Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced results for the quarter ended September 30, 2024. Net income totaled $31.7 million for the third quarter of 2024, representing earnings per diluted common share of $0.89. In comparison, Peoples reported net income of $29.0 million, representing earnings per diluted common share of $0.82, for the second quarter of 2024 and net income of $31.9 million, representing earnings per diluted common share of $0.90, for the third quarter of 2023.
“We are very pleased with our results for the first nine months of 2024. We saw core improvements in deposit growth, net interest margin, and fee-based income,”said Tyler Wilcox, President and Chief Executive Officer. “Our total stockholders’ equity to total assets ratio improved to 12.31% compared to 11.68% and our tangible equity to tangible assets ratio improved to 8.25% from 7.61% compared to the prior quarter. We continue to focus on driving shareholder value through consistent financial performance.”
Statement of Operations Highlights:
— Net interest income for the third quarter of 2024 increased $2.3 million, or 3%, when compared to the linked quarter.
— Net interest margin increased to 4.27% for the third quarter of 2024, compared to 4.18% for the linked quarter driven by higher accretion income.
— Peoples recorded a provision for credit losses of $6.7 million for the third quarter of 2024, compared to a provision for credit losses of $5.7 million for the second quarter of 2024.
— The provision for credit losses was driven by net charge-offs, and negatively impacted earnings per diluted common share by $0.15 for the third quarter of 2024 and $0.13 for the second quarter of 2024.
— Total non-interest income, excluding net gains and losses, increased $1.2 million, or 5%, for the third quarter of 2024 compared to the linked quarter.
— The increase was primarily driven by higher mortgage banking income due to higher net gains from the origination and sale of real estate loans to the secondary market.
— Total non-interest expense for the third quarter of 2024 decreased $2.7 million compared to the linked quarter.
— The efficiency ratio for the third quarter of 2024 was 55.1%, compared to 59.2% for the linked quarter.
Balance Sheet Highlights:
— Period-end total loan and lease balances at September 30, 2024 decreased $53.5 million, or 3% annualized, compared to at June 30, 2024.
— The decrease was driven by decreases in (i) construction loans, (ii) other commercial real estate loans, (iii) residential real estate loans, and (iv) commercial and industrial loans, partially offset by an increase in home equity lines of credit. The decreases were primarily driven by paydown activity.
— Asset quality metrics remained stable during the third quarter of 2024.
— Criticized loans decreased $2.3 million compared to June 30, 2024.
— Classified loans increased $13.1 million and was driven by the downgrade of two commercial relationships.
— Annualized net charge-offs were 0.38% of average total loans, representing a return to pre-pandemic levels.
— Period-end total deposit balances at September 30, 2024 increased $185.4 million, or 3%, compared to at June 30, 2024
— Excluding an increase in brokered certificates of deposit of $83.3 million, core deposits were up $102.1 million compared to the linked quarter, driven by an increase in retail certificates of deposits and higher governmental deposit accounts.
— Total loan balances were 84% of total deposit balances at September 30, 2024, compared to 87% at June 30, 2024.
Impact of the Limestone Merger: As of the close of business on April 30, 2023, Peoples completed its previously announced merger with Limestone Bancorp, Inc. (“Limestone”), a bank holding company headquartered in Louisville, Kentucky, and the parent company of Limestone Bank, pursuant to a definitive Agreement and Plan of Merger (the “Merger Agreement”) dated October 24, 2022. Under the terms of the Merger Agreement, Limestone merged with and into Peoples, and immediately thereafter Limestone Bank merged with and into Peoples’ wholly-owned subsidiary, Peoples Bank (collectively, the “Limestone Merger”), in a transaction valued at $177.9 million. Peoples recorded acquisition-related expenses, primarily related to the Limestone Merger, which included $(0.7) million, $(0.1) million and $10.7 million in other non-interest expense for the three months ended September 30, 2024, March 31, 2024, and June 30, 2023, respectively. There was no such expense for the three months ended June 30, 2024. For the nine months ended September 30, 2024, Peoples recorded acquisition-related expenses of $(0.7) million compared to $15.7 million for the nine months ended September 30, 2023.
Net Interest Income Net interest income was $88.9 million for the third quarter of 2024 and increased $2.3 million when compared to the linked quarter. Net interest margin was 4.27% for the third quarter of 2024, compared to 4.18% for the linked quarter. The increase in net interest income and margin was primarily driven by an increase in accretion income, net of amortization, from acquisitions and higher earning asset yields, which were offset by higher borrowing costs
Net interest income for the third quarter of 2024 decreased $4.4 million, or 5%, compared to the third quarter of 2023. The decrease in net interest income compared to the third quarter of 2023 was driven by higher funding costs. Net interest margin decreased 43 basis points when compared to the third quarter of 2023, driven primarilyby higher rates on deposits.
Accretion income, net of amortization expense, from acquisitions was $8.1 million for the third quarter of 2024, $5.8 million for the linked quarter and $9.5 million for the third quarter of 2023, which added 39 basis points, 28 basis points and 48 basis points, respectively, to net interest margin. The increase in accretion income for the third quarter of 2024 when compared to the linked quarter was primarily driven by higher loan and lease payoffs. The decrease in accretion income for the current quarter compared to the third quarter of 2023 was a result of lower accretion.
For the first nine months of 2024, net interest income increased $11.2 million, or 4%, compared to the first nine months of 2023, while net interest margin decreased 36 basis points to 4.24%. The increase in net interest income was driven by increases in market interest rates and an additional four months of income from the Limestone Merger. The decrease in net interest margin for the first nine months of 2024 compared to the first nine months of 2023 was primarily driven by higher borrowing costs, which offset higher earning asset yields.
Accretion income, net of amortization expense, from acquisitions was $20.3 million for the nine months ended September30, 2024, compared to $15.8 million for the nine months ended September30, 2023, which added 33 and 29 basis points, respectively, to net interest margin. The increase in accretion income for the first nine months of 2024 compared to the same period in 2023 was due to an additional four months in 2024 from the Limestone Merger.
Provision for Credit Losses: The provision for credit losses was $6.7million for the third quarter of 2024, compared to $5.7million for the linked quarter and $4.1million for the third quarter of 2023. The provision for credit losses for the third quarter of 2024 was mainly a result of net charge-offs. The provision for credit losses for the second quarter of 2024 was driven by (i) higher net charge-offs, (ii) an increase of reserves on individually analyzed loans and leases and (iii) loan growth. The increase in the provision for credit losses for the third quarter of 2024 compared to the third quarter of 2023, was largely attributable to an increase in the reserves for individually analyzed loans and leases and higher net charge-offs.
The provision for credit losses during the first nine months of 2024 was $18.5million, compared to a provision for credit losses of $13.9million for the first nine months of 2023. The provision for credit losses during the first nine months of 2024 was mainly a result of (i) higher net charge-offs, (ii) an increase in reserves on individually analyzed loans and leases, (iii) economic forecast deterioration and (iv) loan growth. The provision for credit losses during the first nine months of 2023 was driven by (i) the addition of the provision for the non-purchased credit deteriorated loans acquired in the Limestone Merger, (ii) loan growth and (iii) economic forecast deterioration, partially offset by a reduction in the reserves for individually analyzed loans and leases and the use of updated loss drivers.
The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management’s quarterly estimates. The provision for credit losses negatively impacted earnings per diluted common share by $0.15 for the third quarter of 2024, $0.13 for the second quarter of 2024, and $0.09 for the third quarter of 2023. For the first nine months of 2024, the provision negatively impacted earnings per diluted common share by $0.42, compared to $0.33 for the first nine months of 2023.
For additional information on net charge-offs, credit trends and the allowance for credit losses, see the “Asset Quality” section below.
Net Gains and Losses: Net gains and losses include gains and losses on investment securities, asset disposals and other transactions, which are included in total non-interest income on the Consolidated Statements of Income. The net loss for the third quarter of 2024 was $0.9million, compared to a net loss of $0.8million for the linked quarter, and a net loss of $0.3 million for the third quarter of 2023. The net loss for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023 were driven primarily by net losses on repossessed assets of $0.5 million, $0.4 million and $0.3 million, respectively.
The net loss realized during the first nine months of 2024 was $2.0million, compared to a net loss realized of $4.3million for the first nine months of 2023. The net loss for the first nine months of 2024 was primarily driven by $1.3 million of net losses on repossessed assets. The net loss recognized in the first nine months of 2023 was primarily driven by a $2.0 million pre-tax net loss on the sale of available-for-sale investment securitiesand a $1.6 million write-down of an other real estate owned (“OREO”) property.
Total Non-interest Income, Excluding Net Gains and Losses: Total non-interest income, excluding net gains and losses, for the third quarter of 2024 increased $1.2 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was primarily impacted by increases of $0.8 million in mortgage banking income and $0.7 million in lease income, partially offset by a decrease of $0.6 million in bank-owned life insurance income (“BOLI”). Total non-interest income, excluding net gains and losses, for the third quarter of 2024 was 22% of total revenue (defined as net interest income plus total non-interest income excluding net gains and losses) consistent with the second quarter of 2024.
Compared to the third quarter of 2023, total non-interest income, excluding net gains and losses, increased $2.1 million, primarily due toa $1.9 million increase in lease income, a $0.8 million increase in mortgage banking income, and a $0.6 million increase in trust and investment income, partially offset by a $0.9 million decrease in BOLI income. The increases for the third quarter of 2024, when compared to the third quarter of 2023, were primarily due to gains on early terminations on leases that paid off, higher production in mortgage banking, and an increase in trust and investment income.
For the first nine months of 2024, total non-interest income, excluding gains and losses, increased $8.7 million, or 13%, compared to the first nine months of 2023. The increase was driven by (i) a $2.0 million increase in other non-interest income, driven by operating lease income, (ii) a $1.7 million increase in trust and investment income driven by increases of assets under administration and management, (iii) a $1.4 million increase in lease income driven by gains on terminated leases, (iv) a $1.2 million increase in insurance income driven by higher contingency income and market increases for premiums, (v) a $0.9 million increase in deposit account service charge income, and (vi) a $0.9 million increase in mortgage banking income.
Total Non-interest Expense: Total non-interest expense decreased $2.7 million for the third quarter of 2024, compared to the linked quarter. The decrease in total non-interest expense was primarily due to decreases of $2.8 million in other non-interest expense, driven by a one-time $1.3 million true-up of corporate expenses recorded in the linked quarter, and a decrease of $0.6 million in data processing and software expense.
Compared to the third quarter of 2023, total non-interest expense decreased $5.6 million, or 8%. The decrease in total non-interest expense was primarily due to a decrease of $5.1 million in acquisition-related expenses. Excluding acquisition-related expenses, non-interest expenses decreased $0.5 million, or 1%, primarily due to a decrease of $2.7 million in other non-interest expense, partially offset by an increase of $1.1 million in data processing and software expense.
For the nine months of 2024, total non-interest expense increased $4.5 million, or 2%, compared to the first nine months of 2023. Excluding acquisition-related expenses, non-interest expenses increased $21.0 million, or 11%, primarily due to increases of $11.6 million in salaries and employee benefits costs due to additional employees added in the Limestone Merger, and $4.4 million and $2.5 million in data processing and software expense and in net occupancy and equipment expense, respectively, due to recent growth, including through acquisitions.
The table below summarizes the amount of acquisition-related expenses for each line item that is a component of non-interest expense. Acquisition-related expenses are considered a non-core non-interest expense by Peoples. This information is used by Peoples to provide information useful to investors in understanding Peoples’ operating performance and trends.
Three Months Ended Nine Months Ended
September 30 June 30, September 30 September 30
2024 2024 2023 2024 2023
(Dollars in thousands) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Non-interest expense:
Salaries and employee benefit costs $ 37,085 $ 36,564 $ 36,608 $ 112,542 $ 106,661
Data processing and software expense 6,111 6,743 6,288 18,623 15,578
Net occupancy and equipment expense 5,905 6,142 5,501 18,330 15,836
Professional fees 2,896 2,935 3,456 8,798 13,775
Amortization of other intangible assets 2,786 2,787 3,280 8,361 7,951
Electronic banking expense 1,844 1,941 1,836 5,566 5,159
Marketing expense 971 681 1,267 2,708 3,554
FDIC insurance premiums 1,241 1,251 1,260 3,678 3,525
Franchise tax expense 917 760 772 2,558 2,678
Communication expense 814 736 752 2,349 2,089
Other loan expenses 1,178 1,036 856 3,290 2,133
Other non-interest expense 4,342 7,182 9,820 16,510 19,859
Total non-interest expense 66,090 68,758 71,696 203,313 198,798
Acquisition-related non-interest expense:
Salaries and employee benefit costs - - 562 16 5,708
Data processing and software expense - - 1,289 (18) 1,290
Net occupancy and equipment expense - - 2 - 31
Professional fees - - 429 (38) 5,532
Electronic banking expense - - - (100) 115
Marketing expense - - 38 10 61
Communication expense - - 1 - 1
Other loan expenses - - - - 1
Other non-interest expense (662) - 2,113 (616) 2,955
Total acquisition-related non-interest expense (662) - 4,434 (746) 15,694
Non-interest expense excluding acquisition-related expense:
Salaries and employee benefit costs 37,085 36,564 36,046 112,526 100,953
Data processing and software expense 6,111 6,743 4,999 18,641 14,288
Net occupancy and equipment expense 5,905 6,142 5,499 18,330 15,805
Professional fees 2,896 2,935 3,027 8,836 8,243
Amortization of other intangible assets 2,786 2,787 3,280 8,361 7,951
Electronic banking expense 1,844 1,941 1,836 5,666 5,044
Marketing expense 971 681 1,229 2,698 3,493
FDIC insurance premiums 1,241 1,251 1,260 3,678 3,525
Franchise tax expense 917 760 772 2,558 2,678
Communication expense 814 736 751 2,349 2,088
Other loan expenses 1,178 1,036 856 3,290 2,132
Other non-interest expense 5,004 7,182 7,707 17,126 16,904
Total non-interest expense excluding acquisition-related expense $ 66,752 $ 68,758 $ 67,262 $ 204,059 $ 183,104
The efficiency ratio for the third quarter of 2024 was 55.1%, compared to 59.2% for the linked quarter and 58.4% for the third quarter of 2023. The efficiency ratio, adjusted for non-core items, was 55.7% for the third quarter of 2024, compared to 59.2% for the linked quarter, and 52.5% for the third quarter of 2023. The efficiency ratio and the adjusted for non-core items efficiency ratio improved compared to the linked quarter mainly as the result of a reduction in non-interest expense and an increase in net interest income. The efficiency ratio and the adjusted for non-core items efficiency ratio increased for the third quarter of 2024 compared to the third quarter of 2023 due to higher non-interest expense and lower revenue. The efficiency ratio for the first nine months of 2024 was 57.4%, compared to 59.7% for the first nine months of 2023. The efficiency ratio improved compared to theprior year first nine months due to the decrease in acquisition-related expenses. The efficiency ratio, adjusted for non-core items, was 57.7% for the first nine months of 2024, compared to 54.2% for the first nine months of 2023. The increase in the efficiency ratio, adjusted for non-core items, for the first nine months of 2024 compared to the first nine months of 2023 was due to higher non-interest expense. Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business.
Income Tax Expense: Peoples recorded income tax expense of $9.2 million with an effective tax rate of 22.5% for the third quarter of 2024, compared to income tax expense of $6.9 million with an effective tax rate of 19.1% for the linked quarter and income tax expense of $8.8 million with an effective tax rate of 21.7% for the third quarter of 2023. The increase in income tax expense when compared to the prior quarter was driven by a $1.1 million one-time benefit recognized in the second quarter of 2024 related to a prior year amended return and higher pre-tax income. The increase in income tax expense when compared to the third quarter of 2023 was primarily due to higher effective tax rate. Peoples recorded income tax expense of $24.3 million with an effective tax rate of 21.2% for the first nine months of 2024 and $22.1 million with an effective tax rate of 21.7% in the first nine months of 2023. The increase in income tax expense was driven by higher pre-tax income.
Investment Securities and Liquidity: Peoples’ investment portfolio primarily consists of available-for-sale investment securities reported at fair value and held-to-maturity investment securities reported at amortized cost. The available-for-sale investment securities balance at September30, 2024 decreased $38.5 million when compared to at June30, 2024, increased $32.3 million when compared to at December 31, 2023, and increased $62.1 million when compared to at September30, 2023. The decrease in the balance when compared to at June30, 2024, was driven by principal payment reductions. The balances of unrealized losses, net of tax, on available-for-sale investment securities recognized within accumulated other comprehensive loss were $83.7 million, $112.7 million, $104.2 million, and $148.1 million at September30, 2024, at June30, 2024, at December 31, 2024, and at September30, 2023, respectively. The decrease in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period.
The held-to-maturity investment securities balance at September30, 2024 decreased $8.3 million when compared to at June 30, 2024 and increased $10.0 million and $18.2 million when compared to at December 31, 2023 and at September30, 2023, respectively. The decrease when compared to the linked quarter was driven by principal payments. The increase when compared to September30, 2023 was primarily driven by purchases of higher yielding, longer duration securities booked asheld-to-maturity. The balances of net unrealized losses on held-to-maturity investment securities were$57.1 million, $79.4 million, $71.6 million and $105.5 million at September30, 2024, at June30, 2024, at December 31, 2023, and at September30, 2023, respectively.
The effective duration of the investment portfolio as of September30, 2024 was approximately 5.42 years. The duration of Peoples’ investments is managed as part of its Asset Liability Management program, and has the potential to impact both liquidity and capital, as mismatches in duration may require a liquidation of investment securities at market prices to meet funding needs. These assets are one component of Peoples’ liquidity profile.
Peoples maintains a number of liquid and liquefiable assets, borrowing capacity, and other sources of liquidity to ensure the availability of funds. At September30, 2024, Peoples had liquid and liquefiable assets totaling $648.7 million, which included (i) cash and cash equivalents, (ii) unpledged government and agency investment securities and (iii) unpledged non-agency investment securities that could be liquidated. At September30, 2024, Peoples had a total borrowing capacity of $554.7 million available through the Federal Home Loan Bank (“FHLB”), the Federal Reserve Bank (“FRB”), and federal funds. Additionally, at September30, 2024, Peoples had other contingent sources of liquidity totaling $3.4 billion. Cash and cash equivalents decreased $143.0 million when compared to December 31, 2023 due to an improvement in other inputs in our aforementioned liquidity metrics, specifically unencumbered securities, driven by the migration of deposit balances to IntraFi Cash Service accounts (“ICS”), freeing up investment securities previously held as collateral against those balances, and requiring less cash to be held on the balance sheet.
Loans and Leases: The period-end total loan and lease balances at September30, 2024 decreased $53.5 million, or 3% annualized, compared to at June30, 2024. The decrease in the period-end total loan and lease balances was primarily driven by decreases of (i) $20.5 million in construction loans, (ii) $15.5 million in other commercial real estate loans, (iii) $11.8 million in residential real estate loans, and (iv) $7.9 million in commercial and industrial loans, partially offset by an increase of $5.5 million in home equity lines ofcredit.
The period-end total loan and lease balances at September30, 2024 increased $112.6 million compared to at December 31, 2023, primarily driven by growth of $83.8 million in premium finance loans, $65.2million in commercial and industrial loans, $24.4 million in home equity lines of credit, and $18.9 million in leases.
The period-end total loan and lease balances at September30, 2024 increased $187.4 million compared to at September30, 2023, primarily driven by organic growth in our commercial and industrial, premium finance, lease, and home equity lines of credit portfolios of $121.3 million, $97.7 million, $30.4 million, and $29.2 million, respectively.
Quarterly average total loan balancesincreased $61.8 million compared to the linked quarter. The increase in average total loan balances when compared to the linked quarter was primarily the result of growth of (i) $28.3 million in premium finance loans, (ii) $24.6 million in consumer indirect loans, and (iii) $24.4 million in commercial and industrial loans, partially offset by a reduction of $25.6 million in other commercial real estate loans.
Compared to the first nine months quarter of 2023, quarterly average loan balances in the current quarter increased $0.8 billion, or 15%. The increase was driven by growth in our other commercial real estate, commercial and industrial, premium finance, and lease portfolios of $395.6 million, $207.9 million, $92.7 million, and $55.9 million, respectively.
Asset Quality: Overall, asset quality remained relatively stable through the third quarter of 2024. Delinquency trends remained stable as loans considered current comprised 98.5%, 98.8%, and 99.0% of the loan portfolio at September30, 2024, at June30, 2024, and at September30, 2023, respectively. Total nonperforming assets at September 30, 2024 increased $21.1 million, or 43%, compared to at June 30, 2024, and increased $27.3 million, or 64%, compared to at September 30, 2023. The increase in nonperforming assets compared to the linked quarter was primarily due to an increase in the balance of leases, premium finance loans, commercial and industrial loans, and residential real estate loans past due and accruing. The increase in nonperforming assets is driven by higher administrative delinquencies on Vantage leases and premium finance loans. The increase in nonperforming assets compared to at September30, 2023, was impacted by the increase of loans past due and accruing. Nonperforming assets as a percent of total loans and OREO was 1.11% at September 30, 2024, compared to 0.77% at June 30, 2024, and 0.70% at September 30, 2023.
Criticized loans, which are those categorized as special mention, substandard or doubtful, decreased $2.3 million, or 1%, compared to at June 30, 2024, increased $2.4 million, or 1%, compared to at December 31, 2023, and increased $24.5 million, or 11%, compared to at September 30, 2023. As a percent of total loans, criticized loans were 3.79% at September 30, 2024, compared to 3.79% at June 30, 2024, 3.82% at December 31, 2023, and 3.50% at September 30, 2023. The decrease in the amount of criticized loans compared to at June 30, 2024 was primarily driven by paydowns on previously downgraded loans. Compared to at December 31, 2023 and at September 30, 2023, the increase in the amount of criticized loans was primarily driven by loan downgrades.
Classified loans, which are those categorized as substandard or doubtful, increased $13.1 million, or 11%, compared to at June30, 2024, increased $13.2 million, or 11%, compared to at December 31, 2023, and increased $8.4 million, or 7%, compared to at September30, 2023. As a percent of total loans, classified loans were 2.12% at September30, 2024, compared to 1.90% at June30, 2024, 1.95% at December 31, 2023, and 2.05% at September30, 2023. The increase in classified loans compared to at June30, 2024 was primarily driven by the downgrade of two commercial relationships. The increase in classified loans when compared to at September30, 2023, was primarily driven by loan and lease downgrades.
Annualized net charge-offs were 0.38% of average total loans for the third quarter of 2024, compared to 0.27% for the linked quarter, and 0.15% for the third quarter of 2023. The increase relative to the linked quarter was driven by an increase in charge-offs on leases originated by our North Star Leasing business. The increase in net charge-offs during the third quarter of 2024 versus the prior year third quarter was primarily attributable to an increase in charge-offs on (i) leases originated by our North Star Leasing business, (ii) indirect consumer loans, (iii) commercial and industrial loans, and (iv) deposit account overdrafts.
At September 30, 2024, the allowance for credit losses increased $0.4 million when compared to at June 30, 2024, increased $4.6 million when compared to at December 31, 2023, and increased $3.7 million when compared to at September 30, 2023. The increase in the allowance for credit losses at September 30, 2024 when compared to at June 30, 2024 and at December 31, 2023 was primarily due to an increase in reserves for individually analyzed loans and leases. The increase in the allowance balance at September 30, 2024 when compared to September 30, 2023 was driven by an increases in reserves for individually analyzed loans and leases, as well as loan growth. The ratio of the allowance for credit losses as a percent of total loans was 1.06% at September 30, 2024, compared to 1.05% at June 30, 2024, and 1.03% at September 30, 2023. The ratio of allowance for credit losses as a percentage of non-performing loans decreased to 106.82% compared to 160.56% at June 30, 2024, and 178.23% at September 30, 2023.
Deposits: As of September30, 2024, period-end total deposits increased $185.4 million compared to at June30, 2024. The increase was primarily driven by increases of (i) $83.3 million in brokered certificates of deposit, (ii) $71.3 million in retail certificates of deposit,and (iii) $57.8 million in governmental deposit accounts, partially offset by a decrease of $19.2 million in non-interest bearing deposits. The increase in retail certificates of deposits was due to current specials being offered, while the increase in governmental deposit accounts was due to the seasonality of those balances. The increase in brokered deposits was due to the lower-cost of funding available compared to Federal Home Loan Bank (“FHLB”) advances.
Compared to December 31, 2023, period-end total deposits increased $330.9 million, or 5%. The increase was primarily driven by increases of $440.7 million in retail certificates of deposit, $119.2 million in money market deposit accounts and $97.4 million in governmental deposits, partially offset by decreases of $114.2 million in non-interest bearing deposits, $79.5 million in brokered deposits, $78.4 million in interest bearing demand accounts, and $54.3 million in savings accounts.
Compared to September30, 2023, period-end deposit balances increased $445.6 million, or 6%. The increase was primarily driven by increases of $685.4 million in retail certificates of deposit, $163.8 million in money market deposit accounts, and $62.5 million in governmental deposit accounts, offset by decreases of $122.2 million, $115.6 million, $115.2 million, and $113.0 million in savings accounts, non-interest bearing deposits, interest-bearing demand deposit accounts and brokered certificates of deposit, respectively. The increase in retail certificates of deposits was driven by special promotional rate offerings over the past year.
The percentages of retail deposit balances and commercial deposit balances of the total deposit balance at September30, 2024 were 79% and 21%, respectively, compared to 78% and 22%, respectively, at June30, 2024, and 79% and 21%, respectively, at September30, 2023.
Uninsured deposits were 27%,27%, and 28% of total deposits at September30, 2024, at June30, 2024, and at September30, 2023, respectively. Uninsured amounts are estimated based on the portion of customer account balances that exceeded the FDIC limit of $250,000. Peoples pledges investment securities against certain governmental deposit accounts, which collateralized $714.1million, or 36%, $748.3 million, or 38%, and $812.7 million, or 42% of the uninsured deposit balances at September30, 2024, at June30, 2024, and at September30, 2023, respectively.
Average deposit balances during the third quarter of 2024 increased $29.9 million when compared to the linked quarter, and increased $331.5 million, or 5%, when compared to the third quarter of 2023. The increase in average deposit balances compared to the linked quarter was driven by increases of $122.1 million in retail certificates of deposits and $29.0 million in governmental deposits, partially offset by decreases of $72.3 million in brokered certificates of deposits and $22.7 million in interest bearing deposits. Total demand deposit accounts comprised 34%, 35% and 39% of total deposits at September30, 2024, at June30, 2024 and at September30, 2023, respectively.
Stockholders’ Equity: Total stockholders’ equity at September30, 2024 increased $47.1 million, or 4%, compared to at June30, 2024. This change was primarily driven by net income of $31.7million and a decrease of $27.7 million in accumulated other comprehensive loss during the quarter, partially offset by dividends paid of $14.2 million. The decrease in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period.
Total stockholders’ equity at September30, 2024 increased $71.4 million, or 7%, compared to at December 31, 2023, which was due to net income of $90.3 million and a decrease of $19.1 million in accumulated other comprehensive loss in the first nine months of 2024, partially offset by dividends paid of $42.1 million.
Total stockholders’ equity at September30, 2024 increased $131.8 million, or 13%, compared to at September30, 2023, which was due to net income of $124.1 million in the last twelve months and a decrease in other comprehensive loss of $61.3 million, partially offset by dividends paid of $56.2 million.
At September30, 2024, the tier 1 risk-based capital ratio was 12.58%, compared to 12.53% at June30, 2024, and 12.31% at September30, 2023. The common equity tier 1 risk-based capital ratio was 11.79% at September30, 2024, compared to 11.74% at June30, 2024, and 11.57% at September30, 2023. The total risk-based capital ratio was 13.48% at September30, 2024, compared to 13.44% at June30, 2024, and 13.14% at September30, 2023. Peoples adopted the five-year transition to phase in the impact of the adoption of the current expected credit loss (“CECL”) model (accounting standard) on regulatory capital ratios. Compared to at June30, 2024, and at September30, 2024, these ratios improved due to net income during the third quarter of 2024, partially offset by dividends paid.
At September30, 2024, book value per common share and tangible book value per common share, which excludes goodwill and other intangible assets, were $31.65 and $20.29, respectively, compared to $30.36 and $18.91, respectively, at June30, 2024, and $28.06 and $16.52, respectively, at September30, 2023. The ratio of total stockholders’ equity to total assets increased 63 basis points when compared to June30, 2024. The tangible equity to tangible assets ratio, which excludes goodwill and other intangible assets, increased 64 basis points when compared to at June30, 2024. Compared to at September30, 2023, the total stockholders’ equity to total assets ratio increased from 11.11% to 12.31%, and the tangible equity to tangible assets ratio increased from 6.85% to 8.25%. The ratios increased compared to at September30, 2023, primarily due to net income over the last twelve months and a decrease in accumulated other comprehensive loss as a result of the changes in the market value of available-for-sale investment securities .
Peoples Bancorp Inc. (“Peoples”, Nasdaq: PEBO)is a diversified financial services holding company and makes available a complete line of banking, trust and investment, insurance and premium financing solutions through its subsidiaries. Headquartered in Marietta, Ohio since 1902, Peoples has established a heritage of financial stability, growth and community impact. Peoples had $9.1 billion in total assets as of September30, 2024, and 149 locations, including 130 full-service bank branches in Ohio, West Virginia, Kentucky, Virginia, Washington D.C., and Maryland. Peoples’ vision is to be the Best Community Bank in America.
Peoples is a member of the Russell 3000 index of United States (“U.S.”) publicly-traded companies. Peoples offers services through Peoples Bank (which includes the divisions of Peoples Investment Services, Peoples Premium Finance and North Star Leasing), Peoples Insurance Agency, LLC, and Vantage Financial, LLC.
Conference Call to Discuss Earnings: Peoples will conduct a facilitated conference call to discuss third quarter 2024 results of operations on October22, 2024, at 11:00 a.m., Eastern Time, with members of Peoples’ executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285. A simultaneous webcast of the conference call audio and earnings conference call presentation will be available online via the “Investor Relations” section of Peoples’ website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples’ website in the “Investor Relations” section for one year.
Use of Non-US GAAP Financial Measures: This news release contains financial information and performance measures determined by methods other than those in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Management uses these “non-US GAAP” financial measures in its analysis of Peoples’ performance and the efficiency of its operations. Management believes that these non-US GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with US GAAP, nor are they necessarily comparable to non-US GAAP performance measures that may be presented by other companies. Below is a listing of the non-US GAAP financial measures used in this news release:
— Core non-interest expense is a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses and the COVID-19 employee retention credit.
— The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income, excluding net gains and losses. This ratio is a non-US GAAP financial measure since it excludes amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.
— The efficiency ratio adjusted for non-core items is calculated as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income, excluding net gains and losses. This ratio is a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses, the COVID-19 employee retention credit, and the amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.
— Tangible assets, tangible equity, the tangible equity to tangible assets ratio and tangible book value per common share are non-US GAAP financial measures since they exclude the impact of goodwill and other intangible assets acquired through acquisitions on both total stockholders’ equity and total assets.
— Total non-interest income, excluding net gains and losses, is a non-US GAAP financial measure since it excludes all gains and losses included in earnings.
— Pre-provision net revenue is defined as net interest income plus total non-interest income, excluding net gains and losses, minus total non-interest expense. This measure is a non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in net income.
— Return on average assets adjusted for non-core items is calculated as annualized net income (less the after-tax impact of all gains and losses, acquisition-related expenses, and COVID-19 employee retention credit divided by average assets. This measure is a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses and acquisition-related expenses.
— Return on average tangible equity is calculated as annualized net income (less the after-tax impact of amortization of other intangible assets) divided by average tangible equity. This measure is a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from net income and the impact of average goodwill and other average intangible assets acquired through acquisitions on average stockholders’ equity.
A reconciliation of these non-US GAAP financial measures to the most directly comparable US GAAP financial measures is included at the end of this news release under the caption of “Non-US GAAP Financial Measures (Unaudited).”
Safe Harbor Statement: Certain statements made in this news release regarding Peoples’ financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate,” “estimate,” “may,” “feel,” “expect,” “believe,” “plan,” “will,” “will likely,” “would,” “should,” “could,” “project,” “goal,” “target,” “potential,” “seek,” “intend,” “continue,” “remain,” and similar expressions.
These forward-looking statements reflect management’s current expectations based on all information available to management and its knowledge of Peoples’ business and operations. Additionally, Peoples’ financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to:
(1) the effects of interest rate policies, changes in the interest rate environment due to economic conditions and/or the fiscal and monetary policy measures undertaken by the U.S. government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity;
(2) the effects of inflationary pressures on borrowers' liquidity and ability to repay;
(3) the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the interest rate policies of the Federal Reserve Board, the completion and successful integration of acquisitions, and the expansion of commercial and consumer lending activities;
(4) competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, which can in turn impact Peoples' credit spreads, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals;
(5) uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies in the State of Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or acquired companies to a variety of new and more stringent legal and regulatory requirements;
(6) the effects of easing restrictions on participants in the financial services industry;
(7) current and future local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, supply-demand imbalances affecting local real estate prices, high unemployment rates in the local or regional economies in which Peoples operates and/or the U.S. economy generally, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, potential or imposed tariffs, uncertainties surrounding the upcoming U.S. Presidential election and potential changes in the U.S. Senate and House of Representatives, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, and changes in the relationship of the U.S. and U.S. global trading partners) and the impact these conditions may have on Peoples, Peoples' customers and Peoples' counterparties, and Peoples' assessment of the impact, which may be different than anticipated;
(8) Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;
(9) changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties' performance and creditworthiness generally, which may be less favorable than expected in light of recent inflationary pressures and continued elevated interest rates, and may adversely impact the amount of interest income generated;
(10) Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
(11) future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses;
(12) changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations;
(13) the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model;
(14) adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;
(15) the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
(16) Peoples' ability to receive dividends from Peoples' subsidiaries;
(17) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
(18) the impact of larger or similar-sized financial institutions encountering problems, such as the failure in 2024 of Republic First Bank, and closures in 2023 of Silicon Valley Bank in California, Signature Bank in New York and First Republic Bank in California, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity, including Peoples' continued ability to grow deposits or maintain adequate deposit levels, and may further result in potential increased regulatory requirements, increased reputational risk and potential impacts to macroeconomic conditions;
(19) Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;
(20) any misappropriation of the confidential information which Peoples possesses could have an adverse impact on Peoples' business and could result in regulatory actions, litigation and other adverse effects;
(21) Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples' primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands;
(22) operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and Peoples' subsidiaries are highly dependent;
(23) changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;
(24) the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business;
(25) the impact on Peoples' businesses, personnel, facilities or systems of losses related to acts of fraud, theft, misappropriation or violence;
(26) the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters including severe weather events, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including Russia's war in Ukraine and the ongoing conflicts in the Middle East);
(27) the potential deterioration of the U.S. economy due to financial, political or other shocks;
(28) the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;
(29) the impact on Peoples' businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples' intellectual property;
(30) risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets;
(31) Peoples' ability to integrate the Limestone Merger, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;
(32) the risk that expected revenue synergies and cost savings from the Limestone Merger may not be fully realized or realized within the expected time frame;
(33) changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases;
(34) the vulnerability of Peoples' network and online banking portals, and the systems of parties with whom Peoples contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches;
(35) regulatory and legal matters, including the failure to resolve any outstanding matters on a timely basis and the potential of new regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;
(36) Peoples' business may be adversely affected by increased political and regulatory scrutiny of corporate environmental, social and governance ("ESG") practices;
(37) the effect of a fall in stock market prices on the asset and wealth management business; and
(38) other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website - www.peoplesbancorp.com under the "Investor Relations" section.
As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its September 30, 2024 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from the estimates and information contained in this news release.
PER COMMON SHARE DATA AND SELECTED RATIOS (Unaudited)
At or For the Three Months Ended At or For the Nine Months Ended
September 30, June 30, September 30, September 30,
2024 2024 2023 2024 2023
PER COMMON SHARE:
Earnings per common share:
Basic $ 0.90 $ 0.83 $ 0.91 $ 2.57 $ 2.49
Diluted 0.89 0.82 0.90 2.55 2.47
Cash dividends declared per common share 0.40 0.40 0.39 1.19 1.16
Book value per common share (a) 31.65 30.36 28.06 31.65 28.06
Tangible book value per common share (a)(b) 20.29 18.91 16.52 20.29 16.52
Closing price of common shares at end of period $ 30.09 $ 30.00 $ 25.38 $ 30.09 $ 25.38
SELECTED RATIOS:
Return on average stockholders' equity (c) 11.46% 10.99% 12.59% 11.25% 11.56%
Return on average tangible equity (c)(d) 19.40% 19.21% 23.04% 19.50% 21.05%
Return on average assets (c) 1.38% 1.27% 1.44% 1.32% 1.31%
Return on average assets adjusted for non-core items (c)(e) 1.39% 1.30% 1.69% 1.34% 1.59%
Efficiency ratio (f)(h) 55.10% 59.19% 58.38% 57.43% 59.69%
Efficiency ratio adjusted for non-core items (g)(h) 55.67% 59.19% 52.53% 57.65% 54.19%
Net interest margin (c)(h) 4.27% 4.18% 4.70% 4.24% 4.60%
Dividend payout ratio (i) 44.74% 48.94% 43.26% 46.65% 47.70%
(a) Data presented as of the end of the period indicated. (b) Tangible book value per common share represents a non-US GAAP financial measure since it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." (c) Ratios are presented on an annualized basis. (d) Return on average tangible equity represents a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from net income and it excludes the balance sheet impact of average goodwill and other intangible assets acquired through acquisitions on average stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." (e) Return on average assets adjusted for non-core items represents a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses, acquisition-related expenses, and COVID-19 employee retention credit. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." (f) The efficiency ratio is defined as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income (excluding all gains and losses). This ratio represents a non-US GAAP financial measure since it excludes amortization of other intangible assets, and all gains and losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." (g) The efficiency ratio adjusted for non-core items is defined as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income (excluding all gains and losses). This ratio represents a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses, COVID-19 employee retention credit, and all gains and losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)." (h) Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate. (i) This ratio is calculated based on dividends declared during the period divided by net income for the period.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2024 2024 2023 2024 2023
(Dollars in thousands, except per share data) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Total interest income $ 133,620 $ 130,770 $ 123,593 $ 391,983 $ 314,159
Total interest expense 44,708 44,157 30,319 129,818 63,154
Net interest income 88,912 86,613 93,274 262,165 251,005
Provision for credit losses 6,735 5,683 4,053 18,520 13,889
Net interest income after provision for credit losses 82,177 80,930 89,221 243,645 237,116
Non-interest income:
Electronic banking income 6,359 6,470 6,466 18,875 18,375
Trust and investment income 4,882 4,999 4,288 14,480 12,786
Deposit account service charges 4,520 4,339 4,516 13,082 12,192
Insurance income 4,271 4,109 4,250 14,878 13,679
Lease income 1,827 1,116 (66) 4,179 2,730
Bank owned life insurance income 460 1,037 1,375 2,997 2,924
Mortgage banking income 1,051 243 237 1,615 740
Net loss on investment securities (74) (353) (7) (428) (2,108)
Net loss on asset disposals and other transactions (795) (428) (307) (1,564) (2,218)
Other non-interest income 2,293 2,172 2,452 6,163 4,179
Total non-interest income 24,794 23,704 23,204 74,277 63,279
Non-interest expense:
Salaries and employee benefit costs 37,085 36,564 36,608 112,542 106,661
Data processing and software expense 6,111 6,743 6,288 18,623 15,578
Net occupancy and equipment expense 5,905 6,142 5,501 18,330 15,836
Professional fees 2,896 2,935 3,456 8,798 13,775
Amortization of other intangible assets 2,786 2,787 3,280 8,361 7,951
Electronic banking expense 1,844 1,941 1,836 5,566 5,159
FDIC insurance expense 1,241 1,251 1,260 3,678 3,525
Other loan expenses 1,178 1,036 856 3,290 2,133
Franchise tax expense 917 760 772 2,558 2,678
Communication expense 814 736 752 2,349 2,089
Marketing expense 971 681 1,267 2,708 3,554
Other non-interest expense 4,342 7,182 9,820 16,510 19,859
Total non-interest expense 66,090 68,758 71,696 203,313 198,798
Income before income taxes 40,881 35,876 40,729 114,609 101,597
Income tax expense 9,197 6,869 8,847 24,334 22,059
Net income $ 31,684 $ 29,007 $ 31,882 $ 90,275 $ 79,538
CONSOLIDATED STATEMENTS OF INCOME (Cont.)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2024 2024 2023 2024 2023
(Dollars in thousands, except per share data) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
PER COMMON SHARE DATA:
Net income available to common shareholders $ 31,684 $ 29,007 $ 31,882 $ 90,275 $ 79,538
Less: Dividends paid on unvested common shares 215 218 143 576 388
Less: Undistributed loss allocated to unvested common shares 64 55 79 183 190
Net earnings allocated to common shareholders $ 31,405 $ 28,734 $ 31,660 $ 89,516 $ 78,960
Weighted-average common shares outstanding 34,793,704 34,764,489 34,818,346 34,766,281 31,771,061
Effect of potentially dilutive common shares 405,679 353,159 243,551 340,431 206,425
Total weighted-average diluted common shares outstanding 35,199,383 35,117,648 35,061,897 35,106,712 31,977,486
Earnings per common share - basic $ 0.90 $ 0.83 $ 0.91 $ 2.57 $ 2.49
Earnings per common share - diluted $ 0.89 $ 0.82 $ 0.90 $ 2.55 $ 2.47
Cash dividends declared per common share $ 0.40 $ 0.40 $ 0.39 $ 1.19 $ 1.16
Weighted-average common shares outstanding - basic 34,793,704 34,764,489 34,818,346 34,766,281 31,771,061
Weighted-average common shares outstanding - diluted 35,199,383 35,117,648 35,061,897 35,106,712 31,977,486
Common shares outstanding at the end of period 35,538,607 35,498,977 35,395,990 35,538,607 35,395,990
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2024 2023
(Dollars in thousands) (Unaudited)
Assets
Cash and cash equivalents:
Cash and due from banks $ 139,244 $ 111,680
Interest-bearing deposits in other banks 144,463 315,042
Total cash and cash equivalents 283,707 426,722
Available-for-sale investment securities, at fair value (amortized cost of
$1,189,792 at September30, 2024 and $1,184,288 at December31, 2023) (a) 1,080,667 1,048,322
Held-to-maturity investment securities, at amortized cost (fair value of
$636,529 at September30, 2024 and $612,022 at December31, 2023) (a) 693,637 683,657
Other investment securities, at cost 55,691 63,421
Total investment securities (a) 1,829,995 1,795,400
Loans and leases, net of deferred fees and costs (b) 6,271,839 6,159,196
Allowance for credit losses (66,639) (62,011)
Net loans and leases 6,205,200 6,097,185
Loans held for sale 3,246 1,866
Bank premises and equipment, net of accumulated depreciation 105,202 103,856
Bank owned life insurance 143,065 140,554
Goodwill 362,414 362,169
Other intangible assets 41,508 50,003
Other assets 166,134 179,627
Total assets $ 9,140,471 $ 9,157,382
Liabilities
Deposits:
Non-interest-bearing $ 1,453,441 $ 1,567,649
Interest-bearing 6,029,716 5,584,648
Total deposits 7,483,157 7,152,297
Short-term borrowings 175,945 601,121
Long-term borrowings 236,824 216,241
Accrued expenses and other liabilities 119,573 134,189
Total liabilities $ 8,015,499 $ 8,103,848
Stockholders' Equity
Preferred shares, no par value, 50,000 shares authorized, no shares issued at September 30, 2024 or at - -
December31, 2023
Common shares, no par value, 50,000,000 shares authorized, 36,772,459 shares issued at September30, 865,326 865,227
2024 and 36,736,041 shares issued at December31, 2023, including shares in treasury
Retained earnings 375,396 327,237
Accumulated other comprehensive loss, net of deferred income taxes (82,496) (101,590)
Treasury stock, at cost, 1,323,075 common shares at September30, 2024 and 1,511,348 common shares (33,254) (37,340)
at December31, 2023
Total stockholders' equity 1,124,972 1,053,534
Total liabilities and stockholders' equity $ 9,140,471 $ 9,157,382
(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $0 and $236, respectively, as of September 30, 2024 and $0 and $238, respectively, as of December 31, 2023. (b) Also referred to throughout this document as "total loans" and "loans held for investment."
SELECTED FINANCIAL INFORMATION (Unaudited)
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands) 2024 2024 2024 2023 2023
Loan Portfolio
Construction $ 320,094 $ 340,601 $ 314,687 $ 364,019 $ 374,016
Commercial real estate, other 2,180,491 2,195,979 2,243,780 2,196,957 2,189,984
Commercial and industrial 1,250,152 1,258,063 1,214,615 1,184,986 1,128,809
Premium finance 286,983 293,349 238,962 203,177 189,251
Leases 433,009 430,651 422,694 414,060 402,635
Residential real estate 777,542 789,344 781,888 791,095 791,965
Home equity lines of credit 233,109 227,608 221,079 208,675 203,940
Consumer, indirect 677,056 675,054 650,228 666,472 668,371
Consumer, direct 112,198 113,655 113,588 128,769 134,562
Deposit account overdrafts 1,205 1,067 1,306 986 857
Total loans and leases $ 6,271,839 $ 6,325,371 $ 6,202,827 $ 6,159,196 $ 6,084,390
Total acquired loans and leases (a) $ 1,585,552 $ 1,686,784 $ 1,757,169 $ 1,825,129 $ 1,925,554
Total originated loans and leases $ 4,686,287 $ 4,638,587 $ 4,445,658 $ 4,334,067 $ 4,158,836
Deposit Balances
Non-interest-bearing deposits (b) $ 1,453,441 $ 1,472,697 $ 1,468,363 $ 1,567,649 $ 1,569,095
Interest-bearing deposits:
Interest-bearing demand accounts (b) 1,065,912 1,083,512 1,107,712 1,144,357 1,181,079
Retail certificates of deposit 1,884,139 1,812,874 1,680,413 1,443,417 1,198,733
Money market deposit accounts 894,690 869,159 859,961 775,488 730,902
Governmental deposit accounts 824,136 766,337 825,170 726,713 761,625
Savings accounts 864,935 880,542 901,493 919,244 987,170
Brokered deposits 495,904 412,653 483,444 575,429 608,914
Total interest-bearing deposits $ 6,029,716 $ 5,825,077 $ 5,858,193 $ 5,584,648 $ 5,468,423
Total deposits $ 7,483,157 $ 7,297,774 $ 7,326,556 $ 7,152,297 $ 7,037,518
Total demand deposits (b) $ 2,519,353 $ 2,556,209 $ 2,576,075 $ 2,712,006 $ 2,750,174
Asset Quality
Nonperforming assets (NPAs):
Loans 90+ days past due and accruing $ 27,578 $ 7,592 $ 7,662 $ 6,716 $ 9,117
Nonaccrual loans 34,807 33,669 31,361 25,477 26,187
Total nonperforming loans (NPLs) (f) 62,385 41,261 39,023 32,193 35,304
Other real estate owned (OREO) 7,397 7,409 7,238 7,174 7,174
Total NPAs $ 69,782 $ 48,670 $ 46,261 $ 39,367 $ 42,478
Criticized loans (c) $ 237,627 $ 239,943 $ 256,565 $ 235,239 $ 213,156
Classified loans (d) 133,241 120,180 147,518 120,027 124,836
Allowance for credit losses as a percent of NPLs (f) 106.82% 160.56% 166.11% 194.38% 178.23%
NPLs as a percent of total loans (f) 0.99% 0.65% 0.63% 0.52% 0.58%
NPAs as a percent of total assets (f) 0.76% 0.53% 0.50% 0.43% 0.48%
NPAs as a percent of total loans and OREO (f) 1.11% 0.77% 0.74% 0.64% 0.70%
Criticized loans as a percent of total loans (c) 3.79% 3.79% 4.14% 3.82% 3.50%
Classified loans as a percent of total loans (d) 2.12% 1.90% 2.38% 1.95% 2.05%
Allowance for credit losses as a percent of total loans 1.06% 1.05% 1.05% 1.01% 1.03%
Total demand deposits as a percent of total deposits (b) 33.67% 35.03% 35.16% 37.92% 39.08%
Capital Information (e)(g)(i)
Common equity tier 1 capital ratio (h) 11.79% 11.74% 11.69% 11.75% 11.57%
Tier 1 risk-based capital ratio 12.58% 12.53% 12.50% 12.58% 12.31%
Total risk-based capital ratio (tier 1 and tier 2) 13.48% 13.44% 13.40% 13.38% 13.14%
Leverage ratio 9.86% 9.56% 9.43% 9.57% 9.34%
Common equity tier 1 capital $ 821,192 $ 799,710 $ 780,017 $ 766,691 $ 752,728
Tier 1 capital 875,800 854,050 834,089 820,495 801,010
Total capital (tier 1 and tier 2) 938,474 916,073 894,662 873,225 855,054
Total risk-weighted assets $ 6,962,652 $ 6,814,149 $ 6,674,114 $ 6,524,577 $ 6,505,779
Total stockholders' equity to total assets 12.31% 11.68% 11.46% 11.50% 11.11%
Tangible equity to tangible assets (j) 8.25% 7.61% 7.37% 7.33% 6.85%
(a) Includes all loans and leases acquired and purchased in 2012 and thereafter. (b) The sum of non-interest-bearing deposits and interest-bearing demand accounts is considered total demand deposits. (c) Includes loans categorized as special mention, substandard, or doubtful. (d) Includes loans categorized as substandard or doubtful. (e) Data presented as of the end of the period indicated. (f) Nonperforming loans include loans 90+ days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and OREO. (g) September 30, 2024 data based on preliminary analysis and subject to revision. (h) Peoples' capital conservation buffer was 5.24% at September 30, 2024, 5.66% at June 30, 2024, 5.60% at March 31, 2024, 5.38% at December 31, 2023, 5.14% at September 30, 2023, compared to required capital conservation buffer of 2.50% (i) Peoples has adopted the five-year transition to phase in the impact of the adoption of CECL on regulatory capital ratios. (j) This ratio represents a non-US GAAP financial measure since it excludes the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."
PROVISION FOR (RECOVERY OF) CREDIT LOSSES INFORMATION
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2024 2024 2023 2024 2023
(Dollars in thousands) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Provision for credit losses
Provision for credit losses $ 6,279 $ 5,397 $ 3,764 $ 17,510 $ 13,188
Provision for checking account overdrafts 456 286 289 1,010 701
Total provision for credit losses $ 6,735 $ 5,683 $ 4,053 $ 18,520 $ 13,889
Net Charge-Offs
Gross charge-offs $ 6,591 $ 4,607 $ 2,834 $ 15,072 $ 6,730
Recoveries 507 374 516 1,435 1,672
Net charge-offs $ 6,084 $ 4,233 $ 2,318 $ 13,637 $ 5,058
Net Charge-Offs (Recoveries) by Type
Construction $ - $ - $ - $ - $ 9
Commercial real estate, other (100) 80 181 109 178
Commercial and industrial 258 46 196 532 (243)
Premium finance 33 51 21 130 55
Leases 3,697 2,204 737 6,959 1,641
Residential real estate (58) (4) 23 (65) 25
Home equity lines of credit 2 9 32 4 106
Consumer, indirect 1,634 1,450 777 4,474 2,439
Consumer, direct 143 126 81 486 213
Deposit account overdrafts 475 271 270 1,008 635
Total net charge-offs $ 6,084 $ 4,233 $ 2,318 $ 13,637 $ 5,058
As a percent of average total loans (annualized) 0.38% 0.27% 0.15% 0.29% 0.12%
SUPPLEMENTAL INFORMATION (Unaudited)
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands) 2024 2024 2024 2023 2023
Trust assets under administration and management $ 2,124,320 $ 2,071,832 $ 2,061,402 $ 2,021,249 $ 1,900,488
Brokerage assets under administration and management 1,608,368 1,567,775 1,530,954 1,473,814 1,364,372
Mortgage loans serviced for others 347,719 341,298 348,937 356,784 366,996
Employees (full-time equivalent) 1,496 1,489 1,498 1,478 1,482
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)
Three Months Ended
September 30, 2024 June 30, 2024 September 30, 2023
(Dollars in thousands) Balance Income/ Yield/ Cost Balance Income/ Yield/ Cost Balance Income/ Yield/ Cost
Expense Expense Expense
Assets
Short-term investments $ 57,436 $ 954 6.60% $ 178,094 $ 2,502 5.65% $ 62,609 $ 801 5.08%
Investment securities (a)(b) 1,897,701 16,397 3.46% 1,870,372 16,144 3.45% 1,819,248 14,116 3.10%
Loans (b)(c):
Construction 330,779 6,654 7.87% 328,943 6,595 7.93% 400,396 9,983 9.76%
Commercial real estate, other 2,049,150 37,640 7.19% 2,074,718 36,420 6.94% 1,965,927 34,369 6.84%
Commercial and industrial 1,254,709 24,730 7.71% 1,230,290 23,897 7.68% 1,128,420 22,561 7.82%
Premium finance 288,841 6,052 8.20% 260,513 5,746 8.73% 179,390 3,565 7.78%
Leases 424,549 11,922 10.99% 419,764 11,982 11.29% 384,606 11,508 11.71%
Residential real estate (d) 920,703 12,110 5.26% 925,629 11,460 4.95% 952,863 11,879 4.99%
Home equity lines of credit 231,760 4,836 8.30% 225,362 4,612 8.23% 201,973 4,012 7.88%
Consumer, indirect 681,002 10,372 6.06% 656,405 9,669 5.92% 662,462 8,774 5.25%
Consumer, direct 120,941 2,271 7.47% 119,048 2,095 7.08% 139,595 2,416 6.87%
Total loans 6,302,434 116,587 7.27% 6,240,672 112,476 7.16% 6,015,632 109,067 7.13%
Allowance for credit losses (66,154) (64,745) (60,724)
Net loans 6,236,280 6,175,927 5,954,908
Total earning assets 8,191,417 133,938 6.44% 8,224,393 131,122 6.34% 7,836,765 123,984 6.23%
Goodwill and other intangible assets 405,022 407,864 411,229
Other assets 546,313 548,197 558,415
Total assets $ 9,142,752 $ 9,180,454 $ 8,806,409
Liabilities and Equity
Interest-bearing deposits:
Savings accounts $ 870,914 $ 227 0.10% $ 892,465 $ 222 0.10% $ 1,058,606 $ 447 0.17%
Governmental deposit accounts 824,918 5,960 2.87% 795,913 5,594 2.83% 758,409 4,012 2.10%
Interest-bearing demand accounts 1,072,850 591 0.22% 1,095,553 495 0.18% 1,198,100 520 0.17%
Money market deposit accounts 854,075 5,609 2.61% 850,375 5,419 2.56% 717,765 2,943 1.63%
Retail certificates of deposit 1,865,312 20,151 4.30% 1,743,238 18,423 4.25% 1,043,579 7,161 2.72%
Brokered deposits (e) 410,035 4,713 4.57% 482,310 5,506 4.59% 631,410 7,399 4.65%
Total interest-bearing deposits 5,898,104 37,251 2.51% 5,859,854 35,659 2.45% 5,407,869 22,482 1.65%
Short-term borrowings (e) 318,752 4,050 5.07% 407,273 4,978 4.90% 458,462 5,169 4.48%
Long-term borrowings 234,779 3,407 5.75% 234,961 3,520 5.98% 148,234 2,668 7.19%
Total borrowed funds 553,531 7,457 5.36% 642,234 8,498 5.30% 606,696 7,837 4.72%
Total interest-bearing liabilities 6,451,635 44,708 2.76% 6,502,088 44,157 2.73% 6,014,565 30,319 1.96%
Non-interest-bearing deposits 1,468,498 1,476,870 1,627,231
Other liabilities 122,861 140,042 159,755
Total liabilities 8,042,994 8,119,000 7,801,551
Stockholders' equity 1,099,758 1,061,454 1,004,858
Total liabilities and stockholders' equity $ 9,142,752 $ 9,180,454 $ 8,806,409
Net interest income/spread (b) $ 89,230 3.68% $ 86,965 3.61% $ 93,665 4.27%
Net interest margin (b) 4.27% 4.18% 4.70%
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited) -- (Continued)
Nine Months Ended
September 30, 2024 September 30, 2023
(Dollars in thousands) Balance Income/ Yield/ Cost Balance Income/ Yield/ Cost
Expense Expense
Assets
Short-term investments $ 125,720 $ 5,377 5.71% $ 57,271 $ 1,862 4.35%
Investment securities (a)(b) 1,867,003 47,775 3.41% 1,827,261 40,673 2.97%
Loans (b)(c):
Construction 333,048 19,652 7.75% 333,895 20,437 8.07%
Commercial real estate, other 2,066,631 111,302 7.08% 1,671,019 82,403 6.50%
Commercial and industrial 1,229,491 72,142 7.71% 1,021,573 56,728 7.32%
Premium finance 253,383 16,362 8.48% 160,729 8,374 6.87%
Leases 418,084 35,970 11.30% 362,222 31,426 11.44%
Residential real estate (d) 925,756 34,892 5.03% 903,622 32,414 4.78%
Home equity lines of credit 224,648 13,745 8.17% 190,225 10,634 7.47%
Consumer, indirect 664,610 29,322 5.89% 651,578 23,947 4.91%
Consumer, direct 121,359 6,465 7.12% 125,826 6,401 6.80%
Total loans 6,237,010 339,852 7.19% 5,420,689 272,764 6.66%
Allowance for credit losses (64,052) (55,757)
Net loans 6,172,958 5,364,932
Total earning assets 8,165,681 393,004 6.36% 7,249,464 315,299 5.76%
Goodwill and other intangible assets 407,858 374,924
Other assets 541,515 496,497
Total assets $ 9,115,054 $ 8,120,885
Liabilities and Equity
Interest-bearing deposits:
Savings accounts $ 889,629 $ 675 0.10% $ 1,066,783 $ 1,166 0.15%
Governmental deposit accounts 795,019 16,639 2.80% 696,359 7,408 1.42%
Interest-bearing demand accounts 1,092,407 1,538 0.19% 1,160,698 1,232 0.14%
Money market deposit accounts 829,825 15,917 2.56% 661,272 5,774 1.17%
Retail certificates of deposit 1,730,818 54,472 4.20% 817,512 13,120 2.15%
Brokered deposit (e) 486,832 16,972 4.66% 452,574 13,846 4.09%
Total interest-bearing deposits 5,824,530 106,213 2.44% 4,855,198 42,546 1.17%
Short-term borrowings (e) 371,426 13,212 4.75% 477,826 14,940 4.18%
Long-term borrowings 233,343 10,392 5.91% 126,449 5,668 5.98%
Total borrowed funds 604,769 23,604 5.20% 604,275 20,608 4.14%
Total interest-bearing liabilities 6,429,299 129,817 2.70% 5,459,473 63,154 1.50%
Non-interest-bearing deposits 1,482,318 1,607,411
Other liabilities 132,003 134,003
Total liabilities 8,043,620 7,200,887
Stockholders' equity 1,071,434 919,998
Total liabilities and stockholders' equity $ 9,115,054 $ 8,120,885
Net interest income/spread (b) $ 263,187 3.66% $ 252,145 4.26%
Net interest margin (b) 4.24% 4.60%
(a) Average balances are based on carrying value. (b) Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate. (c) Average balances include nonaccrual and impaired loans. Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status. Loan fees included in interest income were immaterial for all periods presented. (d) Loans held for sale are included in the average loan balance listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income. (e) Interest related to interest rate swap transactions is included, as appropriate to the transaction, in interest expense on short-term FHLB advances and interest expense on brokered deposits for the periods presented in which FHLB advances and brokered deposits were being utilized.
NON-US GAAP FINANCIAL MEASURES (Unaudited) The following non-US GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. The following tables summarize the non-US GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(Dollars in thousands) 2024 2024 2023 2024 2023
Core non-interest expense:
Total non-interest expense $ 66,090 $ 68,758 $ 71,696 $ 203,313 $ 198,798
Less: acquisition-related expenses (662) - 4,434 (746) 15,694
Less: pension settlement charges - - 2,424 - 2,424
Add: COVID -19 Employee Retention Credit - - - - 548
Core non-interest expense $ 66,752 $ 68,758 $ 64,838 $ 204,059 $ 181,228
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(Dollars in thousands) 2024 2024 2023 2024 2023
Efficiency ratio:
Total non-interest expense $ 66,090 $ 68,758 $ 71,696 $ 203,313 $ 198,798
Less: amortization of other intangible assets 2,786 2,787 3,280 8,361 7,951
Adjusted total non-interest expense 63,304 65,971 68,416 194,952 190,847
Total non-interest income 24,794 23,704 23,204 74,277 63,279
Less: net loss on investment securities (74) (353) (7) (428) (2,108)
Less: net loss on asset disposals and other transactions (795) (428) (307) (1,564) (2,218)
Total non-interest income, excluding net gains and losses 25,663 24,485 23,518 76,269 67,605
Net interest income 88,912 86,613 93,274 262,165 251,005
Add: fully tax-equivalent adjustment (a) 318 352 391 1,022 1,140
Net interest income on a fully tax-equivalent basis 89,230 86,965 93,665 263,187 252,145
Adjusted revenue $ 114,893 $ 111,450 $ 117,183 $ 339,456 $ 319,750
Efficiency ratio 55.10% 59.19% 58.38% 57.43% 59.69%
Efficiency ratio adjusted for non-core items:
Core non-interest expense $ 66,752 $ 68,758 $ 64,838 $ 204,059 $ 181,228
Less: amortization of other intangible assets 2,786 2,787 3,280 8,361 7,951
Adjusted core non-interest expense 63,966 65,971 61,558 195,698 173,277
Adjusted revenue $ 114,893 $ 111,450 $ 117,183 $ 339,456 $ 319,750
Efficiency ratio adjusted for non-core items 55.67% 59.19% 52.53% 57.65% 54.19%
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.
NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
At or For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands, except per share data) 2024 2024 2024 2023 2023
Tangible equity:
Total stockholders' equity $ 1,124,972 $ 1,077,833 $ 1,062,002 $ 1,053,534 $ 993,219
Less: goodwill and other intangible assets 403,922 406,417 409,285 412,172 408,494
Tangible equity $ 721,050 $ 671,416 $ 652,717 $ 641,362 $ 584,725
Tangible assets:
Total assets $ 9,140,471 $ 9,226,461 $ 9,270,774 $ 9,157,382 $ 8,942,534
Less: goodwill and other intangible assets 403,922 406,417 409,285 412,172 408,494
Tangible assets $ 8,736,549 $ 8,820,044 $ 8,861,489 $ 8,745,210 $ 8,534,040
Tangible book value per common share:
Tangible equity $ 721,050 $ 671,416 $ 652,717 $ 641,362 $ 584,725
Common shares outstanding 35,538,607 35,498,977 35,486,234 35,314,745 35,395,990
Tangible book value per common share $ 20.29 $ 18.91 $ 18.39 $ 18.16 $ 16.52
Tangible equity to tangible assets ratio:
Tangible equity $ 721,050 $ 671,416 $ 652,717 $ 641,362 $ 584,725
Tangible assets $ 8,736,549 $ 8,820,044 $ 8,861,489 $ 8,745,210 $ 8,534,040
Tangible equity to tangible assets 8.25% 7.61% 7.37% 7.33% 6.85%
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(Dollars in thousands) 2024 2024 2023 2024 2023
Pre-provision net revenue:
Income before income taxes $ 40,881 $ 35,876 $ 40,729 $ 114,609 $ 101,597
Add: provision for credit losses 6,735 5,683 4,053 18,520 13,889
Add: loss on OREO 2 - 1 2 1,623
Add: loss on investment securities 74 353 7 428 2,108
Add: loss on other assets 764 397 283 1,470 557
Add: loss on other transactions 28 31 23 92 38
Pre-provision net revenue $ 48,484 $ 42,340 $ 45,096 $ 135,121 $ 119,812
NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(Dollars in thousands) 2024 2024 2023 2024 2023
Annualized net income adjusted for non-core items:
Net income $ 31,684 $ 29,007 $ 31,882 $ 90,275 $ 79,538
Add: net loss on investment securities 74 353 7 428 2,108
Less: tax effect of net loss on investment securities (a) 16 74 2 90 443
Add: net loss on asset disposals and other transactions 795 428 307 1,564 2,218
Less: tax effect of net loss on asset disposals and other transactions (a) 167 90 65 328 466
Add: acquisition-related expenses (662) - 4,434 (746) 15,694
Less: tax effect of acquisition-related expenses (a) (139) - 931 (157) 3,296
Add: pension settlement charges - - 2,424 - 2,424
Less: tax effect of pension settlement charges (a) - - 509 - 509
Less: COVID -19 Employee Retention Credit - - - - 548
Add: tax effect of COVID -19 Employee Retention Credit (a) - - - - 115
Net income adjusted for non-core items $ 31,847 $ 29,624 $ 37,547 $ 91,260 $ 96,835
Days in the period 92 91 92 274 273
Days in the year 366 366 365 366 365
Annualized net income $ 126,047 $ 116,666 $ 126,488 $ 120,586 $ 106,342
Annualized net income adjusted for non-core items $ 126,696 $ 119,147 $ 148,964 $ 121,902 $ 129,468
Return on average assets:
Annualized net income $ 126,047 $ 116,666 $ 126,488 $ 120,586 $ 106,342
Total average assets $ 9,142,752 $ 9,180,454 $ 8,806,409 $ 9,115,054 $ 8,120,885
Return on average assets 1.38% 1.27% 1.44% 1.32% 1.31%
Return on average assets adjusted for non-core items:
Annualized net income adjusted for non-core items $ 126,696 $ 119,147 $ 148,964 $ 121,902 $ 129,468
Total average assets $ 9,142,752 $ 9,180,454 $ 8,806,409 $ 9,115,054 $ 8,120,885
Return on average assets adjusted for non-core items 1.39% 1.30% 1.69% 1.34% 1.59%
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.
NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
For the Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(Dollars in thousands) 2024 2024 2023 2024 2023
Annualized net income excluding amortization of other intangible assets:
Net income $ 31,684 $ 29,007 $ 31,882 $ 90,275 $ 79,538
Add: amortization of other intangible assets 2,786 2,787 3,280 8,361 7,951
Less: tax effect of amortization of other intangible assets (a) 585 585 689 1,756 1,670
Net income excluding amortization of other intangible assets $ 33,885 $ 31,209 $ 34,473 $ 96,880 $ 85,819
Days in the period 92 91 92 274 273
Days in the year 366 366 365 366 365
Annualized net income $ 126,047 $ 116,666 $ 126,488 $ 120,586 $ 106,342
Annualized net income excluding amortization of other intangible assets $ 134,803 $ 125,522 $ 136,768 $ 129,409 $ 114,740
Average tangible equity:
Total average stockholders' equity $ 1,099,758 $ 1,061,454 $ 1,004,858 $ 1,071,434 $ 919,998
Less: average goodwill and other intangible assets 405,022 407,864 411,229 407,858 374,924
Average tangible equity $ 694,736 $ 653,590 $ 593,629 $ 663,576 $ 545,074
Return on average stockholders' equity ratio:
Annualized net income $ 126,047 $ 116,666 $ 126,488 $ 120,586 $ 106,342
Average stockholders' equity $ 1,099,758 $ 1,061,454 $ 1,004,858 $ 1,071,434 $ 919,998
Return on average stockholders' equity 11.46% 10.99% 12.59% 11.25% 11.56%
Return on average tangible equity ratio:
Annualized net income excluding amortization of other intangible assets $ 134,803 $ 125,522 $ 136,768 $ 129,409 $ 114,740
Average tangible equity $ 694,736 $ 653,590 $ 593,629 $ 663,576 $ 545,074
Return on average tangible equity 19.40% 19.21% 23.04% 19.50% 21.05%
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.
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SOURCE Peoples Bancorp Inc.
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