Peoples Bancorp (US:PEBO)2022-11-03 19:04Acquisitions - Peoples announced a definitive agreement to acquire Limestone Bank in an all-stock merger valued at approximately $208.2 million[196]. - On April 1, 2022, Peoples Insurance acquired an insurance agency in eastern Kentucky for total consideration of $3.8 million, recognizing preliminary intangibles of $2.1 million[196]. - Peoples completed the acquisition of Vantage on March 7, 2022, for total consideration of $82.9 million, acquiring assets including $154.9 million in leases[196]. - The acquisition of Vantage resulted in preliminary goodwill of $27.2 million and other intangible assets of $13.2 million[197]. - Peoples acquired $1.2 billion in loans and $1.8 billion in deposits from the Premier Merger, with a transaction valued at $261.9 million[198]. - Recent acquisitions, including Vantage and Premier, have positively impacted average balances in loans and deposits, contributing to overall growth[229]. Financial Performance - Peoples reported net income of $26.0 million for Q3 2022, with earnings per diluted common share of $0.92, compared to $0.88 in Q2 2022 and a loss of $0.28 in Q3 2021[201]. - Net interest income for Q3 2022 was $67.1 million, an increase of $5.6 million, or 9%, from the linked quarter, and up $24.5 million, or 57%, from Q3 2021[202]. - The net interest margin increased to 4.17% in Q3 2022, up from 3.84% in the linked quarter and 3.50% in Q3 2021[202]. - Total non-interest income, excluding net gains and losses, increased by $0.8 million in Q3 2022 compared to the linked quarter, driven by a $1.3 million increase in lease income[206]. - For the first nine months of 2022, total non-interest income, excluding gains and losses, increased by $9.8 million, or 19%, compared to the same period in 2021[207]. - The efficiency ratio for Q3 2022 was 57.2%, down from 58.8% in the previous quarter and significantly improved from 94.7% in Q3 2021[210]. - For the first nine months of 2022, the efficiency ratio was 60.7%, a notable decrease from 78.4% for the same period in 2021[211]. Assets and Liabilities - Total assets as of September 30, 2022, were $7.01 billion, down 4% from $7.28 billion at June 30, 2022[214]. - Total liabilities decreased to $6.25 billion at September 30, 2022, from $6.49 billion at June 30, 2022[215]. - Total stockholders' equity decreased by $26.3 million from June 30, 2022, primarily due to an other comprehensive loss of $41.6 million[217]. - Total assets increased to $7,124,108 thousand as of September 30, 2022, compared to $7,121,663 thousand in the previous quarter[224]. - Total loans reached $4,591,002 thousand with a net interest margin of 5.33% for the quarter ended September 30, 2022, up from 5.00% in the previous quarter[224]. - Total interest-bearing deposits amounted to $4,250,586 thousand, with an interest rate spread of 0.22% for the quarter[224]. Credit Quality - The allowance for credit losses was $52,719 thousand, slightly decreased from $54,148 thousand in the previous quarter[224]. - The provision for credit losses was $1.8 million in Q3 2022, compared to a recovery of $0.8 million in the linked quarter and a provision of $9.0 million in Q3 2021[204]. - Net charge-offs for the third quarter of 2022 were $1,688,000, representing 0.15% of average total loans on an annualized basis[315]. - Nonperforming assets (NPAs) were $45,095,000 as of September 30, 2022, remaining stable at 0.64% of total assets compared to June 30, 2022[317]. - The allowance for credit losses as a percentage of nonaccrual loans was 189.95% as of September 30, 2022, indicating strong coverage[317]. Regulatory and Risk Management - The company is subject to regulation by the Ohio Division of Financial Institutions, the Federal Reserve Bank of Cleveland, and the FDIC[194]. - Peoples' financial condition and results are influenced by risks related to the COVID-19 pandemic, interest rate changes, and competitive pressures[187]. - The company emphasizes the importance of maintaining required capital levels and adequate sources of funding and liquidity[189]. - The company is focused on managing interest rate risk exposure and ensuring adequate liquidity through its asset-liability management function[332]. - The ALCO has established an IRR management policy to monitor and manage the level of interest rate risk[334]. Taxation - The effective tax rate for Q3 2022 was 22.2%, compared to 21.6% in the previous quarter and a tax benefit of 27.4% in Q3 2021[212]. - For the first nine months of 2022, the income tax expense was $20.2 million with an effective tax rate of 21.4%, up from $4.0 million and 16.8% in the same period of 2021[275]. Operational Expenses - Total non-interest expense increased by $2.4 million, or 5%, in Q3 2022 compared to the linked quarter, primarily due to increases in salaries and employee benefits[208]. - For the nine months ended September 30, 2022, total non-interest expense increased by $18.0 million, or 13%, compared to the same period in 2021, driven by increases in salaries and employee benefits[209]. - Salaries and employee benefit costs rose to $28.618 million in Q3 2022, a 12.0% increase from $25.589 million in Q3 2021[257]. - Data processing and software expense increased to $3.279 million in Q3 2022, up 29.6% from $2.529 million in Q3 2021[264].