PEBO - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Peoples Bancorp Inc.'s Conference Call. My name is Rocco and I will be your conference facilitator today. Today's call will cover a discussion of the results of operations for the quarterly period and fiscal year ended December 31st, 2017. [Operator Instructions] This call is also being recorded.

If you object to the recording, please disconnect at this time. the forward-looking this financial statements future that projections will performance advised events. other or regarding be commentary call in contain or Please Peoples' future current are on statements management's These based expectations. involve are in statements facts, statements risks Securities in this uncertainties which and filings. a The not Exchange of number Commission's call, are historical forward-looking detailed Peoples and and in of of ASB; the Corp.; the These changes; ability approval consumer including of Jobs and competitive implementation of or the Tax proposed the proposed and timing enactment additional such the financial current include, and preliminary changes the in but of and Financial ability acquisitions uncertainties ASB and the timing, with and Act and and/or recently nature uncertainty of are including interest in activity; policy the developments regarding review of on as approval other Cuts future in industry; state environment; recently terms conditions obtain enacted of uncertainty tax the not the business lending speculation limited analysis changes enacted the manager activities. of Tax the and and administration, nature, Act of successful strategies; to Job to, pending with Cuts and economic the the acquisitions, the accompanying and/or insurance federal legal the of rate the expansion regulations; the the success, changes ASB impact future effects the presidential regulatory and cost banking, of integration services to Peoples' merger integrate and regulatory by scheduled; merger shareholders pending the Peoples' this within knowledge bounds the of based reasonable believes on of forward-looking operations. are Management call and statements during their the made business assumptions

XX as release is this Peoples available of it any This measures each will except to by I section is XXXX and of for XX after Investor Financial earnings year. the be on Chief President Treasurer, and morning minutes legal call fourth during and responsibility these call Mr. tab. disclaims release. directly statements. Participants this A webcast facilitate. from under may include of available a Investor about the conference. your non-GAAP for the Sulerzyski, Officer; commentary, included questions opening be to forward-looking following peoplesbancorp.com is Officer was will this this Sulerzyski, to the of possible comparable Chuck will forward-looking financial call end An Relations period, will and call, Rogers, followed required most John Executive may today's call requirements. materially at issued Peoples' maybe prepared discussed peoplesbancorp.com by earnings the be archived the quarter measures statements will However, which Chief update at reconciliation at in differ question-and-answer available financial one these applicable and results Relations begin you actual statements. GAAP

Chuck Sulerzyski

million quarter our net or share diluted share $X.XX all full $X.XX you, the $XX.X compares Good share. results. thank Earlier the fourth $X we morning, year Thank quarter morning you $X.XX this in for XXXX in or quarter to income fourth quarter or for us Rocco. per and $X.X of per This of million a review diluted million and per third XXXX. diluted joining reported fourth of and

a XXXX. acquisition-related pension by expense was the and expense gains impacted enacted items quarter resulted of expense two during share. includes discuss additional partially in Act. that of during of of fourth a additional income fourth included Jobs security net reduction or to recently These full The The also resulted earnings fourth offset charge $X.XX of the XXXX year of million by share the per was quarter XXXX the $X.XX These the $XXX,XXX. Tax of of per $XXX,XXX was in diluted quarter income fourth diluted were of for which Cuts $XXX,XXX, quarter $X.XX to income for during tax quarter. $X.XX This million quarter the quarter tax non-interest XXXX. XXXX, Net $X.XX For additional settlement diluted a the in full more details legislation $XX.X This John fourth $XXX,XXX fourth expense resulted in of of which reduction items earnings year investment fourth per few per per of the minutes. resulted a share diluted diluted of of $XX.X the full added and approximately The items income gains non-core XXXX. was in share tax and both XXXX. year earnings noninterest or share non-core in XXXX. will new in -- cost

full During added during XXXX, income share third diluted year grew to XXXX the third recognized of we quarter the security Compared gains investment the per earnings which to XX%. XXXX, of net $X.XX our for quarter.

over improvement. The in income to driven income by XXXX. net compared non-core in and control this income with pleased growth recognized We our $X.X million during of are expenses We XXXX net expenses. during non-interest continued increases interest both was and $XXX,XXX

of most to had performance, to During year. positive approximately for the XX growth, that the growth improved grew growth quality. the good loan revenue XXXX. grew estate XXXX, through XXth, half the basis of $XX most larger XXst, year-over-year loans XXXX, in asset year million. indirect security X% XXXX experienced half almost is we which balances as last the during these also commercial $XX consistent while operating added saw gains were X% Like Commercial loan benefited of quarter. compared news investment slower payoffs payoffs lending period-end industrial $X.XX have last positive the quarter million operating the this per September share. from commercial able full we diluted leverage nine out million, growth generate expense December We At Loan grew approximately of quarter we some we X% on comparing outpacing consumer commercial provided compared a which was quarters, fourth balances with leverage real When quarters. of to of fourth loans totaled $XX The our XXXX. increase annualized an loan and almost

in and $X these a third the offset balances loan million December the XXXX were included criticized criticized million were relationship to XXst, consumer in indirect growth lending. June but compared payoffs was an end Total was partially that considered by the energy XXXX. consumer Specifically that $X relationship quarter, of of XXth, as at declined

growth fourth Average of $XXX loan compared have loan acquired quarter, $XXX to year increased driven the XXXX of The to estate X% million loan for average XXst, balances in of consumer fourth has lending by a the growth. balances residential compared provided indirect was estate million reduction XXXX, the portfolios. average quarter XXXX or slowdown XXXX. XXXX. indirect declines Quarterly loan while real one-off Commercial driven growth loans. increased loan the consumer X% balances partially offset loan primarily in significant since balances compared rate residential real in in the in the During experienced primarily by to December full been or has --

to third year. we the loans XX% have between organic compared Provision the and of five quarter. was Over flat acquired years, last for growth, a excluding losses loan experienced X%

and have for quarter, points full charge-off XX Most the quality quarter loan to XX% single basis in the the fourth decreased compared $X.X the points XX increase During was decreased commercial of improvements relationship. $X.X quarter year loan XXst, to or for was XX%. was asset assets in offset XXXX a in fourth increases December XXst, assets or million the Compared estate charge-offs December balances. fourth XXXX. Non-performing September related basis real rate to during XXXX. The as non-performing million net of XXXX, XXth,

compared increased to during XXXX, as the evidenced reduce XXst, relationship quarter. downgraded December criticized Delinquency one X% non-core quarter. considered two XXth, XX.X% was to higher with levels loans December asset fourth XX.X% were the increase to our to September XXXX sort items XXXX. stable third compared to was in was quarter due earlier, non-performing classified by was declined classified reduction. large Total while loans $X commercial grew million. compared XXth, September actively increase partially XXst, have at This mentioned trends and professional the at during approximately the expenses portfolio coupled at XXst, mostly as fees. December current At due The loan XXXX that the to non-interest $X million of XX% XXXX, loans We

was total flat. Excluding of slightly. the non-interest Compared was total relatively up to non-core items, quarter expense non-interest fourth the expense XXXX,

largely XXXX. X% increased cost in The to compared during and XXXX increased of higher amortization with salaries other is year to to to increase due professional data full by higher employee were non-interest benefits salaries compensation These declines was and recognized. increase XXXX, medical benefits cost cost. settlement offset was software which of for and assets. processing coupled due charges pension tied This For increases communications fees, employee performance insurance and corporate expense, and total and expense partially XXXX, in intangible incentive

bank the continually to to of the total of structure We closed efficiency of evaluate reaching delivery During quarter our two during XXXX, brand branches, of of closures we latter services XXXX. customers. a half optimize six fourth our the

quarter quarter to compared the And for ratio ratio in to for XX.X% quarter our of and for for compared year. the the XXXX target was line was XXXX and fourth with XXXX. efficiency XX.X% fourth XX.X% efficiency XXXX Our XX.X% during for the was the third of XX.X%

fourth Absent in efficiency ratio the costs, fourth ratio impacted XXXX. of XX.X%. the is have quarter two efficiency of in these quarter from fourth an third and quarter Our to compared down our quarter mentioned. was ratio the by non-core we items the flat was XX.X% XX.X% adjusted adjusted already as efficiency for This

systems the upgrade. recognized related of of fourth non-core charges we $XXX,XXX quarter to XXXX, During our

For fee-based and to well the investment activities. capital additional the XXXX. for provide items and XX.X% net the around to income XX.X% as in was XXXX, to two income, compared interest will additional adjusted full call security sheet, as our income the and turn insights gains quarter, now balance non-recurring of to efficiency I taxes margin, details over related year John ratio

John Rogers

Thanks Chuck.

investment items, in $XXX,XXX of securities million to the investment $X.X last year, compared quarter. fourth reduce equity during bank certain continued equity the in we value recognized to As to two the in we additional Beginning during This the our it quarter on income statement. fluctuations third relates the position led securities investment nonrecurring XXXX, to on to market securities. similar gain

the of in Our main future upon imposition values quarters, periods. depending volatility reporting some market pose future could at end

federal a XXXX, income to tax required December rate tax of XX% reevaluation we under the Jobs of Previously, Tax recently recognized As income to record had and and tax use assets Act. us liabilities of requires our at Cuts XX% XXst, to tax new law deferred rate. deferred and tax assets our were deferred liabilities federal enacted and a we the a

we result, wrote tax impact net a As of which tax our by deferred during had the a direct fourth expense $XXX,XXX on assets XXXX. down our income quarter

will tax will we rate. our rate tax income benefit lower during the approximately XX%. forward, income expense at federal effective Going recording XXXX We tax from anticipate be

down and investment was to quarter. the net recorded to fee-based on previously Net largely slightly interest than $XXX,XXX recognition Moving reduction proceeds and we income third compared our which interest was of due to temporary income. quarter the at during security income, for margin, impairment. had This of other the received third

of proceeds, quarter. net quarter XXXX X% increased quarter during fourth third the linked compared the interest to the Excluding income

to to XXXX year income year compared four of X.XX% security growth during the of rates Net declined interest XXXX, was interest to Loan basis from proceeds much full the has of the For with year, this investment increase the interest grew received the of rise to compared interest during fourth full of it the up quarter provided XXXX. for margin income XXXX. on and coupled the quarter. X% fourth Net $XXX,XXX. benefited net X% points in compared XXXX, prior

XXXX. of additional we margin for receive and down margin in These interest quarter yields temporary quarter, quarter, to increases basis XXXX. fourth of income added previously in Although for the full X.XX% was quarter of of investment third was loan security during impairment. net in XXXX, on net is cost during interest quarter, net the and outpaced expense Accretion recorded amortization XXXX proceeds yields nine the we the acquisitions, eight full during other XXXX eight of interest quarter and than the proceeds which loan of to grew have did fourth added basis points XXXX. not funding which XX third Higher year expanded declined to third the XX% compared to short-term points in investment of XXXX. X.XX% to points income, from compared during compared Compared the deposit XX% margin the quarter fourth the XX and fourth the points the year Accretion basis to and net quarter. basis points basis

to basis accretion the and to electronic due year XXXX. interest third added income trust XXXX, net For income, X%. points swap compared income. of in full points Compared was in largely quarter, margin to increase basis income banking grew income, XX the fee investment fee-based to and XX This growth

trust overdraft and to XXXX, insurance higher growth deposit driven experienced to resulted and by fee migration of grew in quarter fee-based service electronic the some third Compared fees. income, to This which led also swap the quarter. service account compared account We charges from of charges investment X%. account fourth banking checking offset This the by products, higher lower commissions, was income. income was partially and growth income,

all XXXX, account grew clients income from compared of XX% Fee-based XXXX total partially year categories charges, fee-based fees. in of being lower resulting revenue full the and XXXX. service the during revenue X% was offset to XX% increases by with For overdraft deposit in

XXXX As to it the XXXX. December to XXth, XX% XX% September balance in sheet, December assets XXXX XXst, portfolio compared XXst, declined investment of and to securities our total at both relates

investment reduction impairment. of than quarter declined investment to basis recorded previously compared for points on the third The other temporary proceeds security quarter. XX have and the in due recognition yield the to Our we third which the was

previously received and other For for of recorded investment was rates. by XX yield than we prepayments XXXX, investment largely on and interest This driven during quarter, the temporary security basis higher the second full our which received impairment, year proceeds improved the points.

XXXX compared million to grew XXst, deposits, flat Our of XXst, XXth, $XXX and at XXXX relatively December exclude which core were CDs, to X% XXXX. December compared September

deposits to and in total period-end grew increases Our XXth, $XXX was XXXX driven December or X%. to X% period-end million by XXst, Compared deposits or increased $XX September million CDs. compared XXXX,

to average demand deposits and and XXXX quarter total XX% an million full $XX at compared deposits December XXst, both or September Our the XXXX increased XX% total third December for the X% compared Total $XXX deposits X% XXth, increase million compared up XXXX of XXXX. of to XXst, or year were comprised at XXXX, to of XXXX.

net was market the to investment continues reductions September increase dividends of was be strong offset of paid source by to Our strength, stockholders equity a driven increase XXXX. XXth, which an This compared securities. partially by of our to earnings value

basis equity Our XXXX. but points compared to tangible was fourth assets declined basis during the up quarter six tangible ratio points XX XXst, to December

XXst, value tangible December priority book per a XXXX. well-capitalized making to Our capital compared share healthy We're X% maintain status. exceeding increased to ratios

Tier XXXX. Our common at capital was ratio X XXst, XX.X% equity December

$X.XX strong return This risk-weighted result represents dividend, now assets. share. a per our this to per rate dividends a our stockholders total XXth, While capital of is shareholders in earnings in and of XX% earnings paid fourth we share was our dividend to to XXXX capital from increase of believe dividend The our net our for performance our in payout ratio XX.X%. quarter. increase a due risk-based increase largely is final the takes a XX.X% our into X we was and be call back announced increase September account ratios Chuck comments. now the our future quarterly in Tier will the outpaced for periods. turn his benefit income ratio increase This from XXXX tax compared equity which of capital which to the rate federal was reduced the I net the in receiving morning, will and to We

Chuck Sulerzyski

systems, core we our We a focus business. communities. we invested Thanks our at yet multiple evident is and years, very completed did while of and to in worked year. have facilities, continuing just our clients This hard dedication In and people been has improving and this all acquisitions, results. John. our good paid and off XXXX believe has I on are is satisfied. in not beginning the recent

generating X.X by to positive loan X% growth average growth XXXX have X%, XXXX, XXXX, ratio of book reducing tangible during to accomplishments of from points growth improving basis assets XX% leverage notable the compared -- almost XXXX, revenue an most our X% XXX share acquisition our increasing compared checking average insurance expense return to with [ph] by XXst, XXXX balances achieving in to XXX outpacing announcing our compared XXXX, of for to compared on compared been on system per Some XXst, $X.XX our for of XXXX, value year XXXX, from equity operating efficiency our compared fourth and to XXXX X% by per XXXX, X.X% and acquisition XX growing share $X.XX first X% XXXX, non-performing or XX% full growth average of growing increasing balances compared quarter bank year-end post December dividend stockholder for account compared our deposit reducing assets by XX% completing XXst, X.XX% to agency to XXXX, December in December XXXX to $XX.XX to the at our our upgrade. the of with of return

pleased will mind, to With While anticipated momentum the benefits which announced continue here XXXX. excludes are that we are results, with our and focus our thoughts our of around going acquisition. into in we maintain our XXXX

loan growth X% We expect to point-to-point X%. of

credit in Fee-based X.XX. increase to expected margin revenue be an growth cost X% expect interest will is XXXX. believe between be approximately net and in X%. We We

to growth X% be X% for XXXX. expense non-interest expect We between and

as between guidance XXXX for Our approximately line of ratio is efficiency previous and tax These efficiency and include the updated our John XX%. we and target call stated, expectations an be tax to during XXXX effective our XX% And rate. in we issued anticipate are XX% ratio for yield XXXX. with effective

announced the that for merger October. conditions closing we with We are working pending through in the ASB

acquisition and of mid-April $X.XX one-time first anticipate The will majority largest quarter and acquisition be since this accretive anticipate be $X.XX will approximately upgrade. We to progress costs to the XXXX. a approvals. pending believe approximately our $X.XX are our second during recognized closing in deal This to $X.X still $X.XX We XXXX XXXX, and by our of excluding will system one-time cost date of one-time in currently earnings We in acquisition be making deal XXXX. the in costs. million second

acquisitions as acquisition again, is working we Chief questions. priority will on open the commentary first which will to call of Rocco. growth Officer. concludes turn smoothly, go our key is and Rogers, We and as the to This for focused Q&A part still ensure ASB well call me are John Once our our organic session XXXX. call Financial facilitator, I and the now for for joining Sulerzyski is this Chuck Thank the you. back are

Operator

And sir. thank you

session. We Instructions] will Michael question-and-answer question [Operator Today's Please from of comes ahead. KBW. now begin first the go Perito

Michael Perito

John, Hey, afternoon. Chuck, good

Chuck Sulerzyski

Good Mike. morning

John Rogers

you Mike? doing How are

Michael Perito

Few questions for me.

obviously So, the ranges, Chuck, right? very everything about thinking mean, I guidance. in all kind I think I as you efficiency before It's guess, help appreciate guess, ratio And helpful. they're But the and the on all be of move on range the of to can get of a lower to XX% you maybe end that us versus that the some you give else, as differences XX%, XXXX? higher we the the little could end what color

Chuck Sulerzyski

that less mean, certain more guidance revenues give of chance some it, the we of higher probably in on is we up expenses it. in there. we I of end what of We're kind the pretty could of of than variance the expenses be terms just to pieces loans, if the I Yes, the strong are two mean, to pick and there's but stupid, sound revenues see

So, to reaction that. that would be my

Michael Perito

All right.

on margin would next could or it is there's expense move be you growth initiatives performance, be the side, big anything mean no So, say as through or whether revenues by range variables we year? the really more driven that you

Chuck Sulerzyski

I low now. we've X% at I think pretty years, been few last year, before, several this year the mean, look single-digit for expense the managing expenses tightly if growth you years

growth see years. don't last us over expense few I initiative expense big through a So, going relatively with minimal the

John Rogers

is Yes, Mike, this John.

look that reducing expenses. major any don't at on expenses continuously, but our special we have emphasis approach I think always work is or effort we

as that's As control we'll But of things. along can through every of nickels to and look challenge network become approach expenses. Chuck as part doing our we kind we're at proceed and said, types usual and I find the to branch the some to we year think way continue see dimes those everything business our where of

Chuck Sulerzyski

company leverage. understands focused And everybody operating positive and the in is on

what driving really that's internal So, standpoint. we're an from cultural

John Rogers

their not watch gets see the so branch that. They know showing one's they they to P&L, expenses, see focus and every need they're And on revenue, up, if they others. the

Michael Perito

And longer you. guys depending XX%, of morning then I the kind looks guess, should, high-level of XX it the shakes on side on little call you higher lift kind ROA capital mean, the maybe this Chuck dividend dividend, in more the you more Got I range to the it. guys, I like tax you the to term. But help of us mean, and saw I generating on out the next should the it presumably, about a XX this of payout thoughts help capital release quarter that rates equation, the with kind it, but internally. can give be keep Thank reform now. year. of near-term on capital would bp seem you'll

think this post thinking tax point? deployment I lot going side it capital of more reform guys you being kind generated. How capital at about of still a the be to are there's

John Rogers

tax we have we the than more portfolio reform. our and average to reform is managed Well, of how the a investment historically, big benefit because tax will help

try You done capital put past. I we acquisitions work you all believe us our through have see in see and increase to dividend, intelligently continue all time, to to over like the

Chuck Sulerzyski

I mean important. think that's right. Mike, dividend think I I Yes, it's

well. the their long repurchases employ for levels. into a it's ratio acquisitions payout we don't right viable that I as a economically said be lift current We've our a And will we leaning in XX%, always seem income XX% between have and at big really we little like than can we in will we're targeted run, we've the return had. maybe capital way and higher have little We see and stock afford at now, point. bit traditionally us think bit dividend but this

Michael Perito

a guess, now made no deals to is to bank Does get if where guys share will and side out there repurchases? this towards started guys stuff there's it we're at sense continue Or deal that TC the hopeful other with the a here XX%, to pipeline, the ever dividend? make year that enough will you and point organic direction up and I been addition you where there's on sense can point of from full you're moving growth drift that consider the that have in

Chuck Sulerzyski

We are open us to times It's tangible [ph] share it repurchases price. in against the I future. don't share at at We're doing XXX book. that just not doing that's repurchases. set just see that

John Rogers

And if share we're from we're doing acquisitions, buyback. a locked out really doing

given we're So, that, out back the do we right so rules. now, can't

it's So, [Indiscernible]. to going be

Michael Perito

makes topic. Thanks. one that And just one sense. then just last Yes, on

on once of give about opportunity topic you as How backdrop year here with feeling Ohio mean, are ASB partners we sense? know up? you a make pick can that Chuck, just into kind the finding conversations the the I move us guys continue move there reform of you next now Just some pass M&A tax you finalized. to

Chuck Sulerzyski

a that's strategy. our well of Yes, piece obviously, big

tax would think give give will a this I sense -- of everybody that everybody optimism. the reform

deal effect. not going it's opposite to So, anything, flow, if have might it sure so accelerate the I'm

had. heavier than conversations -- it the than in past. are world but have been the to they in institutions may has is that at it's think being I there little the look continue And had C we the differently it that dialogue. in I can't are past, corps say

John Rogers

and and mentioned, that priority year. first here our part But our and through first right is Mike, ASB. go employees that That's customers as as bringing conversion of the priority the the the ASB bank of we on the kind of now Chuck of

Michael Perito

year. Got Good it. Great. Thanks.

Chuck Sulerzyski

Thanks. Thank you.

John Rogers

Mike. Thanks

Operator

today question next Reevey Please comes our Kevin from ahead. go A. Davidson. D. And of

Kevin Reevey

How gentlemen. morning Good are you?

Chuck Sulerzyski

Doing great Kevin.

John Rogers

How Kevin. are you? Good

Kevin Reevey

Good. Thanks.

go a your growth And quarter first seeing you the you of the the year-ago So, what how you talk first where in comparable this like does strong Can question in the year to loan growth quarter about pipeline then commercial from? compare geographically the if vertical. saw does period? come look that into related to that and we're

Chuck Sulerzyski

varied that you in our getting of XXXX, close say our Northeast had the tell commercial that's that ballpark. we've really there's been hitting from more -- in only it's a it we years of out would has geography the every my I year, tenure, a is footprint. growth and will It's portion the I over pretty even had years, year calendar to usually, where seven growth at year-to-year. which footprint commercial some our across few

part is second good probably year. say last your where I it of higher The would looking and pipeline last slightly question, it's year, was to than relative

Kevin Reevey

you growth And mortgage see X% come you loan expect let's X% say, the XXXX that then or to commercial side the in lending? to outlined, do versus, that on more commercial estate real residential

Chuck Sulerzyski

continue. the share long Well, we that of C&I our see relative real over growing we have growing estate trend been commercial shrinking and a time period both and consumer the

within of as of XXX%. of less in a subcategories commitments, and not portfolio. commercial that well pride terms in take estate and of is the a of to terms we than lines exposures percentage And consumer real between in continue construct about capital, lot commercial and Our portfolio but our the XXX%,

we X% to X%. give to guidance did So,

we've X% in don't any from in to said this might years, that so I law see tell change. You maybe But it. tax or loan we XX%. script that of off the of and over it's note you beat great far guidance the early that increase that I potentially demand will we side to last we range would the X be high are on hope able

and the good you'll quarter. numbers. about marketplace decreasing You loan hopefully, see saw growth year and in growth basis, Year-over-year similar loan we fourth in X% the feel third on types of average a full

Kevin Reevey

related X.XX rate hikes is to last are assuming the if my X.XX, Chuck, any then question, for And XXXX. many NIM of at all? How you in your guidance

Chuck Sulerzyski

I one let have, -- over me believe, in have that we John, We there. and turn to

John Rogers

that December Yes, one impact anticipate we happened well, more in one June. of and the

Kevin Reevey

Thanks guys. Great. Appreciate it.\

John Rogers

You're welcome.

Chuck Sulerzyski

Thank you.

Operator

next Today's James. of go Instructions] Raymond [Operator question comes ahead. Daniel from Please Cardenas

Daniel Cardenas

Hey, good morning guys.

Chuck Sulerzyski

Dan. Hi

John Rogers

Dan. morning Good

Daniel Cardenas

that there question, going giving costs just kind cautionary in alluded higher. statement? kind is you've Just quick Or you pause that concern? Chuck. Is footprint seeing XXXX your for credit are that you're to guidance, of your that's something a a In of be

Chuck Sulerzyski

No, few scripts last the in every granted. for if I think say you over industry think the because you've should taken be year living I seen we're loss read for that or the that that ratios for years, the time. fantasy I us don't a

look quality. good very have Last a mentioned of of If in remain I portfolio, perverse may done terms mentioned saw at were what forward terms construction in long-term much, to earlier I credit a this to movement course script we way, about some want quality even aspects terms but you around, we and during positive that collectively time, during performer not the time a year very of credit the the very credit the it, of quartile we're that downturn. in of NPAs. kind the next downturn almost performer look lowering much in and out top we've of the we bottom over the the credits we in moving be mindful quartile

Daniel Cardenas

see, us as with are franchise, do going or what into Yes the And probably good. et you put guys is All windfall of give can you're cetera? then right. it's how any of expectations -- you that but you to much investments to still going into get going early, maybe to tax guidance know Good. the can -- to I that thoughts

Chuck Sulerzyski

that. of saw dividend a only it's piece the not Well, you as that

that I there's forward. upside the going on think dividend

been we regularity. with the done I investments in been making at think business. core, We've been the the facilities regularity. we've floorplan, done good that mortgage We've deal, We've system. the we've systems doing with doing the done very have

not have deferred like So, maintenance. we we have spend of high a we it's It's million to have neglected. money that on not things amount XX like

the of will I will And shareholder that employees think so believe benefit some benefit. I and some the see the the of see

Daniel Cardenas

is Great. Okay. passed maybe and of deposit kind depositor? of rate on the margin most the you goes that How what the And then to on pressures seeing as to recent then guys competitive to it right expected are the now? of get kind side And much hike.

Chuck Sulerzyski

and at John stab I'll I'll it. let let a -- take that fine-tune

have capacity still We loan-to-deposit XXXX. from in increases rate ratio. a deposit modest some done have We

from increases I deposit us. more think larger margin ahead But hard-pressed client from the to get that standpoint, while let being won't preserve for we far building we'd appropriately them competitive and And a like competitive rate of will institutions a the standpoint. deposits. be

John Rogers

hear Chuck's really that institutions offering deal occasionally lot higher et we think cetera, rate the we side. rates, some Competitively, right. are competitors but the on a I major that smaller we see pressure from Dan, with of don't

special out pressure some I to indicates, that but I investment we've and them just of progressively keep it have seen lot it perhaps hard don't the far it. watch information to a At it. as data came be We're they're We the far CDs had -- an cetera deposit interest-bearing of We I'd time into not moving market hear will et but continue in can a there offering move, a I that product nothing checking. leave money rates, for think would don't higher year. of either. some cetera. than and yet. of else. But not next -- et the point, anticipate with goes, CDs, product We customer eyes before. might time period that a bank move people be lot We that here they're look good would markets, We on We money to and yet, would or our but new insurance there. rate higher seeing continually anticipate a for it lot it We think complaints, we with gave can say rates we we what someplace at hear moving, and do there's but project so a yes, as trying don't put someone our we would into

Chuck Sulerzyski

brings John side. good a investment Yes, up point the on

retail We we have had referrals $XX good deposit yet from our growth, the of we investment during -- reported, year, sold of to million the system referrals as course the business.

of growth. about what very the for I and us has that as insurance a And think we're and beneficial business I that So, been between think others. between our synergy and and had is year-over-year revenue business businesses differentiator key us investment still X% part the banking investment meaningful the a businesses

Daniel Cardenas

last Good, And good. the question. then

the is of how lower portfolio, of can around asset And XX% optimal base, look I total As our what's you much shrink securities want kind your guys that? that you see at? which level to

John Rogers

give down. eventually, XX% our And bring or that XX% of few it And to if the we down side intentional. I say a growth, the would be to loan that would, take, bit a was on bit I would be years, little outward little year into either think the that. bring down would for we like continued move plan We range, appropriate further. that to a look I probably to that is down with believe

Daniel Cardenas

Great. Congrats good quarter on guys. the

Chuck Sulerzyski

Thanks.

John Rogers

Thanks Dan.

Operator

comes next from of our question Please Partners. O'Neill And Siefers Scott go ahead. and Sandler

Scott Siefers

morning. Good

Chuck Sulerzyski

morning Good Scott.

Scott Siefers

couple a But today. guys Apologies on little the margin this. you just to guide. I clarity in covered around advance bouncing of get been have want I if calls

or XXXX. mean, So, so the I at already X.XX above or for basically range. you're

what then there baked puts and of Fed curious into kind go see as you assumption. as what major throughout just that So, and guys we takes the is the year behavior

John Rogers

in basis we've increase that on the on of in the Fed side, [Indiscernible]. well it in year Later The benefit one some Most perspective. book they three was about tax anticipated one that but X.XX If March margin be Scott, would in as if we It's muni as of guidance margin and the is from times, on additional additional June. impact that our taxes three December helpful that's Yes, there, one, not points there us. great provided. reflect would of provide June. the the reflected that does to the impact course, in of the a guidance in and go course,

up your slightly, You hopefully, got were so all questions. I breaking

Scott Siefers

you Yes, did.

of see, a that estimation? equal, the for gravy, good points, So, Was adjustment, Anything kind one kind an immediate then we'd FTE increase. minus rate all be three lower in else and basis the of from term, else would right?

John Rogers

again that so. Yes, core basis. on might hopefully, this accretion mean down -- I I And slightly year. anticipate would a be we we think

really with pickup at we have this probably we'll ASB. a course, But Of yet. haven't reflected numbers it point our in

Scott Siefers

Okay.

John Rogers

that We us well. to will positive coming slight forward throughout due will as we benefit be year, some that the into and a roll debt do year a last swaps have give as starting some maturing and

Scott Siefers

if And then Okay. can jump I to fee All income. right.

You a guys on on basis. have quarter very fees strong core

Just curious.

X% to on fees. You've talked growth about X% XXXX versus in the XXXX

off. the kind or in we takes. walk see maybe, course neighborhood through you off of hand could $XX point the base somewhere starting as puts is you to have or first appropriate Chuck insurance quarter a the forecasting. of first if But mortgage then that it that's And in John, strong million, So, really the and here stronger of as off tapers what then what we're progresses. major environment Presumably, a year you

the as what do you as of through here look year? the drivers guys the we major see So, course out

John Rogers

all I income benefits insurance, think the that continue the above first the that you of as -- get we the would to income, but pace, well. probably a fee Electronic expect range that good slightly we've we would grow that within categories to within we'd not be trust quite if of Perhaps that the at at consider ex pace to that. still income. expect higher in would rate the -- XXXX we to to investment quarter identified. would at be from income. and contingent we best range XXXX expect the grow the banking to expect continue XXXX We Definitely end would of

plan use their small incentive a for to have people We cards.

also the to still would And there. up the but growth expect we see our benefit there, account charges, We there. was the would be big our under somewhat from repricing overdrafts. that in of deposit some given to account within changes And in component will there show deposit service charges expect service pressure, within

continue our year We're bit on income consistent That's well, not on working bank-owned SBA life within a I as And give year. past be those of might insurance, some a course. should we lending also relatively us bit perhaps down sell and think which growth and probably have as above. little a should small in to on well, rate-dependent, have an probably this the income, fee good originate as significant bump of little swap we business that strategy with And amount well. So, average. enhanced a growth. Mortgage fee banking,

Scott Siefers

you Okay, perfect. All the colors. guys. right. I appreciate Thank all

John Rogers

You're welcome. you. Thank

Operator

Thank any are At you. no remarks? Sir, time, do further this closing you there have questions.

Chuck Sulerzyski

good Yes, Relations and day. will our I be this participating. to your remember release earnings everyone Thanks a for webcast the thank of archived on section. and want a Investor under Please that call for peoplesbancorp.com time have

Operator

and has concluded conference presentation. we you attending thank now This for you. Thank today's

your disconnect You lines. may now

Peoples Bancorp (PEBO) 23 Jan 182017 Q4 Earnings call transcript