Peoples Bancorp (PEBO) Q4 2024 earnings summary

Executive summary

• Full-year 2024 net income reached $117.2 million, with diluted EPS of $3.31, both exceeding consensus estimates and marking a record for the third consecutive year.

• Net interest income rose 3% year-over-year, and fee-based income increased 10%, driven by lease, trust, investment, and insurance income.

• Book value per share rose 5% to $31.26; tangible book value per share up 10% to $19.94; tangible equity to tangible assets improved to 8.01%.

• Deposit balances grew $443 million (6%) year-over-year, with a stable loan portfolio and improved asset quality.

• Peoples completed the Limestone Bancorp merger in April 2023, with related acquisition expenses significantly lower in 2024.

Financial highlights

• Net interest margin was 4.21% for 2024, outperforming peers but declining from 2023 due to higher deposit costs.

• Efficiency ratio improved to 58% for 2024, with Q4 at 59.6%; adjusted efficiency ratio was 54.4%.

• Non-interest income increased 14% for the year, aided by the Limestone Merger and commercial loan swap fees.

• Non-interest expense increased 7% sequentially in Q4, up 3% for the year due to expanded footprint.

• Provision for credit losses was $6.3 million in Q4 2024, up from $1.3 million in Q4 2023, driven by higher net charge-offs.

Outlook and guidance

• 2025 guidance projects positive operating leverage, with noninterest expense expected at $69–$71 million per quarter (Q2–Q4).

• Loan growth targeted at 4%–6% for 2025; net interest margin expected to stabilize between 4% and 4.2%, assuming a 50 bps Fed rate cut.

• Fee-based and non-interest income growth anticipated in mid to high single digits.

• Provision for credit losses and net charge-off rates expected to remain stable or modestly improve.

• Management remains committed to expense control and business growth, focusing on client and community engagement.