Peoples Bancorp (US:PEBO)2025-10-30 18:05Financial Performance - Peoples reported net income of $29.5 million for Q3 2025, with earnings per diluted common share of $0.83, compared to $21.2 million and $0.59 in Q2 2025, and $31.7 million and $0.89 in Q3 2024[168]. - For the nine months ended September 30, 2025, net income was $75.0 million, or $2.10 per diluted common share, down from $90.3 million, or $2.55 per diluted common share for the same period in 2024[168]. - Annualized net income for Q3 2025 was $116,943, compared to $85,081 in Q2 2025, reflecting an increase in annualized net income adjusted for non-core items to $126,528[244]. - The annualized net income adjusted for non-core items for the first nine months of 2025 was $104,216, compared to $121,902 for the same period in 2024[244]. Earnings and Income Analysis - Non-core items negatively impacted earnings per diluted common share by $0.07 in Q3 2025, $0.01 in Q2 2025, and $0.01 in Q3 2024[168]. - Net interest income for Q3 2025 was $91.3 million, an increase of $3.8 million, or 4%, from the linked quarter, and a $2.4 million, or 3%, increase from Q3 2024[169]. - The efficiency ratio for Q3 2025 was 57.1%, an improvement from 59.3% in the linked quarter[181]. - Pre-provision net revenue (PPNR) for Q3 2025 was $48,340, an increase from $44,375 in Q2 2025, driven by higher net interest income from loans and investment securities[239]. Asset and Liability Management - Total assets as of September 30, 2025, were $9.62 billion, an increase from $9.54 billion at June 30, 2025, and $9.25 billion at December 31, 2024[183]. - Total liabilities were $8.44 billion at September 30, 2025, up from $8.39 billion at June 30, 2025, and $8.14 billion at December 31, 2024[184]. - Total stockholders' equity at September 30, 2025, increased by $29.4 million compared to June 30, 2025, primarily due to net income of $29.5 million[185]. - The total fair value of available-for-sale securities at September 30, 2025, was $976,906,000, down from $1,051,497,000 in the previous quarter[253]. Credit Quality and Losses - Provision for credit losses in Q3 2025 was $7.3 million, down from $16.6 million in the linked quarter and up from $6.7 million in Q3 2024[171]. - Net charge-offs for Q3 2025 were $6.8 million, or 0.41% of average total loans annualized, compared to $7.0 million, or 0.43%, in the linked quarter[173]. - The allowance for credit losses increased to $74,485 thousand in Q3 2025 from $65,186 thousand in Q2 2025[191]. - Total net charge-offs for the third quarter of 2025 were $6.829 million, or 0.41% of average total loans on an annualized basis, a decrease from $6.964 million, or 0.43%, in the linked quarter[267]. Regulatory and Compliance - The company is subject to regulation by the Ohio Division of Financial Institutions, the Federal Reserve Bank of Cleveland, and the FDIC[161]. - Peoples may face increased regulatory scrutiny and potential impacts from recent failures of other financial institutions[157]. - The capital conservation buffer was 5.79% at September 30, 2025, indicating a strong capital position above regulatory requirements[276]. Operational Highlights - As of September 30, 2025, Peoples operated 145 locations, including 127 full-service bank branches across multiple states[161]. - Peoples' business activities are currently limited to one reporting unit and reportable operating segment, which is community banking[161]. - The company continues to focus on controlling expenses while recognizing necessary costs for business growth[242]. Interest Rate and Economic Sensitivity - The company anticipates potential risks from changes in interest rate policies and inflationary pressures affecting borrowers' liquidity and repayment ability[156]. - The estimated increase in net interest income for a 300 basis point rise in interest rates is $36,689 thousand, which is a 9.7% increase[283]. - The bear steepener scenario produced an increase in net interest income of 0.8% and an increase in the economic value of equity of 5.6% as of September 30, 2025[286]. Non-Interest Income - Total non-interest income, excluding net gains and losses, for Q3 2025 decreased by $0.3 million compared to the linked quarter but increased by $1.2 million compared to Q3 2024[176]. - E-banking income for Q3 2025 was $6.538 million, slightly up from $6.359 million in Q3 2024[207]. - Trust and investment income for Q3 2025 was $5.414 million, up from $4.882 million in Q3 2024, reflecting increased brokerage income[210]. Loan Portfolio and Growth - Total loans for Q3 2025 amounted to $6,634,323 thousand, with a net interest margin of 6.71%, consistent with Q2 2025[191]. - The total loan and lease balances at September 30, 2025 increased by $456.9 million, or 7%, compared to September 30, 2024, with significant contributions from commercial and industrial loans and other commercial real estate loans[257]. - Loans secured by commercial real estate, including commercial construction loans, comprised the largest portion of the loan portfolio at September 30, 2025[259]. Employee and Operational Expenses - Salaries and employee benefit costs for the first nine months of 2025 increased to $117.4 million from $112.5 million in 2024, driven by annual merit increases[219]. - Total non-interest expense for the first nine months of 2025 increased by $7.7 million, or 4%, compared to the same period in 2024[180]. - Data processing and software expenses for the first nine months of 2025 increased to $21.7 million from $18.6 million in 2024 due to costs associated with recent technology projects[226].