PEOPLES BANCORP INC Q1 FY2025 earnings call

• Diluted EPS was $0.68. Book value per share grew 2% to $31.90, tangible book value up 4% to $20.68. Dividend increased for the 10th consecutive year.
• Loan growth over 4%, with commercial real estate, residential real estate, and consumer indirect loans contributing. Deposit balances grew 2% with core deposit growth over 3%.
• Credit quality improved with reductions in net charge-offs, nonperforming assets, and criticized/classified loans. Allowance for credit losses grew.
• Continued optimism in regulatory and tax outlook, but uncertainty around tariffs with nominal impact so far. Recognized as America's Best Banks and top workplace, with strong associate culture and ability to integrate mergers.

For the first quarter, Peoples Bancorp Inc. had diluted earnings per share of $0.68. Annualized loan growth was over 4%, with commercial real estate loans leading growth at $75M. Deposit balances grew 2%, driven by money market and governmental deposits, with core deposit growth over 3% after reducing brokered CDs by $96M. Net interest income was down 1% QoQ, but core net interest income grew and net interest margin expanded 3 basis points to 4.12%. Fee-based income grew over 2%, though partially offset by lower commercial loan swap fees, etc. Credit quality improved with annualized net charge-off rate at 52bps (vs 61bps QoQ), nonperforming assets down over $3M, and allowance for credit losses growing nearly $2M to 1.01% of total loans.

• Expect positive operating leverage for 2025. Assuming 50bps Fed rate cuts, full year net interest margin between 4% and 4.2%.
• Fee-based income expected to grow mid-single digits. Noninterest expense Q2-Q4 2025 expected $69M-$71M.
• Loan growth expected 4%-6%. Provision for credit losses to normalize to 2024 rates in back half of 2025.

• Macroeconomic uncertainty including impact of tariffs, consumer confidence fluctuations, and regulatory changes.
• Credit risk related to small ticket leasing portfolio charge-offs and potential macroeconomic impacts on credit quality.

Q: On loan growth and tariffs impact A: Tyler mentions strong sales pipeline, optimism in small business space, and added talent in markets, with loan growth guide based on current pipeline.

Q: On fee income guidance reduction A: Kathryn says insurance income softer, mortgage on balance sheet, and wealth management dependent on market volatility.

Q: On consumer behavior and tariffs A: Tyler notes increased indirect lending, deposit growth, strong mortgage pipeline, and HELOC activity as consumer behaviors.

Q: On acquisition and stock buybacks A: Kathryn mentions ongoing stock buyback plan, and Tyler talks about strategic patience in acquisitions.