Peoples Bancorp ((PEBO)) has held its Q1 earnings call. Read on for the main highlights of the call.
Peoples Bancorp’s recent earnings call presented a balanced sentiment, highlighting both positive achievements and ongoing challenges. The company reported growth in loans and deposits, along with accolades for workplace excellence and banking performance. However, these positives were tempered by a decline in net interest income, increased provisions for credit losses, and persistent issues within the leasing portfolio.
Loan Growth and Asset Quality Improvements
Peoples Bancorp experienced an annualized loan growth exceeding 4%, showcasing a robust expansion in their lending activities. The company also reported improvements in asset quality metrics, including reductions in the annualized net charge-off rate, nonperforming assets, and criticized and classified loans. These improvements reflect the company’s effective risk management strategies.
Deposit Growth
The company saw a 2% increase in deposit balances, driven by higher money market and governmental deposit account balances. This resulted in a core deposit growth of over 3%, indicating strong customer trust and engagement with Peoples Bancorp’s banking services.
Book Value and Tangible Book Value Growth
Peoples Bancorp reported a 2% growth in book value per share, reaching $31.90, while the tangible book value per share improved by 4% to $20.68. This growth in value per share underscores the company’s solid financial foundation and shareholder value enhancement.
Dividend Increase
Continuing its commitment to returning value to shareholders, Peoples Bancorp announced an increase to the quarterly dividend for the tenth consecutive year, reflecting confidence in its ongoing financial performance and stability.
Recognition and Awards
The company received recognition from USA TODAY as a top workplace for the fourth consecutive year and was named one of America’s Best Banks by Forbes in 2025. These accolades highlight Peoples Bancorp’s commitment to excellence in both employee satisfaction and banking services.
Decline in Net Interest Income
Despite the positive growth metrics, Peoples Bancorp faced a 1% decline in net interest income compared to the previous quarter, with a slight decrease in the net interest margin by 3 basis points. This decline presents a challenge in maintaining profitability amidst changing market conditions.
Increased Provision for Credit Losses
The provision for credit losses increased by nearly $4 million compared to the linked quarter, primarily driven by net charge-offs during the first quarter. This increase indicates heightened caution in credit risk management.
Elevated Net Charge-Offs in Leasing Portfolio
The company continued to experience elevated net charge-offs in its small ticket leasing business, although these declined by over $2 million compared to the linked quarter. This ongoing issue highlights the challenges within this segment of their portfolio.
Forward-Looking Guidance
Looking ahead, Peoples Bancorp anticipates loan growth of 4% to 6% for the year, with a forecasted full-year net interest margin between 4% and 4.2%, assuming potential rate reductions by the Federal Reserve later in the year. These projections reflect cautious optimism in navigating the evolving economic landscape.
In summary, Peoples Bancorp’s earnings call highlighted a mix of growth and challenges. While the company achieved significant progress in loan and deposit growth and received notable recognitions, it also faces ongoing challenges in net interest income and credit loss provisions. The forward-looking guidance suggests a strategic focus on maintaining growth and managing risks effectively.