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Mar 31, 2020
Peoples Bancorp Q1 2020 Earnings Report
Reported a loss impacted by COVID-19 and CECL adoption.
Key Takeaways
Peoples Bancorp announced a loss of $0.04 per share for Q1 2020, heavily impacted by COVID-19 related developments and the implementation of the CECL accounting standard. The company approved 2,432 PPP loans for $426 million as of April 17, 2020, and is offering loan modifications and payment deferrals to clients. Despite the loss, the company saw loan growth of 5% annualized, core deposit growth of 7%, and a stable net interest margin of 3.51%.
Loss per diluted share of $0.04, impacted by $17 million of provision for credit losses.
Loan growth of 5% annualized compared to the linked quarter-end.
Core deposit growth of 7% from the linked quarter-end.
Net interest margin was relatively stable at 3.51%.
Peoples Bancorp
Peoples Bancorp
Forward Guidance
Peoples Bancorp provided guidance for the remainder of 2020, excluding large market changes and the impact of PPP and the premium financing company acquisition. They anticipate a net interest margin between 3.30% and 3.45%, total non-interest expense between $33 and $34 million per quarter, fee income to average $16 million per quarter, and loan growth to be between 0-2% for 2020 compared to year-end. They also expect to earn approximately $13 million in pre-tax income during 2020 from the SBA PPP and the premium finance company acquisition to be accretive to earnings by approximately 2 to 4 cents during 2020.
Positive Outlook
- Net interest margin between 3.30% and 3.45% for the last 9 months of 2020.
- Fee income to average $16 million per quarter for the last three quarters of 2020.
- Loan growth to be between 0-2% for 2020 compared to year-end.
- Approximately $13 million in pre-tax income during 2020 from the SBA PPP.
- Premium finance company acquisition will be accretive to earnings by approximately 2 to 4 cents during 2020, and 11 to 14 cents in 2021.
Challenges Ahead
- Impact of the pandemic on the loan portfolio will be manageable, but some losses are expected.
- Businesses and consumers will take a cautionary stance after restrictions are lifted.
- Economic recovery is expected to be slow.
- One-time acquisition costs of between $500,000 and $750,000 during the remainder of 2020.
- Future capital needs and the projected length and depth of any economic recession may impact the quarterly dividend.