"We are pleased with the results achieved in 2025, highlighted by positive operating leverage, excluding the impact of accretion income, and solid loan growth," said Tyler Wilcox, President and Chief Executive Officer. "We remain focused on this momentum and commitment to delivering strong returns for our shareholders and community in 2026."
Statement of Operations Summary:
Net interest income for the fourth quarter of 2025 decreased $0.3 million when compared to the linked quarter driven by lower loan yields.
Net interest margin decreased to 4.12% for the fourth quarter of 2025, compared to 4.16% for the linked quarter, driven by lower loan and investment yields, partially offset by lower funding costs.
Accretion income, net of amortization expense, contributed 8 basis points to margin for the fourth quarter, consistent with the 8 basis points recognized in the linked quarter.
Peoples recorded a provision for credit losses of $8.1 million for the fourth quarter of 2025, compared to a provision for credit losses of $7.3 million for the third quarter of 2025.
The provision for credit losses for the fourth quarter of 2025 was primarily driven by (i) net charge-offs, (ii) loan growth, and (iii) a slight deterioration in the economic forecasts used within the current expected credit loss ("CECL") model, partially offset by reductions in reserves for individually analyzed loans and leases. The provision for credit losses negatively impacted earnings per diluted common share by $0.18 for the fourth quarter of 2025 and $0.16 for the third quarter of 2025.
Total non-interest income, excluding net gains and losses, increased $1.4 million, or 5%, for the fourth quarter of 2025 compared to the linked quarter.
The increase was driven by increases in lease income, deposit account service charges, mortgage banking income, and trust and investment income.
Net losses from the sale of assets and the redemption of subordinated debt were $1.9 million for the fourth quarter of 2025, which negatively impacted diluted EPS by $0.04.
The losses were primarily due to the sale of an other real estate owned ("OREO") property, which resulted in a loss of $0.9 million coupled with a loss of $0.8 million on the redemption of subordinated debt.
Total non-interest expense for the fourth quarter of 2025 increased $1.4 million compared to the linked quarter.
The increase was the result of higher operating lease expense and increased salaries and employee benefit costs.
The efficiency ratio for the fourth quarter of 2025 was 57.8%, compared to 57.1% for the linked quarter.
Balance Sheet Summary:
Period-end total loan and lease balances at December 31, 2025, increased $28.2 million, or 2% annualized, compared to at September 30, 2025.
The increase in loans was driven primarily by growth in commercial and industrial loans and construction loans, partially offset by decreases in premium finance loans, leases, and residential real estate loans.
Key asset quality metrics largely improved during the fourth quarter of 2025.
At December 31, 2025, criticized and classified loans decreased $31.9 million and $11.4 million, respectively, when compared to the linked quarter, driven by paydowns and loan upgrades.
Nonperforming assets decreased due to the sale of an OREO property in the fourth quarter.
Net charge-offs increased to $7.4 million for the fourth quarter of 2025, which represents 0.44% of average total loans on an annualized basis. Of the total, approximately $5.3 million, or 0.31% of average total loans on an annualized basis, was attributable to the North Star Leasing division.
Period-end total deposit balances at December 31, 2025, decreased $22.0 million compared to at September 30, 2025.
The decrease in total deposits was driven by decreases in governmental deposit accounts and retail certificates of deposit, which were partially offset by increases in interest-bearing demand accounts and non-interest bearing deposits.
Total loan balances were 89% and 88% of total deposit balances at December 31, 2025, and at September 30, 2025, respectively.
Net Interest IncomeNet interest income was $91.0 million for the fourth quarter of 2025 and decreased $0.3 million compared to the linked quarter. Net interest margin was 4.12% for the fourth quarter of 2025, compared to 4.16% for the linked quarter. The decreases in net interest income and margin were primarily driven by lower loan and investment yields, partially offset by a decline in funding costs.
Net interest income for the fourth quarter of 2025 increased $4.5 million, or 5%, compared to the fourth quarter of 2024. Net interest margin decreased 3 basis points when compared to the fourth quarter of 2024. The increase in net interest income was primarily driven by lower deposit and borrowing costs. The decrease in net interest margin was driven by reductions in loan yields, attributable to lower accretion income.
Accretion income, net of amortization expense, from acquisitions was $1.8 million for the fourth quarter of 2025, $1.7 million for the linked quarter and $4.9 million for the fourth quarter of 2024, which added 8 basis points, 8 basis points and 23 basis points, respectively, to net interest margin. The decrease in accretion income for the fourth quarter of 2025 when compared to the fourth quarter of 2024 was driven by fewer loan payoffs and more accretion recognized in 2024 from the merger with Limestone Bancorp, Inc. ("Limestone Merger").
For the full year of 2025, net interest income increased $6.5 million compared to the full year of 2024, while net interest margin decreased 7 basis points to 4.14%. The decrease in net interest margin for the full year of 2025 compared to full year of 2024 was primarily driven by lower accretion income.
Accretion income, net of amortization expense, from acquisitions was $9.6 million for the twelve months ended December 31, 2025, compared to $25.2 million for the twelve months ended December 31, 2024, which added 11 and 30 basis points, respectively, to net interest margin. The decrease in accretion income for the full year of 2025 compared to the same period in 2024 was due to more accretion recognized in 2024 from the Limestone Merger.
Provision for Credit Losses:The provision for credit losses was $8.1 million for the fourth quarter of 2025, compared to $7.3 million for the linked quarter and $6.3 million for the fourth quarter of 2024. The provisions for credit losses for both the fourth quarter of 2025 and the linked quarter were primarily driven by (i) net charge-offs, (ii) loan growth, and (iii) a slight deterioration in the economic forecasts used within the CECL model, partially offset by reductions in reserves for individually analyzed loans and leases. The provision for credit losses for the fourth quarter of 2024 was primarily driven by net charge-offs.
The provision for credit losses during the full year of 2025 was $42.2 million, compared to a provision for credit losses of $24.8 million for the full year of 2024. The provision for credit losses during the full year of 2025 was mainly a result of (i) net charge-offs, (ii) loan growth, (iii) deterioration in the economic forecasts used within the CECL model, (iv) a periodic refresh in loss drivers utilized within the CECL model, and (v) an increase in reserves for leases originated by the North Star Leasing division. The provision for credit losses during the full year of 2024 was mainly a result of (i) net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, (iii) economic forecast deterioration and (iv) loan growth.
The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management's quarterly estimates. The provision for credit losses negatively impacted earnings per diluted common share by $0.18 for the fourth quarter of 2025, $0.16 for the third quarter of 2025, and $0.13 for the fourth quarter of 2024. The provision negatively impacted earnings per diluted common share by $0.94 for the full year of 2025, compared to $0.51 for the full year of 2024.
For additional information on net charge-offs, credit trends and the allowance for credit losses, see the "Asset Quality" section below.
Net Gains and Losses:Net gains and losses include gains and losses on investment securities, asset disposals and other transactions, which are included in total non-interest income on the Consolidated Statements of Income. The net loss for the fourth quarter of 2025 was $2.0 million, compared to a net loss of $3.1 million for the linked quarter, and a net loss of $1.7 million for the fourth quarter of 2024. The net loss for the fourth quarter of 2025 was driven by a $0.9 million net loss on the sale of an OREO property and a $0.8 million loss on the redemption of subordinated debt. The net loss for the third quarter of 2025 was driven by a $2.7 million net loss on the sale of lower-yielding available-for-sale securities. The net loss for the fourth quarter of 2024 was driven by a $1.2 million write-down of an OREO property.
The net loss realized during the full year of 2025 was $5.7 million, compared to a net loss realized of $3.7 million for the full year of 2024. The net loss in 2025 was primarily driven by the $2.7 million net loss on the sale of lower yielding available-for-sale securities, $1.4 million net loss on repossessed assets, $0.9 million net loss on the sale of an OREO property, and an $0.8 million net loss on the redemption of subordinated debt. The net loss recognized in 2024 was primarily driven by $1.8 million of net losses on repossessed assets and a $1.2 million write-down of an OREO property.
Total Non-interest Income, Excluding Net Gains and Losses:Total non-interest income, excluding net gains and losses, for the fourth quarter of 2025 increased $1.4 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was primarily impacted by an increase of $0.6 million in lease income, driven by operating lease income, and increases of $0.3 million in each of deposit account service charges, mortgage banking income, and trust and investment income. Total non-interest income, excluding net gains and losses, for the fourth quarter of 2025 was 24% of total revenue (defined as net interest income plus total non-interest income excluding net gains and losses) compared to 23% of total revenue for the linked quarter.
Compared to the fourth quarter of 2024, total non-interest income, excluding net gains and losses, increased $1.4 million due to an increase of $1.1 million in lease income, driven by an increase in month-to-month lease income, an increase of $0.7 million in trust and investment income, which was driven by an increase in assets under administration and management, and an increase of $0.4 million in mortgage banking income, partially offset by a decrease of $0.8 million in other non-interest income, driven by swap fee income.
For the full year of 2025, total non-interest income, excluding gains and losses, increased $6.7 million, or 6%, compared to the full year of 2024. The increase was driven by (i) a $5.1 million increase in lease income, driven by increases in month-to-month lease income and operating lease income, (ii) a $1.9 increase in trust and investment income, driven by an increase in assets under administration and management, and (iii) a $0.3 million increase in bank owned life insurance income. These increases were partially offset by a $0.6 million decrease in deposit account service charges due to customer activity.
Total Non-interest Expense:Total non-interest expense increased $1.4 million for the fourth quarter of 2025, compared to the linked quarter. The increase in total non-interest expense was primarily due to increases of $0.5 million in other non-interest expense, driven by higher corporate expenses, $0.5 million in operating lease expense, and $0.4 million in salaries and employee benefit costs.
Compared to the fourth quarter of 2024, total non-interest expense increased $0.8 million. The increase in total non-interest expense was primarily driven by increases of $1.6 million in salaries and employee benefit costs, which were driven by higher sales-based and incentive compensation, base salaries and wages, and medical costs, and $0.8 million in data processing and software expense, due to costs associated with recent technology projects, partially offset by a decrease of $1.7 million in other non-interest expense, driven by acquisition-related expenses recorded in 2024.
For the full year of 2025, total non-interest expense increased $8.5 million, or 3%, compared to the full year of 2024. The higher expense was driven by increases of (i) $6.5 million in salaries and employee benefits costs, which were driven by higher sales-based and incentive compensation and medical costs, (ii) $3.9 million in data processing and software expenses, due to costs associated with recent technology projects, and (iii) $1.1 million in operating lease expense, partially offset by a decrease of $2.3 million in amortization of other intangible assets.
The efficiency ratio for the fourth quarter of 2025 was 57.8%, compared to 57.1% for the linked quarter and 59.6% for the fourth quarter of 2024. The efficiency ratio increased compared to the linked quarter mainly as the result of higher non-interest expense, driven by increased other non-interest expense, as a result of higher corporate expenses, operating lease expense and salaries and employee benefits costs. The efficiency ratio for the full year of 2025 was 58.7%, compared to 58.0% for the full year of 2024. The efficiency ratio increased compared to the prior year due to the increase in non-interest expense. Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business.
Income Tax Expense: Peoples recorded income tax expense of $6.2 million with an effective tax rate of 16.4% for the fourth quarter of 2025, compared to income tax expense of $8.5 million with an effective tax rate of 22.4% for the linked quarter and income tax expense of $7.9 million with an effective tax rate of 22.7% for the fourth quarter of 2024. The decrease in income tax expense and the effective tax rate when compared to the linked and prior year quarters was impacted by updates to state tax rates driven by apportionment, reducing expense by $0.9 million, and a $0.7 million benefit relating to tax credits purchased in the fourth quarter of 2025. Peoples recorded income tax expense of $28.0 million with an effective tax rate of 20.8% for the full year of 2025 and $32.3 million with an effective tax rate of 21.6% in the full year of 2024. The decrease in income tax expense was primarily driven by lower pre-tax income. The effective tax rate was lower in the current period due to the benefit of the aforementioned tax credit.
Investment Securities and Liquidity:Peoples' investment portfolio primarily consists of available-for-sale investment securities reported at fair value and held-to-maturity investment securities reported at amortized cost. The available-for-sale investment securities balance at December 31, 2025, increased $7.5 million when compared to at September 30, 2025, and decreased $99.2 million when compared to at December 31, 2024. The balances of unrealized losses, net of tax, on available-for-sale investment securities recognized within accumulated other comprehensive loss were $71.0 million, $78.1 million, and $111.8 million at December 31, 2025, at September 30, 2025, and at December 31, 2024, respectively. The decrease in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period, which were driven by changes in market interest rates. At December 31, 2025, Peoples' investment securities represented approximately 20.5% of total assets, compared to 20.5% at September 30, 2025, and 20.7% at December 31, 2024.
The held-to-maturity investment securities balance at December 31, 2025, decreased $9.0 million when compared to at September 30, 2025, and increased $148.0 million when compared to at December 31, 2024. The increase when compared to December 31, 2024, was primarily driven by purchases of higher yielding, longer duration securities.
The effective durations of the available-for-sale investment securities and the held-to-maturity investment securities as of December 31, 2025, were approximately 5.75 and 7.75 years, respectively. The duration of Peoples' investments is managed as part of Peoples' Asset Liability Management program, and has the potential to impact both liquidity and capital, as mismatches in duration may require a liquidation of investment securities at market prices to meet funding needs. These assets are one component of Peoples' liquidity profile.
Peoples maintains a number of liquid and liquefiable assets, borrowing capacity, and other sources of liquidity to ensure the availability of funds. At December 31, 2025, Peoples had liquid and liquefiable assets totaling $858.8 million, which included (i) cash and cash equivalents, (ii) unpledged government and agency investment securities and (iii) unpledged non-agency investment securities that could be liquidated. At December 31, 2025, Peoples had a total borrowing capacity of $827.9 million available through the Federal Home Loan Bank ("FHLB"), the Federal Reserve Bank ("FRB"), and federal funds. Additionally, at December 31, 2025, Peoples had contingent sources of liquidity totaling $4.0 billion. Contingent sources of liquidity are generally comprised of borrowing capacity at the FHLB and FRB, unpledged securities, liquifiable securities, and available capacity from wholesale funding sources. Cash and cash equivalents decreased $28.7 million when compared to December 31, 2024, as the level of cash may fluctuate given Peoples' total liquidity position.
Loans and Leases:The period-end total loan and lease balances at December 31, 2025, increased $28.2 million, or 2% annualized, compared to at September 30, 2025. The increase in loans was driven by increases of $46.3 million in commercial and industrial loans and $39.9 million in construction loans, partially offset by decreases of $20.2 million in premium finance loans, $17.1 million in leases, $14.1 million in residential real estate loans, and $9.8 million in indirect consumer loans.
The period-end total loan and lease balances at December 31, 2025, increased $398.9 million, or 6%, compared to at December 31, 2024, driven by increases of $208.0 million in other commercial real estate loans, $188.1 million in commercial and industrial loans, and $30.7 million in indirect consumer loans, partially offset by a decrease of $40.9 million in leases.
Quarterly average total loan balances increased $87.5 million, or 1%, compared to the linked quarter. The increase in average total loan balances when compared to the linked quarter was primarily the result of increases of $113.3 million in other commercial real estate loans and $71.7 million in commercial and industrial loans, partially offset by decreases of $60.8 million in constructions loans and $22.0 million in leases.
Compared to full year of 2024, quarterly average loan balances increased $301.7 million, or 5%. The increase was driven by growth of (i) $161.3 million in commercial and industrial loans, (ii) $87.8 million in other commercial real estate loans, (iii) $53.1 million in residential real estate loans, and (iv) $25.9 million in indirect consumer loans, partially offset by a decrease of $32.2 million in leases.
Asset Quality:Key asset quality metrics largely improved during the fourth quarter of 2025. Delinquency trends remained stable as loans considered current comprised 98.6%, 99.0%, and 98.7% of the loan portfolio at December 31, 2025, at September 30, 2025, and at December 31, 2024, respectively. Total nonperforming assets at December 31, 2025 decreased $2.2 million, or 5%, compared to at September 30, 2025, and decreased $6.3 million, or 13%, compared to at December 31, 2024. Nonperforming assets decreased compared to at September 30, 2025, and December 31, 2024, because of the sale of an OREO property in the fourth quarter of 2025. Nonperforming assets as a percent of total loans and OREO was 0.63% at December 31, 2025, compared to 0.66% at September 30, 2025, and 0.77% at December 31, 2024.
Criticized loans, which are those categorized as special mention, substandard or doubtful, decreased $31.9 million, or 12%, compared to at September 30, 2025, and decreased $4.8 million, or 2%, compared to at December 31, 2024. As a percent of total loans, criticized loans were 3.50% at December 31, 2025, compared to 3.99% at September 30, 2025, and 3.80% at December 31, 2024. The decrease in the amount of criticized loans compared to at September 30, 2025, and at December 31, 2024, was driven by paydowns and loan upgrades.
Classified loans, which are those categorized as substandard or doubtful, decreased $11.4 million, or 7%, compared to at September 30, 2025, and increased $18.4 million, or 14%, compared to at December 31, 2024. As a percent of total loans, classified loans were 2.18% at December 31, 2025, compared to 2.36% at September 30, 2025, and 2.03% at December 31, 2024. The decrease in classified loans compared to at September 30, 2025, was primarily driven by paydowns and loan upgrades. Compared to at December 31, 2024, classified loans increased due to loan downgrades.
Annualized net charge-offs were 0.44% of average total loans for the fourth quarter of 2025, compared to 0.41% for the linked quarter, and 0.61% for the fourth quarter of 2024. Compared to the linked quarter, net charge-offs increased slightly, primarily driven by net charge-offs in leases originated by the North Star Leasing division. The decrease in net charge-offs during the fourth quarter of 2025 versus the prior year fourth quarter was primarily attributable to a decrease in charge-offs in leases originated by the North Star Leasing division.
At December 31, 2025, the allowance for credit losses increased $0.8 million when compared to at September 30, 2025, and increased $12.3 million when compared to at December 31, 2024. The ratio of the allowance for credit losses as a percent of total loans was 1.12% at December 31, 2025, compared to 1.11% at September 30, 2025, and 1.00% at December 31, 2024. The ratio of allowance for credit losses as a percentage of non-performing loans was 178.00% at December 31, 2025, compared to 193.01% at September 30, 2025, and 148.13% at December 31, 2024.
Deposits:As of December 31, 2025, period-end total deposits decreased $22.0 million compared to at September 30, 2025. The decrease in total deposits was attributable to decreases in governmental deposit accounts and retail certificates of deposits of $29.8 million and $24.8 million, respectively. These decreases were partially offset by increases in interest-bearing demand accounts and non-interest-bearing deposits of $23.8 million and $9.3 million, respectively.
Compared to at December 31, 2024, period-end deposit balances increased $20.0 million. The increase in total deposits was primarily driven by increases of $67.1 million in money market deposits, $62.4 million in retail certificates of deposit, $37.8 million in non-interest bearing deposits, and $20.4 million in savings accounts. These deposit increases were partially offset by decreases of $138.9 million in brokered deposits and $35.8 million in governmental deposit accounts. The increase in retail certificates of deposits was driven by special promotional rate offerings over the past year.
The percentages of retail deposit balances and commercial deposit balances of the total deposit balance were 78% and 22%, respectively, at December 31, 2025, 77% and 23%, respectively, at September 30, 2025, and 79% and 21%, respectively, at December 31, 2024.
Uninsured deposits were 26%, 27%, and 26% of total deposits at December 31, 2025, at September 30, 2025, and at December 31, 2024, respectively. Uninsured amounts were based on the portion of customer account balances that exceeded the FDIC limit of $250,000. Peoples pledges investment securities against certain governmental deposit accounts, which collateralized $615.6 million, or 31%, $660.0 million, or 32%, and $656.9 million, or 33%, of the uninsured deposit balances at December 31, 2025, at September 30, 2025, and at December 31, 2024, respectively.
Average deposit balances during the fourth quarter of 2025 decreased $8.2 million when compared to the linked quarter, and increased $113.5 million, or 1%, when compared to the fourth quarter of 2024. The decrease over the linked quarter was driven by decreases of $18.6 million in brokered deposits, $12.8 million in governmental deposits, and $8.0 million in retail certificates of deposits, partially offset by an increase of $35.2 million in non-interest bearing deposits. The increase when compared to the fourth quarter of 2024 was driven by increases of $95.5 million in retail certificates of deposit, $88.4 million in non-interest bearing deposits, and $67.3 million in money market deposits, partially offset by decreases of $96.1 million and $37.4 million in brokered deposits and governmental deposits, respectively. Total demand deposit accounts comprised 35% of total deposits at December 31, 2025 and 34% at both September 30, 2025, and December 31, 2024.
Stockholders' Equity:Total stockholders' equity at December 31, 2025, increased $23.8 million, or 2%, compared to at September 30, 2025. This change was primarily driven by net income of $31.8 million and a decrease of $6.9 million in accumulated other comprehensive loss during the quarter, partially offset by dividends paid of $14.6 million. The decrease in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period.
Total stockholders' equity at December 31, 2025, increased $95.0 million, or 9%, compared to at December 31, 2024, which was due to net income of $106.8 million for the last twelve months and a decrease in other comprehensive loss of $39.8 million, partially offset by dividends paid of $58.1 million.
Peoples Bancorp Inc. ((", Peoples", , NASDAQ:PEBO) is a diversified financial services holding company and makes available a complete line of banking, trust and investment, insurance and specialty financing solutions through its subsidiaries. Headquartered in Marietta, Ohio, since 1902, Peoples has established a heritage of financial stability, growth and community impact. Peoples had $9.6 billion in total assets as of December 31, 2025, and 144 locations, including 126 full-service bank branches in Ohio, West Virginia, Kentucky, Virginia, Washington D.C., and Maryland. Peoples' vision is to be the Best Community Bank in America.
Peoples is a member of the Russell 3000 index of United States ("U.S.") publicly-traded companies. Peoples offers services through Peoples Bank (which includes the divisions of Peoples Investment Services, Peoples Premium Finance and North Star Leasing), Peoples Insurance Agency, LLC, and Vantage Financial, LLC.
Conference Call to Discuss Earnings:Peoples will conduct a facilitated conference call to discuss fourth quarter 2025 results of operations on January 20, 2026, at 11:00 a.m., Eastern Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285. A simultaneous webcast of the conference call audio and earnings conference call presentation will be available online via the "Investor Relations" section of Peoples' website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the "Investor Relations" section for one year.
Use of Non-US GAAP Financial Measures:This news release contains financial information and performance measures determined by methods other than those in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Management uses these "non-US GAAP" financial measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-US GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with US GAAP, nor are they necessarily comparable to non-US GAAP performance measures that may be presented by other companies. Below is a listing of the non-US GAAP financial measures used in this news release:
The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income, excluding net gains and losses. This ratio is a non-US GAAP financial measure since it excludes amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.
Tangible assets, tangible equity, the tangible equity to tangible assets ratio, and tangible book value per common share are non-US GAAP financial measures since they exclude the impact of goodwill and other intangible assets acquired through acquisitions on both total stockholders' equity and total assets.
Total non-interest income, excluding net gains and losses, is a non-US GAAP financial measure since it excludes all gains and losses included in earnings.
Pre-provision net revenue is defined as net interest income plus total non-interest income, excluding net gains and losses, minus total non-interest expense. This measure is a non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in net income.
Return on average tangible equity is calculated as annualized net income (less the after-tax impact of amortization of other intangible assets) divided by average tangible equity. This measure is a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from net income and the impact of average goodwill and other average intangible assets acquired through acquisitions on average stockholders' equity.
A reconciliation of these non-US GAAP financial measures to the most directly comparable US GAAP financial measures is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."
Safe Harbor Statement:Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are "forward-looking statements" within the meaning of 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 are identified by the fact they are not historical facts and include words such as "anticipate," "estimate," "may," "feel," "expect," "believe," "plan," "will," "will likely," "would," "should," "could," "project," "goal," "target," "potential," "seek," "intend," "continue," "remain," and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to:
(1)
the effects of interest rate policies, including any changes to such policies that may result from potential changes in the composition of the Federal Reserve Board, changes in the interest rate environment due to economic conditions and/or the fiscal and monetary policy measures undertaken by the U.S. government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity;
(2)
the effects of inflationary pressures on borrowers' liquidity and ability to repay;
(3)
the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the interest rate policies of the Federal Reserve Board, the completion and successful integration of acquisitions, and the expansion of commercial and consumer lending activities;
(4)
competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, which can in turn impact Peoples' credit spreads, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals;
(5)
uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies, including the Ohio Division of Financial Institutions, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or acquired companies to a variety of new and more stringent legal and regulatory requirements;
(6)
the effects of easing restrictions on participants in the financial services industry;
(7)
current and future local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, supply-demand imbalances affecting local real estate prices, high unemployment rates in the local or regional economies in which Peoples operates and/or the U.S. economy generally, a future U.S. government shutdown, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, and changes in the relationship of the U.S. and U.S. global trading partners), and changes in the federal, state, and local governmental policy and the impact these conditions may have on Peoples, Peoples' customers and Peoples' counterparties, and Peoples' assessment of the impact, which may be different than anticipated;
(8)
Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;
(9)
changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties' performance and creditworthiness generally, which may be less favorable than expected in light of recent inflationary pressures and continued elevated interest rates, and may adversely impact the amount of interest income generated;
(10)
Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
(11)
future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses;
(12)
changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations;
(13)
the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model;
(14)
adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures and the impacts of potential or imposed tariffs on markets, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;
(15)
the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
(16)
Peoples' ability to receive dividends from Peoples' subsidiaries;
(17)
Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
(18)
the impact of larger or similar-sized financial institutions encountering problems, such as the failure in 2024 of Republic First Bank, and closures in 2023 of Silicon Valley Bank in California, Signature Bank in New York and First Republic Bank in California, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity, including Peoples' continued ability to grow deposits or maintain adequate deposit levels, and may further result in potential increased regulatory requirements, increased reputational risk and potential impacts to macroeconomic conditions;
(19)
Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;
(20)
any misappropriation of the confidential information which Peoples possesses could have an adverse impact on Peoples' business and could result in regulatory actions, litigation and other adverse effects;
(21)
Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples' primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands;
(22)
operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and Peoples' subsidiaries are highly dependent;
(23)
changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;
(24)
the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business;
(25)
the impact on Peoples' businesses, personnel, facilities or systems of losses related to acts of fraud, theft, misappropriation or violence;
(26)
the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters including severe weather events, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including Russia's war in Ukraine, ongoing conflicts in the Middle East, and mounting tensions with Venezuela);
(27)
the potential deterioration of the U.S. economy due to financial, political or other shocks;
(28)
the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;
(29)
the impact on Peoples' businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples' intellectual property;
(30)
risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets;
(31)
changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases;
(32)
the vulnerability of Peoples' network and online banking portals, and the systems of parties with whom Peoples contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches;
(33)
regulatory and legal matters, including the failure to resolve any outstanding matters on a timely basis and the potential of new regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;
(34)
Peoples' business may be adversely affected by increased political and regulatory scrutiny of corporate environmental, social and governance ("ESG") practices;
(35)
the effect of a fall in stock market prices on Peoples' asset and wealth management business;
(36)
the risk that energy tax credits purchased and used by Peoples to reduce tax liabilities will be disallowed by the IRS; and
(37)
other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as supplemented by the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Quarterly Report on Form 10-Q for the quarter ended September 30, 2025. Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website - www.peoplesbancorp.com under the "Investor Relations" section.
As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its December 31, 2025 consolidated financial statements as part of its Annual Report on Form 10-K to be filed with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and/or to revise its financial information from the estimates and information contained in this news release.
PER COMMON SHARE DATA AND SELECTED RATIOS (Unaudited)
At or For the Three Months Ended
For the Year Ended
December 31,
September 30,
December 31,
December 31,
2025
2025
2024
2025
2024
PER COMMON SHARE:
Earnings per common share:
Basic
$ 0.90
$ 0.83
$ 0.77
$ 3.03
$ 3.34
Diluted
0.89
0.83
0.76
2.99
3.31
Cash dividends declared per common share
0.41
0.41
0.40
1.63
1.59
Book value per common share (a)
33.78
33.13
31.26
33.78
31.26
Tangible book value per common share (a)(b)
22.77
22.05
19.94
22.77
19.94
Closing price of common shares at end of period
$ 30.03
$ 29.99
$ 31.69
$ 30.03
$ 31.69
SELECTED RATIOS:
Return on average stockholders' equity (c)
10.53 %
10.06 %
9.56 %
9.22 %
10.81 %
Return on average tangible equity (c)(d)
16.57 %
16.17 %
16.15 %
14.97 %
18.61 %
Return on average assets (c)
1.31 %
1.22 %
1.17 %
1.13 %
1.28 %
Efficiency ratio (e)(f)
57.78 %
57.11 %
59.57 %
58.68 %
57.97 %
Net interest margin (c)(f)
4.12 %
4.16 %
4.15 %
4.14 %
4.21 %
Dividend payout ratio (g)
46.10 %
49.72 %
52.79 %
54.45 %
48.06 %
(a)
Data presented as of the end of the period indicated.
(b)
Tangible book value per common share represents a non-US GAAP financial measure since it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."
(c)
Ratios are presented on an annualized basis.
(d)
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 net income and it excludes the balance sheet impact of average goodwill and other intangible assets acquired through acquisitions on average stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."
(e)
The efficiency ratio is defined as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income (excluding all gains and losses). This ratio represents a non-US GAAP financial measure since it excludes amortization of other intangible assets, and all gains and losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."
(f)
Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate.
(g)
This ratio is calculated based on dividends declared during the period divided by net income for the period.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
For the Year Ended
December 31,
September 30,
December 31,
December 31,
2025
2025
2024
2025
2024
(Dollars in thousands, except per share data)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Total interest income
$ 130,549
$ 132,808
$ 128,793
$ 514,306
$ 520,776
Total interest expense
39,500
41,459
42,257
159,076
172,075
Net interest income
91,049
91,349
86,536
355,230
348,701
Provision for credit losses
8,050
7,280
6,267
42,162
24,787
Net interest income after provision for credit losses
82,999
84,069
80,269
313,068
323,914
Non-interest income:
Electronic banking income
6,329
6,538
6,267
25,024
25,142
Trust and investment income
5,692
5,414
5,033
21,448
19,513
Deposit account service charges
4,617
4,274
4,502
16,965
17,584
Insurance income
4,520
4,469
4,523
19,592
19,401
Lease income
4,290
3,643
3,222
15,612
10,480
Bank owned life insurance income
1,173
1,143
1,219
4,561
4,216
Mortgage banking income
537
245
173
1,398
1,788
Net (loss) gain on investment securities
(77)
(2,580)
12
(2,659)
(416)
Net loss on asset disposals and other transactions
(1,908)
(478)
(1,746)
(3,027)
(3,310)
Other non-interest income
1,099
1,159
1,884
5,164
4,968
Total non-interest income
26,272
23,827
25,089
104,078
99,366
Non-interest expense:
Salaries and employee benefit costs
39,118
38,698
37,499
156,530
150,041
Data processing and software expense
7,401
7,356
6,598
29,118
25,221
Net occupancy and equipment expense
5,980
5,896
5,821
23,178
24,151
Professional fees
3,168
2,798
3,311
12,663
12,109
Amortization of other intangible assets
2,210
2,211
2,800
8,845
11,161
Electronic banking expense
2,120
2,161
1,982
8,324
7,548
Operating lease expense
1,513
1,039
1,102
4,590
3,539
FDIC insurance expense
1,350
1,284
1,251
5,136
4,929
Other loan expenses
1,219
1,385
857
4,936
4,147
Marketing expense
1,059
1,001
1,206
3,681
3,914
Franchise tax expense
845
