- Diluted Earnings Per Share: $0.68 for the first quarter.
- Annualized Loan Growth: Over 4%.
- Deposit Balances Growth: 2% increase.
- Core Deposit Growth: Over 3%.
- Book Value Per Share: Grew 2% to $31.90.
- Tangible Book Value Per Share: Improved 4% to $20.68.
- Tangible Equity to Tangible Assets Ratio: Improved to 8.34% from 8.01% at year-end.
- Net Interest Income: Down 1% compared to the linked quarter.
- Net Interest Margin: Down 3 basis points, but expanded 3 basis points on a core basis.
- Fee-Based Income Growth: Over 2% increase.
- Non-Interest Expense: Increased slightly due to one-time expenses.
- Annualized Net Charge-Off Rate: Declined to 52 basis points from 61 basis points in the fourth quarter.
- Non-Performing Assets: Decreased over $3 million, representing 50 basis points of total assets.
- Allowance for Credit Losses: Grew nearly $2 million to 1.01% of total loans.
- Provision for Credit Losses: Increased nearly $4 million compared to the linked quarter.
- Quarterly Dividend: Increased for the 10th consecutive year to $0.41 per share.
- Efficiency Ratio: 60.7%, up from 59.6% in the linked quarter.
- Loan-to-Deposit Ratio: 83%, consistent with year-end.
- Investment Portfolio: Declined $40 million, representing 20.3% of total assets.
- Deposit Composition: 76% retail deposit balances, 24% commercial deposit balances.
- Regulatory Capital Ratios: Improved compared to year-end.
Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Peoples Bancorp Inc (Marietta OH) (PEBO, Financial) reported a 4% annualized loan growth for the first quarter, aligning with their 2025 guidance.
- The company saw improvements in asset quality metrics, including reductions in net charge-off rate, non-performing assets, and criticized and classified loans.
- Deposit balances grew by 2%, driven by higher money market and governmental deposit account balances, with a reduction in brokered CDs.
- The tangible equity to tangible assets ratio improved to 8.34% at the end of the first quarter, up from 8.01% at year-end.
- Peoples Bancorp Inc (Marietta OH) (PEBO) announced an increase in their quarterly dividend for the 10th consecutive year, reflecting strong shareholder returns.
Negative Points
- Net interest income declined by 1% compared to the linked quarter, and net interest margin decreased by 3 basis points.
- The company experienced a slight increase in non-interest expenses due to one-time costs related to stock-based compensation and employer health savings account contributions.
- The provision for credit losses increased by nearly $4 million compared to the linked quarter, driven by net charge-offs.
- Fee-based income growth was modest at 2%, with declines in commercial loan swap fees, deposit account service charges, and electronic banking income.
- The small ticket leasing business continued to drive net charge-offs, although there was a decline compared to the previous quarter.
Q & A Highlights
Q: Can you provide some color on the loan growth outlook given the current economic conditions and tariff impacts?
A: Tyler Wilcox, President and CEO, explained that despite the first quarter traditionally being softer, the second quarter pipeline looks strong. There is optimism in the small business space, and the company continues to add talent, which serves as a tailwind for loan growth. The impact of tariffs remains uncertain, but current market confidence supports the existing loan growth guidance.
Q: How long do you expect it will take for the North Star Leasing business to return to a normalized range?
A: Tyler Wilcox noted that while loss content remains elevated, it is moving in the right direction. The high balance accounts, which were a significant portion of the portfolio, are expected to decrease significantly by year-end. The company anticipates a decline in charge-offs throughout the year, with a return to historical norms not expected in the second quarter.
Q: What are the drivers behind the reduced fee income guidance?
A: Kathryn Bailey, CFO, stated that insurance income came in softer than expected, and more mortgage activity is being held on the balance sheet. Additionally, the volatility in the market affects wealth management income, contributing to the reduced guidance.
Q: Can you discuss the opportunities for reducing non-maturity deposit pricing and the impact on the margin?
A: Kathryn Bailey mentioned that there are opportunities to reprice the deposit book, particularly retail CDs, downward. The company has been running short-term specials and expects to continue this strategy, which should help maintain a stable margin even if the Fed remains on pause.
Q: What are your thoughts on M&A and crossing the $10 billion threshold?
A: Tyler Wilcox expressed a strong desire to cross the $10 billion mark but emphasized strategic patience. The company is actively engaged in conversations and evaluating opportunities, with no rush to make a deal. The focus is on finding the right partner and strategy that aligns with their growth objectives.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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