Earnings call transcript Q2 2023

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Operator

Good morning and welcome to Peoples Bancorp Inc.’s Conference Call. My name is Kate and I will be your conference facilitator. Today’s call will cover a discussion of the results of operations for the 3 and 6 months ended June 30, 2023. [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 call, are historical forward-looking detailed Peoples’ and and

knowledge Management within the assumptions based on believes the reasonable operations. forward-looking and statements of made of their during business this call are Peoples’ balance

from except possible these responsibility legal is results required actual disclaims forward-looking differ materially by statements. it any forward-looking However, to statements may Peoples after as applicable these update this requirements. call, maybe

call accounting Peoples’ minutes financial this which followed measures issued most about earnings will the include under section principles this financial GAAP XX peoplesbancorp.com will second be of measures facilitate. available will at call I a XX was the directly reconciliation peoplesbancorp.com comparable to of by earnings Investor Investor year. available archived on quarter An release morning Relations. release. this end for to and accepted of the Relations the or is webcast discussed XXXX call commentary, GAAP during prepared at is question-and-answer This in A included of non-generally the X period,

questions Participants Officer; and Officer Treasurer. in President Tyler opening Sulerzyski, and your today’s Executive Mr. Bailey, call be conference. statements. may Chief Financial begin And for will and Wilcox, available Officer; Chief following be Sulerzyski, Chuck will Katie Chief you Operating each

Chuck Sulerzyski

and admirably as process. a The retirement in complex succession Earlier Tyler completed thank Tyler Thank XXXX you, my increasingly month, joining this diligent has Good Peoples you our for of announced Board communicated done roles. my was Wilcox today. and and morning successor. Kate. March call

greater our the fully I am he X us he of all businesses. years, has confident last can to height. running take even been For

loans impacted per were acquisition-related our awesome impacted results. by for the were earnings Limestone quarter. They for They share, the one-time income for million allowance $XX.X to Limestone. credit totaled $X.XX. to was expenses. losses the the by Net also establish were from acquired Turning diluted quarter and provision Earnings the for

For quarter, We additional conversion is to $X place. the acquisition-related our EPS expenses scheduled an reduced Systems million diluted $X we in the recognized third $X.XX. quarter acquisition-related anticipate take million which Limestone million by of expenses, in $XX.X to during the when

to that purchase At the we same higher credit the totaled merger. credit this considered earnings provision time, established allowance $X.XX. by which losses We were This credit related not quarter, deteriorated. additional share million loans per for acquired the recorded impacted losses for provision the specifically Limestone for diluted negatively $XX

of of For second to our the the million compared growth million some or to interest quarter, compared $X.X net fee-based $XX linked income of performance X% included or quarter. linked quarter, highlights income the XX%

as Excluding leverage a expense non-core for from linked XX.X% outpaced the the non-core quarter linked to operating expenses, positive compared growth excluding adjusted efficiency our growth. Also we reduction generated ratio expenses, total non-interest was total quarter. revenue XX.X%,

analyzed. We allowance million quarter Limestone the acquired increase our X.XX% The million partially related to a losses for credit in at from credit allowance of meeting no added merger. relates either of it due being criteria the in or As off the the quality, individually this around release be increase was allowance total reserves loans reductions longer the in had individually analyzed to allowance quarter. to our loans loans by loan end. This paid the to our $XX was related offset $X in an nearly to

XXXX which our were allowance. reduction and our last updated a drivers loss to in in $X our We contributed model, in refreshed CECL million

X.XX% quarter to of linked end. assets our OREO at in the to million same June March had X.X% also improvements compared assets the $X loans non-performing at X.XX% in to our reduction time, We assets X.X% forecast. compared improved allowance total the to total from in declined of XX. a Non-performing at economic At XX

our current an of end loan at quarter March XX. XX.X% from at XX%, was portfolio Portion considered improvement

charge-off Our for quarter, quarterly first was X annualized basis the quarter. net rate XX from for basis improvement points an points second the

gross net the during were similar commercial relatively Our periods, a in industrial but had charge-offs loans between we the quarter. recovery and

Our linked total criticized to of loans, our loans improved while the X.X% compared to quarter. classified X.XX% declined loans to

monitor We commercial though our very portion are small office portfolio. space, actively it of is even continuing loan to a

loan Our and borrowers total $X.X office-based top total top represented XX% of balances. portfolio. and million million outstanding balance loan the X% our $XXX end $X.X commitments of These outstanding commercial XX in borrowers quarter represented The at in portfolio. averaged million was outstanding

Our has the shifted the Limestone loan modestly portfolio. concentration mix of acquisition since

increase within have We exposure seen hospitality an retail merger. facilities and Limestone following in construction, the

at has commitments at land been $XXX small outstanding remains a Land development area $XXX in quarter of the the reported the $XXX at an million of million first total the second portfolio and quarter. the percentage close. or of million quarter Construction with total at balances end Multifamily from on of to million have of quarter development balances loans $XXX at end growth grown X.X% in million end. $XXX

portfolio outstanding Central of multifamily within XX% the in At located Ohio. June total were balances XX, our

metrics are for These located projects top multifamily with growth XX% guarantor XX notable loans of strong account markets the support. portfolio. and Our multifamily within funded

with major We continue to see our no projects. construction problems

formas. speed been or up delay, them of projects While in leasing higher have occasional projected permitting than rents construction there at initial been the these has desired at an with most largely pro the

to the to $XXX the balances was Hospitality loan merger. in be compromise highly and continue of within growth plan balances The to hotel second our Limestone due the industry. a of a quarter to We selective meaningful will do increase the increased as in not million million total portfolio. total and X.XX% way loans for exposure from $XXX percentage

in metropolitan hospitality Lexington exposures $X size. areas, primarily Louisville, and portfolio by driven and top additional Ohio The market. of borrowers million in XX Kentucky diversification extended XX% represent Cincinnati these located $XX top exposure range Our is hotels now market from the hospitality deal the in as and portfolio within Columbus to XX the million in now the are with

At with of market XX%. quarter the respectively. XX%, weighted loan XX portfolio occupancy its was the trailing competitors value hospitality remain XX% portfolio above trends Occupancy the and and end, to average at within trailing reported X-month

billion In quarter notable worth. addition, loans including for have the to loan from and Limestone. liquidity related balances, the end, projects we support, net majority of sponsor $X.X At acquired including our

were acquired the was loans, Growth linked Limestone, loan $XX loan compared portfolio balances, to XX% our led up organic annualized million. our $XXX quarter. our construction Excluding which or – million grew by

commercial $XX grew X% or in increases had industrial and annualized. also which loans, We million

commercial consumer variable finance and lease an third XX% real commercial XX% or totaled At and a were $XX occupied, Our grew to of loans owner Compared estate and total loans X% linked at June XX%, of the an was which quarter, XX, real were million was construction over increased on on loans estate XX% XX% X%. XX%, annualized remaining loans million while were loans our rate. specialty fixed rate commercial XX% At comprised loans $XX a the balances industrial basis. quarter of loans basis. total our also or end, annualized

the about to further In for will call turn now Tyler its and details quarter debut performance, our merger. the over I Limestone

Tyler Wilcox

to the everyone call. our introduction and has Thanks, in Chuck. to listen I time given the appreciate

I the our excited all and clients, and aspects Our future shareholders. businesses, spent benefits our our what years opportunity. many communities is understanding and bright, associates I’m needs learning about ultimately of

a clients, on We being culture, while will future top employer performance. continue financial above-average focusing to leverage relationships our . our strengths with into and providing the

is higher from having increased The grew income was of XX%. and One banking acquisition. integral stream, basis, than to the to of the fee-based performance-based all of limestone electronic higher service which insurance prior year-to-date the along business Vantage during income income, recognized benefited first with increase a trust our annual the decline linked compared X%. most the income which diversified income from fee-based quarter and of the growth was our nearly commissions up is with merger, limestone and The our categories increased a $X.X on charge also linked attributable fee-based part. our income. quarter, account income important quarter. to quarter, our investment offset and aspects We million from Compared drivers benefited of year of revenue an income Compared the or which XX%, in fee-based the deposit our merger more

to base. Moving continues our on to rate our deposit book. show The higher of the value environment significant deposit

much We Limestone while balances retaining of our low deposit also linked Compared merger. billion as as deposit by total in deposit the quarter end, deposits balances to on driven and was acquired our grew the possible. are $X.X focused the maintaining costs

to increased $XXX CDs, Our Limestone total deposits, million, excluding merger. the due mostly brokered

our March a compared end. for million to or million XX. retail which total had deposits $XXX quarter. our increase non-interest-bearing deposits the deposits Excluding governmental or million reduction CDs seasonal which more brokered compared deposits in quarter the of an offset than $XXX Limestone X% $XXX by CDs, was of included decrease We to $XX down linked X% acquired in in and declined million This were

demand and accounts $XX savings Additionally, million, $XX interest-bearing declined million respectively. and

so inflated have of As in have due the commercial deposit better our acquired increased deposit quarter rates periods to deposit deposits the basis, a be competitive of since On we national we in this have shift deposits terms to XXXX. more recent and trends before, declines some performed and we quarterly compared time, our At balances. bank expected. brokered retain COVID, was in CDs, same been deposits to second mentioned excluding of

at in At of retail balances. quarter which of total is XX% XX% deposit Our balances comprised and commercial businesses small consumers at XX% compared demand XX% includes XX. June comprised end, March deposit deposit and to XX deposits our deposits in composition

Our average XX. relationship $XX,XXX was deposit at customer June

merger. to our recent on Moving

We benefiting financially from impact and the both operationally. Limestone of are

and close business inclusive we are the presented the we the of quarter XX, April the of results Limestone. merger As of completed for on

to core Limestone weekend the August. the convert will our first in system, system We

be accounting. provide and will Katie clients. more details this regarding that transition and a later confidence purchase Limestone additional will have little functionality We give merger our on, new will A the to successful

last $XX As including are diligently asset crossed billion pass regulatory is realize once and mark a this approach, impacted Chuck compliance. are mentioned areas that many the we’re disciplined working call, to to that and prepare threshold taking during are our there

to with transition. worked specialists the prepare this needed have to for changes We address

infrastructure technology, endeavor. successful to put and also the have place make in a this associates We

We are give calendar technology some software, new which adding our of and the associates available. newest e-mail, will meeting

link working our implement will customer and businesses. are a more a relationship with seamless systems to software, management and our approach clients new also partners within which to our data-driven other We enable will

and to improvement limestone, I our acquisition. look through to continued excited I performance. bank is will At and improve in part forward order no in Chuck hurry mentorship culture, into over further on stress fine the of Katie the the future. about another we and and success, organization continue we and like I’m the to our grateful Constant to which grow to the his that we with. are absorbing focused our to learning are lead I time, fully same I’m opportunity a get partner our years, team will of professionals to appreciate

up is who financial will the metrics additional Next quarter. cover for Katie,

Katie Bailey

Tyler. Thanks,

and expanded Our growth market to X linked to organic point net net interest interest income periods. improved the X.XX%. Compared recent rates due margin quarter, interest to in the merger, limestone increased basis

own was which which related our overall Limestone impacted the merger, we the positively income by had For margin Limestone, pull the to from margin. accretion anticipated of declines down with profile offset quarter,

margin as we first our our work accounting. around Accretion to the impacted income, quarter. XX deposit For same second the and XX amortization would recorded X.XX%, quarter. the improve of points negatively basis for comparison is which points this net our average which Also was acquisition our from purposes, broker income for expense margin Limestone’s improved We deposit I finalize our and while interest acquisitions, loan accretion of added basis for XXXX million margin note net period. the helping our review balances yields, linked interest our X.XX% to that were period during quarter was preliminary $X.X more was our costs. than compared to overall processes to net doubled

provided deposits Brokered cost lower other than sources. funding a funding utilizing

XX basis For deposit to the our quarter. the for XX compared quarter, costs total was points linked points basis

be interest points the points. margin between a basis, points within X.XX% XXXX the total On net while the for increased for to we year and margin income full XX that had prior XX XX to XX quarter. net interest interest mentioned and brokered deposits, net year-to-date basis we range. income XX% to margin anticipated linked grew basis Excluding net we interest our was grew our the Last of basis our to and quarter, year deposit would continue basis that quarter, costs Compared expanded for XX% our fall expect quarter compared points. X.XX%,

total grew increase. quarter. non-interest recorded million the our we of the compared XX% in For expense $XX.X which Chuck as expenses, quarter, acquisition-related majority linked to mentioned, the drove But a

quarter, expense total compared additional expenses footprint when linked the in from non-interest increase to For $X.X the the the and operating And acquisition-related the entire quarter. Limestone with up coupled expense expanded included million costs. made

prior basis, the have a to total increased higher comparison Vantage been the the Compared acquisition-related on XX% acquisition. periods year-to-date year expense year-to-date to and by on basis. and impacted was Limestone non-interest a expenses, XX% quarter, lease merger these The the prior

compared expenses, for was XX.X% the XX.X% efficiency compared ratio quarter for for the was for XX.X% quarter. linked non-core Our adjusted linked XX.X% to to ratio reported the When quarter. our efficiency

the to And on basis, it XXXX, ratio adjusted months of our X X% XXXX. For X%. declined reported efficiency first an compared declined

the for million. $XX preliminary goodwill at to relates of accounting modeled interest to million subject We change the was which review includes rates $X the due announced it As in which deal we loan component on is million The recorded Limestone we million the procedures. was the to than This is in purchase the since our transaction discount, we for price. change market adjustments and $XX stock lower merger, the as higher interest based valued finalized $XXX had merger. the further credit

lower reductions had being and in driven $X as balances. for from This anticipated up allowance than Limestone had credit mark projected PCD million was on ended the $X lower small. PCD loans purchase The by relatively credit million million. intangible loans deposit than deposit a preliminary deteriorated losses core pool Our of we credit was $X was

some discount investment in we securities pre-merger, and close was securities after sold those for portfolio not recorded brought million relates available change driven was the do market date. sale. by we Limestone ours they and projected the typically we as we interest As carried to securities entire the of shortly the portfolio, it Limestone additional that invest in higher we investment rates. than some $XX into In some originally the and sold

At of $XX declined million our preliminary analysis, preferred what tangible to goodwill securities securities The to acquired period differences $X contributed our Our end, we X.X discount end. quarter on XX.X% our to than due assets on value years change again, interest rates. trust originally combination portfolio to compared earn-back and higher at market projected. of linked from book debt subordinated the Based of million improved quarter the projected, recorded to all the to compared total was X.X in these investment years. in the XX.X% reduction

exposure. monitor asset-sensitive relatively continue it to to balance our position. interest risk to As sensitivity, manage continue our for relates we rate our a sheet to to remain sheet manage neutral We slightly rate interest we balance opportunities will and

continue of ratio linked our some as equity in had the quarter be our merger. end risk-based XX.X% end, ratio our levels was well quarter capital At fluctuation a ratios was capital compared common our our ratio to total result X.X%. to capital and was Our leverage X Tier We capital Limestone XX.X%, capitalized.

for of our balances the the we this there quarter was issued partial received inflated For of Limestone the assets equity in the only as the a leverage average of the in quarter, ratio numerator ratio. our but was benefit acquired denominator

be equity the tangible by the anticipated ratio X.X% quarter Limestone X.X% We linked merger. negatively impacted assets tangible this ratio to Our to from end. declined had would at

to be short-term However, impact. this we a expect

to turn his the Chuck comments. for final call I back will now

Chuck Sulerzyski

with this quarter, coupled merger Thank you, Limestone positively growth. impacted our The results organic Katie.

We this low adjusted with quarter, XX.X%. which ratio efficiency pleased our are was

we was quarter. at margin Limestone from was regulatory interest in X.XX% reduced linked net recorded had the and Our compared stable expected than of anticipated amount for the merger the levels to quarter the our which our goodwill decline capital the lower

future. the positioned well are We for

invested people with are for Limestone expenses. call are this include merger. improving the projections have cross exclude billion $XX XXXX. in impact but assets, finish guidance to We and the of up as our our and in to remainder These our of want the acquisition-related we the We we efficiencies with preparing systems Limestone merger,

rest due merger the expect XXXX, income well net reprice the as the rates. to to the impact During of to we as full higher market continue interest grow loans our as of of a higher Limestone to of benefits to interest rates year continue our

as coupled net margin funding We costs. of the recognize continue in to expansion the of slowdown impact interest year, increased expect Limestone a the with for we remainder

year. if net two includes We projection of between We during in last This that still XXXX. and potential will anticipated quarters could the margin the rate recognition our of and would year X.X% based A accretion for the on second finalizing through we additional year was and expect rest remainder Limestone X.X% improve for be some a the to there the full fluctuate increase the is of and are the compression merger, minor slightly margin of third increase. of which activity margin interest from one believe income the variable year. the impact

acquired X% our loans, growth believe X%. organic will we be annual between the Excluding and loan Limestone

percentage to low digits to income We in mid-double compared expect be XXXX. to the fee-based growth

merger. our compared to assume XX% for XX% non-interest full a in of to XXXX, increase the total our anticipating which are acquisition-related we XXXX, Limestone with to associated We cost savings expense year expenses anticipated excluding achieve continues the

to Limestone. expenses be remaining fourth expenses excluding quarter. these still XX% We will full for record million We expect between we and acquisition-related believe ratio, between our that the should XX% and year, anticipating expenses the efficiency including be million one-time quarter. third $X $X We in for are minimal the during

XXXX. XXXX Current rate net will estimates with charge-off be relatively EPS is diluted consensus our cost XXXX for expect $X.XX. consistent during We

excluding to one-time losses expenses expect beat a We loans. provision consensus for acquired the credit Limestone estimates, and for acquisition-related

for Based a exceed reported projections, basis. on XXXX on EPS XXXX diluted our we to expect

positive plan a for the from outlook to the the benefits have We merger. as Limestone the we remainder continue to year of reap

within the anticipate projected We XX% saves with recognizing merger the in our associated also year. cost calendar

are offerings our are growth teams to organic the that we new We about our clients, can service with also optimistic coupled product projecting. and provide

itself our Our lends well footprint growth. to

we our the banks, and Fargo, not including do As many extensive many of serve. Wells Citi America big within communities of Chase, have an four network Bank of

that are approximately have we our you counties those have branches. and branches, XX. leads drive banks revenue first expand at If the the there half counties only in to opportunities believe our bank We Those big XX Of XXX a XXX our to look new Marietta, total are within XX% headquarters to from of business XX-minute the and offerings generated this clients. of for XXXX. four

these to teams experience. make our will and extraordinary We on continue focus will together developing work relationships client to an

for call This Chuck this concludes Officer; Chief we me our Officer. the Chief our is and will for Q&A the Bailey, commentary, Once again, Financial joining questions. Katie Operating and session is open Wilcox, Sulerzyski, and Tyler

I you. Thank turn will hands call into our call facilitator. the back now the of

Operator

is Brendan Instructions] Nosal first Piper The from of [Operator question go Sandler. Please ahead.

Brendan Nosal

Hey, guys. good are I you hope doing well. morning,

Chuck Sulerzyski

Good morning, Brendan.

Brendan Nosal

off start to for expenses. on outlook the here Maybe

increase. and I year I You as to came your and than think the like we XX% quarter, little a for heard correctly, was XX% we’d if said prior the see XX% merger the looking costs, outlook – better was you I in for in for a think guide then, I Chuck, to

parts our curious that up that of the So bit? just a moving little pushed just

Katie Bailey

Yes.

of new and investments referenced in this those we system. think remainder the people through technology as I and the it’s proceed of engagement and in some system script year. both We client investments technology

Brendan Nosal

it. Got

Okay. reported cost correct? all And the for that’s XXXX base,

Katie Bailey

Yes.

Brendan Nosal

then I And one before for you Alright. step back. it. more Got

that on some internally offered you think guys done billion what think still assets just you you you about get as in to guys $XX commentary for do of get you done to inning are and there, in. what have Just preparing needs what preparation

Chuck Sulerzyski

late to innings. mid into Were

I in billion. cross also reiterate, $XX to want we’re we’re good shape. hurry in pretty think no I to

hurry a get cross in are We billion. $XX to to ready

just I So that distinction. make want to

Brendan Nosal

helpful. Yes, that’s

questions. Okay, for taking the thank you

Chuck Sulerzyski

you. Thank

Operator

question from Tamayo next is go Raymond Daniel James. of ahead. The Please

Daniel Tamayo

guys. Thanks,

your retirement on to on Tyler promotion. your Chuck, congrats, and First,

Chuck Sulerzyski

Thanks, Dani.

Tyler Wilcox

you. Thank

Daniel Tamayo

first on be comments, be going I I that who think to there more said I in or on – forward So there or guess, your hear compression will the was is the here margin. Katie, – going margin. it Chuck

last sheet third well in I the about think Limestone quarter the a accretion. talked balance from hire we quarter as for the more potential as reset

couple curious compression. think of just for So the – as kind we you of within timing moving next the of just could the terms of as in the walk parts of – the over forecast through us if quarters the margin,

Katie Bailey

Yes.

XXX might fair the back we acquisition. lower to a quarter, commentary there still the the range lower to – going with in related working the little had put might thought Just that that of the day than QX first being from out XXX value X a be come Limestone we to through

we accretion sure So through came accretion. we if weren’t which the saw QX you income, for had that meaningful we actuals numbers have would in the

quarter through numbers there quarter of that possibility I light a think had as that the in quarter, in in QX finalization, to call, some QX accretion income shift and fair being marks in said adjustments those the so referenced had meaningful the accretion related and anymore in would we wouldn’t this between in we those you expect expect we finalize to first minor don’t QX. might third And had work because that, what but as continue the rebound to we be script happen QX I a value

Chuck Sulerzyski

the the margin don’t the the change next And in guide year. was any the X.X% of dramatic couple for see to X.X% We in quarters.

Daniel Tamayo

on That’s so And loan helpful. talked then mid side, double-digit growth low you including limestone about the growth, Alright. to loan obviously, Okay. balances.

just balances that? let within kind forward? a that fund flows down deposit using letting bit? or there that? in going securities cash from to planning draw you to of for growth, Are you’re then brokered And expectation how about Is think we should how So the little some on curious planning the

Katie Bailey

Yes.

would the it relates does That loan referenced the kind the PEBO loans, to in Just Limestone script to growth the I as today. loans the the think same. will in as I to half the year, to loan earlier it of back that to much it it is, growth X% back guidance here of increase. X% for of core not X% that of be to say this include relates we the funding X% go

the some the seen acquired both what in then portfolio, reductions PEBO and from investment have You through we Limestone.

I like that think you to to expect some of continue, use cash the growth. to would investment you fund loan flows mentioned, the of book the

story I governmental think end likely quarter and through watermark third side, the generally the on another deposits of deposit will the remain the similar at increase September. hit with of kind the exception we proceed high of as

So, a we otherwise but as that would mechanism is source evaluate brokered continue as specifically we use to an growth we deposits, the use, expect FHLB. which some alternative of and CDs generally to an on would funding governmental overnight

Daniel Tamayo

just what on And placeholder a CDs Okay. in rates? you as putting quarter or were here, the and broker second

Katie Bailey

about I customer, high-Xs, and you on are the CDs, brokered the asking side. in to deposits was X On so think customer CD it on

Daniel Tamayo

retail the Yes, stuff.

Katie Bailey

the in were they Yes, mid-Xs.

Daniel Tamayo

Thanks for all taking Great. Okay. my questions.

Katie Bailey

Thank you.

Operator

next Switzer is Please Tim The of KBW. go from ahead. question

Tim Switzer

Mike there. morning. Hey I on am for Good Perito.

congrats to upcoming for Chuck, and as retirement the new off, the on well role. First Tyler

Tyler Wilcox

you. Thank

Chuck Sulerzyski

Thanks.

Tim Switzer

originations? had were What the the of line last yields follow-up at question the end the like of quick on of loan new just quarter I for there. kind blended a

Chuck Sulerzyski

Yes.

product. originations, the a then average, was get can I had I the was some a total were my portfolio, know on than Just the particular X.XX%. if give you assuming indirect Commercial they me was second, least exact hands it, don’t I put at the numbers, higher can on X.XX%, consumer X.X%. but you

Tim Switzer

are Thank the first for of of have NIM point next good Okay. a Do quarter Limestone. off full NIM Yes, the helpful. because have at great. like you. the then what And the you give end – us was that’s of quarter? you the That’s kind to spot we jumping of quarter, just kind going impact so

Katie Bailey

It for will quarter. an on Look was get to I answer, what the call. the to close back up to pretty try you was reported

Tim Switzer

like. sounds a it Okay. significant change, Not

Katie Bailey

the influenced heavily No. accretion. And again, by that was

Tim Switzer

guess I guys you accretion, around Was June well? ex core Right. at you in X.XX look reported if still the about it there as NIM.

Chuck Sulerzyski

Yes, it be Yes. should yes.

Tim Switzer

And for few looking you billion, Okay. be there about anything $XX past another it’s wanting looking billion $XX a billion, the Would one, looking $XX to but or are being saw would guys’ to comments open Is asset acquire even eventually but for? from That’s great. past now? years not you your specific if to deal, you threshold. the grow cross

Chuck Sulerzyski

We of have different ways. it. couple three to a it is looked There ways at do

You a can do deal. big

much. prevailing do can can is doesn’t grow fact, banks that go the or deal organically. X really couple a results while after small years a the at of years, you a the deal way if look X to You later, those of you And wisdom matter doing this big years is it

So, Again, I as really focus no rush. think our is get to prepared as possible. we are in

of lot a have room. We

investment the billion. We continue portfolio. to can down are We at take $X.X

to will organically. grow We continue

with to institutions And best strategic we get is in conversations that as the front closer, will all we have us. of continue make of sizes. We decision

to a a organically, And deal. and shoot we whisker preference do billion. if wouldn’t a deal crushed over so wouldn’t crushed went $XX be small did we But I to have of we maybe a if large I be us

Tim Switzer

guys. Okay. you, me. That makes all sense. That’s Thank for

Katie Bailey

Thank you.

Chuck Sulerzyski

you. Thank

Operator

next Please is Nick Cucharale The question go of from Group. Hovde ahead.

Nick Cucharale

morning Good you? everyone, how are

Chuck Sulerzyski

Good Great. morning.

Nick Cucharale

On growth guide? Is confidence that seeing improved you sense us demand are the are can deeper the that particular driving or your you that give the increased the opportunities in a give guide, broad-based organic it segments across loan footprint you of trajectory?

Chuck Sulerzyski

at X%. XX%, the didn’t came in The increase guide First X% guide. consistent the to been off, at which quarter actual guide. We has than the was higher

demand our across are we geography. think good I seeing

long are growing. from that projects multifamily some benefiting are are We approved funding, construction that

little more continues to seeing but chug outstanding are our bit, us we business So, that’s helping along. indirect a

geography. specialty to the both from chug portfolio product finance and really a Our play, is continue the from It along. lines businesses

Nick Cucharale

base It’s And with you Okay. or are both, or business. to the just deepening XXXX. environment, attribute the your first customer then on to is XXXX relative a half much hard insurance market, but it your That’s do helpful. question frankly? relationships How a expanding quite results up XX%

Chuck Sulerzyski

Well, A acquisitions. year-over-year I very to three is impact is it there think some small of of some it. whisker pieces

of services focus the have suite some an really products market, of it business we is and organizational-wide Some is and customers. our retirement on hardening bringing leasing, of to insurance, etcetera, the it plans,

Nick Cucharale

questions. taking Thank Great. you my for

Chuck Sulerzyski

Thank you.

Katie Bailey

Thank you, Nick.

Operator

is McEvoy go question ahead. Terry next The Please of Stephens. from

Terry McEvoy

morning everyone. Hi. Good

Chuck Sulerzyski

are How Hi. doing? you

Terry McEvoy

month, am both percentage you recent bank What on of either I from of yet, a from this lines? I income and are insurance news and some on to crunched those thoughts the but relative to like has trust it Maybe the on or great and looks your doing revenue investment the congrats numbers the the acquiring of acquisitions, basis haven’t grow earlier revenue given leasing declined some businesses company. congrats.

Chuck Sulerzyski

businesses. Well, first off, we love those

We committed them. are to

acquisition do look would space. shrunk in them. continue businesses. fee-based relative small we last And businesses pretty both in We investment has insurance very but our them increase love deals margin We to in higher consistently basis, would over doing a six the be been love space. more in to to We commitment on hasn’t to The those of shrunk business. percentage total for a the have candidates the deals quarters

Terry McEvoy

months? could over kind how is those do which follow-up months much impact $X And on on estate the of rates what have X next, billion of today, over interest matures the XX the you call and you portfolio, be commercial higher borrowers? that it, to then a know evaluated as real stressed of And

Chuck Sulerzyski

Yes.

we of stress we borrowers in what our have memory balance have can’t lending number I stress the I we that them the $XXX the think comfortable rates loans basically, to a number what but sheet. absorb when to next were them X%. my matures And are underwritten. the you Katie, with ability do – was you are tell higher We these very on deep developers, proven sponsors is it million. with Jason, or do you X%,

Katie Bailey

right. That’s

Chuck Sulerzyski

million, next Not $XXX that’s year $XXX some year. million bad number this it, of I got maturing for the and XX year next like for age, was right. years for

Terry McEvoy

my Great. Thanks questions. for taking

Katie Bailey

Terry. Thanks

Chuck Sulerzyski

Yes.

Operator

Davidson. question Please is Manuel next ahead. D.A. from The go Navas of

Manuel Navas

I was there missing around Was new wanted on yields the on did just and component I at I X%. right X%, – Hey. circle there? but X% up hear loan consumers commercial to a

Chuck Sulerzyski

are businesses, there Yes, helped leasing which increase some to it.

Manuel Navas

Okay.

much other And cash month is the overall roughly little securities per a bit X%, perfect. are lower, per getting then quarter? in the So, components but or are flows you how

Katie Bailey

$XX to month. million million $XX per

Manuel Navas

impressive. it’s And really

have You the pretty just or estimate are are so an deposits. low pretty Do of far. there, deposit you it’s brokered ex minimal betas kind you

low, So, rising you it somewhat. though pretty to expect stay it is

Chuck Sulerzyski

value the franchise. That’s of the

in Our about deposits, comment the we that large the the there places was competitors. of are, absence the where

times like have share have places are service in towns and to market left the that provide proud rewards many most We this. across with and dominant in competitors we small

Manuel Navas

to stats, acquisitions? of from at sense make want branch you to target of The that your would consider branches kind area Marietta. XX-minute you Is core in are of drive XX like that XXX Is such? as out describe the Yes. zone, it would kind that the the

Chuck Sulerzyski

No, I look would than say broader those for the acquisition acquisitions area at areas. is We that. would in certainly

We in do places for other more We have cost would Virginia. metropolitan in we do Kentucky would love West Ohio. more and to are in more We area. D.C.-Baltimore do in like opportunity we to takeout, but –

into I here. is Pennsylvania, someday, real to Southwest which close we mean probably X think hours X.X will I Southwestern Pennsylvania to get is, hours.

we find had deals. places to can just and right with So, We of we that the do the business the right mix of lots partners right have philosophies.

Manuel Navas

promotions so that’s going around longer, working I team. the you But Thank on that’s with have all for moving to I a with congrats you going that. guys. guys appreciate while and good I you too. really on and of the appreciate different am

Chuck Sulerzyski

to going have too.. while me longer, a are you And for

Manuel Navas

Yes, absolutely.

Chuck Sulerzyski

Thank you.

Katie Bailey

Manuel. Thanks

Operator

Scott. question next of Montgomery Daniel go The ahead. Cardenas is Janney Please from

Daniel Cardenas

guys. Hey. morning Good

Chuck Sulerzyski

Hi Daniel.

Daniel Cardenas

look maybe moment give shaping if anything at to you watch out up? trends there And is how quality, list little there as of color a As bit can the that’s credit any are us you at we causing concern?

Chuck Sulerzyski

scares the almost good early too say, me as I we I had be indicated really in It really It’s quarter. have improvements to very good to the good, true. little But but concerns. script, during

I but have optimistic stuff that and are on, the vast are the working we that think of on we majority always have. issues You things you

short-term. issues So, see any the we don’t in

Daniel Cardenas

of then at basis, a mostly way Is that as to I kind looking provision increase and as it cover on expected about So, near-term? charge-offs just be the think growth. best go-forward to

Chuck Sulerzyski

away count me. do, that do yes, going it provision rainy But get a are I glad put system and allow we for design going us that to right. of to you Katie? doesn’t money How Katie have to think because Yes, day. is to rid be I

Daniel Cardenas

kind the And year? what’s side, tax half then on run in to use of for back of a rate good you the the guys

Katie Bailey

acquisition. in being thereabouts, that XX% it’s a driven XX.X%, up by little Limestone At

Daniel Cardenas

Okay. question me. then for last And

Limestone, expectations? seeing? your with of that is of projected the deposits acquired are terms within runoff you what And kind In

Chuck Sulerzyski

seen our pretty So our first far, the really – see stuff. the closed and fees systems. We we convert Xst. They then people’s but next and haven’t really August just will bank it’s in any of of We weekend May short. fees see

I us answer. give we think front can before in you that’s a So, good of

Daniel Cardenas

Fair That’s of both well Chuck Alright. have. goes Congrats, and all enough. I I all hope you. Tyler. for

Chuck Sulerzyski

you. Thank

Operator

is follow-up a [Operator Sandler. The Brendan Instructions] question Please of Piper Nosal from go next ahead.

Brendan Nosal

taking for Hey guys. the Thanks follow-up.

follow-up cost to the on wanted Just outlook.

million expenses midpoint I for half or think if year quarter each per quarters. I the it so for take or $XXX or about of of in million next the the guide, so $XX the of implies two the back

or Just of transitory is about that that how or is things? $XX want that indeed for new sure forward? you so, rate less thinking run are that And prepare any if as billion, make the is more you to going

Katie Bailey

I million, systems million the closer technology. a $XX both And of to $XX Brendan, ‘XX. the we the to think I investments of like That is in that people and would is $XX preparation range little some it’s $XX the million and cross billion mentioned, again, high, quarters coming in and say

Brendan Nosal

clarifying. for you Thank it. Got

Katie Bailey

Thank you.

Operator

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

Chuck Sulerzyski

morning. joining for for remember archived everyone a webcast our be and and call thank to time, release of have our section. that will want you your Relations day. I Thank great under call earnings Yes. a Investor this this Please at the peoplesbancorp.com

Operator

presentation. you for The conference attending now today’s has Thank concluded.

You may now disconnect.

Peoples Bancorp (PEBO) 25 Jul 232023 Q2 Earnings call transcript