Peoples Bancorp (PEBO) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The diluted earnings per share for the first quarter were $0.68, with a 2$31.90 and a 4% increase in tangible book value per share to $20.68 [6][8] - Annualized loan growth was over 4$75 million, while residential real estate loans increased by $13 million and consumer indirect loans grew by$10 million [17] - Fee-based income grew over 2%, primarily due to performance-based insurance commissions [9][23] - Nonperforming assets decreased by over $3 million, representing 50 basis points of total assets compared to 53 basis points at year-end [11][12] Market Data and Key Metrics Changes - The company experienced a decline in consumer confidence nationally, but this did not translate into reduced consumer demand in its lines of business [14][70] - The deposit composition was 76$26,000 [30][29] Company Strategy and Development Direction - The company aims to achieve positive operating leverage for 2025 compared to 2024, with expectations of loan growth between 4% and 6% [38][40] - The management is committed to maintaining high standards and has received recognition for being a top workplace and one of America's Best Banks [36][37] - The company is actively engaged in M&A discussions but is focused on strategic patience, preferring to find the right partner rather than rushing into acquisitions [73][74] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is uncertainty around tariffs, the actual impact on clients and business has been nominal so far [13][14] - The company expects to normalize the provision for credit losses in the second half of 2025, with a slight reduction anticipated in the second quarter [40][101] - Management expressed optimism regarding loan demand and production, particularly in the small business space [46][70] Other Important Information - The company announced an increase in its quarterly dividend for the tenth consecutive year, now at $0.41 per share, resulting in an annualized yield of 5.95% [31][32] - The efficiency ratio was reported at 60.7%, up from 59.6% for the linked quarter, driven by higher costs and lower accretion income [25][26] Q&A Session Summary Question: Insights on loan growth outlook amid tariff discussions - Management indicated strong visibility into the second quarter pipeline and expressed optimism despite potential macroeconomic impacts [44][46] Question: Timeline for normalizing charge-offs in leasing - Management expects charge-offs to continue declining throughout the year, with a significant reduction in high balance accounts contributing to this trend [50][51] Question: Fee income guidance reduction drivers - The reduction was attributed to softer performance-based insurance commissions and changes in mortgage income expectations [55][56] Question: Consumer behavior changes due to tariffs - Management noted increased indirect lending and strong mortgage pipeline activity, indicating consumer confidence in securing loans [68][70] Question: M&A strategy and geographic focus - The company aims to expand in Ohio, Kentucky, West Virginia, and Virginia, while remaining patient in finding the right acquisition opportunities [74][120]