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EX-99.1 - EX-99.1 - PEOPLES BANCORP INCexhibit991q22020confer.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 24, 2020 (July 21, 2020)

pebonewlogoa221.jpg
PEOPLES BANCORP INC.
(Exact name of Registrant as specified in its charter)

Ohio000-1677231-0987416
(State or other jurisdiction(Commission File(I.R.S. Employer
of incorporation)Number)Identification Number)

138 Putnam Street, PO Box 738
Marietta,Ohio45750-0738
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code:(740)373-3155

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common shares, without par valuePEBOThe Nasdaq Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 2.02  Results of Operations and Financial Condition

On July 21, 2020, management of Peoples Bancorp Inc. (“Peoples”) conducted a facilitated conference call at approximately 11:00 a.m., Eastern Daylight Time, to discuss results of operations for the quarter ended June 30, 2020. A replay of the conference call audio will be available on Peoples’ website, www.peoplesbancorp.com, in the “Investor Relations” section for one year. A copy of the transcript of the conference call is included as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in this Item 2.02 and Exhibit 99.1 included with this Current Report on Form 8-K, is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in such filing.
During the conference call, management referred to non-Generally Accepted Accounting Principles ("US GAAP") financial measures that are used by management to provide information useful to investors in understanding Peoples' operating performance and trends, and to facilitate comparisons with the performance of Peoples' peers. The following tables show the differences between the non-US GAAP financial measures referred to during the conference call and the most directly comparable US GAAP-based financial measures.
NON-US GAAP FINANCIAL MEASURES (Unaudited)
The following non-US GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. Peoples also uses the non-US GAAP financial measures for calculating incentive compensation. The following tables summarize the non-US GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:

Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20202020201920202019
Core non-interest expense:
Total non-interest expense$31,805  $34,325  $38,876  $66,130  $70,736  
Less: acquisition-related expenses47  30  6,770  77  7,023  
Less: pension settlement charges151  368  —  519  —  
Less: severance expenses79  13  —  92  —  
Less: COVID-19 expenses918  140  —  1,058  —  
Core non-interest expense$30,610  $33,774  $32,106  $64,384  $63,713  




NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20202020201920202019
Efficiency ratio:
Total non-interest expense31,805  $34,325  38,876  66,130  70,736  
Less: amortization of other intangible assets728  729  824  1,457  1,518  
Adjusted non-interest expense$31,077  $33,596  $38,052  $64,673  $69,218  
Total non-interest income$14,664  $15,737  $15,289  $30,401  $30,718  
Less: net gain (loss) on investment securities62  319  (57) 381  (27) 
Less: net loss on asset disposals and other transactions(122) (87) (293) (209) (475) 
Total non-interest income, excluding net gains and losses$14,724  $15,505  $15,639  $30,229  $31,220  
Net interest income$34,860  $34,636  $36,049  $69,496  $69,963  
Add: fully tax-equivalent adjustment (a)269  272  267  541  467  
Net interest income on a fully tax-equivalent basis$35,129  $34,908  $36,316  $70,037  $70,430  
Adjusted revenue$49,853  $50,413  $51,955  $100,266  $101,650  
Efficiency ratio62.34 %66.64 %73.24 %64.50 %68.09 %
Efficiency ratio adjusted for non-core items:
Core non-interest expense$30,610  $33,774  $32,106  $64,384  $63,713  
Less: amortization of other intangible assets728  729  824  1,457  1,518  
Adjusted core non-interest expense$29,882  $33,045  $31,282  $62,927  $62,195  
Adjusted revenue$49,853  $50,413  $51,955  $100,266  $101,650  
Efficiency ratio adjusted for non-core items59.94 %65.55 %60.21 %62.76 %61.19 %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.


(Dollars in thousands, except per share data)June 30,March 31,December 31,September 30,June 30,
20202020201920192019
Tangible equity:
Total stockholders' equity$569,177  $583,721  $594,393  $588,533  $579,022  
Less: goodwill and other intangible assets176,625  177,447  177,503  179,126  176,763  
Tangible equity$392,552  $406,274  $416,890  $409,407  $402,259  
Tangible assets:
Total assets$4,985,819  $4,469,120  $4,354,165  $4,396,148  $4,276,376  
Less: goodwill and other intangible assets176,625  177,447  177,503  179,126  176,763  
Tangible assets$4,809,194  $4,291,673  $4,176,662  $4,217,022  $4,099,613  
Tangible book value per common share:
Tangible equity$392,552  $406,274  $416,890  $409,407  $402,259  
Common shares outstanding19,925,083  20,346,843  20,698,941  20,700,630  20,696,041  
Tangible book value per common share$19.70  $19.97  $20.14  $19.78  $19.44  
Tangible equity to tangible assets ratio:
Tangible equity$392,552  $406,274  $416,890  $409,407  $402,259  
Tangible assets$4,809,194  $4,291,673  $4,176,662  $4,217,022  $4,099,613  
Tangible equity to tangible assets8.16 %9.47 %9.98 %9.71 %9.81 %






NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands, except per share data)20202020201920202019
Pre-provision net revenue:
Income (loss) before income taxes$5,885  $(921) $11,836  $4,964  $29,582  
Add: provision for credit losses (a)11,834  16,969  626  28,803  363  
Add: net loss on OREO—  17  24  17  49  
Add: net loss on investment securities—  —  57  —  27  
Add: net loss on other assets145  70  274  215  431  
Add: net loss on other transactions—  —  —  —  —  
Less: recovery of credit losses (a)—  —  —  —  —  
Less: net gain on OREO —  —   —  
Less: net gain on investment securities62  319  —  381  —  
Less: net gain on other transactions22  —   22   
Pre-provision net revenue$17,779  $15,816  $12,812  $33,595  $30,447  
Total average assets$4,828,016  $4,381,627  $4,239,779  $4,604,821  $4,113,403  
Pre-provision net revenue to total average assets (annualized)1.48 %1.45 %1.21 %1.47 %1.49 %
Weighted-average common shares outstanding – diluted19,858,88020,538,21420,442,36620,183,22219,972,350
Pre-provision net revenue per common share – diluted$0.89$0.77$0.62$1.66$1.51
(a) On January 1, 2020, Peoples adopted ASU 2016-13 and adopted the CECL model. Prior to the adoption of CECL, the provision for (recovery of) credit losses was the "provision for (recovery of) loan losses." The provision for credit losses includes changes related to the allowance for credit losses on loans, which includes purchased credit deteriorated loans, held-to-maturity investment securities, and the unfunded commitment liability.








NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20202020201920202019
Annualized net income (loss) adjusted for non-core items:
Net income (loss)$4,749  $(765) $9,598  $3,984  $23,967  
Add: net loss on investment securities—  —  57  —  27  
Less: tax effect of loss on investment securities (a)—  —  12  —   
Less: net gain on investment securities62  319  —  381  —  
Add: tax effect of net gain on investment securities (a)13  67  —  80  —  
Add: net loss on asset disposals and other transactions122  87  293  209  475  
Less: tax effect of net loss on asset disposals and other transactions (a)26  18  62  44  100  
Add: acquisition-related expenses47  30  6,770  77  7,023  
Less: tax effect of acquisition-related expenses (a)10   1,422  16  1,475  
Add: pension settlement charges151  368  —  519  —  
Less: tax effect of pension settlement charges (a)32  77  —  109  —  
Add: severance expenses79  13  —  92  —  
Less: tax effect of severance expenses (a)17   —  20  —  
Add: COVID-19 expenses918  140  —  1,058  —  
Less: tax effect of COVID-19 (a)193  29  —  222  —  
Net income (loss) adjusted for non-core items (after tax)$5,739  $(512) $15,222  $5,227  $29,911  
Days in the period91  91  91  182  181  
Days in the year366  366  365  366  365  
Annualized net income (loss)$19,100  $(3,077) $38,497  $8,012  $48,331  
Annualized net income (loss) adjusted for non-core items (after tax)$23,082  $(2,059) $61,055  $10,511  $60,318  
Return on average assets:
Annualized net income (loss)$19,100  $(3,077) $38,497  $8,012  $48,331  
Total average assets$4,828,016  $4,381,627  $4,239,779  $4,604,821  $4,113,403  
Return on average assets0.40 %(0.07)%0.91 %0.17 %1.17 %
Return on average assets adjusted for non-core items:
Annualized net income (loss) adjusted for non-core items (after tax)$23,082  $(2,059) $61,055  $10,511  $60,318  
Total average assets$4,828,016  $4,381,627  $4,239,779  $4,604,821  $4,113,403  
Return on average assets adjusted for non-core items0.48 %(0.05)%1.44 %0.23 %1.47 %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.



NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months EndedAt or For the Six Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20202020201920202019
Annualized net income (loss) excluding amortization of other intangible assets:
Net income (loss)$4,749  $(765) $9,598  $3,984  $23,967  
Add: amortization of other intangible assets728  729  824  1,457  1,518  
Less: tax effect of amortization of other intangible assets (a)153  153  173  306  319  
Net income (loss) excluding amortization of other intangible assets (after tax)$5,324  $(189) $10,249  $5,135  $25,166  
Days in the period91  91  91  182  181  
Days in the year366  366  365  366  365  
Annualized net income (loss) $19,100  $(3,077) $38,497  $8,012  $48,331  
Annualized net income (loss) excluding amortization of other intangible assets (after tax)$21,413  $(760) $41,109  $10,326  $50,749  
Average tangible equity:
Total average stockholders' equity$572,141  $596,246  $564,992  $584,193  $544,706  
Less: average goodwill and other intangible assets177,012  177,984  175,169  177,498  168,458  
Average tangible equity$395,129  $418,262  $389,823  $406,695  $376,248  
Return on average stockholders' equity ratio:
Annualized net income (loss)$19,100  $(3,077) $38,497  $8,012  $48,331  
Average stockholders' equity$572,141  $596,246  $564,992  $584,193  $544,706  
Return on average stockholders' equity3.34 %(0.52)%6.81 %1.37 %8.87 %
Return on average tangible equity ratio:
Annualized net income (loss) excluding amortization of other intangible assets (after tax)$21,413  $(760) $41,109  $10,326  $50,749  
Average tangible equity$395,129  $418,262  $389,823  $406,695  $376,248  
Return on average tangible equity5.42 %(0.18)%10.55 %2.54 %13.49 %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.






Item 9.01.  Financial Statements and Exhibits
a) - c)
Not applicable.
d) Exhibits
See Index to Exhibits which follows:

INDEX TO EXHIBITS

Exhibit NumberDescription
Transcript of conference call conducted by management of Peoples Bancorp Inc. on July 21, 2020 to discuss results of operations for the quarter ended June 30, 2020
104
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)
* Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedules or exhibits will be furnished supplementally to the SEC upon its request.
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


PEOPLES BANCORP INC.
Date:July 24, 2020By:/s/JOHN C. ROGERS
John C. Rogers
Executive Vice President,
Chief Financial Officer and Treasurer