Executive Summary

Q4 2024 diluted EPS was $0.76, down sequentially from $0.89 (Q3) and year-over-year from $0.96, but modestly above the street’s $0.75 EPS consensus cited by management; the miss to prior periods was driven by lower accretion income and higher non-interest expense, partially offset by stronger fee income from swaps .
Net interest margin compressed to 4.15% (vs. 4.27% in Q3 and 4.43% in Q4 2023) on lower acquisition accretion (23 bps vs. 39 bps in Q3), while provision remained elevated ($6.3M) on leasing charge-offs; efficiency ratio rose to 59.6% as revenue dipped and expenses increased .
Deposits grew $112M QoQ and $443M YoY; loan-to-deposit ratio held at 84% and capital stayed strong (CET1 11.96%, Tier 1 12.40%); asset quality improved with NPAs down 30% QoQ and allowance coverage of NPLs up to 148% .
2025 guidance reiterated: NIM stabilization at 4.0–4.2% (incl. accretion), fee income mid/high-single-digit growth, quarterly noninterest expense of $69–$71M (Q2–Q4, Q1 higher), loan growth 4–6%, provision similar to 2024 run rate; accretion expected at $10–$15M; deposit costs set to decline further .
Near-term stock narrative catalysts: confirmation that leasing charge-offs have peaked and are expected to decline gradually, visible deposit cost reductions supporting NIM stabilization, and ongoing M&A optionality to scale over $10B assets .

What Went Well and What Went Wrong

What Went Well

Fee-based income rose 5% QoQ, led by ~$1.0M higher swap fees; total non-interest income excluding gains/losses lifted to 24% of total revenue in Q4 .
Deposits expanded $111.9M QoQ, with meaningful growth in noninterest-bearing and retail CDs, while loan-to-deposit ratio stayed at 84%—a conservative funding stance .
Asset quality improved: NPAs fell 30% QoQ (to 0.53% of assets), allowance/NPL coverage strengthened to 148%, and delinquency remained stable (98.7% current) .

Management quotes:

“2024 marked the third consecutive year of record net income for Peoples.”
“On a core basis… we had net interest margin expansion of 4 basis points.”
“We expect deposit cost to continue to decline… CD specials at year-end 2024 were around 4% compared to 4.75%–5.25% at year-end 2023.”

What Went Wrong

Net interest margin compressed to 4.15% on accretion decline (23 bps vs. 39 bps in Q3) and provision remained elevated due to leasing charge-offs, dragging EPS vs. prior periods .
Non-interest expense rose $4.4M (+7%) QoQ, driven by higher other non-interest expense including acquisition-related legal contingency and increases in data processing and professional fees .
Net charge-offs accelerated to 0.61% annualized (from 0.38% in Q3), primarily from small-ticket leasing; management guided to gradual decline but still 4–5% NCOs expected for leasing longer term .

Analyst concerns (from Q&A):

Timing divergence between end-of-period loan growth and average balances, and clarity on deposit beta trajectory and broader credit risks outside leasing .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Diluted EPS ($)	$0.96	$0.89	$0.76
Net Interest Margin (%)	4.43%	4.27%	4.15%
Net Interest Income ($MM)	$88.37	$88.91	$86.54
Total Non-Interest Income ($MM)	$24.13	$24.79	$25.09
Adjusted Revenue (non-GAAP, $MM)	$115.08	$114.89	$113.65
Provision for Credit Losses ($MM)	$1.29	$6.74	$6.27
Efficiency Ratio (%)	55.98%	55.10%	59.57%

Estimate comparison (EPS):

Q4 2024 EPS actual $0.76 vs. consensus $0.75 (management-cited). Result: bold beat. Bold: Beat by $0.01 .
Revenue consensus unavailable from S&P Global due to access limits; management did not cite revenue consensus. S&P Global data unavailable.

Segment breakdown – Loans & Leases (Period-end, $MM):

Loan Category	Q4 2023	Q3 2024	Q4 2024
Construction	$364.02	$320.09	$328.39
Commercial real estate, other	$2,196.96	$2,180.49	$2,156.01
Commercial & industrial	$1,184.99	$1,250.15	$1,347.65
Premium finance	$203.18	$286.98	$269.44
Leases	$414.06	$433.01	$406.60
Residential real estate	$791.10	$777.54	$835.10
HELOC	$208.68	$233.11	$232.66
Consumer, indirect	$666.47	$677.06	$669.86
Consumer, direct	$128.77	$112.20	$111.05
Total loans & leases	$6,159.20	$6,271.84	$6,358.00

Key KPIs:

KPI	Q4 2023	Q3 2024	Q4 2024
Loan-to-Deposit Ratio (%)	84%	84%	84%
Deposits ($MM)	$7,152.30	$7,483.16	$7,595.08
NPAs / Total Assets (%)	0.43%	0.76%	0.53%
NPLs / Total Loans (%)	0.52%	0.99%	0.67%
Allowance / Total Loans (%)	1.01%	1.06%	1.00%
Allowance / NPLs (%)	192.62%	106.82%	148.13%
Net Charge-offs (annualized, %)	0.23%	0.38%	0.61%
CET1 (%)	11.56%	11.79%	11.96%
Tier 1 (%)	12.37%	12.58%	12.40%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (incl. accretion)	FY 2025	Reiterated prior quarter	4.0%–4.2%; each 25 bp cut = ~1–2 bps NIM impact	Maintained
Fee-based income growth	FY 2025	Reiterated prior quarter	Mid- to high-single-digit YoY growth	Maintained
Quarterly Noninterest Expense	Q2–Q4 2025	Reiterated prior quarter	$69–$71M; Q1 seasonally higher	Maintained
Loan Growth	FY 2025	Reiterated prior quarter	4%–6% YoY	Maintained
Provision for Credit Losses	FY 2025	Reiterated prior quarter	Similar to 2024 quarterly run rate	Maintained
Net Charge-off Rate (Total Co.)	FY 2025	Reiterated prior quarter	Modestly lower vs. 2024	Maintained
Small-ticket Leasing NCOs	Through cycle	4%–5% target	4%–5% target (post-peak in Q4)	Maintained
Accretion Income	FY 2025	New detail	$10–$15M; 15–20 bps NIM contribution (higher early, lower late)	New detail
Deposit Costs	H1 2025	Ongoing declines	Further declines; CD specials ~4% vs. 4.75–5.25% (FY23)	Maintained trend

Earnings Call Themes & Trends

Topic	Q2 2024 (prior)	Q3 2024 (prior)	Q4 2024 (current)	Trend
Leasing charge-offs	NCOs rising; leases a driver; allowance increased	NCOs 0.38%; leasing elevated; admin delinquencies inflated NPAs	NCOs peaked; aggressive clean-up; gradual decline toward 4%–5%	Improving
Deposit costs/betas	Deposit mix shift to CDs; demand deposits down	Deposit growth continued; retail CDs up on specials	CD specials ~4%; deposit costs reduced 6 bps QoQ; further declines expected	Improving
Accretion income	$5.8M; +29 bps NIM	$8.1M; +39 bps NIM	$4.9M; +23 bps NIM; fewer payoffs	Decreasing
C&I loan momentum	+$43M QoQ; strong demand	Down slightly YoY; some paydowns	+$97.5M QoQ; broad-based growth	Strengthening
Asset quality (ex-leasing)	Stable; criticized down; delinquency stable	NPAs up on admin past-due; criticized stable	NPAs -30% QoQ; delinquency improved; criticized/classified broadly stable	Improving
M&A optionality	Not highlighted	Not highlighted	Active dialogues; preference for larger deals to cross $10B	Building

Management Commentary

“We continue to beat consensus diluted EPS estimates, which were $0.75 for the fourth quarter and $3.30 for the full year of 2024.”
“On a core basis… excluding accretion… we had net interest margin expansion of 4 basis points.”
“We expect our net interest margin [2025]… between 4% and 4.2%… each 25 basis point reduction in rates results in a nominal impact of 1 or 2 basis points.”
“Our CD specials at year-end 2024 were around 4% compared to between 4.75% and 5.25% at year-end 2023.”
“Accretion income… $10 million to $15 million in 2025… 15 to 20 basis points” contribution to NIM .

Q&A Highlights

Loan growth timing: December production drove strong end-of-period growth while earlier-quarter paydowns weighed on averages .
Deposit repricing: proactive reductions already underway; more beta expected even without imminent Fed cuts .
Variable-rate loans: majority reprices monthly; supports asset sensitivity neutrality .
Swap fees: ~$1.2M in Q4 (vs. ~$0.2M in Q3); outlook embeds customer-demand variability .
CRE dynamics: ~$350M of 2025 maturities; strong sales market in core metros; multifamily exposure ~8% of loans with healthy market metrics .
Small-ticket leasing: portfolio ~$191M at year-end; runoff to continue; NCOs expected to trend down toward ~4% .

Estimates Context

EPS: Q4 2024 actual $0.76 vs. consensus $0.75 (management-cited). Result: beat .
Revenue: S&P Global consensus unavailable due to access limitations; management did not cite a revenue consensus.
In absence of SPGI access for detailed revenue/EBITDA estimates, near-term revisions likely modest: lower deposit costs and stabilized NIM support EPS trajectory, while leasing charge-off normalization reduces provision variability .

Note: S&P Global estimates for EPS and revenue could not be retrieved due to request limits; comparisons use management-cited consensus where available .

Key Takeaways for Investors

Q4 demonstrated resilience: fee income strength and deposit growth offsetting NIM compression from lower accretion; EPS beat by $0.01 vs. consensus provides near-term support .
The pivot to deposit cost cuts (CD specials ~4%) and monthly repricing on most variable loans position NIM to stabilize at 4.0–4.2% in 2025—even with modest Fed cuts—reducing earnings volatility .
Credit normalization: leasing charge-offs peaked in Q4; expected gradual decline to 4–5% NCOs for leasing supports provision stability and risk premium compression .
Strong capital and liquidity (CET1 ~12%, tangible equity/tangible assets 8.01%) provide flexibility to fund growth and dividends (payout ~53% of Q4 earnings) without stressing balance sheet .
Broad-based C&I loan growth (+$97.5M QoQ) and rising noninterest-bearing deposits bolster core franchise momentum into 2025 .
M&A optionality is a positive convexity: active dialogues with preference for scaling above $10B; potential to capture share during larger regional combinations .
Near-term trading: watch for disclosures on Q1 seasonal expense uptick and early 2025 accretion trajectory; medium term thesis hinges on deposit beta execution, leasing normalization, and steady fee growth .

PEOPLES BANCORP INC (PEBO)·Q4 2024 Earnings Summary