Nasdaq: PEBO In Investor Pre r Presentation 2 nd Qu Quarte ter 2 2016
Safe H Safe Har arbor St Stat atement Statements in this presentation which are not historical are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include discussions of the strategic plans and objectives or anticipated future performance and events of Peoples Bancorp Inc. (“Peoples”). The information contained in this presentation should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “2015 Form 10-K”) and Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the Securities and Exchange Commission (the "SEC") and each of which is available on the SEC’s website (www.sec.gov) or at Peoples’ website (www.peoplesbancorp.com). Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in Peoples’ 2015 Form 10-K under the section, “Risk Factors” in Part I, Item 1A and in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. As such, actual results could differ materially from those contemplated by forward-looking statements made in this presentation. Management believes that the expectations in these forward-looking statements are based upon reasonable assumptions within the bounds of management's knowledge of Peoples’ business and operations. Peoples disclaims any responsibility to update these forward-looking statements to reflect events or circumstances after the date of this presentation. 2
Ove verview • Profi file le a and nd Inv nvestm tment nt Ratio tiona nale • 2 nd nd Quart rter er 2016 P Perf erform rmance • St Strat ategy • 201 2016 Pe Perfor ormance O Outlook ook • Appen pendi dix 3
Profi file an and d In Inve vest stment Rat Rationale
Corp orporate Prof e Profile • Fin inancial l hold ldin ing c company hea eadquarter ered ed in in Mariet ietta, Oh Ohio io. – Provide a broad range of banking, insurance, and investment services • Cur urrent sn snapsh shot: – Assets: $3.3 billion; Loans: $2.1 billion – Deposits: $2.5 billion – Market capitalization: $396 million – Assets Under Management: $2.0 billion • Cur urrent footp ootprint – Located along major transportation routes – Demographics: • Total population: Approx. 4.1 million • Median income: $46,588 – Key industries: • Health care • Manufacturing (plastics/petrochemicals) • Oil/gas/coal activities (shale opportunities) • Education and social services • Tourism – Unemployment: • OH: 5.0% • WV: 6.0% • KY: 5.0% Market data as of July 21, 2016 • US: 4.9% Unemployment data as of June 2016 Financial data as of June 30, 2016 5
In Inve vestment Rat Rationale • Uniq ique ue com communit ity banking m mode odel – Greater revenue diversity for a community bank our size (32% fee-based) – Strong community reputation and active involvement – Local market teams capable of outmaneuvering larger banks – More sophistication and product breadth than smaller banks • Stron ong, g growin owing fee-based ed busines esses es – Sizable market share in several areas – Prior insurance acquisitions producing steady returns – Potential wealth management opportunities • Capa pacit ity t to o grow ow our our franch chise – Strong capital and fundamentals to support M&A strategy – Proven integration capabilities and scalable infrastructure, including in-process upgrade to a best-in-class core banking platform – Passionate and talented associates • Com ommitted to o di disciplin ciplined e exe xecut cutio ion – Strong, integrated enterprise risk management process – Focused on business line performance and contribution, positive operating leverage, efficiency, and credit quality 6
2 nd Quart rter 2 2016 Perf Perform ormance
Second Q Qua uarter 2016 H 2016 Hig ighli lights • Second c cons nsecutiv ive q quart rter deliv liverin ring $8 $8 millio million n earnin rnings • Annu nnualiz lized lo loan n gro rowth o of 4% 4% wit ith stro rong ng p perf rforma rmance in in both I Ind ndire irect a and nd Comme mmerc rcia ial & l & Ind ndustri rial L l Lend nding ing • Asset q qualit lity imp impro roving ing w wit ith ne net charg rge-off ffs fa falling t to 0.03% of lo loans ns, a and nd re reduced le levels ls o of both crit ritic icize ized a and nd cla lassif ifie ied lo loans ns – Cla lassifie ied loa loans / tie ier 1 ca capit pital l at lowe lowest le level sin ince ce t the he rece cession • Ex Expense co controls h holding co core e effici ciency r ratio be below 6 65% (64.85% fo for the qu quarter, 6 64.56% Y YTD) • Fe Fee i income a at 32% of f reve venues 8
Su Summ mmary Fi Finan ancials QE QE Metrics 6/30/16 3/31/16 O/(U) $ O/(U) % Investment securities $ 855,326 $ 885,462 $ (30,136) -3% Gross loans 2,128,790 2,105,115 23,675 1% Allowance for loan losses (17,838) (17,261) (577) 3% Net loans 2,110,952 2,087,854 23,098 1% Balance Sheet Total assets 3,333,455 3,294,929 38,526 1% Highlights Non-interest-bearing deposits 699,695 716,202 (16,507) -2% Interest-bearing deposits 1,833,276 1,870,881 (37,605) -2% Total deposits 2,532,971 2,587,083 (54,112) -2% Stockholders' equity 437,753 428,486 9,267 2% Net interest income $ 26,308 $ 25,767 $ 541 2% Provision 727 955 (228) -24% Other gains/(losses) (2) 65 (67) -103% Income Non-interest income 12,367 13,054 (687) -5% Statement Non-interest expense 26,505 26,282 223 1% Income tax expense 3,479 3,654 (175) -5% Net income $ 7,962 $ 7,995 $ (33) 0% Return on assets 0.97% 0.98% -0.01% -1% Key Ratio Efficiency ratio (1) 65.08% 64.26% 0.82% 1% Metrics Pre-provision net revenue / avg assets (1) 1.48% 1.54% -0.06% -4% (1) Non-GAAP financial measure. See Appendix for additional information. 9
Ope perat ating E Expe pense ses Four con Fou onsec ecutive q quarters of of wel ell-controlled e d expenses $1,020 $1,250 $90 (4. 4.8%) d decli line in in ds) (thousands core e e expens enses es $27,758 $192 from rom 2 2Q-15 t 5 to 2Q 2Q-16 16 $26,282 $26,027 $26,415 $25,920 2Q-15 3Q-15 4Q-15 1Q-16 2Q-16 Core Non-Interest Expenses * Non-Core Non-Interest Expenses * * No Non-GAAP f financial mea easure. See Appendix. 10
Co Core Ef Effici ciency Effi fficiency h has imp mproved a as a result o of f exp xpense c control a and revenue g growth Firs rst Firs rst Q Quarter r Quart rter r Follo lowin ing 73.00% Follo lowin ing Acquis isit itio ion Acquis isit itio ion of Ohio H Heritage of N NB&T* T* Ba Banc ncorp 71.00% 71.45 71. 45% 71. 71.32 32% 69.00% 69. 69.42 42% 68.78 68. 78% 68. 68.65 65% 67.00% 65.00% 65. 65.30 30% (2.8%) C (2 CAG AGR 64.85 64. 85% 64.69 64. 69% 64.26 64. 26% 63.00% 61.00% 6/30/ 0/2014 2014 9/30/ 0/2014 2014 12/31/ 31/2014 2014 3/31/ 1/2015 2015 6/30/ 0/2015 2015 9/30/ 0/2015 2015 12/31/ 31/2015 2015 3/31/ 1/2016 2016 6/30/ 0/2016 2016 Adjusted Ef Ad Efficiency R Ratio * ** * Acquisition o of f NB&T F Finan ancial G Group, In Inc. (“NB&T”) was was c comp mpleted o on Mar arch 6, 2015 **The Adjusted Effi fficiency R Rat atio i is a a non-GAAP financia ial m l measure ( (see A Appendix ix). It exclu ludes a acquis isit itio ion c costs, p pensio ion s settle lement c char arges, severan ance c char arges an and certai ain o other n non- core e expenses. 11
Loa oan Grow n Growth Originated l Or loa oans w wer ere u up p 19% ov over er t the pr he prior or yea year q quarter, a and d 9% since yea year-end $628 $592 $658 $694 $727 19% 19% gr growth ions) illio ($mill $1,537 $1,415 $1,477 $1,356 $1,285 6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30/2016 Originated Loans Acquired Loans 12
Asse sset Qu Qual ality Crit ritic icized a and Cla lassified lo loan le levels ls c contin inue t to im impro rove 46. 46.4% 4% 44.9% 44. 9% 42.6% 42. 6% 40.7% 40. 7% 39.0% 39. 0% 39.4% 39. 4% ent) (percen 24.5% 24. 5% 25.8% 25. 8% 23. 23.4% 4% 21.7% 21. 7% 20.1% 20. 1% 17. 17.9% 9% 3/31/ 1/20 2015 15 6/30/ 0/20 2015 15 9/30/ 0/20 2015 15 12/31/ 31/2015 015 3/31/ 1/20 2016 16 6/30/ 0/20 2016 16 Criticized / Tier 1 Capital + ALLL Classified / Tier 1 Capital + ALLL 13
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