In Investor Pre r Presentation 2 nd Qu Quarte ter 2 2016 Safe H - - PowerPoint PPT Presentation

SLIDE 1

In Investor Pre r Presentation

2nd Qu Quarte ter 2 2016

Nasdaq: PEBO

SLIDE 2

Safe Safe H Har arbor St Stat atement

2

Statements in this presentation which are not historical are “forward-looking statements” within the meaning

• f 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, 2015 (the “2015 Form 10-K”) and Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the Securities and Exchange Commission (the "SEC") and each

• f

which is available

• n

the SEC’s website (www.sec.gov)

• r

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’ 2015 Form 10-K under the section, “Risk Factors” in Part I, Item 1A and in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. 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.

SLIDE 3

Ove verview

• Profi

file le a and nd Inv nvestm tment nt Ratio tiona nale

• 2nd

nd Quart

rter er 2016 P Perf erform rmance

• St

Strat ategy

• 201

2016 Pe Perfor

• rmance O

Outlook

• ok
• Appen

pendi dix

3

SLIDE 4

Profi file an and d In Inve vest stment Rat Rationale

SLIDE 5

Corp

• rporate Prof

e Profile

• Fin

inancial l hold ldin ing c company hea eadquarter ered ed in in Mariet ietta, Oh Ohio io.

– Provide a broad range of banking, insurance, and investment services

• Cur

urrent sn snapsh shot:

– Assets: $3.3 billion; Loans: $2.1 billion – Deposits: $2.5 billion – Market capitalization: $396 million – Assets Under Management: $2.0 billion

• Cur

urrent footp

• otprint

– Located along major transportation routes – Demographics:

• Total population: Approx. 4.1 million
• Median income: $46,588

– Key industries:

• Health care
• Manufacturing (plastics/petrochemicals)
• Oil/gas/coal activities (shale opportunities)
• Education and social services
• Tourism

– Unemployment:

• OH: 5.0%
• WV: 6.0%
• KY: 5.0%
• US: 4.9%

Market data as of July 21, 2016 Unemployment data as of June 2016 Financial data as of June 30, 2016

5

SLIDE 6

In Inve vestment Rat Rationale

• Uniq

ique ue com communit ity banking m mode

• del

– Greater revenue diversity for a community bank our size (32% fee-based) – Strong community reputation and active involvement – Local market teams capable of outmaneuvering larger banks – More sophistication and product breadth than smaller banks

• Stron
• ng, g

growin

• wing fee-based

ed busines esses es

– Sizable market share in several areas – Prior insurance acquisitions producing steady returns – Potential wealth management opportunities

• Capa

pacit ity t to

• grow
• w our
• ur franch

chise

– Strong capital and fundamentals to support M&A strategy – Proven integration capabilities and scalable infrastructure, including in-process upgrade to a best-in-class core banking platform – Passionate and talented associates

• Com
• mmitted to
• di

disciplin ciplined e exe xecut cutio ion

– Strong, integrated enterprise risk management process – Focused on business line performance and contribution, positive operating leverage, efficiency, and credit quality

6

SLIDE 7

2nd Quart rter 2 2016 Perf Perform

• rmance

SLIDE 8

Second Q Qua uarter 2016 H 2016 Hig ighli lights

• Second c

cons nsecutiv ive q quart rter deliv liverin ring $8 $8 millio million n earnin rnings

• Annu

nnualiz lized lo loan n gro rowth o

• f 4%

4% wit ith stro rong ng p perf rforma rmance in in both I Ind ndire irect a and nd Comme mmerc rcia ial & l & Ind ndustri rial L l Lend nding ing

• Asset q

qualit lity imp impro roving ing w wit ith ne net charg rge-off ffs fa falling t to 0.03%

• f lo

loans ns, a and nd re reduced le levels ls o

• f both crit

ritic icize ized a and nd cla lassif ifie ied lo loans ns

– Cla lassifie ied loa loans / tie ier 1 ca capit pital l at lowe lowest le level sin ince ce t the he rece cession

• Ex

Expense co controls h holding co core e effici ciency r ratio be below 6 65% (64.85% fo for the qu quarter, 6 64.56% Y YTD)

• Fe

Fee i income a at 32% of f reve venues

8

SLIDE 9

Su Summ mmary Fi Finan ancials

9

Investment securities $ 855,326 $ 885,462 $ (30,136)

• 3%

Gross loans 2,128,790 2,105,115 23,675 1% Allowance for loan losses (17,838) (17,261) (577) 3% Net loans 2,110,952 2,087,854 23,098 1% Total assets 3,333,455 3,294,929 38,526 1% Non-interest-bearing deposits 699,695 716,202 (16,507)

• 2%

Interest-bearing deposits 1,833,276 1,870,881 (37,605)

• 2%

Total deposits 2,532,971 2,587,083 (54,112)

• 2%

Stockholders' equity 437,753 428,486 9,267 2% Net interest income $ 26,308 $ 25,767 $ 541 2% Provision 727 955 (228)

• 24%

Other gains/(losses) (2) 65 (67)

• 103%

Non-interest income 12,367 13,054 (687)

• 5%

Non-interest expense 26,505 26,282 223 1% Income tax expense 3,479 3,654 (175)

• 5%

Net income $ 7,962 $ 7,995 $ (33) 0% Return on assets 0.97% 0.98%

• 0.01%
• 1%

Efficiency ratio (1) 65.08% 64.26% 0.82% 1% Pre-provision net revenue / avg assets (1) 1.48% 1.54%

• 0.06%
• 4%

(1) Non-GAAP financial measure. See Appendix for additional information.

Balance Sheet Highlights Income Statement Key Ratio Metrics

Metrics QE 6/30/16 QE 3/31/16 O/(U) $ O/(U) %

SLIDE 10

Ope perat ating E Expe pense ses

2Q-15 3Q-15 4Q-15 1Q-16 2Q-16

$27,758 $25,920 $26,027 $26,282 $26,415 $1,020 $192 $1,250 $90

Core Non-Interest Expenses * Non-Core Non-Interest Expenses *

10

* No Non-GAAP f financial mea

• easure. See Appendix.

(thousands ds)

Fou Four con

• nsec

ecutive q quarters of

• f wel

ell-controlled e d expenses

(4. 4.8%) d decli line in in core e e expens enses es from rom 2 2Q-15 t 5 to 2Q 2Q-16 16

SLIDE 11

Co Core Ef Effici ciency

68. 68.65 65% 71. 71.32 32% 69. 69.42 42% 68. 68.78 78% 71. 71.45 45% 65. 65.30 30% 64. 64.69 69% 64. 64.26 26% 64. 64.85 85%

61.00% 63.00% 65.00% 67.00% 69.00% 71.00% 73.00% 6/30/ 0/2014 2014 9/30/ 0/2014 2014 12/31/ 31/2014 2014 3/31/ 1/2015 2015 6/30/ 0/2015 2015 9/30/ 0/2015 2015 12/31/ 31/2015 2015 3/31/ 1/2016 2016 6/30/ 0/2016 2016

Ad Adjusted Ef Efficiency R Ratio * ** 11

Effi fficiency h has imp mproved a as a result o

• f

f exp xpense c control a and revenue g growth

* Acquisition o

• f

f NB&T F Finan ancial G Group, In

• Inc. (“NB&T”) was

was c comp mpleted o

• n Mar

arch 6, 2015 **The Adjusted Effi fficiency R Rat atio i is a a non-GAAP financia ial m l measure ( (see A Appendix ix). It exclu ludes a acquis isit itio ion c costs, p pensio ion s settle lement c char arges, severan ance c char arges an and certai ain o

• ther n

non- core e expenses.

(2 (2.8%) C CAG AGR

Firs rst Q Quarter r Follo lowin ing Acquis isit itio ion

• f Ohio H

Heritage Ba Banc ncorp Firs rst Quart rter r Follo lowin ing Acquis isit itio ion

• f N

NB&T* T*

SLIDE 12

Loa

• an Grow

n Growth

6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30/2016 $1,285 $1,356 $1,415 $1,477 $1,537 $727 $694 $658 $628 $592

Originated Loans Acquired Loans

12

($mill illio ions)

Or Originated l loa

• ans w

wer ere u up p 19% ov

• ver

er t the pr he prior

• r yea

year q quarter, a and d 9% since yea year-end

19% 19% gr growth

SLIDE 13

Asse sset Qu Qual ality

42. 42.6% 6% 39. 39.0% 0% 40. 40.7% 7% 46. 46.4% 4% 44. 44.9% 9% 39. 39.4% 4% 25. 25.8% 8% 23. 23.4% 4% 24. 24.5% 5% 21. 21.7% 7% 20. 20.1% 1% 17. 17.9% 9%

3/31/ 1/20 2015 15 6/30/ 0/20 2015 15 9/30/ 0/20 2015 15 12/31/ 31/2015 015 3/31/ 1/20 2016 16 6/30/ 0/20 2016 16

Criticized / Tier 1 Capital + ALLL Classified / Tier 1 Capital + ALLL 13

(percen ent)

Crit ritic icized a and Cla lassified lo loan le levels ls c contin inue t to im impro rove

SLIDE 14

6/30/16 C Cred redit E Expos

• sure

re S Spot

• tlight

98.60% 1.40% % of To Total Cre redit Commitments $

Ene Energy I Ind ndus ustry Ex Exposure (O (Oil/ il/Gas/Coal) l) Other Energy

14

95.24% 4.76% % of To Total Cre redit Commitments $

Large Relatio tionship hip E Exposure (Relatio tionships hips > > $15 M MM) Other Relationships > $15 MM

Direct ct credi edit ex expos posure t to

• en

ener ergy i indu dustry clien ents r rem emains low

• w at 1.4

.4% of

• f

total c commi mmitments, and exp xposure t to large r relationships is less t than 5 5% % of f total c commi mmitments

SLIDE 15

CRE C Concentration An Anal alysis

15

• CRE

RE ex exposure is wel well bel elow w supervisory y criter teria esta tablished to to iden enti tify y insti titu tuti tions wi with th heigh ghte tened ed CRE RE concen entr trati tion risk

– Exposure levels also compare favorably to peer institution concentration levels

• Source: SNL Financial, Commercial Bank Call Report Data as of 3/31/16
• Per April 2013 OCC-FRB Guidance. CLD Loans defined as total loans for construction, land, and land development. CRE Loans defined as total non-owner-occupied CRE loans (including CLD)

42% 28% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 110.0%

Peer Bank Subs --CLD Loans / Risk-Based Capital

204% 151% 0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% 400.0%

Peer Bank Subs - CRE Loans / Risk-Based Capital

SLIDE 16

16

Lo Loan an an and d Depo posit C Compo mposi sition

Construct ctio ion 4. 4.7% 7%

CR CRE 33. 33.3% 3% C & & I 17. 17.8% 8% Residentia ial l Re Real al E Estat ate 26. 26.1% 1% HEL HELOCs 5. 5.1% 1% Consume mer 13. 13.0% 0%

Loa

• an Por

Portfolio ( (Excluding Depos eposit OD ODs)

Retail C il CDs 16. 16.5% 5% MMDA MMDA 15. 15.9% 9% Broker ered ed CDs Ds 0. 0.8% 8% Savin ings gs 17. 17.3% 3% Inter eres est- Bearin ing Demand 10. 10.0% 0% Publi ublic Fu Funds ds 11. 11.9% 9% Non

• n-

Inter eres est Bearin ing Demand 27. 27.6% 6%

Dep epos

• sit Por

Portfolio

Dat ata as a as of June 30, 30, 2016 2016

SLIDE 17

17

Ins Insurance ce & & Inv Investment t Incom Income C Compos

• sition

Life & e & Healt lth 12. 12.9% 9% P&C Commercial Lines es 58. 58.1% 1% P&C Perso sonal nal Lines es 14. 14.6% 6% Performanc ance base sed 12. 12.6% 6% Oth Other 1. 1.8% 8% Brok rokerage 28. 28.3% 3% Fi Fidu duciary 57. 57.7% 7% Employee ee Benef enefits 14. 14.0% 0%

Insu nsurance Re Reve venue Investme ment R Revenue

Trailin iling Twelve M Months from 6/30/ 0/16 16

SLIDE 18

Busi siness H s Highl hlight hts

• Commercia

ial B l Ban ankin ing

– Loans were up $61 million or 5% from June 2015 – Strong pipeline with $25 million in scheduled net fundings in Q3 2016 – $20 million lending “house limit” although legal limit is over $40 million

• Re

Retail B ail Ban ankin ing

– Non-interest bearing DDA at 25% of total deposits – $65 million or 47% indirect loan growth compared to June 2015

• Insur

uran ance

– Commercial Property & Casualty lines comprising 58% of revenue – Expanding Life & Health segment comprising 13% of revenue

• Trust a

st and Investm tments ts

– $2.0 billion in assets under management – Retirement planning, 401(k) administration, brokerage and trust services

18

SLIDE 19

Stra rategy

SLIDE 20

Strate tegic gic Ro Road M ad Map ap

1.

• 1. Create a Winning C

Culture: : Embrace change / active learners / help each other win / communicate effectively 2.

• 2. Human

an Capital al Development: Define the behaviors and goals / provide the training / measure / coach / reward 3.

• 3. Pricin

ing D Discip ciplin line: Focus on the risk-adjusted margin / fair prices, fair returns 4.

• 4. Operat

atin ing Efficie ciencie cies: Quest for continuous improvement / revenue growth faster than expense growth 5.

• 5. Merg

rger I r Integration: Manage the risk / retain and grow the revenue / lower the cost / delight the community

How w we do do it: it:

“B “Best C Commu mmunity B Bank i k in Ame merica”

Profit itab able le R Revenue G Growth Responsib ible le Ris isk M Man anag agement

• M &

& A A

• Sales

es & & Servi vice P e Proces ess

• Defin

ine t the Ideal al C Clie lient Pro rofile f for N r New Relat atio ionship ips

• Bes

Best C Clien ent R Ret eten ention

• Relat

atio ionship ip R Revie iews; Valu alue A Added

• Deep

eepen R Rel elationships / / Cross S Sell ll

• Unders

rstand C d Customer r Need eeds

• Seek

eek C Clien ent R Ref eferrals Extra raordi rdinary ry Clie lient E Exp xperience Superior W Workforce ce

• Broad D

Deliv livery C y Chan annels

• Delight th

t the Custo tomer

• Knowled

edgea eable, C e, Caring Associates C Consis istently y Deliver vering C Competen ent Advic ice / / Solutio ions

• Consis

istent E Exp xperience at at Ev Every To Touch P Point nt

• DWYSYWD
• Ri

Right P Peop

• ple /

/ Ri Right J Job

• b
• Appetite fo

for Winni nning

• Cu

Culture o

• f

f Learni ning

• Coaching /

/ Devel evelopment

• No Whin

iners / N No E Exc xcuses

• Accountab

abil ilit ity / / Performance ce M Metrics cs

• Re

Reward / / Re Recog cognition

• Our W

Way of f Life fe

• Asset Q

Qualit ality

• Complian

iance / / Regulat atory

• Operat

atio ional R al Risk

• Info

nformation S n Security

• Ch

Chang nge M Mana nagement

• Exe

xecution R Ris isk

• Reputat

atio ional R al Risk

20

• Commitment to Superior Shareholder Returns
• Great Place to Work
• Great Place to Bank
• Meaningful Impact on Our Communities

SLIDE 21

21

Strate tegic P gic Prioritie ities

• Primary emphasis on revenue growth
• Disciplined expense management
• Expand revenue vs. expense growth gap beyond 2%
• Target core efficiency ratio below 65%

Pos

• sit

itiv ive Operat ating ng Leverag age

• Balance growth with prudent credit practices
• Improve diversity within the loan portfolio
• Preserve key metrics superior to most of our peers

Superi rior r Asset t Quality

• Adjust earning asset mix by shifting investments to loans
• Achieve meaningful loan growth each year
• Maintain emphasis on core deposit growth
• Prudent use of capital (dividends, share repurchases &

acquisitions)

High Quality Balanc ance Sheet eet

SLIDE 22

22

Stra rategic T Targ rget ets

Current 5 5 Year Strategy P Planning Period = = 2015 2015-2019 019

Net interest margin (FTE) 3.53% 3.53% 3.57% 3.60% to 3.80% Total revenue growth (1) 32.40% 9.02%

• 1.50%

5% to 8% Total expense growth (1) 35.38%

• 14.59%

3.39% 3% to 6% Non-interest income to total revenue 32.71% 33.63% 31.98% 35% to 40% Efficiency (2) 75.50% 64.26% 65.08% 58% to 62% NPAs to total loans + OREO 0.98% 1.00% 1.04% 0.70% to 1.00% Net charge-offs to average loans (3) 0.78% 0.09% 0.03% 0.30% to 0.50% Loans to total assets 63.59% 63.89% 63.86% 60% to 70% Deposits to total funding 90.25% 91.24% 88.74% 80% to 90% Tier 1 capital 13.68% 13.41% 13.33% 10% to 13%

• Tang. equity to tang. assets (2)

8.69% 8.88% 9.10% 7.50% to 8.50% Return on equity 2.69% 7.59% 7.45% Over 10% Return on assets 0.35% 0.98% 0.97% Over 1% Pre-provision net revenue to assets (2) 0.96% 1.54% 1.48% Over 1.80% Revenue vs. expense growth gap

• 2.98%

23.61%

• 4.89%

Over 2% Dividend payout (4) 96.35% 34.37% 36.47% 30% to 40%

(1) Annualized. 2015 grow th rates reflect impacts from acquisition of NB&T (2) Non-GAAP financial measure. See Appendix (3) 2016 quarterly ratio is annualized. (4) Dividend data reflects amounts declared w ith respect to earnings for the period indicated.

Execute on Strategies

Actual 2015

Superior Asset Quality High Quality Balance Sheet

5-Year Strategic Target Range Metrics

Positive Operating Leverage

QE 3/31/16 QE 6/30/16

SLIDE 23

Infor formation

• n a

accurate a as o

• f July 2016

2016

23

Strate tegic C gic Capabilitie ilities

Wells Bank of City Community Wes Park United Online C Channel Chase Fargo America PNC Huntington National Trust Banco National Bank Bill Pay Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Online Account Opening Yes Yes Yes Yes Yes Yes Yes No No No No Online Loan Applications Yes Yes Yes Yes Yes Yes No No No No Yes Online Financial Management No Yes Yes Yes Yes Yes No No No No No ACH, Wires Stop Payments Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Positive Pay Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Tax Services Yes Yes Yes Yes Yes Yes No No No No Yes P2P Payments Yes Yes Yes Yes No Pending Yes Yes No Yes No Online Chat No No Yes No Yes Yes No No No Yes No Text Alerts Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Bill Pay-Specific to Mobile Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes iPhone/iPad/Andriod Apps Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Text Banking Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Mobile Deposit Capabilities Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes Business Support Center Yes Yes Yes Yes Yes Yes No No No Yes No Facebook Yes Yes Yes Yes Yes Yes Yes No Yes Yes No Twitter Yes Yes Yes Yes Yes Yes Yes No Yes Yes No YouTube Yes Yes Yes Yes Yes Yes No No No Yes Yes LinkedIn Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Prepaid Debit Card Yes Yes No Yes No Yes No Yes No No No Prepaid Gift Card No Yes No Yes No Yes No Yes Yes No Yes Employer-Loaded PayCards Yes Yes Yes Yes No Yes No No No No No PEO EOPLES ES BAN ANCORP Social al M Media C a Chan annel Mobile C Channel Othe her C Cha hannels

Indi dica cate tes Peo eoples es h has as ad advan antag age o e over er C Commu mmunity Ban ank g group

SLIDE 24

2016 Perf Perform

• rmance Ou

Outlook

• ok

SLIDE 25

2016 2016 O Out utlo look

• Main

intain in cor core efficie iciency ratio in io in the he 65% range

– Expenses met quarterly run rate target of $26.5 million in Q2 providing a ratio of 65.08%, and an adjusted ratio of 64.85% – Targeting core efficiency ratio to remain in the 65% range for the year, driven primarily by continuation of expense management initiatives

• Con
• ntinue

ue dr driv ivin ing or

• rganic

c loa loan g growt

• wth

– Annualized Q2 loan growth was 4% – Optimistic that we can still hit 2016 loan growth target of 6%, but will not sacrifice credit quality

• Su

Sustai tain net et in inter teres est t mar argin in th the l e low 3.50s

– Q2 margin was 3.57%, including 11 bps of accretion from acquisitions – Expecting margin in the low 3.50s for the year as accretion from acquisitions continues to taper

• Retu

eturn to to to top-qua quartil ile asset qua qualit lity

– Q2 net charge-off rate of 3 bps – Net charge-offs forecasted at low end of our 20 – 30 bps range for the year

25

SLIDE 26

2016 2016 O Out utlo look

• Com
• mpl

plete cor core banking system pla platfor

• rm con

conversio ion

– Converting to a best-in-class third party platform – Will support future growth and improve operational efficiencies

• Con
• ntinue

ue e exe xecut cuting on

• n acquis

cquisit itio ion strategy

– Primarily focused on insurance and investment opportunities in 2016 to build fee- based revenue. Aiming to move fee-based revenue contribution toward strategic target of between 35 and 40% of revenues – With core banking system platform conversion scheduled for 4th quarter 2016, any bank acquisition would not close until mid-2017, at the earliest

• Main

intain in stron

• ng div

divide idend d pa payout

• ut ratio

io

– Continue paying out 30 – 40% of earnings

26

SLIDE 27

Appe ppendix

SLIDE 28

28

Qu Quar arterly Fi Finan ancial Su Summ mmar ary

2Q 3Q 4Q 1Q 2Q 2015 2015 2015 2016 2016

Diluted EPS $0.27 $0.22 $0.14 $0.44 $0.44 Return on common equity 4.69% 3.89% 2.42% 7.59% 7.45% Return on assets 0.61% 0.51% 0.32% 0.98% 0.97% Pre-provision net revenue to assets (1) (2) 0.99% 1.40% 1.31% 1.54% 1.48% Net interest margin (FTE) 3.46% 3.55% 3.56% 3.53% 3.57% Efficiency ratio (1) 74.19% 65.81% 67.94% 64.26% 65.08% Adjusted efficiency ratio (1) (3) 71.45% 65.30% 64.69% 64.26% 64.85% Tier 1 capital 14.06% 13.77% 13.67% 13.41% 13.33% Total capital 15.04% 14.97% 14.54% 14.29% 14.23%

• Tang. equity to tang. assets (1)

8.73% 8.88% 8.69% 8.88% 9.10% TBV per share (1) $14.52 $14.86 $14.68 $15.39 $15.93 NPAs to loans + OREO 1.25% 1.29% 0.98% 1.00% 1.04% NPAs to TE + ALLL 8.87% 8.92% 7.05% 7.08% 7.19% ALLL to originated loans 1.42% 1.72% 1.19% 1.17% 1.16% Net c/o’s to avg loans (2) 0.11% 0.15% 2.63% 0.09% 0.03% Loan loss prov to avg loans (2) 0.13% 1.14% 1.39% 0.18% 0.14%

(1) Non-GAAP financial measure. See Appendix (2) Annualized (3) Excluding acquisition and other non-core expenses

Metrics Financial Performance Capital Asset Quality

SLIDE 29

29

Key Drivers o

• f

f Shar Shareholde der V Val alue

LTM Revenue Growth

29. 29.8% 8% 5. 5.9% 9% 6. 6.5% 5%

PEBO EBO Peer eers $1 $1-5B 5B

LTM Fee Revenue to Average Assets

1. 1.51% 51% 1. 1.18% 18% 1. 1.07% 07%

PEBO EBO Peer eers $1 $1-5B 5B

NPAs to Loans and OREO

1. 1.00% 00% 1. 1.15% 15% 1. 1.34% 34%

PEBO EBO Peer eers $1 $1-5B 5B

Peers include: SRCE, CHCO, CCNE, CBU, CTBI, FFKT, FMNB, FISI, FDEF, FFBC, THFF, FRME, GABC, HBNC, LKFN, MSFG, PRK, RBCAA, STBA, SYBT, TMP, TSC, UCFC $1-5B group represents all publically-traded Midwest banks with total assets between $1 and $5 billion Source: SNL Financial as of March 31, 2016

Dividend Yield

3. 3.07% 07% 2. 2.75% 75% 2. 2.14% 14%

PEBO EBO Peer eers $1 $1-5B 5B Growth largely attributable to NB&T acquisition

SLIDE 30

Non

• n-GA

GAAP M P Mea easure res

30

($ in Thousands)

Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Income (loss) before income taxes 7,144 $ 5,504 $ 3,008 $ 14,816 $ 11,649 $ 11,441 $ Add: Provision for loan losses 672 5,837 7,238 14,097 955 727 Add: Loss on debt extinguishment – – – 520 – 707 Add: Loss on loans held-for-sale and OREO 73 50 398 529 1 – Add: Loss on securities – – – – – – Add: Loss on other assets 63 1 100 739 30 97 Less: Recovery of loan losses – – – – – – Less: Gain on debt extinguishment – – – – – – Less: Gain on loans held-for-sale and OREO – – – – – – Less: Gains on securities 11 62 56 729 96 767 Less: Gains on other assets – – – – – 35 Pre-provision net revenue 7,941 $ 11,330 $ 10,688 $ 29,972 $ 12,539 $ 12,170 $ Average assets (in millions) 3,220 $ 3,210 $ 3,241 $ 3,112 $ 3,273 $ 3,307 $ Pre-provision net revenue to average assets (a) 0.99% 1.40% 1.31% 0.96% 1.54% 1.48%

PRE-PROVISION NET REVENUE

Pre-provision net revenue (PPNR) represents a non-GAAP financial measure commonly used to evaluate the operating performance and trends of financial services companies, including Peoples. PPNR represents the earnings capacity that can be either retained in order to build capital or used to absorb unexpected losses and preserve existing capital. PPNR is defined as net interest income plus non-interest income minus non-interest expense. This measure is non-GAAP since it excludes provision for (recovery of) loan losses and all gains and/or losses included in earnings.

(a) Presented on an annualized basis

SLIDE 31

Non

• n-GA

GAAP M P Mea easure res

31

EFFICIENCY RATIO

The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This measure is non-GAAP since it excludes intangible amortization and all gains and/or losses included in earnings, and uses the fully tax-equivalent net interest income.

($ in Thousands)

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Total non-interest expense 20,003 $ 22,207 $ 23,981 $ 32,914 $ Less: intangible amortization 282 367 516 673 Efficiency ratio numerator 19,721 $ 21,840 $ 23,465 $ 32,241 $ Net interest income, fully tax-equivalent 16,375 $ 18,205 $ 20,475 $ 21,828 $ Non-interest income 9,719 9,861 10,178 11,508 Efficiency ratio denominator 26,094 $ 28,066 $ 30,653 $ 33,336 $ Efficiency ratio 75.58% 77.82% 76.55% 96.72%

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EFFICIENCY RATIO

The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This measure is non-GAAP since it excludes intangible amortization and all gains and/or losses included in earnings, and uses the fully tax-equivalent net interest income.

($ in Thousands)

Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Total non-interest expense 28,778 $ 26,112 $ 27,277 $ 115,081 $ 26,282 $ 26,505 $ Less: intangible amortization 1,144 1,127 1,133 4,077 1,008 1,007 Efficiency ratio numerator 27,634 $ 24,985 $ 26,144 $ 111,004 $ 25,274 $ 25,498 $ Net interest income, fully tax-equivalent 25,320 $ 26,061 $ 26,379 $ 99,588 $ 26,275 $ 26,810 $ Non-interest income 11,926 11,906 12,101 47,441 13,054 12,367 Efficiency ratio denominator 37,246 $ 37,967 $ 38,480 $ 147,029 $ 39,329 $ 39,177 $ Efficiency ratio 74.19% 65.81% 67.94% 75.50% 64.26% 65.08%

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CORE NON-INTEREST EXPENSE

Core non-interest expenses are non-GAAP since they exclude the impact of acquisition related costs, pension settlement charges, severance charges, search firm fees and legal settlement charges.

($ in Thousands)

Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Total non-interest expense 28,778 $ 26,112 $ 27,277 $ 115,081 $ 26,282 $ 26,505 $ Less: core conversion associated costs

• 90

Less: acquisition related costs 732 109 838 10,723

• Less: pension settlement charges

103 83 5 460

• Less: other non-core charges

185

• 407

592

• Core non-interest expenses

27,758 $ 25,920 $ 26,027 $ 103,306 $ 26,282 $ 26,415 $

($ in Thousands)

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Total non-interest expense 20,003 $ 22,207 $ 23,981 $ 32,914 $ Less: acquisition related costs 1,272 1,463 1,869 9,044 Less: pension settlement charges 536 361 17 269 Less: other non-core charges

• 298
• Core non-interest expenses

18,195 $ 20,383 $ 21,797 $ 23,601 $

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ADJUSTED EFFICIENCY RATIO

The adjusted efficiency ratio is a key financial measure used to monitor performance. The adjusted efficiency ratio is calculated as core non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This measure is non-GAAP since it uses core non-interest expenses (which excludes the impact of acquisition related costs, pension settlement charges, severance charges, search firm fees, and legal settlement charges), and excludes intangible amortization and all gains and/or losses included in earnings, and uses the fully tax-equivalent net interest income.

($ in Thousands)

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Total core non-interest expenses 18,195 $ 20,383 $ 21,797 $ 23,601 $ Less: intangible amortization 282 367 516 673 Adjusted efficiency ratio numerator 17,913 $ 20,016 $ 21,281 $ 22,928 $ Net interest income, fully tax-equivalent 16,375 $ 18,205 $ 20,476 $ 21,828 $ Non-interest income 9,719 9,861 10,178 11,508 Efficiency ratio denominator 26,094 $ 28,066 $ 30,654 $ 33,336 $ Adjusted efficiency ratio 68.65% 71.32% 69.42% 68.78%

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ADJUSTED EFFICIENCY RATIO

The adjusted efficiency ratio is a key financial measure used to monitor performance. The adjusted efficiency ratio is calculated as core non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income. This measure is non-GAAP since it uses core non-interest expenses (which excludes the impact of acquisition related costs, pension settlement charges, severance charges, search firm fees, and legal settlement charges), and excludes intangible amortization and all gains and/or losses included in earnings, and uses the fully tax-equivalent net interest income.

($ in Thousands)

Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Total core non-interest expenses 27,758 $ 25,920 $ 26,027 $ 103,306 $ 26,282 $ 26,415 $ Less: intangible amortization 1,144 1,127 1,133 4,077 1,008 1,007 Adjusted efficiency ratio numerator 26,614 $ 24,793 $ 24,894 $ 99,229 $ 25,274 $ 25,408 $ Net interest income, fully tax-equivalent 25,320 $ 26,061 $ 26,379 $ 99,588 $ 26,275 $ 26,810 $ Non-interest income 11,926 11,906 12,101 47,441 13,054 12,367 Efficiency ratio denominator 37,246 $ 37,967 $ 38,480 $ 147,029 $ 39,329 $ 39,177 $ Adjusted efficiency ratio 71.45% 65.30% 64.69% 67.49% 64.26% 64.85%

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• n-GA

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Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, ($ in Thousdands) 2015 2015 2015 2016 2016 Tangible Equity: Total stockholders' equity, as reported 418,164 $ 424,760 $ 419,789 $ 428,486 $ 437,753 $ Less: goodwill and other intangible assets 151,169 151,339 149,617 148,997 147,971 Tangible equity 266,995 $ 273,421 $ 270,172 $ 279,489 $ 289,782 $ Tangible Assets: Total assets, as reported 3,210,425 $ 3,228,830 $ 3,258,970 $ 3,294,929 $ 3,333,455 $ Less: goodwill and other intangible assets 151,169 151,339 149,617 148,997 147,971 Tangible assets 3,059,256 $ 3,077,491 $ 3,109,353 $ 3,145,932 $ 3,185,484 $ Tangible Equity to Tangible Assets: Tangible equity 266,995 $ 273,421 $ 270,172 $ 279,489 $ 289,782 $ Tangible assets 3,059,256 $ 3,077,491 $ 3,109,353 $ 3,145,932 $ 3,185,484 $ Tangible equity to tangible assets 8.73% 8.88% 8.69% 8.88% 9.10% Tangible Book Value per Share Tangible equity 266,995 $ 273,421 $ 270,172 $ 279,489 $ 289,782 $ Common shares outstanding 18,391,575 18,400,809 18,404,864 18,157,932 18,185,708 Tangible book value per share 14.52 $ 14.86 $ 14.68 $ 15.39 $ 15.93 $

TANGIBLE EQUITY RATIOS

Peoples uses tangible common equity ratios to evaluate the adequacy of Peoples’ stockholders’ equity. Such ratios represent non-GAAP financial information since the calculations exclude the impact of intangible assets acquired through acquisitions

• n both total stockholders' equity and total assets, and the related amortization from earning. Management believes this

information is useful to investors since it facilitates the comparison of Peoples’ operating performance, financial condition and trends to peers, especially those without a level of intangible assets similar to that of Peoples. The following table reconciles the calculation of these non-GAAP financial measures to amounts reported in Peoples’ consolidated financial statements.

SLIDE 37

In Investor Pre r Presentation

2nd Qu Quarte ter 2 2016

Nasdaq: PEBO

SLIDE 38

2nd Qu Quar arter 2 2016 E Ear arnings Re Release ase