Loading...
•
Mar 31, 2023
Peoples Bancorp Q1 2023 Earnings Report
Reported strong quarterly earnings driven by a diversified business model and strong core deposit franchise.
Key Takeaways
Peoples Bancorp reported strong first quarter earnings with a diluted EPS of $0.94. The company saw improvements in net interest income and fee-based income, and maintained strong capital ratios. The acquisition of Limestone is on track, with an expected close at the end of April.
Diluted EPS totaled $0.94, impacted by acquisition-related expenses.
Net interest income increased by 3% with net interest margin expansion of 9 basis points.
Fee-based income grew by 9%, primarily due to annual performance-based insurance income.
Tangible equity to tangible assets ratio improved to 7.1%.
Peoples Bancorp
Peoples Bancorp
Forward Guidance
Peoples Bancorp anticipates continued net interest income growth, loan growth between 25% and 30% including Limestone balances, and fee-based income growth in the low double-digits for the remainder of 2023. The company expects the efficiency ratio to be between 55% and 57% for the full year, including the impact of Limestone.
Positive Outlook
- Net interest income to continue to grow due to the impact of the Limestone merger.
- Full year benefits of higher market interest rates as loans reprice to the newest rate.
- Loan growth of between 25 and 30%, including the new Limestone balances.
- Annual organic loan growth without the acquired loans, will be between 5 and 7%.
- Fee-based income percentage growth to be in the low double-digits compared to 2022.
Challenges Ahead
- Net interest margin expansion to slow through the year, as we continue to increase our funding costs.
- Second quarter margin might come in below the full year range given the merger closing and related purchase accounting adjustments.
- Anticipating a 21% increase in total non-interest expenses for 2023, excluding acquisition-related expenses.
- Acquisition-related expenses during the second quarter of between $9 and $10 million, with another $4 to $5 million during the third quarter.
- An increase of about 5 basis points in net charge-off rate during 2023, compared to 2022.