Peoples Bancorp (PEBO) Q3 2025 earnings summary

Executive summary

• Net income for Q3 2025 was $29.5 million, or $0.83 diluted EPS, up from Q2 2025 but down from $31.7 million ($0.89 EPS) in Q3 2024, with EPS negatively impacted by a $2.7 million loss on securities sales.

• Annualized loan growth reached 8% in Q3, with book value per share up 2% and tangible book value per share up 4% to $22.05.

• Efficiency ratio improved to 57.1% from 59.3% sequentially, though higher than 55.1% in Q3 2024.

• Asset quality improved with lower net charge-offs and a significant reduction in provision for credit losses from Q2, though provision rose year-over-year.

• Return on average tangible equity was 16.2%.

Financial highlights

• Net interest income increased 4% sequentially to $91.3 million, with net interest margin at 4.16%, up from Q2 but down from 4.27% in Q3 2024.

• Non-interest income (excluding gains/losses) declined 1% sequentially but grew 7% year-over-year for the first nine months of 2025.

• Non-interest expense fell 1% sequentially but rose 4% year-over-year, mainly due to higher salaries and benefits.

• Book value and tangible book value per share both increased sequentially.

• Effective tax rate for Q3 2025 was 22.4%.

Outlook and guidance

• Full-year 2025 net interest margin expected between 4% and 4.2%, assuming two 25-basis-point Fed rate cuts in Q4; each cut reduces NIM by 3-4 basis points annually.

• Loan growth for 2025 guided between 4% and 6% year-over-year; for 2026, expected between 3% and 5%.

• Fee-based income growth projected in the mid-single digits for 2025; quarterly fee-based income for 2026 expected between $27 million and $29 million.

• Non-interest expense for Q4 2025 expected between $69 million and $71 million; for 2026, quarterly range of $71 million to $73 million (excluding Q1 seasonality).

• Positive operating leverage targeted for both 2025 and 2026, excluding non-core expenses.