Peoples Bancorp (US:PEBO)2024-05-02 16:27Financial Performance - Peoples reported net income of $29.6 million for Q1 2024, with earnings per diluted common share of $0.84, compared to $33.8 million and $0.96 in Q4 2023, and $26.6 million and $0.94 in Q1 2023[174]. - The company reported a net income of $116.4 million over the last twelve months, contributing to the increase in stockholders' equity[190]. - For the three months ended March 31, 2024, net income was $29,584,000, a decrease from $33,825,000 in the previous quarter and an increase from $26,560,000 in the same period last year[251]. - Annualized net income for Q1 2024 was $118,986,000, down from $134,197,000 in Q4 2023 and up from $107,716,000 in Q1 2023[247]. - The company reported a net income adjusted for non-core items of $29,788,000 for Q1 2024, compared to $36,580,000 in Q4 2023 and $28,718,000 in Q1 2023[247]. Net Interest Income and Margin - Net interest income for Q1 2024 was $86.6 million, a decrease of $1.7 million or 2.0% from the previous quarter, but an increase of $13.8 million or 18.9% compared to Q1 2023[175]. - Net interest margin for Q1 2024 was 4.27%, down from 4.44% in the previous quarter and 4.53% in Q1 2023, primarily due to increased interest expense on deposits[175]. - Net interest income for the first quarter of 2024 was $86.64 million, compared to $72.88 million in the same period last year, reflecting a significant increase[194]. - Net interest income for Q1 2024 grew by 18.9% compared to Q1 2023, driven by increases in market interest rates and the Limestone Merger[201]. - The net interest margin decreased to 4.27% in Q1 2024 from 4.44% in the previous quarter, primarily due to a decrease in accretion income[200]. Acquisitions and Mergers - The Limestone Merger, completed in April 2023, contributed to the increase in accretion income compared to Q1 2023[176]. - The Limestone Merger, completed on April 30, 2023, added $1.46 billion in assets, primarily loans, to the company[188]. - Acquisition-related expenses for Q1 2024 were $(0.1) million, a decrease from $1.3 million in the linked quarter, primarily related to the Limestone Merger[177]. - The increase in PPNR for Q1 2024 compared to Q1 2023 was attributed to increased net interest income from the Limestone Merger[241]. Credit Losses and Charge-offs - The provision for credit losses for Q1 2024 was $6.1 million, up from $1.3 million in the linked quarter and $1.9 million in Q1 2023, driven by macro-economic deterioration, increased reserves, and loan growth[177]. - Net charge-offs for Q1 2024 were $3.3 million, or 0.22% of average total loans annualized, compared to $3.5 million (0.23%) in the linked quarter and $1.5 million (0.13%) in Q1 2023[177]. - The increase in the allowance for credit losses was attributed to a deterioration in macro-economic conditions, increased reserves on individually analyzed loans, and loan growth[270]. - Total gross charge-offs for the first quarter of 2024 were $3.9 million, a decrease from $4.8 million in the fourth quarter of 2023[271]. - The increase in net charge-offs year-over-year was primarily due to higher charge-offs in leases, indirect consumer loans, and commercial industrial loans[273]. Assets and Liabilities - Total assets as of March 31, 2024, were $9.27 billion, up from $9.16 billion at December 31, 2023, and $7.31 billion at March 31, 2023, primarily due to increases in investment securities and loan balances[188]. - Total liabilities increased to $8.21 billion as of March 31, 2024, up from $8.10 billion at December 31, 2023, and $6.49 billion at March 31, 2023[189]. - Total stockholders' equity rose by $8.5 million to $1.45 billion at March 31, 2024, driven by net income of $29.6 million for the first quarter[190]. - Total deposits increased by $784.8 million, or 14%, compared to March 31, 2023, excluding deposits from the Limestone Merger[189]. - Total outstanding loans and leases reached $6.2 billion as of March 31, 2024, compared to $6.16 billion at December 31, 2023[262]. Non-Interest Income and Expenses - Total non-interest income, excluding net gains and losses, decreased by $0.2 million in Q1 2024 compared to the linked quarter, primarily due to a $1.6 million decrease in lease income and a $0.8 million decrease in electronic banking income[179]. - Total non-interest expenses for Q1 2024 increased by $0.8 million, or 1%, compared to the linked quarter, with salaries and employee benefits costs rising by $1.6 million[183]. - The efficiency ratio for Q1 2024 was 58.0%, compared to 56.0% for the linked quarter and 57.8% for Q1 2023, reflecting an increase in interest expense on deposits[186]. - Total non-interest expense for Q1 2024 was impacted by various factors, including a decrease in data processing and software expenses to $5,769,000 from $6,029,000 in Q4 2023[229]. - Insurance income for Q1 2024 increased by $2.2 million compared to the previous quarter, totaling $6,498 thousand[209]. Regulatory and Risk Factors - The company is subject to regulation by the Ohio Division of Financial Institutions, the Federal Reserve Board, and the FDIC[168]. - Future performance is subject to risks including interest rate changes, inflationary pressures, and competitive pressures in the financial services industry[161]. - The company emphasizes the importance of understanding forward-looking statements as strategic objectives rather than absolute targets[170]. Capital and Liquidity - The capital conservation buffer was reported at 5.60% as of March 31, 2024, indicating a strong capital position above regulatory requirements[283]. - As of March 31, 2024, Common Equity Tier 1 capital amounted to $780,017 thousand, with a ratio of 11.69%, slightly down from 11.75% on December 31, 2023[284]. - Total risk-based capital increased to $894,662 thousand, resulting in a ratio of 13.40% as of March 31, 2024, compared to 13.38% at the end of 2023[284]. - Management believes the current liquidity sources and funding availability will meet anticipated cash obligations and off-balance sheet commitments[300]. - The estimated increase in net interest income for a 300 basis point rise in interest rates is projected to be $14,508 thousand, a 4.3% increase[291].