PEBO - Earnings call 4 2023 | Peoples Bancorp Inc.

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Operator

Good morning, and welcome to Peoples Bancorp Inc.'s conference call. My name is Rocco, and I will be your conference facilitator. Today's call will cover a discussion of the results of operations for the quarter and fiscal year ended December 31, 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 and Please Peoples' future current are on statements management's These based expectations. knowledge on a bounds not this in are Peoples' and call and of and Peoples' call, this detailed are Exchange of believes based number Statements statements historical Commission made risks of operations. during reasonable filings. Management which and forward-looking the facts, statements in their assumptions Securities within uncertainties involve businesses the are forward-looking

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

for your directly peoplesbancorp.com call period, the this at of the accepted call on earnings webcast I Investor Chief will peoplesbancorp.com of of begin the be question-and-answer be Investor the reconciliation XXXX today's at available and Relations to of available President may facilitate. for be will archived Officer; financial XX principles, the Chief this will XX opening call in which discussed included Financial An and X section will Sulerzyski, A Sulerzyski, call about Officer; accounting under most Treasurer. measures fourth by Tyler this you year. Participants And in each Operating is a Chuck end was Officer commentary, include followed questions Executive Wilcox, Katie and Bailey, to Peoples' Chief quarter statements. Mr. conference. following available This earnings Relations. comparable non-generally GAAP, release during release. GAAP is will financial prepared or measures issued minutes morning and

Charles W. Sulerzyski

diluted our fourth fourth the record you quarter. $X.X Good XX.X% EPS such In fourth earnings million morning, return $X.XX per average Overall, our to merger, compared we which quarter compared linked improved our for $XX.X many to and on our This which for quarterly reported you, the quarter, linked joining $X.XX in quarter. for million, acquisition-related for today. reduced quarter for while Limestone the expenses includes equity, results Growth the of by stockholders' Rocco. share of Thank thank highlights call earnings diluted XX.X% the included $X.XX. to as was

XX% Our linked for efficiency ratio improved XX.X% the to from quarter.

Our ratio end. the compared declined slightly loan-to-deposit to linked quarter

declined at Our as the are to a since nonperforming quarter of loans and assets total X% linked lowest end level compared great percent the the recession.

grew share and at book per value book improved tangible and to year-end XX $XX.XX value Our per compared to September share at our compared $XX.XX $XX.XX to $XX.XX XXXX, while $XX.XX respectively. to $XX.XX,

equity to tangible and during the tangible X.X% X.X% Our $X end we quarter. to increased a quarter at million to share completed asset the linked repurchase compared ratio

for $X.XX XXXX. our settlement diluted XXXX, which impacted $X.XX. was On a a and full by which EPS our year compared pension XXXX impacted by was and This charge $X.XX net $XXX.X final million, pension expenses income the negatively acquisition-related $XX diluted associated $X.X to of EPS $X.XX includes for plan, million our basis, termination with negatively of million diluted during EPS

asset Some highlights higher and compared Limestone was interest net XXXX year XXXX. costs. improving for to market deposit income include rates, increase the merger driven the controlled of our interest full by while was up This earning we our XX% yields

XXXX. to compared XX% grew income fee-based Our

for faster improved our our Our the X.XX% means prior revenues had to compared to adjusted XXXX We the year return positive grew operating assets on expenses year, XXXX. we than leverage X.XX% expenses. for average compared to which for for noncore

basis adjusted average compared Our XXXX. to noncore rate basis points XX our for improved of XXXX, to net XX.X% efficiency XX.X% our for from time, efficiency XXXX XX.X% improved charge-off to XX for same points for ratio XX.X% and the was At for to ratio expenses loans XXXX. compared

on to credit quality. Moving our

Our the portfolio. in within analyzed were Changes charge-offs, of by the portfolio, our allowance represented charge-offs higher increased were were partially charge-offs which allowance for charge-off The total consumer losses X/X indirect net by driven end. and individually in of a loan loan our quarter lease driven result X.XX% at which offset a loans charge-offs. fraud-related credit was by loan improvements of

our consistent anticipated. indirect charge-offs levels loan While than were pre-pandemic we recent they consumer had were periods, higher with as

of nonperforming quarter risk-adjusted year-end assets XX our leasing the at compared portfolio the down XXXX. X% with loan we basis linked declined. days accruing XX performance. their past end during indirect due the at loans our was both quarter of The nonaccrual For end assets both at compared as XX. quarter September business current the points satisfied quarter to basis considered to year-end, XX and and to At to portfolios, points XX.X% portion basis points decreased XX% XX linked total and fourth compared assets are improved and Nonperforming at on and and end were

points net an our rate quarter, was increase charge-off year the up basis quarter basis of the annualized prior the from XX quarter. for points for basis XX XX points, and For linked

commercial charge-off quarter For during XX partially total was to loans of year-end upgrades full to loans increase while XX criticized loans the in at during and Criticized XXXX basis the rate X.XX% to by while related XXXX. to the offset the increased classified points basis loans year, points of quarter. to points total year-end. growth for payoffs declined XX compared loans our relationships fourth several our was basis for annualized downgrades X.XX% The net at was

basis quality the year. year-end delinquency at loan XX% and In net metrics full XXXX. commercial at combined the had prior year-end and charge-offs of for X net X.XX% points regard remain points for year This compares with and to strong commercial industrial in X real to credit and basis of the charge-offs estate and reported delinquency portfolios,

of it total portfolio loan million these small development XX% well of and loans construction loans totaled as and balances real X.X% land year-end. as represented at a land percentage commercial year-end. $XXX nonowner-occupied to commercial total or of The at of total relates the As loans and XX% estate remains development,

loan at year-end. X% portfolio Our outstanding our office of commercial space balance total was

maturing in have XXXX will an XX% X portfolio. opportunity office large us to We $XX million, reassess give which of totaling our projects

to portfolio, last certificates demand We construction we to decline that in successful balances. occupancy during we relates expected fourth of quarter construction achieve which high project loan in it execution. construction As to our resulted our loan and continue quarter, and mentioned see more the the were obtained projects

totaled with our million. year-end, balances commitments loan of At $XXX outstanding construction $XXX million

appropriate at stood projected. higher to projects up These at million rates and Our continue convert multifamily at from have as speeds balances often $XXX than projects been year-end. leasing and at reach completion construction generally

XX top account of still the of X Our for which loans are phase. multifamily XX% portfolio, funded construction in multifamily

these year-end of less our we X% within and strong markets million and portfolio. noted notable projects than As are previously, $XXX metrics have guarantor of support. total Hospitality were with were the at the growth loan location loan balances

Following hospitality we exit the at the through an exposure reducing year-end. Limestone was other to third were quarter, that our able merger out-of-market hotels acquired

SBA Additionally, materially successfully exited in competitors this within the XX% The trailing occupancies represent the and quarter, Occupancy XX% market changed with the X-month funded Hotel top and of one hospitality generally trailing balance trends the XX hotels flag refinance remain at will respectively. XX portfolio year-end. Q at portfolio above fourth XX%, utilizing loans with hotel a outstanding program. while through XXX the on

compared XX% million end. Our total to linked annualized the loan grew portfolio $XX quarter or

up industrial which acquired million. real $XXX Commercial Limestone and was and the Commercial loans merger. up industrial increased million Most up million, for $X of XX%, growth. estate while finance September million from experienced $XXX were divisions and million consumer commercial balances XXXX, The loan was million up which were XX. provided excludes of the Compared in organic $XX estate, growth most loans organic $XX provided was commercial $XX growth specialty were Finance million. balances growth $XX and Specialty year-end divisions our to real indirect of our while loans the growth loan

industrial our loans loans, were the XX% At residential of consumer was December XX% and XXXX, occupied estate include XX, X%. at home was the equity comprised time, and loans same finance estate estate. owner the total real commercial total construction nearly real of which of which total investment with while At our XX% remainder were of loans our Commercial XX%, real of XX% credit variable rate, total loans and rate. remaining XX% loans. year-end, loans fixed were totaled At were lines specialty XX%

will to turn call now Katie our I performance. financial over the for discussion of a

Kathryn Bailey

Chuck. Thanks,

were During the our deposit linked fourth improved quarter, investment by than income offset quarter lower partially to was the yields. due which costs, net higher interest

accretion, which third quarter due Our XX the was for during the this $X.X X.XX% fourth basis and net quarter. of interest million margin net as margin to for quarter to margin. result was our lower compared higher interest quarter linked margin to being our points adjustments linked a acquisition-related to partially The net added interest totaled X.XX%

strategy. increase deposit $X.X related added margin basis quarter. to deposit increase During contributing of We in this linked as the decline merger, offset to compared with fourth accretion interest from our part quarter points in net quarter short-term which of XXXX, the acquisition recognized that a the rate million partially we net to Limestone higher successful to to income value investment for the a margin. X Also our costs fair marks yields interest higher higher were offered CDs refinements we were

expense CDs, impacted the linked Accretion points quarter. XX for income compared basis our million for quarter our $X.X the for and income, positively Accretion quarter, margin XX interest and quarter. for fourth million points to by were totaled brokered of fourth the quarter For X.XX% deposit net amortization were costs the fourth net third excluding X.XX%. basis the $X.X

prior our while deposit remained net improved by yields Compared margin investment offset our as income higher were to loan year in interest the XX%, grew costs. interest flat net quarter,

net of was total by year Limestone X.XX%. of and interest rates grew costs. XX% the Net our XXXX, points. the the was income to our to compared investment loan interest funding XXXX. impacted Since increased margin increase beginning Most Federal and of interest the partially increased merger deposit our XXXX, net For improving, offset full Reserve in interest compared were net yields positively and higher which by XX due a income margin to basis of XXXX the has

X.X%. Over have only the brokered costs same time period, our deposit when interest-bearing grown excluding CDs,

have During period, the betas CDs. XX%, excluding moved deposit our same brokered

largely the due and as total expenses for $X.X far lower linked to expense quarter. noninterest As the quarter. for to million acquisition-related which compared totaled were expenses for the $X.X quarter, was was Acquisition-related fourth fourth the expenses, million noninterest X% linked down quarter our

million quarter, was for XXXX to XXXX additional These for full for and the larger as well expenses as ongoing offices the quarter XXXX of of fourth from and Limestone. of the the footprint acquisition-related costs the $XX year year of operating XXXX. and prior noninterest increases to the XX% year to expense due the Compared were primarily full compared increased total up XX%

for the Our reported linked XX% linked to When XX.X% compared efficiency for ratio adjusted quarter. XX.X% to linked of deposit to for the efficiency ratio The XX.X% was compared our for fourth the quarter. the increase result the compared was was expenses, quarter quarter. higher costs noncore

XX.X% For to efficiency the full ratio was our for compared XXXX, XXXX. XX.X% of reported year

our Excluding for efficiency XXXX noncore compared XX.X% to to expenses, XX.X% ratio XXXX. improved for

the assets to to declined on declined while to our XX.X%, sheet. slightly total securities balance Moving At ratio year-end, investment to loan-to-deposit XX.X%. our

to actively rate position manage a interest focus sheet continue on our profile. risk We with our balance

investment credit fourth of payback the our This investment and in of $XX a resulted exposure move a we sell within of a to just quarter, During made decision loss recognized over million the and our a million. nearly year reduces portfolio. $X.X securities

it will low-risk lower utilize continue program manner our bank cost those source in our term do with than period. funding opportunistic alternatives. this while so funding We decisions Along Federal short to provided a lines, did earn-back a the Reserve's as be trying to a quarter we in

program overnight a FHLB today, for same than X-year of $X.X As paid assuming it borrowing under basis this we period. the points what are in of we the borrowed and savings rate million XX rate would benefit, funds have less nearly at result will a an over

rate ample this offered previously, attractive source was us. As have on advantageous we we and liquidity the noted for have

to have continue capital strong regulatory ratios. We

that our quarter an this stock our repurchased in of in And confident and shares $X million performance. We price of are mind, with we $XX.XX. average at

nearly repurchased $XX shares of have total XXXX, XXXX We in and for our XXXX million. an aggregate

Tier while to the so X of are in At our dilution. most capital We of equity do ratios year-end, future impact XX.X%. effective cognizant our deploying and our being will improved to was and the capital committed ratio in the continue also manner capital common

was capital XX.X% Our total ratio risk-based and was our X.X%. leverage ratio

At quarter year-end, ratio to our assets compared tangible at X.X% improved equity to tangible to the end. X.X% linked

investment available-for-sale points of the recovery our along linked over on portfolio growth. securities The accumulated losses some basis other comprehensive losses quarter. in Our for accumulated comprehensive XX with of the improved other accounted improvement contributed earnings, our increase the to our

Next, to additional details over I will performance future provide and will outlook. turn around Tyler, the call who our

Tyler Wilcox

acquired up of a income was up quarter, by XXXX, merger, XX%. For and The The rate XX% CDs, our lease the the bright our the linked to CD these largest while retail insurance our quarter of and We A Compared fourth during and ability to prior has quarter short-term quarter service higher Limestone deposits end, income. deposit which million. the increase in the was deposit $XXX for was result Money $XXX X%. some we fee-based driven and quarter income also these this income and $XX of to were had a banking accounts our linked account contributor CDs by million strategy, XX% grew spot us fee-based higher was for periods customers. on fourth electronic been compared income the to interest-bearing improved grew our which or year-to-date grew lot generate total was Compared basis, income lease was a deposits. up higher compared same the impacted charges. with growth declines deposits. offerings market utilizing to pricing to million period other

relatively down flat, we $XX which position were balances in were deposit brokerage noninterest-bearing reduced million. Our our while CDs,

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

retail at our was $XX,XXX relationship was average Our median deposit customer year-end while $X,XXX.

about guidance I year. think next some we to the for updated XXXX, While would like give

the net to but income reductions merger benefit to by full interest rate expect in projected be We from impacted also market the year the of Limestone XXXX. interest impact

said, full higher rates as rate would cuts rates and some our deposit most offset flat we interest costs, the of to competition to net funding stay for being deposit in with those based to minimal higher the with of we If coming interest our half preliminary some reductions with recent year, the would runs, on With of income accelerates. resulting decline X.X% we that middle increases. in lower year, income were the move interest this X.X% margin of of around first the The If have potentially year. point model at net would potential beginning and XX impact anticipate decline but costs, expect be expect to full net flat impact XXXX, X% by for a and basis in If regarding net potential between are our a for expectations there rates for income net to a the X% our coming could margin were could X.X%. with X% it interest lower the year in approximately XXXX, year in margin. interest rates

of of beginning year X.X%. interest could X%, approximately around net with margin reduction by income net rate the lower A point at interest XXX XXXX full basis our

point Our may market is deposit primary corresponding rates slow rates to competition to were potential rates this uncertainty impact in the reduction interest decline. at if the deposit as

In Federal our X% basis would drastically year we rates double-digit were high be rate anticipate fee-based be Reserve anticipate compared interest the below income the for more but XXX unless scenario the to low points this will margin we down interest and further net expected. single-digit to in fall We net compressed, the margin would environment, than not to to believe in XXXX. to growth percentages cut income

of for typically between XXXX and higher quarter being during quarterly million third and XXXX $XX first fourth the each expect with we our of second, total of expenses first expense noninterest due quarter million the annual be $XX We to quarters to the recognized year.

loan our between We believe X% continue to to XXXX be compared XXXX. X% for will growth and

operating an we anticipate charge-off increase we anticipated technology XXXX. the positive for of do for some last for quarter. to basis having do In given expecting mentioned are during rate XXXX around With provision and We our and losses our XXXX expect budget investments year growth points. pre-pandemic loan XX levels, to charge-offs return our not net we full leverage net the be in will credit XXXX, our compared of

positive anticipate in do returning we XXXX. to However, leverage operating

wanted we taxes the include which and As first that to savings each to higher certain at I health note employees, first expenses are annual do payroll during of typically expense customarily merit contributions year, employer expenses for quarter increases. due recognize we higher expect to the to beginning our a stock-based compensation few accounts, quarter, generally that

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

Charles W. Sulerzyski

thank Thanks, call is as reflect producing Tyler. another quarterly the of my point at Peoples final to I record back for time earnings like This I like people. report. would my personal employees on to of a would privilege earnings

stock last XXXX, key our Over over KBW Bank highlights. year-end we and my nearly the tenure, by we X Index XX.X% an years, annualized. The there basis. by at on Looking X% annualized KBW X.X% the XX-year performance beaten Bank have beaten Index as the by have of were S&P several

In Peoples by community XXXX, the bank. the results we differentiated are beat KBW characteristics important More these distinctive that high-performing than makes a XX%. Index

for apologies money make and will businesses people why investors. be ten, top has epitome XX individuals and growth of investments a I'd are share promote communities to meaningful Number to make community help economic reasons to We continue capital of to better. and Letterman, time we our employment. bank. and We been a With provide that the like my to great David choice

most our valuable As a nine, relationships asset. employees have our and with trusted we and meaningful deep are are our Number result, customers.

the banks for. proud as as recognized for of American the of to best Bank to X been to work as -- best America's banks we work recognized For are last have one years, X

distinctive We characterized organizational Number attention we businesses. and have frequent numbers eight, an have passion a coaching and corporate level. individual to improvement, individual set a for a culture and performance of diverse constant by at a

addition and from In leasing traditional to contributions premium earnings we finance. insurance, investments, banking, meaningful have

we are a community As economy should one result, bank average of protected the than better sector stress. the suffers

credit a Number to discipline our key seven, success. is

X finance. consumer to real estate is commercial portfolio specialty lending, industrial, real owner-occupied comprised investment and from and Our smallest, largest of estate, buckets

We years. have tenure over my the averaged last XX basis net of basis points charge-offs XX over points and X

and underwriting credit us risk-adjusted disciplined We a have cycles. margin that have makes management process we better-than-industry a portfolio will overall confident

demonstrated six, historic we of increases XXXX, XXXX a during rate and base. deposit the Number as have quality

X.XX%, While rates the X.X% has XXXX and costs meaningfully increased averages. industry Federal increased December Reserve our since deposit have outperformed of the

Number a and core competency have five, we acquisitions.

insurance, culture. We and banking, our have We do. our targets assimilate learn deals investments financial that the finance. have we We quickly and deals in for associates strengthen specialty and done new them hit

we four, client provide experience. strive Number to an extraordinary

for We the one row Newsweek in as only second are work meaningful capital the a there stock American where to recognized both We for Banks three, and and proud by banks growing prudent. buybacks in XX long-term believe banks best a Number year recognized are in to for. maintain returns. be manage country be the regional a on Best with of Newsweek Banker and levels healthy capital focus use we dividend, and we to

for risk-adjusted returns flavor decision-making We of about is chase we the management to X- by know improved. and X-year Board short-term time in will do a be best the negativity frame. not worry day. our do our two, not We shareholders is long-term Number what guided when

our management from analyst. professionals [indiscernible] is and larger team one, mix a institutions Number of

will Tyler executives as larger As great of young in very mix I grown that within have performance strengths our improve baton, in for Tyler and our investment cadre I experienced interest results. talent our organization. of further Katie your well the confident fully the team a on a as and leaders we from from institutions and like and you management and Thank Peoples. build passed am

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

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

Operator

first Instructions] from question [Operator James. Tamayo comes with Daniel . Today's Raymond

Daniel Tamayo

call. I last on the your sensitivity. of all, thank you all the for detail, first on Tyler, margin guess, congratulations Chuck, the and

there. cuts I repeating had the I you if one more that last mind think of and way basis I just missed all it, the don't guidance, rate points XXX through the line I you got part think of in

Charles W. Sulerzyski

rates is Sure, point primary said slow that I this reduction decline. potential rates deposit to competition impact had as our the may in interest to if were rates at uncertainty deposit Danny, corresponding the market

the cut part the anticipate to rate basis the net in we not this So interest points XXX but to in Federal compressed further for interest fall more environment, you're would expected. would net below margin drastically were scenario be to anticipate margin we referring Reserve income and down unless That's X% than to? the year rates

Daniel Tamayo

I think so, yes.

No, it. got appreciate I that. I So

the guess either on as guess, of of -- . terms in rate ask impact an That of of there's impact to on we big Or baking in starts cuts should then what start assuming to too how whole that you, XXXX? kind a XXXX. we the that? you're of for that mean, me I does now margin or about I in think negatively assuming not let So line guidance in that really, of that bottom terms year are the is back I folks half most NII

Charles W. Sulerzyski

be think don't where back don't were, they bringing And the negative fine. they'll X.X% it will of the see I the 'XX. curve, I to have Fed we rates a stop on should depending on X%. shape to meaningful

Daniel Tamayo

on correct? say on year-end. clarification Is that I a $XXX exited that at hospitality loans, just And you said you post think on the million commentary the you Did year-end?

Charles W. Sulerzyski

out-of-market We exited we quarter. an said during one the No. fourth

Daniel Tamayo

During quarter. the fourth

Okay.

is So that $XXX first the million quarter. into carrying

Okay.

Charles W. Sulerzyski

to continue portfolio. decrease that We

Daniel Tamayo

on just lastly, repurchases. And then I guess,

in has well, amount by stock valuation. small quarter. and the fourth done a large, The repurchased You

reasonable . about a valuation How thinking got shares? in stronger repurchasing what's when the market. valuation You've you are a

Kathryn Bailey

Yes.

continue to quarter. evaluate each We

share bank of willing do back from to it see stock. deal can are in less we repurchase, given the meaningful think But you we to for position prices small we large we relatively would and on take an As go of beyond repurchase the quoted, support a continue as what quarter risk. of a the the slightly to we expect earn volume don't a keep to one continue I do we'll any would again, kind and

Operator

Terry comes today question next with Stephens. Our McEvoy from

Terence McEvoy

I you Chuck, say there. debate I've enjoyed and won working your our congratulations the it's people's year you must and on which market argument with an . on ongoing costs, company deposit so, winning last rewarded

Charles W. Sulerzyski

you, Terry. against bet Thank Don't Pevo. mighty the

Terence McEvoy

that I couple A learned last here. year. questions of

loans, the On common CRE And downgrades. I'm portfolio the criticized that theme for if wondering among any last you built reserves up . quarter.

Charles W. Sulerzyski

combination It We feel and really CRE. C&I good portfolio. about was a of our

our lowest We NPAs of lowest of level have and levels classified.

So we the are of a the the did an remain higher on usually we optimistic QX But charge-offs little portfolio. uptick have in credit extremely rest than QX, which year. in charge-offs

Kathryn Bailey

quarter allowance, to quarter, evaluate a we as to through third and evaluate are in the did as it necessary. and would whether relates And we that proceed, it you qualitative expect, the use we establish factor factor continue as And you but each factors qualitative noted, the go of as we remains.

Terence McEvoy

And expense the XXXX, be the end by crossing then expenses a the . year? of to $XX billion in related of levels the ending will run this as rate most follow-up,

Charles W. Sulerzyski

Yes.

Terence McEvoy

should loan the areas target. maybe How . growth one. last the What And within that in what, growth thinking that portfolio of, you X% to loan about X% XXXX? one just the is then support are

Charles W. Sulerzyski

comment will with we I 'XX good And year that a XX%. had in

perform completion finance be real projects of to commercial some strong. to continue to as continue increase business in We'll will businesses C&I the on see front, move traditional these the estate see our strong. you'll balances specialty think some I

in think I little see we've we'll less portfolio the indirect seen growth a historically. than

Operator

Our Cucharale . Group. next question Hovde with Nicholas comes from

Nicholas Cucharale

to volatile line XXXX, how on across it XXXX? XQ. normalized buyout over leasing a play help may about that and out start for large you course income. The you more Can to pointed . wanted think I the of in fee quite and business us number the

Kathryn Bailey

the we income which volatility noted early this of they Yes. do they leasing as case This transpire. fee discretion had saw our we generally kind is bought at some of is but in one we gains, had the associated periodically And kind XXXX. it's the as meaningful kind quarter you with where bought when them that which first is the company. This buyouts the quarter. this, experience to There of business ownership under customer's of have is seen recognize fourth those kind when we've in we what in

be frequent, the less us. but . upon say would I of it's contingent wants kind customer engage how to they'll So with

Nicholas Cucharale

were So about is half of closer business, to year? the normalized first if you a to think that more it . level for the

Kathryn Bailey

the Yes, by million. fourth about kind of was inflated I think $X quarter

Nicholas Cucharale

those rate still And if then helpful. on CD paying short-term you higher offerings, the what new you money? That's are for And . running campaigns? so, are rate

Kathryn Bailey

kind them said, other term. week. have just that currently each continue The And I short continued we we're month. They're is So every to run rate and over them. like evaluated keeping X%, we of meet, to manage as we

are terms anywhere XX each term. rate months. those to for The is X XX on the different from to So

Nicholas Cucharale

just And for 'XX? XX% the then in in portfolio grew of XXXX. The follow-up just similar expectation rate lastly growth a leasing loan for on growth me, your commentary. Is a

Charles W. Sulerzyski

Yes.

to teens. will high I growth, mid- double-digit think they that have

it's think likely. more I probably

Operator

from question KBW. Switzer comes with Tim Next

Timothy Switzer

career. Chuck . again, Thanks on and congratulations your

Charles W. Sulerzyski

Thank you.

Timothy Switzer

by all NII you guidance appreciate of I different on detailed scenarios. guys the really

So it? right side is deposit margin the a to because due to the there's is Is way the cut the about guys talking kind think near the that right a you . in as of the cut guidance? competition digest in moderates. year, in what easier term competition to now, offset are limited whether later it's that rate about your just negative in to a Is bit little there's

Kathryn Bailey

Yes.

consistent. think I that's

Timothy Switzer

there the just would that meaning be if to in NII minimal was your flattish that to Is 'XX? with impact there's then relative year that And comment mid-'XX. NII reductions full

Kathryn Bailey

we'll think XX% that is we I XX% expecting do rates. given expect what we're some compression of to kind see

something in a we for of by and what is said cuts, 'XX at -- I 'XX accretion X.X% XX what being is ended net driven some in a you if we 'XX. X.X% people something adjustments like kind think expect that closer of I to kind margin, we the ended point to think XXXX is some interest reductions relative generally 'XX, basis expect accretion which of

Timothy Switzer

Right.

Sorry, I a specific. scenario. 'XX I that NII should bit XX% flat is that with in have been in mean more

Kathryn Bailey

I think it we will our acquisition numbers. of the up. Limestone still in be will income X up. have mean Net be the would interest I months additional still

Timothy Switzer

the you. flat of the throughout if NIM rebounding year? in or got . it year, are and then back the up quarter is I towards And rates NIM end the X down first

Kathryn Bailey

around deposit think uncertainty competition. I remains there our

throughout I will think be continue the hold the pressured year. remain throughout the to competition expectation year, deposit we deposit if fierce, have flat rates will on is costs

Timothy Switzer

quite the loan have And of a of the except are down through yield, that I CRE categories, a like maybe and on know of question Can lot . are walk is lower reported accounting might most yields at and quarter-over-quarter, I us on underlying an for purchase seeing stuff. the basis? leases you you're that, be last bit. moderating some the what really

Kathryn Bailey

Yes.

Let to us points the in up did from yields? at is by in see pull earnings yields noise segment level. to in accretion -- some so them point, your the the because the as category loan release see you say, I there think of total portfolio, origination fourth yields, the improvement, as quarter as the XX quarter I origination we in third . would we basis were far But

Operator

comes Davidson. [Operator question from D.A. with Navas next Instructions] Our Manuel

Manuel Navas

mainly bank? kind Is it CDs. over. just funds coming Are to I is bringing other -- follow coming money it the . are you new any these new new to it from? of Chuck. Is customers Do funds customers? have where the up on Congrats, on from wanted color the

Charles W. Sulerzyski

us would new the It's the category. money primarily bank existing be biggest bringing customers, to

Manuel Navas

as pieces Is funding helpful. the X kind to Just That's of this to runs any on color vehicle kind together. brokered those of plan shift off? Okay. the

Kathryn Bailey

we over prefer funding. I as our Yes. would kind think us, comparable again, I to as I think more to overnight of function primary deposits as of pricing . of FHLB it is mean source overnight and relates our deposits alternatives a deposits customer that, such brokered broker evaluation for

Manuel Navas

road? in on you And shift a what earn-back down kind is short was there had, The securities potential more exchange of yields? the for some

Kathryn Bailey

yield in securities, sold during certain over X% the quarter. at I Yes. lower-yielding reinvested we we mean times and

We quarter. restructure fourth another as did up will of the the in we investment an you think with saw, I in continue followed evaluate, kind one. We quarter first to

years, be in we extend And earn it back said there. past keep relatively we'll won't X opportunistic future reasonable. script, relates the at much to we'll if as the As the again, quarter loss all. We in opportunities a

Manuel Navas

any So you the quarter, do? are new across whole reinvestment securities That's the X%. . about

Kathryn Bailey

Those with reinvested we quarter yes. the fourth this are what in transaction, just

throughout not buying consistently quarter. actively have been We each the

to our investment securities last assets As assets you quarter. quarter down went this of saw, percentage relative our -- to

Manuel Navas

did were what sorry, you points I'm you I . up said what? know give loan they the quarter-over-quarter were? about new yields And basis XX to

Kathryn Bailey

. XXX.

Manuel Navas

big wild there That's kind in of cards outlook deposit great. your And other guess, I picture any costs? besides is

Charles W. Sulerzyski

businesses. details feel in on the I about operating outlook think the presented. all underlying that good And really of we optimistic the we're we've

Operator

Montgomery Next question with Cardenas comes Janney Daniel from Scott.

Daniel Cardenas

where valuation now, front? right given . the levels are Just your on are M&A what thoughts

Charles W. Sulerzyski

bad and times institutions dialogue have with good we Well, in to times. continue

to So we're people. and pretty on talking persistent consistent

and than think M&A some will attractive historic get looking that you're being deals both more That little expectations. beginning accounting the of institutions 'XX, beginning whether to more premium greater not you'll and performance levels. institution me I make it are asking are about slightly industry, sense I volume terms think 'XX in better an are has of less think to terms see realistic it a return for of I are institutions said, guess the with currency, the a I to a of that but people wondering in be shares, if some some think in of today a where makes they at liquidity. to of join And lot complexities

Daniel Cardenas

can from And what accretable then, of Kate, kind Limestone -- what expect 'XX? in income we can the Got it. transaction

Kathryn Bailey

Yes.

I margin. think for the accretion fourth points basis we added had to about quarter, XX

-- expect state. be purchase probably as there's we'll some there but extent of benefit and continue any or the think somewhere it that in a year I'm that given off I could kind given of again, would you as that to on we accounting you to margin we pay through any we rewrite And don't that to between telling refine these not of to to proceed [indiscernible] for kind in swings of basis XX quarterly basis think transaction But within a we I would true-ups included probably XX know, we're the . points XXXX. expect But again, what deals quarter. kind lot there. volatility be the of anything that's window.

Operator

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

Charles W. Sulerzyski

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

Operator

today's concludes Thank all attending We call. presentation. for you conference you. today's This thank

You disconnect your a have may and now wonderful lines, day.

Peoples Bancorp (PEBO) 23 Jan 242023 Q4 Earnings call transcript