
1
|
|
—
|
|
1,623
|
|
138
|
Add: loss on investment
securities
|
1,592
|
|
7
|
|
168
|
|
3,700
|
|
61
|
Add: loss on other
assets
|
586
|
|
283
|
|
279
|
|
1,143
|
|
326
|
Add: loss on other
transactions
|
33
|
|
23
|
|
22
|
|
71
|
|
151
|
Less: recovery of
credit losses
|
—
|
|
—
|
|
—
|
|
—
|
|
3,510
|
Pre-provision net
revenue
|
$
47,025
|
|
$
45,096
|
|
$
36,750
|
|
$ 166,837
|
|
$ 125,807
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
8,826,655
|
|
8,806,409
|
|
7,067,193
|
|
8,298,777
|
|
7,094,707
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue to total average assets (annualized)
|
2.11 %
|
|
2.03 %
|
|
2.06 %
|
|
2.01 %
|
|
1.77 %
|
Weighted-average common
shares outstanding – diluted
|
35,089,825
|
|
35,061,897
|
|
27,981,656
|
|
32,760,808
|
|
27,999,602
|
Pre-provision net
revenue per common share – diluted
|
$
1.33
|
|
$
1.28
|
|
$
1.31
|
|
$
5.06
|
|
$
4.48
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Annualized net
income adjusted for non-core items:
|
|
|
|
|
Net income
|
$
33,825
|
|
$
31,882
|
|
$
26,849
|
|
$
113,363
|
|
$
101,292
|
Add: net loss on
investment securities
|
1,592
|
|
7
|
|
168
|
|
3,700
|
|
61
|
Less: tax effect of net
loss on investment securities (a)
|
334
|
|
2
|
|
35
|
|
777
|
|
13
|
Add: net loss on asset
disposals and other transactions
|
619
|
|
307
|
|
301
|
|
2,837
|
|
616
|
Less: tax effect of net
loss on asset disposals and other transactions (a)
|
130
|
|
65
|
|
63
|
|
596
|
|
129
|
Add:
acquisition-related expenses
|
1,276
|
|
4,434
|
|
702
|
|
16,970
|
|
3,016
|
Less: tax effect of
acquisition-related expenses (a)
|
268
|
|
931
|
|
147
|
|
3,564
|
|
633
|
Add: pension settlement
charges
|
—
|
|
2,424
|
|
46
|
|
2,424
|
|
185
|
Less: tax effect of
pension settlement charges (a)
|
—
|
|
509
|
|
10
|
|
509
|
|
39
|
Add: COVID-19-related
expenses
|
—
|
|
—
|
|
2
|
|
—
|
|
134
|
Less: tax effect of
COVID-19-related expenses (a)
|
—
|
|
—
|
|
—
|
|
—
|
|
28
|
Less: COVID -19
Employee Retention Credit
|
—
|
|
—
|
|
—
|
|
548
|
|
—
|
Add: tax effect of
COVID -19 Employee Retention Credit
|
—
|
|
—
|
|
—
|
|
115
|
|
—
|
Net income adjusted for
non-core items
|
$
36,580
|
|
$
37,547
|
|
$
27,813
|
|
$
133,415
|
|
$
104,462
|
|
|
|
|
|
|
|
|
|
|
Days in the
period
|
92
|
|
92
|
|
92
|
|
365
|
|
365
|
Days in the
year
|
365
|
|
365
|
|
365
|
|
365
|
|
365
|
Annualized net
income
|
$
134,197
|
|
$
126,488
|
|
$ 106,520
|
|
$
113,363
|
|
$
101,292
|
Annualized net income
adjusted for non-core items
|
$
145,127
|
|
$
148,964
|
|
$ 110,345
|
|
$
133,415
|
|
$
104,462
|
Return on average
assets:
|
|
|
|
|
|
|
|
|
|
Annualized net
income
|
$
134,197
|
|
$
126,488
|
|
$ 106,520
|
|
$
113,363
|
|
$
101,292
|
Total average
assets
|
$
8,826,655
|
|
$
8,806,409
|
|
$
7,067,193
|
|
$
8,298,777
|
|
$
7,094,707
|
Return on average
assets
|
1.52 %
|
|
1.44 %
|
|
1.51 %
|
|
1.37 %
|
|
1.43 %
|
Return on average
assets adjusted for non-core items:
|
|
|
|
|
Annualized net income
adjusted for non-core items
|
$
145,127
|
|
$
148,964
|
|
$ 110,345
|
|
$
133,415
|
|
$
104,462
|
Total average
assets
|
$
8,826,655
|
|
$
8,806,409
|
|
$
7,067,193
|
|
$
8,298,777
|
|
$
7,094,707
|
Return on average
assets adjusted for non-core items
|
1.64 %
|
|
1.69 %
|
|
1.56 %
|
|
1.61 %
|
|
1.47 %
|
(a) Tax effect is
calculated using a 21% statutory federal corporate income tax
rate.
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
|
For the Three Months
Ended
|
|
For the Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Annualized net
income excluding amortization of other intangible
assets:
|
|
|
|
|
Net income
|
$
33,825
|
|
$
31,882
|
|
$
26,849
|
|
$ 113,363
|
|
$
101,292
|
Add: amortization of
other intangible assets
|
3,271
|
|
3,280
|
|
1,998
|
|
11,222
|
|
7,763
|
Less: tax effect of
amortization of other intangible assets (a)
|
687
|
|
689
|
|
420
|
|
2,357
|
|
1,630
|
Net income excluding
amortization of other intangible assets
|
$
36,409
|
|
$
34,473
|
|
$
28,427
|
|
$ 122,228
|
|
$
107,425
|
|
|
|
|
|
|
|
|
|
|
Days in the
period
|
92
|
|
92
|
|
92
|
|
365
|
|
365
|
Days in the
year
|
365
|
|
365
|
|
365
|
|
365
|
|
365
|
Annualized net
income
|
$
134,197
|
|
$ 126,488
|
|
$ 106,520
|
|
$ 113,363
|
|
$
101,292
|
Annualized net income
excluding amortization of other intangible assets
|
$
144,449
|
|
$ 136,768
|
|
$ 112,781
|
|
$ 122,228
|
|
$
107,425
|
|
|
|
|
|
|
|
|
|
|
Average tangible
equity:
|
|
|
|
|
Total average
stockholders' equity
|
$
1,002,515
|
|
$
1,004,858
|
|
$ 768,650
|
|
$ 940,797
|
|
$
797,984
|
Less: average goodwill
and other intangible assets
|
411,616
|
|
411,229
|
|
327,377
|
|
384,172
|
|
322,639
|
Average tangible
equity
|
$
590,899
|
|
$ 593,629
|
|
$ 441,273
|
|
$ 556,625
|
|
$
475,345
|
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity ratio:
|
|
|
|
|
|
Annualized net
income
|
$
134,197
|
|
$ 126,488
|
|
$ 106,520
|
|
$ 113,363
|
|
$
101,292
|
Average stockholders'
equity
|
$
1,002,515
|
|
$
1,004,858
|
|
$ 768,650
|
|
$ 940,797
|
|
$
797,984
|
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity
|
13.39 %
|
|
12.59 %
|
|
13.86 %
|
|
12.05 %
|
|
12.69 %
|
|
|
|
|
|
|
Return on average
tangible equity ratio:
|
|
|
|
|
|
Annualized net income
excluding amortization of other intangible assets
|
$
144,449
|
|
$ 136,768
|
|
$ 112,781
|
|
$ 122,228
|
|
$
107,425
|
Average tangible
equity
|
$
590,899
|
|
$ 593,629
|
|
$ 441,273
|
|
$ 556,625
|
|
$
475,345
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible equity
|
24.45 %
|
|
23.04 %
|
|
25.56 %
|
|
21.96 %
|
|
22.60 %
|
|
|
|
|
|
|
|
|
|
|
(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-4th-quarter-and-record-annual-results-for-2023-302041322.html
SOURCE Peoples Bancorp Inc.