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Item 5. Market for Registrant’s Common Equity

2022-03-15 compared with 2021-03-01 · 6 added, 120 removed, 35 unchanged (78% of the section changed)

10 unchanged sentences

October 1 – 31, 2021 425 (2) $ 32.94 (2) — $ 30,000,000

$ 23.29 (1)(2)

75,189 $ 13,945,155

November 1 – 30, 2021 —

— $ 30,000,000

102,266 $ 11,491,559

December 1 – 31, 2021 6,297 (2)(3)(4)

2 unchanged sentences

Total 6,722 $ 31.12 — $ 30,000,000

(1) On February 28, 2020, Peoples announced that on February 27, 2020, Peoples' Board of Directors authorized a share repurchase program (the "February 27, 2020 share repurchase program") authorizing Peoples to purchase up to an aggregate of $40 million of its outstanding common shares.

(1) On January 29, 2021, Peoples announced that on January 28, 2021, Peoples' Board of Directors authorized a share repurchase program authorizing Peoples to purchase up to an aggregate of $30.0 million of its outstanding common shares, replacing the February 27, 2020 share repurchase program which terminated on January 28, 2021.

Peoples purchased 75,189, 102,266, and 2,370 common shares under the February 27, 2020 share repurchase program in October, November, and December, respectively.

Additional information regarding the share repurchase programs can be found in "Note 10 Stockholders' Equity" of the Notes to the Consolidated Financial Statements.

(2) Information includes 1,933 common shares, 725 common shares, and 715 common shares purchased in open market transactions during October, November, and December, respectively, by Peoples Bank under the Rabbi Trust Agreement.

There were no common shares repurchased under the share repurchase program during the three months ended December 31, 2021.

(2) Information includes 425 common shares and 700 common shares purchased in open market transactions during October and December by Peoples Bank under the Rabbi Trust Agreement.

The Rabbi Trust Agreement establishes a rabbi trust that holds assets to provide funds for the payment of the benefits under the Peoples Bancorp Inc.

1 unchanged sentence

and Subsidiaries.

(3) Information reported includes an aggregate of 350 common shares withheld to satisfy income taxes associated with restricted common shares which were granted under the Peoples Bancorp Inc.

Third Amended and Restated 2006 Equity Plan and vested during December 2021.

(4) Information reported includes an aggregate of 5,247 common shares withheld to satisfy income taxes associated with unrestricted common shares which were granted during December 2021 and were not subject to vesting requirements.

Performance Graph

12 unchanged sentences

Russell 2000 Financial Services Index $ 100.00 $ 105.73 $ 94.17 $ 116.86 $ 114.48 $ 148.56

ITEM 6 SELECTED FINANCIAL DATA

The information below has been derived from Peoples' Consolidated Financial Statements.

At or For the Year Ended December 31,

(Dollars in thousands, except per share data) 2020 2019 2018 2017 2016

Operating Data (a)

Total interest income $ 157,104 $ 170,095 $ 151,264 $ 126,525 $ 115,444

Total interest expense 18,181 29,257 21,652 13,148 10,579

Net interest income 138,923 140,838 129,612 113,377 104,865

Provision for credit losses (b) 26,254 2,504 5,448 3,772 3,539

Net (loss) gain on investment securities (368) 164 (146) 2,983 930

Net loss on asset disposals and other transactions (290) (782) (334) (63) (1,133)

Total non-interest income excluding net gains and losses (c) 64,330 64,892 57,234 52,653 51,070

Total non-interest expense 133,695 137,250 125,977 107,975 106,911

Net income (d) $ 34,767 $ 53,695 $ 46,255 $ 38,471 $ 31,157

Balance Sheet Data (a)

Total investment securities $ 857,031 $ 1,010,578 $ 871,837 $ 874,486 $ 859,455

Loans, net of deferred fees and costs ("total loans") 3,402,940 2,873,525 2,728,778 2,357,137 2,224,936

Allowance for credit losses 50,359 21,556 20,195 18,793 18,429

Goodwill and other intangible assets 184,597 177,503 162,085 144,576 146,018

Total assets 4,760,764 4,354,165 3,991,454 3,581,686 3,432,348

Non-interest-bearing deposits 997,323 671,208 607,877 556,010 734,421

Brokered certificates of deposits 170,146 207,939 263,854 159,618 38,832

Other interest-bearing deposits 2,742,990 2,412,265 2,083,734 2,014,702 1,759,605

Short-term borrowings 73,261 316,977 356,198 209,491 305,607

Junior subordinated debentures held by subsidiary trust 7,611 7,451 7,283 7,107 6,924

Other long-term borrowings 102,957 75,672 102,361 136,912 138,231

Total stockholders' equity 575,673 594,393 520,140 458,592 435,261

Tangible assets (e) 4,576,167 4,176,662 3,829,369 3,437,110 3,286,330

Tangible equity (e) $ 391,076 $ 416,890 $ 358,055 $ 314,016 $ 289,243

Per Common Share Data (a)

Earnings per common share – basic $ 1.74 $ 2.65 $ 2.42 $ 2.12 $ 1.72

Earnings per common share – diluted 1.73 2.63 2.41 2.10 1.71

Cash dividends declared per common share 1.37 1.32 1.12 0.84 0.64

Book value per common share (f) 29.43 28.72 26.59 25.08 23.92

Tangible book value per common share (e)(f) $ 19.99 $ 20.14 $ 18.30 $ 17.17 $ 15.89

Weighted-average number of common shares outstanding – basic 19,721,772 20,120,119 18,991,768 18,050,189 18,013,693

Weighted-average number of common shares outstanding – diluted 19,843,806 20,273,725 19,122,260 18,208,684 18,155,463

Common shares outstanding at end of period (f) 19,563,979 20,698,941 19,565,029 18,287,449 18,200,067

Closing stock price at end of period (f) $ 27.09 $ 34.66 $ 30.10 $ 32.62 $ 32.46

At or For the Year Ended December 31,

(Dollars in thousands, except per share data) 2020 2019 2018 2017 2016

Significant Ratios (a)

Return on average stockholders' equity 6.04 % 9.48 % 9.48 % 8.54 % 7.20 %

Return on average tangible equity (g) 9.47 14.35 14.81 13.33 11.86

Return on average assets 0.73 1.27 1.19 1.10 0.94

Return on average assets adjusted for non-core items (h) 0.83 1.43 1.32 1.08 0.97

Average stockholders' equity to average assets 12.14 13.41 12.61 12.83 13.03

Average total loans to average deposits 86.28 86.35 89.37 86.10 83.22

Net interest margin (i) 3.24 3.69 3.71 3.62 3.54

Efficiency ratio (j) 63.86 64.74 65.33 62.20 65.13

Efficiency ratio adjusted for non-core items (k) 61.94 61.09 61.32 61.85 64.30

Pre-provision net revenue to total average assets (l) 1.47 1.62 1.57 1.65 1.48

Dividend payout ratio 79.14 50.08 46.65 39.86 37.40

Total loans to deposits (f) 87.14 87.50 92.51 86.42 88.81

Total investment securities as percentage of total assets (f) 18.00 % 23.21 % 21.84 % 24.42 % 25.04 %

Asset Quality Ratios (a)

Nonperforming loans as a percent of total loans (f)(m) 0.82 % 0.75 % 0.71 % 0.73 % 1.13 %

Nonperforming assets as a percent of total assets (f)(m) 0.59 0.50 0.49 0.49 0.75

Nonperforming assets as a percent of total loans and other real estate owned ("OREO") (f)(m) 0.84 0.76 0.71 0.74 1.16

Criticized loans as a percent of total loans (f)(n) 3.72 3.37 4.18 3.84 4.46

Classified loans as a percent of total loans (f)(o) 2.13 2.30 1.61 1.97 2.59

Allowance for credit losses as a percent of total loans (f)(p) 1.48 0.75 0.74 0.80 0.83

Allowance for credit losses as a percent of nonperforming loans (f)(m)(p) 180.14 99.28 104.35 108.52 73.43

Provision for credit losses as a percent of average total loans (b) 0.81 0.09 0.21 0.16 0.17

Net charge-offs as a percent of average total loans (q) 0.05 % 0.04 % 0.15 % 0.15 % 0.09 %

Capital Information (a)(f)

Common equity tier 1 capital ratio (r) 13.01 % 14.59 % 13.66 % 13.26 % 12.91 %

Tier 1 risk-based capital ratio 13.25 14.84 13.92 13.55 13.21

Total risk-based capital ratio (tier 1 and tier 2) 14.50 15.58 14.65 14.43 14.11

Tier 1 leverage ratio 8.97 % 10.41 % 9.99 % 9.75 % 9.65 %

Common equity tier 1 capital $ 409,400 $ 427,415 $ 378,855 $ 327,172 $ 306,506

Tier 1 capital 417,011 434,866 386,138 334,279 313,430

Total capital (tier 1 and tier 2) 456,384 456,422 406,333 355,977 334,957

Total risk-weighted assets $ 3,146,767 $ 2,930,355 $ 2,773,383 $ 2,466,620 $ 2,373,359

Total stockholders' equity to total assets 12.09 % 13.65 % 13.03 % 12.80 % 12.68 %

Tangible equity to tangible assets (e) 8.55 % 9.98 % 9.35 % 9.14 % 8.80 %

(a) Reflects the impact of the acquisition of Triumph Premium Finance beginning July 1, 2020, First Prestonsburg Bancshares Inc.

("First Prestonsburg") beginning April 12, 2019 and ASB Financial Corp.

("ASB") beginning April 13, 2018.

(b) On January 1, 2020, Peoples adopted ASU 2016-13 and implemented the CECL model.

Prior to the adoption of the CECL model, the provision for credit losses was the "provision for loan losses." The provision for credit losses includes changes related to the allowance for credit losses on loans (which includes purchased credit deteriorated loans), held-to-maturity investment securities, and the unfunded commitment liability in 2020.

Additional information regarding the implementation of the CECL model can be found in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements.

(c) Total non-interest income excluding net gains and losses, is a non-US GAAP financial measure since it excludes all gains and/or losses included in earnings.

Additional information regarding the calculation of total non-interest income excluding net gains and losses can be found in "ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Form 10-K under the caption "Core Non-Interest Income and Expense (non-US GAAP)."

(d) Net income includes non-core non-interest expenses totaling $3.9 million in 2020, $7.6 million in 2019, $7.5 million in 2018, $583,000 in 2017, and $1.3 million in 2016.

Additional information regarding the non-core non-interest expense can be found in "ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Form 10-K under the caption "Core Non-Interest Income and Expense (non-US GAAP)."

(e) These amounts represent non-US GAAP financial measures since they exclude the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on total stockholders’ equity and total assets.

Additional information regarding the calculation of these amounts can be found in "ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Form 10-K under the caption "Capital/Stockholders’ Equity."

(f) Data presented as of the end of the year indicated.

(g) Return on average tangible equity represents a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from earnings and it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on total stockholders’ equity.

Additional information regarding the calculation of this amount can be found in "ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Form 10-K under the caption "Return on Average Tangible Equity (non-US GAAP)."

(h) Return on average assets adjusted for non-core items represents a non-US GAAP financial measure since it excludes the release of the deferred tax asset valuation allowance, the impact of the Tax Cuts and Jobs Act on the remeasurement of deferred tax assets and deferred tax liabilities, the after-tax impact of all gains and/or losses, core banking system conversion revenue and expenses, acquisition-related expenses, pension settlement charges, severance expenses, and COVID-19-related expenses in earnings.

(i) Information presented on a fully tax-equivalent ("FTE") basis using a 21% statutory federal corporate income tax rate for 2020, 2019 and 2018 and a 35% statutory federal corporate income tax rate for 2017 and 2016.

(j) The efficiency ratio is defined as total non-interest expense (less amortization of other intangible assets) as a percentage of FTE net interest income plus total non-interest income (excluding all gains and losses).

This amount represents a non-US GAAP financial measure since it excludes amortization of other intangible assets, and all gains and/or losses included in earnings, and uses FTE net interest income.

(k) The efficiency ratio adjusted for non-core items is defined as core non-interest expense (less amortization of other intangible assets) as a percentage of FTE net interest income plus core non-interest income excluding all gains and losses.

This amounts represents a non-US GAAP financial measure since it excludes the impact of all gains and/or losses, core banking system conversion revenue and expenses, acquisition-related expenses, pension settlement charges, severance expenses, and COVID-19-related expenses in earnings, and uses FTE net interest income.

(l) Pre-provision net revenue is defined as net interest income plus total non-interest income (excluding all gains and losses) minus total non-interest expense.

Pre-provision net revenue excludes income tax expense.

This ratio represents a non-US GAAP financial measure since it excludes the provision for loan losses and all gains and/or losses included in earnings.

This measure is a key metric used by federal banking regulatory agencies in their evaluation of capital adequacy for financial institutions.

Additional information regarding the calculation of this ratio can be found in "ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Form 10-K under the caption "Pre-Provision Net Revenue (non-US GAAP)."

(m) Nonperforming loans include loans 90+ days past due and accruing, renegotiated loans and nonaccrual loans.

Nonperforming assets include nonperforming loans and other real estate owned.

(n) Includes loans categorized as special mention, substandard and doubtful.

(o) Includes loans categorized as substandard and doubtful.

(p) On January 1, 2020, Peoples adopted ASU 2016-13 and adopted the CECL model.

Prior to the adoption of the CECL model, the allowance for credit losses was the "allowance for loan losses."

(q) Included $2.5 million in recoveries during 2020 and $1.8 million in recoveries during 2019 on one single large commercial relationship.

(r) Peoples' capital conservation buffer was 6.50% at December 31, 2020, 7.58% at December 31, 2019, 6.65% at December 31, 2018, 6.43% at December 31, 2017, and 6.11% at December 31, 2016.

ITEM 6 [RESERVED]

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity