Core Insights - Peoples Bancorp Inc. reported diluted earnings per share of $0.59 for Q2 2025, with annualized loan growth of 11% and net interest margin expanding by three basis points to 4.15% [24][4]. - The company is facing challenges in its small ticket leasing portfolio, which has seen elevated charge-off levels and a decline in size from $220 million in June 2024 to $160 million in Q2 2025 [43][44]. - Management expects steady net interest margin performance, mid-single-digit loan growth, and a focus on fee-based income expansion while maintaining a neutral interest rate risk profile [12][46]. Financial Performance - Net interest income increased by over $2 million, or 3%, in Q2 2025, while fee-based income declined by 1% primarily due to the absence of performance-based insurance commissions [5][33]. - Noninterest expense decreased by 1% to $70.4 million in Q2 2025, driven by lower salaries and employee benefit costs [5][36]. - The efficiency ratio improved to 59.3% from 60.7% in Q2 2025, reflecting higher net interest income and reduced noninterest expenses [5][37]. Credit Quality - Provision for credit losses totaled $16.6 million in Q2 2025, up $6.5 million from the linked quarter, with net charge-offs of $7 million [6][26]. - The annualized net charge-off rate improved to 43 basis points from 52 basis points in the linked quarter, driven by lower small ticket leasing charge-offs [6][27]. - Allowance for credit losses increased to 1.13% of total loans, aligning closely with peers [7][25]. Loan and Deposit Trends - Annualized loan growth was 11%, with balanced growth across all loan categories, including commercial and industrial loans, residential real estate loans, and construction loans [4][30]. - Deposit balances declined by 1% ($98 million) in Q2 2025, impacted by seasonality and decreases in governmental and money market accounts [8][41]. - The loan to deposit ratio increased to 86% from 83%, reflecting robust loan growth amid seasonal deposit declines [14][38]. Guidance and Outlook - Management expects a full-year 2025 net interest margin of 4.00%-4.20% and loan growth of 4%-6% compared to 2024 [11][46]. - Fee-based income is forecasted to grow in the mid-single-digit percentages versus 2024, led by lease income and other noninterest categories [15][46]. - The company anticipates that small ticket leasing net charge-offs will plateau over the next two quarters, with a focus on managing delinquency trends [47][45].

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of 59 cents for Q2 2025, with an annualized loan growth of 11% [6][8] - Net interest income increased by over $2 million, while the net interest margin expanded by three basis points to 4.15% [14][19] - The overall allowance for credit losses grew by $9.4 million to 1.13% of total loans, with a provision for credit losses totaling $16.6 million, an increase of $6.5 million from the previous quarter [8][9][12] Business Line Data and Key Metrics Changes - Loan growth was balanced across categories, including commercial and industrial loans ($64 million), residential real estate loans ($30 million), and small ticket leasing loans ($14 million) [13] - Fee-based income was relatively stable, with a slight decline of 1% compared to the linked quarter, primarily due to performance-based insurance commissions recognized in Q1 [16][17] - Non-interest expenses declined by 1% to $70.4 million, driven by lower salaries and employee benefits costs [18] Market Data and Key Metrics Changes - The company experienced increased loan demand, reflected in the pipelines and loan growth during the quarter [12] - The investment portfolio grew by approximately $140 million, driven by investments in higher-yielding bonds [20] - Deposit balances declined by 1% or $98 million, with reductions in money market accounts and interest-bearing checking accounts [20][21] Company Strategy and Development Direction - The company aims to achieve positive operating leverage for 2025 compared to 2024, with expectations of loan growth between 4% to 6% [25][26] - The focus remains on managing the balance sheet and interest rate risk profile while generating loan growth with high underwriting standards [27][28] - The company is actively evaluating M&A opportunities, particularly in overlapping markets and adjacent states [110] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the health of the core commercial portfolio, with expectations for charge-offs to plateau in the small ticket leasing segment [36][43] - The company has not observed significant impacts from tariffs on loan growth or credit metrics, but continues to monitor the portfolio closely [12][68] - Future guidance includes expectations for fee-based income growth in the mid-single-digit percentages compared to 2024 [26] Other Important Information - The tangible equity to tangible assets ratio remained stable at 8.3% [22] - The efficiency ratio improved to 59.3% compared to 60.7% for the linked quarter [19] - The company was recognized as one of America's Greatest Workplaces 2025 by Newsweek, highlighting its commitment to employees [28] Q&A Session Summary Question: Insights on charge-offs and credit outlook - Management indicated that charge-offs in the small ticket leasing segment are expected to plateau, correlating with the decline of high balance accounts [35][36] Question: Reserves perspective and CECL impact - Specific reserves added were primarily related to small ticket leasing, with management believing they are appropriately reserved at this point [39][43] Question: Loan growth guidance and drivers - Management maintained a loan growth guidance of mid-single digits for 2025, citing strong production and pipelines [50][51] Question: Deposit growth outlook - Seasonal growth in governmental deposits is expected in Q3, with overall deposit pricing remaining stable [52][54] Question: M&A opportunities and capital management - The company remains opportunistic regarding stock repurchases and is actively exploring M&A opportunities in existing and adjacent markets [108][110]

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of 59 cents for Q2 2025, with an annualized loan growth of 11% [6][7] - Net interest income increased by over $2 million, while the net interest margin expanded by three basis points to 4.15% [14][20] - The allowance for credit losses grew by $9.4 million to 1.13% of total loans, with a provision for credit losses totaling $16.6 million, an increase of $6.5 million from the previous quarter [8][12] Business Line Data and Key Metrics Changes - Fee-based income was relatively stable, with a slight decline of 1% compared to the linked quarter, primarily due to performance-based insurance commissions recognized in Q1 [16][18] - The small ticket leasing business experienced elevated charge-off levels, with net charge-offs decreasing from $5.4 million in the previous quarter to $4.8 million [10][24] - Loan growth was balanced across categories, including commercial and industrial loans, residential real estate loans, and construction loans [13] Market Data and Key Metrics Changes - The company observed increased loan demand, reflected in the pipelines and loan growth during the quarter [12] - Non-performing assets increased slightly to 49 basis points of total assets, primarily due to higher balances in loans past due [11] - The commercial real estate loans comprised 34% of total loans, with 46% of total loans being fixed rate [13][21] Company Strategy and Development Direction - The company aims to achieve positive operating leverage for 2025 compared to 2024, with expectations of loan growth between 4% to 6% [26][27] - The management is focused on maintaining high underwriting standards to protect credit quality while offering competitive deposit rates [28][29] - The company is actively managing its balance sheet and interest rate risk profile, with a commitment to community engagement and employee satisfaction [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding credit quality and loan growth, despite potential economic uncertainties [12][28] - The company has not observed significant impacts from tariffs on loan growth or credit metrics but continues to monitor the portfolio closely [12][71] - Future expectations include a plateau in small ticket leasing net charge-offs and a stable outlook for deposit growth [26][58] Other Important Information - The tangible equity to tangible assets ratio remained stable at 8.3%, with book value per share growing by 1% [22][23] - The investment portfolio grew by approximately $140 million, driven by investments in higher-yielding bonds [21] Q&A Session Summary Question: Insights on charge-offs and credit quality - Management indicated that charge-offs in small ticket leasing are correlated with high balance accounts and expect them to plateau in the upcoming quarters [36][45] Question: Loan growth guidance and drivers - The company maintained a loan growth guidance of mid-single digits for 2025, citing strong production and robust demand across various business lines [54] Question: Deposit growth outlook and competition - Management expects seasonal growth in governmental deposits and stable trends in other deposit categories, with ongoing efforts to manage deposit costs [56][58] Question: Capital levels and stock repurchase plans - The company remains opportunistic regarding stock repurchases, with a focus on maintaining strong capital levels for potential M&A opportunities [107][109]

Financial Performance Highlights - Net income reached $21.2 million, translating to $0.59 of diluted earnings per share[11] - Annualized loan growth was 11%[11] - Book value per share grew 1%, while tangible book value per share increased 2%, to $32.33 and $21.18, respectively[11] - Net interest income increased over $2 million, and net interest margin expanded 3 basis points[11] - Excluding accretion income, net interest margin expanded 8 basis points[11] Loan Portfolio and Asset Quality - Total loan balances grew 11% annualized compared to March 31, 2025[15] - The allowance for credit losses grew to 1.13% of total loans[11, 25] - Annualized net charge-off rate declined to 43 basis points[11, 27] - Small-ticket lease balances comprised 2% of total loan balances at June 30, 2025[18, 22] North Star Leasing - North Star Leasing balances comprised only 2% of Peoples' total loan portfolio at June 30, 2025[18] - The North Star portfolio origination yield (before accounting adjustments) is around 20%[18] Net Interest Income and Margin - Net interest income grew over $2 million compared to the linked quarter, and net interest margin expanded 3 basis points[11, 37] - Accretion income declined $0.9 million[37] Deposits - Second quarter 2025 deposits declined $81 million, or 1%, compared to the linked quarter, excluding brokered CDs[51]

Core Insights - Peoples Bancorp reported revenue of $114.46 million for the quarter ended June 2025, marking a year-over-year increase of 4.4% and a surprise of +1.38% over the Zacks Consensus Estimate of $112.9 million [1] - The EPS for the same period was $0.60, down from $0.84 a year ago, resulting in an EPS surprise of -23.08% compared to the consensus estimate of $0.78 [1] Financial Performance Metrics - Total earning assets averaged $8.38 billion, slightly below the average estimate of $8.41 billion [4] - Net Interest Margin was reported at 4.2%, exceeding the average estimate of 4.1% [4] - Efficiency ratio stood at 59.3%, better than the estimated 61.5% [4] - Net charge-offs as a percentage of average total loans (annualized) were 0.4%, matching the average estimate [4] - Mortgage banking income was $0.22 million, significantly lower than the average estimate of $0.62 million [4] - Total Non-interest income reached $26.88 million, surpassing the estimated $25.87 million [4] - Electronic banking income was $6.27 million, slightly above the average estimate of $6.1 million [4] - Bank owned life insurance income was $1.11 million, exceeding the average estimate of $0.95 million [4] - Insurance income was reported at $4.55 million, above the average estimate of $4.38 million [4] - Deposit account service charges totaled $4.06 million, slightly above the average estimate of $4.05 million [4] - Net Interest Income was $87.58 million, higher than the average estimate of $87.11 million [4] - Net interest income on a fully tax-equivalent basis was $87.86 million, also exceeding the average estimate of $87.11 million [4] Stock Performance - Shares of Peoples Bancorp have returned +5.6% over the past month, compared to the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Peoples Bancorp reported quarterly earnings of $0.6 per share, missing the Zacks Consensus Estimate of $0.78 per share, and down from $0.84 per share a year ago, indicating an earnings surprise of -23.08% [1] Financial Performance - The company posted revenues of $114.46 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.38%, and up from $109.69 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus revenue estimates three times [2] Stock Performance - Peoples Bancorp shares have lost about 0.4% since the beginning of the year, while the S&P 500 has gained 7.2% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.83 on revenues of $115.1 million, and for the current fiscal year, it is $3.15 on revenues of $456.47 million [7] - The estimate revisions trend for Peoples Bancorp was unfavorable ahead of the earnings release [6] Industry Context - The Banks - Midwest industry is currently in the top 31% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) This section provides an overview of Peoples Bancorp Inc.'s Q2 2025 performance, highlighting key financial results, CEO commentary, and significant financial summaries [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Peoples Bancorp Inc. reported a decrease in net income and diluted earnings per share for the second quarter of 2025 compared to both the linked quarter and the second quarter of 2024 Net Income and EPS Overview | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------------------- | :------ | :------ | :------ | | Net Income | $21.2M | $24.3M | $29.0M | | Earnings per Diluted Share | $0.59 | $0.68 | $0.82 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Tyler Wilcox, President and CEO, expressed satisfaction with strong annualized loan growth and net interest margin expansion in Q2 2025, reiterating the company's focus on sustainable growth and strong shareholder returns - CEO Tyler Wilcox highlighted **strong annualized loan growth** and **net interest margin expansion** in Q2 2025, with a continued focus on sustainable growth and strong shareholder returns[2](index=2&type=chunk) [Key Financial Summaries](index=1&type=section&id=Key%20Financial%20Summaries) The company achieved an 11% annualized increase in total loan and lease balances and a 3% increase in net interest income quarter-over-quarter, driven by lower funding costs and an expanded net interest margin of 4.15% Q2 2025 Key Financial Highlights (QoQ) | Metric | Q2 2025 vs Q1 2025 | | :-------------------------------------- | :----------------- | | Period-end total loan and lease balances | +$173.1M (11% annualized) | | Net interest income | +$2.3M (3%) | | Net interest margin | 4.15% (vs 4.12%) | | Provision for credit losses | $16.6M (vs $10.2M) | | EPS impact from provision | -$0.36 (vs -$0.22) | [Detailed Financial Performance Analysis](index=1&type=section&id=Detailed%20Financial%20Performance%20Analysis) This section provides an in-depth analysis of the company's financial performance, covering net interest income, credit losses, non-interest income and expense, efficiency, and income tax [Net Interest Income](index=1&type=section&id=Net%20Interest%20Income) Net interest income increased quarter-over-quarter due to lower funding costs, leading to net interest margin expansion, but saw a modest increase year-over-year while net interest margin decreased Net Interest Income and Margin Trends | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------------ | :-------- | :-------- | :-------- | :-------- | :-------- | | Net Interest Income | $87.6M | $85.3M | $86.6M | $172.8M | $173.3M | | Net Interest Margin | 4.15% | 4.12% | 4.18% | 4.14% | 4.22% | | Accretion Income | $2.6M | $3.5M | $5.8M | $6.1M | $12.3M | | Accretion bps | 12 bps | 17 bps | 28 bps | 15 bps | 30 bps | - The increase in net interest income and margin QoQ was primarily driven by lower deposit and borrowing costs[6](index=6&type=chunk)[7](index=7&type=chunk] - The decrease in net interest margin YoY was due to reductions in loan yields, driven by lower accretion income, partially offset by lower funding costs[6](index=6&type=chunk)[7](index=7&type=chunk) [Provision for Credit Losses](index=1&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses significantly increased in Q2 2025 compared to both the linked quarter and the prior year, primarily driven by higher net charge-offs, increased reserves, and deteriorating economic forecasts Provision for Credit Losses and EPS Impact | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------------------- | :-------- | :-------- | :-------- | | Provision for Credit Losses | $16.6M | $10.2M | $5.7M | | EPS Impact from Provision | -$0.36 | -$0.22 | -$0.13 | - Key drivers for the increased provision in Q2 2025 included net charge-offs, increased reserves on individually-analyzed loans and North Star Leasing, a periodic refresh in CECL model loss drivers, deterioration in economic forecasts, and loan growth[4](index=4&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk] [Net Gains and Losses](index=3&type=section&id=Net%20Gains%20and%20Losses) The company reported net losses in Q2 2025, which improved compared to both the linked quarter and the prior year, consistently driven by repossessed assets Net Gains and Losses | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Net Loss | -$0.3M | -$0.4M | -$0.8M | -$0.6M | -$1.1M | - Net losses for all periods were primarily driven by losses on repossessed assets[16](index=16&type=chunk)[17](index=17&type=chunk] [Total Non-interest Income, Excluding Net Gains and Losses](index=1&type=section&id=Total%20Non-interest%20Income%2C%20Excluding%20Net%20Gains%20and%20Losses) Total non-interest income, excluding net gains and losses, decreased slightly quarter-over-quarter due to seasonal insurance income, but increased significantly year-over-year, primarily driven by higher lease income Non-Interest Income (Excluding Net Gains & Losses) Trends | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Total Non-interest Income (excl. gains) | -$0.3M QoQ| +$2.7M YoY| | +$4.0M (8%) 6M YoY | | | Insurance income (QoQ) | -$1.5M | | | | | | Lease income (QoQ) | +$0.7M | | | | | | Electronic banking income (QoQ) | +$0.4M | | | | | | Lease income (YoY) | | | +$2.0M | | | | Other non-interest income (YoY) | | | +$0.3M | | | - The QoQ decrease was primarily due to seasonal performance-based commissions in insurance income, partially offset by gains on terminated Vantage Financial leases and increased electronic banking income[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk] - The YoY increase was driven by operating lease income, insurance income, and swap fee income[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk] [Total Non-interest Expense](index=1&type=section&id=Total%20Non-interest%20Expense) Total non-interest expense decreased quarter-over-quarter due to lower salaries and employee benefits and corporate expenses, but increased year-over-year, mainly driven by higher sales-based incentives and medical costs Total Non-Interest Expense Trends | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Total Non-interest Expense | -$0.4M QoQ| +$1.6M (2%) YoY | | +$3.9M (3%) 6M YoY | | | Salaries & employee benefits (QoQ) | -$0.9M | | | | | | Other non-interest expense (QoQ) | -$0.4M | | | | | | Professional fees (QoQ) | +$0.5M | | | | | | Data processing & software (QoQ) | +$0.4M | | | | | | Salaries & employee benefits (YoY) | | | +$2.3M | | | | Professional fees (YoY) | | | +$0.7M | | | | Data processing & software (YoY) | | | +$0.6M | | | - The QoQ decrease in salaries and employee benefits was due to annual expenses occurring in Q1, including stock-based compensation and HSA contributions[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk] - The YoY increase was driven by higher sales-based incentives, medical costs, and payroll taxes[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk] [Efficiency Ratio](index=3&type=section&id=Efficiency%20Ratio) The efficiency ratio improved quarter-over-quarter due to higher net interest income and lower non-interest expenses, but worsened for the first six months of 2025 compared to the prior year Efficiency Ratio Trends | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------- | :------ | :------ | :------ | :------ | :------ | | Efficiency Ratio| 59.3% | 60.7% | 59.2% | 60.0% | 58.6% | - The QoQ improvement was mainly a result of higher net interest income and lower non-interest expenses[24](index=24&type=chunk)[25](index=25&type=chunk] - The increase for the first six months of 2025 compared to the prior year was due to increased non-interest expense and lower net interest income[24](index=24&type=chunk)[25](index=25&type=chunk] [Income Tax Expense](index=4&type=section&id=Income%20Tax%20Expense) Income tax expense decreased quarter-over-quarter primarily due to lower net income, while the effective tax rate remained relatively stable, with the prior year's Q2 rate being lower due to a one-time benefit Income Tax Expense and Effective Tax Rate | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------------ | :-------- | :-------- | :-------- | :-------- | :-------- | | Income Tax Expense | $6.2M | $7.0M | $6.9M | $13.3M | $15.1M | | Effective Tax Rate | 22.7% | 22.4% | 19.1% | 22.6% | 20.5% | - The decrease in income tax expense QoQ was primarily due to lower net income[26](index=26&type=chunk] - The lower effective tax rate in Q2 2024 was attributed to a **$1.1 million** one-time benefit from a prior year amended return[26](index=26&type=chunk] [Balance Sheet and Asset Quality](index=1&type=section&id=Balance%20Sheet%20and%20Asset%20Quality) This section analyzes the company's balance sheet composition, including investment securities, loans, deposits, stockholders' equity, and asset quality metrics [Investment Securities and Liquidity](index=4&type=section&id=Investment%20Securities%20and%20Liquidity) Available-for-sale investment securities balances decreased across all comparative periods, while held-to-maturity investment securities increased, driven by strategic purchases of higher-yielding, longer-duration securities Investment Securities Balances | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------- | :----------- | :------------ | | Available-for-sale investment securities| -$22.2M QoQ | -$32.1M vs Dec | -$67.6M YoY | | | Held-to-maturity investment securities | +$146.6M QoQ | +$125.2M vs Dec| +$198.0M YoY | | Unrealized Losses on AFS Securities (Net of Tax) | Date | Amount | | :------------ | :----------- | | June 30, 2025 | $90.9M | | March 31, 2025| $96.6M | | June 30, 2024 | $112.7M | - Peoples maintains strong liquidity with **$878.5 million** in liquid and liquefiable assets and a total borrowing capacity of **$607.5 million** through FHLB, FRB, and federal funds[30](index=30&type=chunk] [Loans and Leases](index=1&type=section&id=Loans%20and%20Leases) Total loan and lease balances experienced strong annualized growth quarter-over-quarter, driven primarily by increases in commercial and industrial, residential real estate, and construction loans Total Loan and Lease Balances Growth | Period-end Comparison | Change in Total Loans & Leases | | :-------------------- | :----------------------------- | | June 30, 2025 vs March 31, 2025 | +$173.1M (11% annualized) | | June 30, 2025 vs Dec 31, 2024 | +$243.6M (4%) | | June 30, 2025 vs June 30, 2024 | +$276.2M (4%) | - Growth in the loan portfolio was primarily driven by increases in commercial and industrial loans (**+$63.6M QoQ**), residential real estate loans (**+$29.8M QoQ**), and construction loans (**+$22.2M QoQ**)[5](index=5&type=chunk)[31](index=31&type=chunk] [Asset Quality](index=2&type=section&id=Asset%20Quality) Asset quality metrics remained stable, with improved delinquency trends, while nonperforming assets saw a slight QoQ increase but decreased YoY, and the allowance for credit losses significantly increased Key Asset Quality Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------- | :------------ | | Loans considered current | 99.1% | 98.5% | 98.8% | | Total nonperforming assets | +$0.8M QoQ | -$2.0M YoY | | | Nonperforming assets as % of total loans & OREO | 0.71% | 0.71% | 0.77% | | Criticized loans | +$17.9M QoQ | +$4.5M YoY | | | Criticized loans as % of total loans | 3.70% | 3.52% | 3.79% | | Classified loans | +$1.2M QoQ | +$4.8M YoY | | | Classified loans as % of total loans | 1.89% | 1.93% | 1.90% | | Allowance for credit losses as % of total loans | 1.13% | 1.01% | 1.05% | | Allowance for credit losses as % of NPLs| 183.82% | 163.76% | 160.56% | Annualized Net Charge-offs | Period | Rate | | :----- | :------ | | Q2 2025| 0.43% | | Q1 2025| 0.52% | | Q2 2024| 0.27% | - The increase in criticized and classified loans was primarily driven by the downgrade of one commercial relationship and other loan downgrades[37](index=37&type=chunk)[38](index=38&type=chunk] [Deposits](index=2&type=section&id=Deposits) Period-end total deposits decreased quarter-over-quarter due to seasonal governmental deposits and a strategic reduction in brokered deposits, partially offset by growth in retail certificates of deposit, but increased year-over-year Period-end Total Deposits Trends | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------- | :----------- | :------------ | | Total Deposits | -$97.5M QoQ | +$47.0M vs Dec | +$339.4M (5%) YoY | | | Governmental deposits (QoQ) | -$52.5M | | | | | Money market deposits (QoQ) | -$39.8M | | | | | Brokered deposits (QoQ) | -$16.2M | | | | | Retail certificates of deposit (QoQ) | +$39.3M | | | | Uninsured Deposits and Collateralization | Date | Uninsured Deposits % of Total | Collateralized % of Uninsured | | :------------ | :---------------------------- | :---------------------------- | | June 30, 2025 | 26% | 32% | | March 31, 2025| 27% | 35% | | June 30, 2024 | 30% | 38% | - The decrease in governmental deposits was due to seasonality, while the decrease in brokered deposits was a strategic shift to lower-rate funding sources[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk] - The increase in retail certificates of deposit was driven by promotional offerings[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk] [Stockholders' Equity](index=6&type=section&id=Stockholders'%20Equity) Total stockholders' equity increased across all comparative periods, primarily driven by net income and a decrease in accumulated other comprehensive loss, partially offset by dividends paid Total Stockholders' Equity Trends | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :----------- | :------------ | | Total Stockholders' Equity | $1,153.4M | +$15.5M (1%) QoQ | +$41.8M (4%) vs Dec | +$75.5M (7%) YoY | | Net income (QoQ) | $21.2M | | | | | Decrease in AOCI (QoQ) | $5.4M | | | | | Dividends paid (QoQ) | $14.6M | | | | [Company Information](index=7&type=section&id=Company%20Information) This section provides essential information about Peoples Bancorp Inc., including its profile, conference call details, explanation of non-US GAAP financial measures, and a safe harbor statement regarding forward-looking statements [Company Profile](index=7&type=section&id=Company%20Profile) Peoples Bancorp Inc. is a diversified financial services holding company based in Marietta, Ohio, with $9.5 billion in total assets and 145 locations across six states, offering a full range of banking, trust, investment, insurance, and premium financing solutions - Peoples Bancorp Inc. (NASDAQ: PEBO) is a diversified financial services holding company headquartered in Marietta, Ohio, with **$9.5 billion** in total assets and **145 locations** across Ohio, West Virginia, Kentucky, Virginia, Washington D.C., and Maryland as of June 30, 2025[51](index=51&type=chunk] - The company provides banking, trust and investment, insurance, and premium financing solutions through its subsidiaries, including Peoples Bank, Peoples Insurance Agency, LLC, and Vantage Financial, LLC[51](index=51&type=chunk)[52](index=52&type=chunk] [Conference Call Details](index=8&type=section&id=Conference%20Call%20Details) Peoples Bancorp Inc. will host a conference call on July 22, 2025, at 11:00 a.m. Eastern Time, to discuss its second quarter 2025 results, with participation available via phone or webcast - A conference call to discuss Q2 2025 results will be held on July 22, 2025, at 11:00 a.m. ET, accessible via phone (866) 890-9285 and webcast on www.peoplesbancorp.com[53](index=53&type=chunk] [Non-US GAAP Financial Measures Explanation](index=8&type=section&id=Non-US%20GAAP%20Financial%20Measures%20Explanation) The news release utilizes non-US GAAP financial measures, which management believes provide a clearer understanding of ongoing operations and enhance comparability with prior periods and peers - Management uses non-US GAAP financial measures to analyze performance and operational efficiency, believing they provide a greater understanding of ongoing operations and enhance comparability[54](index=54&type=chunk] - Non-US GAAP measures used include Core non-interest expense, Efficiency ratio, Tangible assets/equity/book value, Total non-interest income (excluding net gains and losses), Pre-provision net revenue, and Return on average tangible equity[56](index=56&type=chunk] [Safe Harbor Statement & Risk Factors](index=8&type=section&id=Safe%20Harbor%20Statement%20%26%20Risk%20Factors) The report contains forward-looking statements subject to various risks and uncertainties, including interest rate policies, inflation, competitive pressures, regulatory changes, economic conditions, credit quality, and operational risks - Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including interest rate policies, inflationary pressures, business strategy implementation, and competitive pressures among financial institutions[55](index=55&type=chunk)[57](index=57&type=chunk] - Other significant risk factors include legislative or regulatory changes, local and national economic conditions, future credit quality, changes in accounting standards, adverse changes in financial markets, and operational risks such as cybersecurity attacks and system failures[57](index=57&type=chunk)[58](index=58&type=chunk] - The company encourages readers to understand forward-looking statements as strategic objectives rather than absolute targets and undertakes no obligation to update them, except as required by law[60](index=60&type=chunk] [Financial Tables (Unaudited)](index=12&type=section&id=Financial%20Tables%20%28Unaudited%29) This section presents unaudited financial tables, including per common share data, consolidated statements of income and balance sheets, selected financial information, provision for credit losses, supplemental data, and non-US GAAP reconciliations [Per Common Share Data and Selected Ratios](index=12&type=section&id=PER%20COMMON%20SHARE%20DATA%20AND%20SELECTED%20RATIOS) This section provides a summary of key per common share data and selected financial ratios, including basic and diluted earnings per share, cash dividends, book value, tangible book value, and various return and efficiency metrics Per Common Share Data and Selected Ratios | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | June 30, 2025 (6M) | June 30, 2024 (6M) | | :------------------------------------ | :------------ | :------------- | :------------ | :----------------- | :----------------- | | Earnings per common share: Basic | $0.60 | $0.69 | $0.83 | $1.29 | $1.67 | | Earnings per common share: Diluted | $0.59 | $0.68 | $0.82 | $1.28 | $1.66 | | Cash dividends declared per common share | $0.41 | $0.40 | $0.40 | $0.81 | $0.79 | | Book value per common share | $32.33 | $31.90 | $30.36 | $32.33 | $30.36 | | Tangible book value per common share | $21.18 | $20.68 | $18.91 | $21.18 | $18.91 | | Return on average stockholders' equity| 7.42 % | 8.79 % | 10.99 % | 8.09 % | 11.15 % | | Return on average tangible equity | 12.31 % | 14.66 % | 19.21 % | 13.46 % | 19.55 % | | Return on average assets | 0.92 % | 1.07 % | 1.27 % | 0.99 % | 1.29 % | | Efficiency ratio | 59.25 % | 60.68 % | 59.19 % | 59.96 % | 58.62 % | | Net interest margin | 4.15 % | 4.12 % | 4.18 % | 4.14 % | 4.22 % | | Dividend payout ratio | 68.90 % | 58.46 % | 48.94 % | 63.32 % | 47.69 % | [Consolidated Statements of Income](index=13&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) This section provides the detailed consolidated statements of income, outlining total interest income and expense, net interest income, provision for credit losses, various non-interest income and expense categories, and ultimately net income Consolidated Statements of Income (Selected Items) | Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | June 30, 2025 (6M) | June 30, 2024 (6M) | | :------------------------------------ | :------------ | :------------- | :------------ | :----------------- | :----------------- | | Total interest income | $126,407 | $124,542 | $130,770 | $250,949 | $258,363 | | Total interest expense | $38,830 | $39,287 | $44,157 | $78,117 | $85,110 | | Net interest income | $87,577 | $85,255 | $86,613 | $172,832 | $173,253 | | Provision for credit losses | $16,642 | $10,190 | $5,683 | $26,832 | $11,785 | | Total non-interest income | $26,880 | $27,099 | $23,704 | $53,979 | $49,483 | | Total non-interest expense | $70,362 | $70,787 | $68,758 | $141,149 | $137,223 | | Income before income taxes | $27,453 | $31,377 | $35,876 | $58,830 | $73,728 | | Income tax expense | $6,241 | $7,041 | $6,869 | $13,282 | $15,137 | | Net income | $21,212 | $24,336 | $29,007 | $45,548 | $58,591 | [Consolidated Balance Sheets](index=15&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) This section presents the consolidated balance sheets, detailing assets such as cash, investment securities, loans and leases, and goodwill, as well as liabilities including deposits and borrowings, and stockholders' equity Consolidated Balance Sheets (Selected Items, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Total cash and cash equivalents | $186,075 | $217,664 | | Total investment securities | $2,019,054 | $1,918,487 | | Loans and leases, net | $6,526,908 | $6,294,655 | | Total assets | $9,540,608 | $9,254,247 | | Total deposits | $7,637,208 | $7,590,205 | | Total liabilities | $8,387,258 | $8,142,657 | | Total stockholders' equity | $1,153,350 | $1,111,590 | [Selected Financial Information](index=16&type=section&id=SELECTED%20FINANCIAL%20INFORMATION) This section provides detailed selected financial information across multiple quarters, including the breakdown of the loan portfolio, total investment securities, various deposit categories, comprehensive asset quality metrics, and capital ratios Selected Financial Information (in thousands) | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------- | :----------- | :----------- | :------------ | | Total loans and leases | $6,601,589 | $6,428,526 | $6,358,003 | $6,271,839 | $6,325,371 | | Total Investment Securities | $2,019,054 | $1,878,462 | $1,918,487 | $1,829,995 | $1,883,865 | | Total deposits | $7,637,208 | $7,734,749 | $7,590,205 | $7,483,157 | $7,297,774 | | Total nonperforming assets (NPAs) | $46,641 | $45,815 | $48,936 | $69,782 | $48,670 | | Criticized loans | $244,442 | $226,542 | $241,302 | $237,627 | $239,943 | | Classified loans | $125,014 | $123,842 | $128,815 | $133,241 | $120,180 | | Allowance for credit losses as % of NPLs| 183.82 % | 163.76 % | 148.13 % | 106.82 % | 160.56 % | | Common equity tier 1 capital ratio | 11.95 % | 12.10 % | 11.95 % | 11.80 % | 11.74 % | | Total stockholders' equity to total assets | 12.09 % | 12.31 % | 12.01 % | 12.31 % | 11.68 % | [Provision for Credit Losses Information](index=18&type=section&id=PROVISION%20FOR%20%28RECOVERY%20OF%29%20CREDIT%20LOSSES%20INFORMATION) This table provides a detailed breakdown of the provision for credit losses, gross charge-offs, recoveries, and net charge-offs by loan type for the three and six months ended June 30, 2025, March 31, 2025, and June 30, 2024 Provision for Credit Losses and Net Charge-Offs (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | June 30, 2025 (6M) | June 30, 2024 (6M) | | :-------------------------------------- | :------------ | :------------- | :------------ | :----------------- | :----------------- | | Total provision for credit losses | $16,642 | $10,190 | $5,683 | $26,832 | $11,785 | | Gross charge-offs | $7,829 | $8,760 | $4,607 | $16,589 | $8,481 | | Recoveries | $865 | $639 | $374 | $1,504 | $928 | | Net charge-offs | $6,964 | $8,121 | $4,233 | $15,085 | $7,553 | | Net Charge-Offs as % of average total loans (annualized) | 0.43 % | 0.52 % | 0.27 % | 0.48 % | 0.23 % | [Supplemental Information](index=18&type=section&id=SUPPLEMENTAL%20INFORMATION) This table provides supplemental operational data, including trust and brokerage assets under administration and management, mortgage loans serviced for others, and full-time equivalent employees for various periods Supplemental Information (in thousands) | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------- | :----------- | :----------- | :------------ | | Trust assets under administration and management | $2,138,439 | $2,037,992 | $2,061,267 | $2,124,320 | $2,071,832 | | Brokerage assets under administration and management | $1,724,311 | $1,626,768 | $1,614,189 | $1,608,368 | $1,567,775 | | Mortgage loans serviced for others | $326,710 | $337,279 | $346,189 | $347,719 | $341,298 | | Employees (full-time equivalent) | 1,477 | 1,460 | 1,479 | 1,496 | 1,489 | [Consolidated Average Balance Sheets and Net Interest Income](index=19&type=section&id=CONSOLIDATED%20AVERAGE%20BALANCE%20SHEETS%20AND%20NET%20INTEREST%20INCOME) These tables present the consolidated average balance sheets and net interest income, detailing average balances, income/expense, and yields/costs for earning assets and interest-bearing liabilities Consolidated Average Balance Sheets and Net Interest Income (Selected Items, in thousands) | Metric | June 30, 2025 (3M) | March 31, 2025 (3M) | June 30, 2024 (3M) | June 30, 2025 (6M) | June 30, 2024 (6M) | | :-------------------------------------- | :----------------- | :------------------ | :----------------- | :----------------- | :----------------- | | Total earning assets | $8,375,813 | $8,277,356 | $8,224,393 | $8,326,855 | $8,152,671 | | Total interest-bearing liabilities | $6,494,220 | $6,456,846 | $6,502,088 | $6,475,637 | $6,418,009 | | Net interest income/spread | $87,857 | $85,538 | $86,965 | $173,395 | $173,958 | | Net interest margin | 4.15 % | 4.12 % | 4.18 % | 4.14 % | 4.22 % | [Non-US GAAP Financial Measures Reconciliation](index=21&type=section&id=NON-US%20GAAP%20FINANCIAL%20MEASURES%20%28Unaudited%29) This section provides detailed reconciliations of various non-US GAAP financial measures to their most directly comparable US GAAP measures, including the efficiency ratio, tangible equity, tangible assets, tangible book value per common share, pre-provision net revenue, and adjusted annualized net income and return on average tangible equity Efficiency Ratio Reconciliation (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | June 30, 2025 (6M) | June 30, 2024 (6M) | | :-------------------------------------- | :------------ | :------------- | :------------ | :----------------- | :----------------- | | Adjusted total non-interest expense | $68,151 | $68,574 | $65,971 | $136,725 | $131,648 | | Total non-interest income, excluding net gains and losses | $27,160 | $27,462 | $24,485 | $54,622 | $50,606 | | Net interest income on a fully tax-equivalent basis | $87,857 | $85,538 | $86,965 | $173,395 | $173,958 | | Adjusted revenue | $115,017 | $113,000 | $111,450 | $228,017 | $224,564 | | Efficiency ratio | 59.25 % | 60.68 % | 59.19 % | 59.96 % | 58.62 % | Tangible Equity and Assets Reconciliation (in thousands) | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------- | :----------- | :----------- | :------------ | | Total stockholders' equity | $1,153,350 | $1,137,821 | $1,111,590 | $1,124,972 | $1,077,833 | | Less: goodwill and other intangible assets | $397,785 | $400,099 | $402,422 | $403,922 | $406,417 | | Tangible equity | $755,565 | $737,722 | $709,168 | $721,050 | $671,416 | | Total assets | $9,540,608 | $9,246,000 | $9,254,247 | $9,140,471 | $9,226,461 | | Less: goodwill and other intangible assets | $397,785 | $400,099 | $402,422 | $403,922 | $406,417 | | Tangible assets | $9,142,823 | $8,845,901 | $8,851,825 | $8,736,549 | $8,820,044 | | Tangible book value per common share | $21.18 | $20.68 | $19.94 | $20.29 | $18.91 | | Tangible equity to tangible assets | 8.26 % | 8.34 % | 8.01 % | 8.25 % | 7.61 % | Pre-provision Net Revenue Reconciliation (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | June 30, 2025 (6M) | June 30, 2024 (6M) | | :-------------------------------------- | :------------ | :------------- | :------------ | :----------------- | :----------------- | | Income before income taxes | $27,453 | $31,377 | $35,876 | $58,830 | $73,728 | | Add: provision for credit losses | $16,642 | $10,190 | $5,683 | $26,832 | $11,785 | | Pre-provision net revenue | $44,375 | $41,930 | $42,340 | $86,305 | $86,636 |

Core Points - Peoples Bancorp Inc. reported a net income of $21.2 million for Q2 2025, down from $24.3 million in Q1 2025 and $29.0 million in Q2 2024, resulting in diluted earnings per share of $0.59 [1][57] - The company experienced strong annualized loan growth and net interest margin expansion, with a net interest margin of 4.15% for Q2 2025, up from 4.12% in the previous quarter [2][10] - The provision for credit losses increased significantly to $16.6 million in Q2 2025, compared to $10.2 million in Q1 2025 and $5.7 million in Q2 2024, primarily due to net charge-offs and increased reserves [9][11] Financial Performance - Net interest income for Q2 2025 was $87.6 million, an increase of $2.3 million from the previous quarter and $1.0 million from Q2 2024 [4][5] - Total non-interest income, excluding net gains and losses, decreased by $0.3 million, or 1%, compared to the linked quarter, primarily due to a decrease in insurance income [10][16] - Total non-interest expense decreased by $0.4 million compared to the linked quarter, driven by lower salaries and employee benefit costs [19][20] Asset Quality - Key asset quality metrics remained stable, with delinquency trends improving as loans considered current comprised 99.1% of the loan portfolio [33] - Criticized loans increased by $17.9 million, or 8%, compared to the previous quarter, driven by the downgrade of one commercial relationship [34] - The allowance for credit losses increased to $9.4 million compared to the previous quarter, with a ratio of 1.13% of total loans [37] Loans and Deposits - Total loan and lease balances increased by $173.1 million, or 11% annualized, compared to the previous quarter, driven by growth in commercial and industrial loans and residential real estate loans [28][29] - Total deposits decreased by $97.5 million compared to the previous quarter, primarily due to decreases in governmental deposit accounts and money market deposits [38][39] - Retail deposit balances represented 78% of total deposits as of June 30, 2025, consistent with previous periods [41] Stockholders' Equity - Total stockholders' equity increased by $15.5 million, or 1%, compared to the previous quarter, driven by net income and a decrease in accumulated other comprehensive loss [44][45] - The book value per common share was $32.33 as of June 30, 2025, reflecting an increase from previous periods [57]

Financial Performance - Peoples reported net income of $24.3 million for Q1 2025, down from $29.6 million in Q1 2024, representing a decrease in earnings per diluted common share from $0.84 to $0.68[166]. - The provision for credit losses was $10.2 million for Q1 2025, up from $6.3 million in the linked quarter and $6.1 million in Q1 2024, primarily driven by net charge-offs[169]. - Total stockholders' equity increased by $26.2 million compared to December 31, 2024, driven by net income of $24.3 million for the quarter[180]. - For the first quarter of 2025, net income was $24,336 thousand, a decrease from $26,930 thousand in the previous quarter and $29,584 thousand in the same quarter of 2024[234]. - Annualized net income adjusted for non-core items (after tax) for Q1 2025 was $99,860 thousand, down from $116,181 thousand in Q4 2024 and $119,807 thousand in Q1 2024[238]. Interest Income and Expenses - Net interest income for Q1 2025 was $85.3 million, a decrease of $1.4 million, or 2%, compared to Q1 2024, primarily due to lower accretion income[167]. - Total interest income decreased by $4,256 thousand for the three months ended March 31, 2025, compared to the previous quarter, primarily due to a decline in loan income[189]. - Total interest expense increased by $2,972 thousand for the three months ended March 31, 2025, compared to the previous quarter, driven by higher costs in deposit accounts[189]. - FTE net interest income for Q1 2025 was $85.538 million, compared to $86.822 million in the linked quarter[185]. Asset and Liability Management - Total assets remained flat at $9.25 billion as of March 31, 2025, compared to December 31, 2024, with total loan and lease balances increasing by $70.5 million, or 4% annualized[178]. - Total liabilities decreased to $8.11 billion at March 31, 2025, down from $8.14 billion at December 31, 2024, primarily due to a $174.2 million decrease in short-term borrowings[179]. - The allowance for credit losses was $63,060 thousand as of March 31, 2025, compared to $65,798 thousand at December 31, 2024[187]. - The amount of excess cash reserves maintained at the FRB of Cleveland decreased to $52.6 million at March 31, 2025, compared to $104.7 million at December 31, 2024[241]. Loan Portfolio - Total loans reached $6,354,462 thousand with a yield of 6.77% for the three months ended March 31, 2025, compared to $6,241,228 thousand and 7.01% in the previous quarter[187]. - The total loan and lease balances increased by $70.5 million, or 4% annualized, from December 31, 2024, primarily driven by a $74.5 million increase in other commercial real estate loans[246]. - Commercial real estate loans, including commercial construction loans, comprised the largest portion of the loan portfolio at March 31, 2025, with a total exposure of $2,299,337 thousand[250]. - The company maintains a diverse commercial loan portfolio, with no single industry comprising over 10% of the total loan portfolio[247]. Credit Quality - Total net charge-offs for the first quarter of 2025 were $8.121 million, or 0.52% of average total loans, down from $9.586 million, or 0.61%, in the linked quarter[256]. - The allowance for credit losses increased to $65.232 million as of March 31, 2025, from $63.348 million on December 31, 2024, representing a growth driven by macro-economic conditions, reserves on analyzed loans, and loan growth[252]. - As of March 31, 2025, total nonperforming assets (NPAs) decreased to $45.8 million, down from $48.9 million at December 31, 2024, representing a reduction of 4.3%[258]. - Total loans 90+ days past due and accruing decreased to $4.2 million at March 31, 2025, from $8.6 million at December 31, 2024, a decline of 51.3%[258]. Equity and Capital - The capital conservation buffer was 5.75% at March 31, 2025, indicating a strong capital position above regulatory requirements[265]. - As of March 31, 2025, Common Equity Tier 1 capital increased to $845,200 thousand, representing a ratio of 12.10%, up from 11.95% at December 31, 2024[266]. - Tangible book value per common share rose to $20.68 at March 31, 2025, compared to $19.94 at December 31, 2024, primarily due to an increase in tangible equity[268]. Operational Efficiency - The efficiency ratio for Q1 2025 was 60.7%, up from 59.6% in the linked quarter, mainly due to higher non-interest expenses[176]. - Total non-interest expense increased by $0.3 million for Q1 2025 compared to the linked quarter, primarily due to a $2.3 million increase in salaries and employee benefits[174]. - The efficiency ratio for Q1 2025 was 60.68%, up from 59.57% in Q4 2024 and 58.06% in Q1 2024, primarily due to higher non-interest expenses[232]. Regulatory and Competitive Environment - The company is subject to regulation by the Ohio Division of Financial Institutions, the Federal Reserve Board, and the FDIC, among others[159]. - Peoples may face increased competitive pressures from both financial and non-financial institutions, affecting credit spreads and customer acquisition[154]. - The company anticipates potential impacts from interest rate policies and economic conditions on its financial performance[154].

Financial Performance - Net income for the first quarter of 2025 was $24.3 million, with earnings per diluted common share of $0.68, down from $26.9 million and $0.76 in the fourth quarter of 2024[1]. - Net income for Q1 2025 was $24,336,000, down 9.8% from $26,930,000 in Q4 2024 and down 17.7% from $29,584,000 in Q1 2024[82]. - Basic earnings per common share for Q1 2025 were $0.69, down from $0.85 in Q1 2024, representing a decrease of 18.82%[50]. - Diluted earnings per common share for Q1 2025 were $0.68, compared to $0.84 in Q1 2024, reflecting a decline of 19.05%[50]. - Annualized net income adjusted for non-core items for Q1 2025 was $99,860,000, a decrease of 14.0% from $116,181,000 in Q4 2024 and a decrease of 16.7% from $119,807,000 in Q1 2024[82]. - Return on average assets for Q1 2025 was 1.07%, down from 1.17% in Q4 2024 and 1.32% in Q1 2024[82]. - Return on average stockholders' equity for Q1 2025 was 8.79%, down from 9.56% in Q4 2024 and 11.30% in Q1 2024[86]. Income and Expenses - Net interest income decreased by $1.3 million, or 1%, to $85.3 million for the first quarter of 2025, with a net interest margin of 4.12%, down from 4.15% in the linked quarter[4][5]. - Total interest income for Q1 2025 was $124,542,000, a decrease of 3.5% from $128,793,000 in Q4 2024[56]. - Net interest income after provision for credit losses decreased to $75,065,000 in Q1 2025 from $80,269,000 in Q4 2024, reflecting a decline of 6.4%[56]. - Total non-interest income, excluding net gains and losses, increased by $0.6 million, or 2%, driven by a rise in insurance income due to seasonal commissions[12]. - Total non-interest income increased to $27,099,000 in Q1 2025, up 8.0% from $25,089,000 in Q4 2024[56]. - The efficiency ratio for the first quarter of 2025 was 60.7%, up from 59.6% in the linked quarter, reflecting higher non-interest expenses[17]. - The efficiency ratio improved to 60.68% for the three months ended March 31, 2025, compared to 59.57% in the previous quarter, indicating a slight increase in operational efficiency[77]. Credit Quality - The provision for credit losses increased to $10.2 million for the first quarter of 2025, compared to $6.3 million in the fourth quarter of 2024, negatively impacting earnings per diluted common share by $0.22[8][9]. - Provision for credit losses rose to $10,190,000 in Q1 2025, compared to $6,267,000 in Q4 2024, indicating a significant increase of 62.5%[67]. - Annualized net charge-offs were 0.52% of average total loans for Q1 2025, down from 0.61% in the linked quarter and up from 0.22% in Q1 2024[31]. - Nonperforming loans (NPLs) as a percentage of total loans decreased to 0.62% in Q1 2025 from 0.67% in Q4 2024[66]. - The allowance for credit losses increased to $65,232,000 in Q1 2025 from $63,348,000 in Q4 2024, indicating a rise in provisions[62]. - The allowance for credit losses as a percentage of NPLs increased to 163.77% in Q1 2025 from 148.13% in Q4 2024, indicating a stronger reserve position[66]. Assets and Liabilities - Total assets as of March 31, 2025, were $9,246,000,000, a slight decrease from $9,254,247,000 at the end of Q4 2024[62]. - Total stockholders' equity increased by $26.2 million, or 2%, compared to December 31, 2024, primarily due to net income of $24.3 million[38]. - Total stockholders' equity increased by $75.8 million, or 7%, compared to March 31, 2024, driven by net income of $112.0 million over the last twelve months[39]. - Total deposits increased to $7,734,749,000 in Q1 2025, up from $7,590,205,000 in Q4 2024, representing an increase of 1.9%[62]. - Total loan and lease balances increased by $70.5 million, or 4% annualized, compared to December 31, 2024, with significant growth in commercial real estate loans and residential real estate loans[3][23]. - Total average assets for Q1 2025 were $9,195,467,000, an increase from $9,146,057,000 in Q4 2024 and $9,021,651,000 in Q1 2024[82]. Market and Shareholder Information - Cash dividends declared per common share remained stable at $0.40 for both Q1 2025 and Q4 2024, up from $0.39 in Q1 2024[50]. - The dividend payout ratio increased to 58.46% in Q1 2025 from 46.46% in Q1 2024, reflecting a rise of 25.83%[50]. - The closing price of common shares at the end of Q1 2025 was $29.66, down from $29.61 in Q1 2024[50]. - Tangible book value per common share increased to $20.68 as of March 31, 2025, up from $19.94 at December 31, 2024, representing a growth of 3.70%[79].