Peoples Bancorp (US:PEBO)2019-04-23 21:02Financial Data and Key Metrics Changes - The company reported record net income of $14.4 million or $0.73 per diluted share, an increase from $13.9 million or $0.71 per diluted share in the previous quarter and $11.7 million or $0.64 per diluted share a year ago [9] - Return on average assets was 1.46% and return on average stockholder equity was 11.12% [10] - Net interest income grew by 16% compared to the first quarter of 2018, with a net interest margin expansion of three basis points to 3.80% compared to the linked quarter [10] - Total deposit growth was 6% since December 31, 2018, with a recovery of $1.8 million on a previously charged-off commercial loan positively impacting earnings [11] Business Line Data and Key Metrics Changes - Commercial and industrial loans grew by $28 million or 20% annualized compared to year-end, while consumer loans increased by $15 million or 12% annualized [24][26] - Total loans increased by $9 million compared to December 31, 2018, with organic total loans growing $19 million or 3% annualized [22] - The efficiency ratio was 62.7% for the first quarter of 2019, compared to 62% in the fourth quarter of 2018 [14] Market Data and Key Metrics Changes - The company experienced a decline in non-performing assets by $1.2 million or 6% compared to December 31, 2018, and a 5% increase compared to March 31, 2018 [15][16] - Criticized loans decreased by $24 million or 22% compared to December 31, 2018, and by $27 million or 23% compared to March 31, 2018 [17] Company Strategy and Development Direction - The company is focused on growing its core business while preparing for the First Prestonsburg acquisition, which is expected to be accretive to earnings by approximately $0.06 to $0.07 during 2019 [51][52] - The company anticipates loan growth of 5% to 7% for the full year 2019, with a strong pipeline for commercial loans [25][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position, noting strong credit metrics and a solid dividend policy [80][82] - The company expects to generate positive operating leverage for the full year and anticipates an effective tax rate between 19% and 19.5% for 2019 [56] Other Important Information - The company announced a quarterly dividend increase to $0.34 per share, representing a payout of 47% of first-quarter diluted earnings per share [49] - The tangible book value per common share increased to $19.00 compared to $18.30 at December 31, 2018 [48] Q&A Session Summary Question: Discussion on fee income trends - Management noted seasonal impacts on fee income, with expectations for mortgage banking to pick up in Q2 and Q3 [60][61] Question: Insights on commercial real estate lending - Management indicated a cautious approach to commercial real estate lending, focusing on prime developers [65] Question: Impact of customer behavior on deposit service charges - Management acknowledged that customers are managing deposits more intelligently, leading to a decline in overdraft fees [66][67] Question: Loan growth expectations - Management confirmed a 20% increase in the commercial loan pipeline compared to the previous year, amounting to low $50 million [70] Question: Positioning of the company moving forward - Management expressed satisfaction with the current credit portfolio and indicated a preference for maintaining a strong capital base [82][93]