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PEOPLES BANCORP INC (PEBO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 EPS of $0.68 declined QoQ and YoY (Q4 2024: $0.76; Q1 2024: $0.84) as provision rose to $10.2M on leasing charge-offs; headline NIM fell 3 bps to 4.12%, but core NIM ex-accretion expanded 3 bps, and fee income rose 8% QoQ; asset quality metrics improved .
  • Results missed S&P Global consensus: EPS $0.68 vs $0.73 est (−$0.05) and “Revenue” $102.2M vs $112.7M est (−$10.6M); both Q3 and Q4 2024 were beats, making Q1 a reversal vs recent trend (S&P Global) [Q1/Q4/Q3 estimates data: GetEstimates].
  • Balance sheet trends were constructive: loans grew ~4% annualized QoQ (+$70.5M), deposits +2% QoQ (+$144.5M) with a strategic $96M reduction in brokered CDs; uninsured deposits ~27% and well-collateralized; CET1 improved to 12.09% .
  • FY25 outlook reaffirmed: NIM 4.0–4.2% assuming two 25 bp Fed cuts; loan growth 4–6%; noninterest expense $69–71M in Q2–Q4; provision normalizing in H2; dividend raised to $0.41 (10th consecutive yearly increase) .
  • Near-term stock drivers: miss vs consensus and elevated provision (albeit improving Leasing trajectory) vs improving deposit mix, core NIM expansion ex-accretion, and reiterated FY25 guide .

What Went Well and What Went Wrong

  • What Went Well

    • Core spread resilience: despite a 3 bps headline NIM dip to 4.12%, core NIM (ex-accretion) expanded 3 bps and core NII grew; accretion contribution moderated to 17 bps from 23 bps .
    • Funding mix improved: total deposits +$144.5M QoQ (+2%) driven by money market and governmental deposits; brokered CDs −$96.0M; L/D ~83% stable .
    • Asset quality improved: NPAs fell to 0.50% of assets (0.53% prior), criticized and classified loans declined; allowance coverage vs NPLs rose to 163.8% .
    • Management tone/discipline: reiterated 2025 guide (positive operating leverage; NIM 4.0–4.2% with limited rate sensitivity) and highlighted continued expense control and pricing discipline .
    • Quote: “On a core basis, which excludes accretion income, net interest margin expanded by three basis points” – CEO Tyler Wilcox .

  • What Went Wrong

    • Consensus miss: EPS missed by ~$0.05 and revenue by ~$10.6M vs S&P Global consensus, reversing prior-quarter beats (see Estimates Context) (S&P Global) [GetEstimates].
    • Provision higher than anticipated: provision rose to $10.2M (Q4: $6.3M) on leasing charge-offs; the provision reduced EPS by ~$0.22 .
    • Efficiency ratio worsened: 60.7% vs 59.6% QoQ and 58.1% YoY on seasonal first‑quarter expenses (stock comp forfeiture true-up and HSA contributions) .
    • Fee income mix: insurance performance commissions were softer YoY; mgmt trimmed fee-growth expectations modestly (more mortgages held on balance sheet) .

Financial Results

Headline metrics and ratios (company-reported)

MetricQ1 2024Q4 2024Q1 2025
Net Interest Income ($M)$86.640 $86.536 $85.255
Total Noninterest Income ($M)$25.779 $25.089 $27.099
Provision for Credit Losses ($M)$6.102 $6.267 $10.190
Diluted EPS ($)$0.84 $0.76 $0.68
Net Interest Margin (%)4.26% 4.15% 4.12%
Efficiency Ratio (%)58.06% 59.57% 60.68%
Return on Avg Assets (%)1.32% 1.17% 1.07%

vs. S&P Global Consensus (EPS, Revenue)

MetricQ3 2024Q4 2024Q1 2025
EPS – Actual ($)0.905*0.828*0.698*
EPS – Consensus Mean ($)0.823*0.757*0.730*
Revenue – Actual ($M)106.971*247.472*102.164*
Revenue – Consensus Mean ($M)111.558*110.000*112.717*
  • Note: Asterisks indicate Values retrieved from S&P Global.
  • Q1 2025 surprise: EPS −$0.03 to −$0.05 vs different EPS bases (company diluted EPS $0.68 vs S&P primary EPS ~0.70); Revenue −$10.6M (S&P definition) (S&P Global) [GetEstimates].
  • Prior trend: Q3 and Q4 2024 were beats on EPS vs S&P consensus (S&P Global) [GetEstimates].

Balance sheet and credit KPIs (period-end)

KPIMar 31, 2024Dec 31, 2024Mar 31, 2025
Loans & Leases ($M)$6,202.8 $6,358.0 $6,428.5
Deposits ($M)$7,326.6 $7,590.2 $7,734.7
CET1 Ratio (%)11.69% 11.95% 12.09%
Tangible Eq / Tangible Assets (%)7.37% 8.01% 8.34%
Book Value / Share ($)$29.93 $31.26 $31.90
Tangible BV / Share ($)$18.39 $19.94 $20.68
Allowance / Loans (%)1.05% 1.00% 1.01%
NPLs / Loans (%)0.63% 0.67% 0.62%
NPAs / Assets (%)0.50% 0.53% 0.50%
Uninsured Deposits (% of total)28% 26% 27%

Loan portfolio composition (period-end)

Category ($M)Mar 31, 2024Dec 31, 2024Mar 31, 2025
Construction$314.7 $328.4 $319.1
CRE (Other)$2,243.8 $2,156.0 $2,230.5
C&I$1,214.6 $1,347.6 $1,343.8
Premium Finance$239.0 $269.4 $264.1
Leases$422.7 $406.6 $395.5
Residential RE$781.9 $835.1 $848.2
HELOC$221.1 $232.7 $235.4
Consumer Indirect$650.2 $669.9 $680.3
Consumer Direct$113.6 $111.1 $110.6
Total Loans & Leases$6,202.8 $6,358.0 $6,428.5

Credit cost detail

  • Annualized net charge-offs: 0.22% (Q1’24), 0.61% (Q4’24), 0.52% (Q1’25) .
  • Leasing net charge-offs: $1.06M (Q1’24), $7.62M (Q4’24), $5.41M (Q1’25) .

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2024 call)Current Guidance (Q1 2025)Change
Net Interest MarginFY 20254.0–4.2% with modest 1–2 bps per 25 bp cut 4.0–4.2% assuming two 25 bp cuts; low rate sensitivity Maintained
Noninterest ExpenseQ2–Q4 2025 (quarterly)$69–$71M $69–$71M Maintained
Loan GrowthFY 20254%–6% 4%–6% Maintained
Fee Income GrowthFY 2025Mid- to high-single digits Mid-single digits; modest reduction (insurance performance commissions softer; more mortgages retained) Slightly Lower
Provision Run RateFY 2025Similar to 2024 quarterly run-rate Normalize in H2 2025 after elevated H1 on leasing; Q2 still elevated Clarified cadence
DividendOngoing$0.40/qtr as of Q4 $0.41/qtr declared (10th straight annual increase) Raised

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
NIM and AccretionNIM +9 bps QoQ; accretion $8.1M added 39 bps NIM 4.15% (from 4.27%), accretion $4.9M added 23 bps NIM 4.12%; accretion $3.5M added 17 bps; core NIM +3 bps Accretion tapering; core spread stable
Deposit Pricing/BetasLowered CD specials post Fed cuts; middle-of-the-pack pricing Deposits +$112M; continued CD repricing; deposit betas lag Deposits +2% QoQ; brokered −$96M; scope to reprice CDs lower Positive funding tailwind
Small-ticket Leasing CreditExpected peak in Q4; normalization to ~4–5% NCOs medium term Q4 peak; path toward ~4–5% NCOs; specific reserves utilized NCOs improved; Q2 still elevated; thereafter normalizing; high-balance exposure shrinking Improving through 2025
Macro/TariffsCautious on demand/CRE paydowns Neutral/limited rate sensitivity; cautious optimism Tariff impact nominal so far; continued monitoring; potential reshoring benefits Watch, but limited current impact
Fee MixLease/mortgage income variable Swap fees spike $1.2M; expect variability Insurance performance commissions softer YoY; more mortgages on balance sheet Slight headwind vs prior
Capital/BuybacksCapital improving; opportunistic buybacks Capital build; opportunistic M&A and buybacks Repurchases executed in April; continue monitoring Ongoing optionality
M&A / >$10BActive dialogue; patience, prefer larger deal Investments to cross $10B; patient toward larger deals Active conversations; 2 years organic headroom; strategic patience Unchanged stance

Management Commentary

  • Strategic discipline: “We expect to achieve positive operating leverage for 2025… anticipate a full year net interest margin of between 4% and 4.2%… reduced our asset sensitivity… now relatively neutral” – CEO Tyler Wilcox .
  • Funding and capital: “Deposit balances grew 2%... reduced our brokered CDs by over $96 million… tangible equity to tangible assets ratio improved to 8.3%” – CFO Kathryn Bailey .
  • Leasing normalization: “We are exactly where we thought we would be… high-balance accounts will be between $8–$10 million by year-end, down from over $50 million last year” – CEO .
  • Dividends: “Increase to our quarterly dividend (now $0.41 per share)… 10th consecutive year” – CFO ; dividend declaration PR confirms terms .
  • Core profitability: “On a core basis… net interest margin expanded by three basis points” – CEO .

Q&A Highlights

  • Loan growth outlook: Pipeline strong into Q2; Q1 annualized growth ~4% aligns with 2025 4–6% guide; acknowledges potential payoff pickup .
  • Leasing credit cadence: Q2 provision still elevated; gradual normalization thereafter as high-balance exposures roll off; yields holding 18–20% .
  • Fee income: Guidance trimmed modestly due to softer insurance performance commissions and more on-balance-sheet mortgages; wealth/trust sensitive to markets .
  • Margin drivers: Ample runway to reprice retail CDs lower even absent near-term Fed cuts; accretion expected ~15–17 bps in Q2, <15 bps in H2 .
  • Capital returns/M&A: Executed buybacks in April; maintain strategic patience, leaning to a larger deal to cross $10B but no rush .
  • Tax rate: Run-rate now ~22–22.5% (vs prior ~21.5%) .

Estimates Context

  • Q1 2025 vs S&P Global consensus: EPS $0.698* vs $0.730* (miss), “Revenue” $102.164M* vs $112.717M* (miss). Prior two quarters were beats on EPS (Q4: $0.828* vs $0.757*; Q3: $0.905* vs $0.823*) (S&P Global) [GetEstimates].
  • Implications: Street models likely lower near-term EPS on higher H1 provisioning and slightly softer fee trajectory; margin and funding mix trends (lower CD rates, reduced brokered) and sustained 4–6% loan growth may offset into H2 as provision normalizes .
  • Note: S&P “Revenue” uses a standardized definition and can differ from company’s adjusted revenue presentation (S&P Global) [GetEstimates].

Key Takeaways for Investors

  • Core NIM expansion ex-accretion and deposit repricing tailwinds support the 4.0–4.2% FY25 NIM guide despite accretion tapering; near-term spread resilience looks credible .
  • Leasing credit costs are tracking the guided path (Q4 peak → Q1 down → Q2 still elevated → H2 normalization); watch Q2 provision cadence and leasing NCOs for confirmation .
  • Funding quality improved: deposits +2% QoQ with brokered −$96M; uninsured deposits ~27% and largely collateralized; loan/deposit ~83% affords balance-sheet flexibility .
  • Capital trending higher (CET1 12.09%); dividend raised to $0.41 (≈6% yield at cited date) with opportunistic buybacks resuming in April—supportive of total shareholder return .
  • Short-term: EPS/revenue miss and elevated provision likely weigh; any evidence of faster lease normalization or stronger fee momentum could catalyze a rebound [GetEstimates] .
  • Medium-term: Reaffirmed guide, core margin stability, and improving credit backdrop position PEBO for positive operating leverage in 2025; M&A optionality remains, but with strategic patience .

Appendix: Additional Disclosures and Data Points

  • Q1 details: Net interest income $85.3M (−1.3M QoQ); NIM 4.12% (−3 bps); accretion $3.5M (17 bps); provision $10.2M (−$0.22 EPS impact); fee income +$0.6M QoQ (insurance seasonal commissions) .
  • Asset quality: NPAs 0.50% of assets; criticized loans 3.53% of loans (down QoQ); classified loans 1.93% (down QoQ); coverage vs NPLs 163.77% .
  • Liquidity: Liquid/liquefiable assets $723.7M; borrowing capacity $1.1B; additional contingent sources $3.9B .
  • Deposit mix: Retail 76% / Commercial 24%; DDA 34% of total deposits; noninterest-bearing 20% .
  • Dividend declaration (April 22, 2025): $0.41 per share, payable May 19, 2025; ~5.9% annualized yield at the referenced price .

S&P Global note: Values marked with * are retrieved from S&P Global.