PEOPLES BANCORP INC. Item 2.02 Results of Operations and Financial Condition
OnJanuary 25, 2022 , management ofPeoples Bancorp Inc. ("Peoples") conducted a facilitated conference call at approximately11:00 a.m., Eastern Standard Time , to discuss results of operations for the quarter and twelve months endedDecember 31, 2021 . A replay of the conference call audio will be available on Peoples' website, www.peoplesbancorp.com, in the "Investor Relations" section for one year. A copy of the transcript of the conference call is included as Exhibit 99.1 to this Current Report on Form 8-K. The information contained in this Item 2.02 and Exhibit 99.1 included with this Current Report on Form 8-K, is being furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in such filing. During the conference call, management referred to non-Generally Accepted Accounting Principles ("US GAAP") financial measures that are used by management to provide information useful to investors in understanding Peoples' operating performance and trends, and to facilitate comparisons with the performance of Peoples' peers. The following tables show the differences between the non-US GAAP financial measures referred to during the conference call and the most directly comparable US GAAP-based financial measures. Three Months Ended Year Ended December 31, September 30, December 31, December 31, (Dollars in thousands) 2021 2021 2020 2021 2020 Core non-interest expense: Total non-interest expense$ 47,991 $
57,860
918 16,209 77 21,423 489
Less: pension settlement charges - 143 4 143 1,054
Less: severance expenses 16 - 771 79 1,055
Less: COVID-19 related expenses 566 181 126 1,248 1,332
Less: Peoples Bank Foundation, Inc. - - - 500 -
contribution
Less: contract negotiation expenses (603) 1,851 - 1,248 - Core non-interest expense$ 47,094 $ 39,476 $ 32,272 $ 159,096 $ 129,765
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Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2021 2021 2020 2021 2020
Efficiency ratio:
Total non-interest expense $ 47,991 $ 57,860 $ 33,250 $ 183,737 $ 133,695
Less: amortization of other 1,508 1,279 909 4,775 3,223
intangible assets
Adjusted total non-interest expense 46,483 56,581 32,341 178,962 130,472
Total non-interest income 20,647 16,346 16,501 69,717 63,672
Add: net loss on investment (158) (166) (751) (862) (368)
securities
Add: net gain (loss) on asset 1,784 (308) (53) 1,325 (290) disposals and other transactions Total non-interest income, 19,021 16,820 17,305 69,254 64,330
excluding net gains and losses
Net interest income 54,579 42,578 34,308 172,395 138,923 Add: fully tax-equivalent 380 351 251 1,350 1,054 adjustment (a) Net interest income on a fully 54,959 42,929 34,559 173,745 139,977 tax-equivalent basis Adjusted revenue $ 73,980 $ 59,749 $ 51,864$ 242,999 $ 204,307 Efficiency ratio 62.83 % 94.70 % 62.36 % 73.65 % 63.86 % Efficiency ratio adjusted for non-core items: Core non-interest expense $ 47,094 $ 39,476 $ 32,272$ 159,096 $ 129,765 Less: amortization of other 1,508 1,279 909 4,775 3,223 intangible assets Adjusted core non-interest expense 45,586 38,197 31,363 154,321 126,542 Adjusted revenue $ 73,980 $ 59,749 $ 51,864$ 242,999 $ 204,307 Efficiency ratio adjusted for 61.62 % 63.93 % 60.47 % 63.51 % 61.94 %
non-core items
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.
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At or For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands, except per share 2021 2021 2021 2021 2020
data)
Tangible equity:
Total stockholders' equity $ 845,204 $ 831,882 $ 585,505 $ 578,893 $ 575,673
Less: goodwill and other intangible 296,627 295,415 221,576 184,007 184,597
assets
Tangible equity $ 548,577 $ 536,467 $ 363,929 $ 394,886 $ 391,076
Tangible assets:
Total assets $ 7,068,376 $ 7,059,752 $ 5,067,634 $ 5,143,052 $ 4,760,764
Less: goodwill and other intangible 296,627 295,415 221,576 184,007 184,597
assets
Tangible assets $ 6,771,749 $ 6,764,337 $ 4,846,058 $ 4,959,045 $ 4,576,167
Tangible book value per common share:
Tangible equity $ 548,577 $ 536,467 $ 363,929 $ 394,886 $ 391,076
Common shares outstanding 28,297,771 28,265,791 19,660,877 19,563,979 19,563,979
Tangible book value per common share $ 19.39 $ 18.98 $ 18.51 $ 20.18 $ 19.99
Tangible equity to tangible assets ratio:
Tangible equity $ 548,577 $ 536,467 $ 363,929 $ 394,886 $ 391,076
Tangible assets $ 6,771,749 $ 6,764,337 $ 4,846,058 $ 4,959,045 $ 4,576,167
Tangible equity to tangible assets 8.10% 7.93% 7.51% 7.96% 8.55%
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2021 2021 2020 2021 2020
Pre-provision net revenue:
Income (loss) before income taxes $ 34,848 $ (7,930) $ 24,836 $ 58,655 $ 42,646
Add: provision for credit losses - 8,994 - - 26,254 Add: loss on OREO 2 32 162 34 197 Add: loss on investment securities 556 316 1,020 2,046 1,023 Add: loss on other assets 235 363 148 714 601 Add: net loss on other transactions - 6 - -
-
Less: recovery of credit losses 7,613 - 7,277 280 - Less: gain on OREO 307 - 43 315 77 Less: gain on investment securities 397 150 269 1,184
655
Less: gain on other transactions 1,511 - - 1,504 - Less: gain on other assets 203 93 214 462 431 Pre-provision net revenue $ 25,610 $ 1,538 $ 18,363 $ 57,704$ 69,558 Total average assets 7,098,927 5,475,147 4,837,978 5,672,607 4,739,289 Pre-provision net revenue to total 1.43% 0.11% 1.51% 1.02%
1.47%
average assets (annualized) Weighted-average common shares 28,114,980 20,789,271 19,442,284 21,959,883
19,843,806
outstanding - diluted Pre-provision net revenue per common $ 0.91 $ 0.07 $ 0.94 $ 2.62 $ 3.49 share - diluted
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Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2021 2021 2020 2021 2020
Annualized net income adjusted for non-core items: Net income (loss)
$ 27,926 $ (5,758) $ 20,573 $ 47,734 $ 34,767
Add: net loss on investment securities 158 166 751 862 368
Less: tax effect of net loss on investment 33 35 158 181 77
securities (a)
Add: loss on asset disposals and other - 308 53 - 290
transactions
Less: tax effect of net loss on asset - 65 11 - 61 disposals and other transactions (a) Less: gain on asset disposals and other 1,784 - - 1,325 - transactions (a) . . .
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