Peoples Bancorp (US:PEBO)2021-01-26 22:50Financial Data and Key Metrics Changes - The company reported record quarterly net income with diluted EPS of $1.05 in Q4 2020, compared to $0.51 in the linked quarter and $0.72 in Q4 2019 [7] - For the full year 2020, diluted EPS was $1.73, down from $2.63 in 2019 [7] - The company achieved positive operating leverage for the full year 2020 compared to 2019, meaning revenue growth outpaced expense growth [8] - The provision for credit losses totaled $26.3 million for 2020, with a recovery of $7.3 million recognized in Q4 [9][10] Business Line Data and Key Metrics Changes - The company’s PPP loan balances declined by $94 million or 20% from September 30, 2020, with $3.7 million of interest income recognized from PPP loans in Q4 [8][9] - New deposit accounts associated with PPP clients totaled nearly $15 million, with $35 million in loans [9] - The loan portfolio saw a 2% decline from September 30, 2020, primarily due to the forgiveness of PPP loans [19] Market Data and Key Metrics Changes - The company noted improvements in economic forecasts, with a 2% improvement in U.S. unemployment and a 3% improvement in Ohio GDP compared to previous forecasts [9] - The delinquency rate improved, with 98.9% of the total loan portfolio considered current at the end of December 2020, compared to 98.6% at the end of 2019 [16] Company Strategy and Development Direction - The company aims for low single-digit loan growth in 2021, excluding PPP loans, contingent on continued economic improvement [40] - The management expressed optimism about potential acquisitions within their footprint and emphasized a commitment to maintaining capital levels while considering stock buybacks [55][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of the COVID-19 pandemic on operations and expressed confidence in the resilience of their business model [6] - The company anticipates higher expenses in Q1 2021 due to seasonal factors but remains optimistic about loan growth based on early indicators [40] - Management expects to see a stabilization in charge-offs, projecting them to remain flat year-over-year in 2021, depending on economic recovery and vaccination progress [81] Other Important Information - The company repurchased $4.3 million in shares during Q4 2020, totaling nearly $30 million for the year [36] - The allowance for credit losses stood at 1.48% of total loans at December 31, 2020, a reduction from 1.67% at September 30, 2020 [37] Q&A Session Summary Question: What is the trend for PPP forgiveness? - Management indicated that approximately 31% of the PPP loans have been forgiven as of the call, with expectations for most of the first batch to be forgiven in Q1 and Q2 2021 [45] Question: What are the expectations for net charge-offs in 2021? - Management believes charge-offs may remain flat year-over-year, with a potential return to more normal levels in the 20 to 30 basis points range, depending on economic conditions [81] Question: What are the capital priorities for 2021? - The company remains committed to dividends and is optimistic about acquisitions, while expecting less buyback activity compared to 2020 [55]