Nasdaq: PEBO In Investor estor Pr Pres esent entati ation on nd Qu 2 nd Quart rter er 20 2018 18
Sa Safe e Harb rbor or St Statement tement Statements in this presentation which are not historical are “forward -looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include discussions of the strategic plans and objectives or anticipated future performance and events of Peoples Bancorp Inc. (“Peoples”) . The information contained in this presentation should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “ 2017 Form 10- K”) and Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (the “June 30, 2018 Form 10- Q”), filed with the Securities and Exchange Commission (“SEC”), which is available on the SEC’s website (www.sec.gov) or at Peoples’ website (www.peoplesbancorp.com). Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in Peoples’ 2017 Form 10 - K under the section, “Risk Factors” in Part I, Item 1A, and in Peoples’ June 30, 2018 Form 10 -Q under the heading "ITEM 1A. RISK FACTORS" in Part II. As such, actual results could differ materially from those contemplated by forward-looking statements made in this presentation. Management believes that the expectations in these forward-looking statements are based upon reasonable assumptions within the bounds of management's knowledge of Peoples’ business and operations. Peoples disclaims any responsibility to update these forward-looking statements to reflect events or circumstances after the date of this presentation. 2
Ov Over erview view • Profile ile an and Inv nvest stmen ment t Rat atio iona nale le • Acqu quis isition ition • St Strat ategy gy • Q2 2018 18 Performanc rmance • Appendix pendix 3
Pr Prof ofile le and nd Inv nvest estment ment Rational onale
Cor orporate porate Pr Prof ofile ile • Finan ancia ial ho holdi ding ng com ompany pany he headqu dquar artere ered in Mariet etta, a, Ohi hio. o. – Provides a broad range of banking, insurance, and investment services • Cur urren ent snapshot: pshot: – Assets: $4.0 billion; Loans: $2.7 billion – Deposits: $2.9 billion – Market capitalization: $766 million – Assets Under Admin/Mgmt: $2.3 billion • Cur urren ent foo ootpr prin int – Demographics: • Median income: $45,000 – Key industries: • Health care • Manufacturing (plastics/petrochemicals) • Oil/gas/coal activities (shale opportunities) • Education and social services • Tourism – Unemployment: • OH: 5.2% OH: 4.3% • WV: 4.7% WV: 5.4% • KY: 5.3% KY: 4.1% • US: 4.3% US: 4.0% Market data as of July 23, 2018 Unemployment data as of May 2018 Financial data as of June 30, 2018 5 5
Inv nvestmen estment t Ra Rationale onale • Unique communi nity ty banking ng model – Greater revenue diversity (30% fee-based) than the average $1 - 10 billion bank – Strong community reputation and active involvement – Local market teams capable of out-maneuvering larger banks – More sophistication and product breadth than smaller banks ( insurance, retirement plans, swaps, etc.) • Stron ong, g, diverse fee-base ased d busines nesse ses – 20th largest bank-owned insurance agency, with expertise in commercial, personal, life & health – Wealth management – $2.3 billion in assets under administration and management, including brokerage, trust and retirement planning • Capacity ity to grow our franchi hise se – Strong capital and fundamentals to support M&A strategy – Proven integration capabilities and scalable infrastructure • Committe tted to discipl iplined ned executio tion – Strong, integrated enterprise risk management process – Dedicated to delivering positive operating leverage – Focused on business line performance and contribution, operating efficiency, and credit quality • Attract activ ive e di dividen dend d op oppo portunity – Targeting 40% to 50% payout ratio – Dividend paid increased from $0.15 per share for Q1 2016 to $0.28 for Q1 and Q2 2018 6
Acquis uisiti ition on
ASB SB Fi Finan nancial cial Cor orp p Acquisit isition ion ASB Financial Corp merged into Peoples on April 13, 2018 Six full-service bank branches in the Portsmouth and Cincinnati, Ohio regions, and two loan production offices in the Cincinnati, Ohio region Total consideration paid was $41.5 million Financial Summary as of 4/13/18 The acquisition included a - Total assets = $275 million mortgage origination group - Total loans = $240 million operating out of the Cincinnati, - Total deposits = $199 million Ohio area, which specializes in originating and selling mortgage In total, the acquisition loans to the secondary market. contributed $0.03 to earnings per diluted common share for the second quarter of 2018. 8
Stra rateg tegy
Stra St rategic tegic Ro Road d Ma Map “Best Community Bank in America” • • Commitment to Superior Shareholder Returns Great Place to Bank • • Great Place to Work Meaningful Impact on Our Communities Extraor aordin inary ary Respons onsib ible le Profi fitab table le Reve venu nue e Growt wth First st-Cla lass Workp kplace lace Risk Manag agem ement ent Client nt Experience ience • Broad • Our Way of Life oad Deliver ivery Channels els • Under • Right t People le / R Right Job erstan tand Customer er Needs • Delig • Asset ight the Customer er t Quality ity • Appetite tite for Winnin ing • Sales es & Service vice Proce cess • Knowled • Complian edgeable, eable, Caring ng iance ce / Regulatory latory • Define e the Ideal al Client t • Culture e of Lear arnin ing Associates ciates Consisten stently tly Profi file le for New Delive iverin ing Competent tent • Oper eration ational al Risk Advice ice / Solution tions Relation ationships ips • Coachin ing / D Develop elopment ent • Infor • Best Client ormation ation Secur urity ty nt Retentio ention • Consistent tent Exper erience ience at • No Whiners Every Touch ch Point ers / No Excus uses es • Deepen en Relat lation ionships ips / • Change e Management ement Cross Sell • DWYSYW YWD • Accou ountab tabil ility ity / • Execu cution tion Risk Performan formance ce Metrics ics • Seek k Client t Referrals errals • Relati ation onship hip Review views s / V VIP Calls; s; Value e Added ed • Reputa • M & utatio tiona nal l Risk & A • Reward ard / Recog ogni niti tion on 1. 1. Create te a Winni ning ng Culture: ture: Embrace change / be active learners / help each other win / communicate effectively How w we 2. 2. Human n Capita ital l Developm lopment: nt: Define the behaviors and goals / provide the training / measure / coach / reward do it: 3. 3. Pricing ing Disci cipl pline ine: Focus on the risk adjusted margin / fair prices, fair returns 4. 4. Opera rating ting Effic icien ienci cies: Quest for continuous improvement / revenue growth faster than expense growth 5. 5. Merger Integra gration tion: Manage the risk / retain and grow the revenue / lower the cost / delight the community 10
St Stra rategic tegic Pr Prioriti orities es See page 18 • Focused on sustainable revenue growth Pos ositive itive See page 19 • Disciplined expense management Ope perating rating • Expand revenue vs expense growth gap beyond 2% See page 20 Leverage verage • Drive core efficiency ratio to 60% See page 21 See page 22 • Preserve key metrics superior to most of our peers Supe peri rior or See page 24 • Balance growth with prudent credit practices Asset set Quality ality • Improve diversity within the loan portfolio See page 26 • Achieve meaningful loan growth each year See page 27 High gh • Maintain emphasis on core deposit growth Quality ality See page 28 • Adjust earning asset mix by shifting investments to loans Balanc lance See page 29 • Prudent use of capital (dividends, share repurchases & Shee eet See page 30 acquisitions) 11
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