0000318300FALSE00003183002020-01-212020-01-21
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 24, 2020 (January 21, 2020)

PEBO-20200121_G1.JPG
PEOPLES BANCORP INC.
(Exact name of Registrant as specified in its charter)

Ohio 000-16772 31-0987416
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification Number)

138 Putnam Street, PO Box 738
Marietta, Ohio 45750-0738
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (740) 373-3155

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common shares, without par value PEBO The Nasdaq Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02  Results of Operations and Financial Condition

On January 21, 2020, management of Peoples Bancorp Inc. (“Peoples”) conducted a facilitated conference call at approximately 11:00 a.m., Eastern Standard Time, to discuss results of operations for the quarter and twelve months ended December 31, 2019. 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.



NON-US GAAP FINANCIAL MEASURES (Unaudited)
The following non-US GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. The following tables summarize the non-US GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:


Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018
Core non-interest expense:
Total non-interest expense $ 33,521    $ 32,993    $ 30,956    $ 137,250    $ 125,977   
Less: acquisition-related expenses 65    199    382    7,287    7,262   
Less: pension settlement charges —    —    91    —    267   
Less: severance expenses 270    —    —    270    —   
Core non-interest expense $ 33,186    $ 32,794    $ 30,483    $ 129,693    $ 118,448   

Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018
Efficiency ratio:
Total non-interest expense $ 33,521    $ 32,993    $ 30,956    $ 137,250    $ 125,977   
Less: amortization of other intangible assets 888    953    861    3,359    3,338   
Adjusted total non-interest expense 32,633    32,040    30,095    133,891    122,639   
Total non-interest income 17,163    16,393    14,177    64,274    56,754   
Less: net gain (loss) on investment securities 94    97    —    164    (146)  
Less: net loss on asset disposals and other transactions (229)   (78)   (15)   (782)   (334)  
Total non-interest income, excluding net gains and losses 17,298    16,374    14,192    64,892    57,234   
Net interest income 35,121    35,754    34,121    140,838    129,612   
Add: fully tax-equivalent adjustment (a) 287    314    212    1,068    881   
Net interest income on a fully tax-equivalent basis 35,408    36,068    34,333    141,906    130,493   
Adjusted revenue $ 52,706    $ 52,442    $ 48,525    $ 206,798    $ 187,727   
Efficiency ratio 61.92  % 61.10  % 62.02  % 64.74  % 65.33  %
Efficiency ratio adjusted for non-core items:
Core non-interest expense $ 33,186    $ 32,794    $ 30,483    $ 129,693    $ 118,448   
Less: amortization of other intangible assets 888    953    861    3,359    3,338   
Adjusted core non-interest expense 32,298    31,841    29,622    126,334    115,110   
Adjusted revenue $ 52,706    $ 52,442    $ 48,525    $ 206,798    $ 187,727   
Efficiency ratio adjusted for non-core items 61.28  % 60.72  % 61.04  % 61.09  % 61.32  %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.



NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
At or For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands, except per share data) 2019 2019 2019 2019 2018
Tangible equity:
Total stockholders' equity $ 594,393    $ 588,533    $ 579,022    $ 535,121    $ 520,140   
Less: goodwill and other intangible assets 177,834    179,126    176,763    161,242    162,085   
Tangible equity $ 416,559    $ 409,407    $ 402,259    $ 373,879    $ 358,055   
Tangible assets:
Total assets $ 4,357,208    $ 4,396,148    $ 4,276,376    $ 4,017,119    $ 3,991,454   
Less: goodwill and other intangible assets 177,834    179,126    176,763    161,242    162,085   
Tangible assets $ 4,179,374    $ 4,217,022    $ 4,099,613    $ 3,855,877    $ 3,829,369   
Tangible book value per common share:
Tangible equity $ 416,559    $ 409,407    $ 402,259    $ 373,879    $ 358,055   
Common shares outstanding 20,698,941    20,700,630    20,696,041    19,681,692    19,565,029   
Tangible book value per common share $ 20.12    $ 19.78    $ 19.44    $ 19.00    $ 18.30   
Tangible equity to tangible assets ratio:
Tangible equity $ 416,559    $ 409,407    $ 402,259    $ 373,879    $ 358,055   
Tangible assets $ 4,179,374    $ 4,217,022    $ 4,099,613    $ 3,855,877    $ 3,829,369   
Tangible equity to tangible assets 9.97  % 9.71  % 9.81  % 9.70  % 9.35  %

Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018
Pre-provision net revenue:
Income before income taxes $ 17,627    $ 18,149    $ 16,367    $ 65,358    $ 54,941   
Add: provision for loan losses 1,136    1,005    975    2,504    5,448   
Add: net loss on OREO 44    5    30    98    21   
Add: net loss on investment securities —    —    —    —    146   
Add: net loss on other assets 188    73    —    692    224   
Add: net loss on other transactions —    —    —    —    76   
Less: net gain on investment securities 94    97    —    164    —   
Less: net gain on other assets 3    —    15    8    —   
Pre-provision net revenue $ 18,898    $ 19,135    $ 17,357    $ 68,480    $ 60,869   
Total average assets 4,350,769    4,311,389    3,990,331    4,222,540    3,871,832   
Pre-provision net revenue to total average assets (annualized) 1.72  % 1.76  % 1.73  % 1.62  % 1.57  %



NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018
Annualized net income adjusted for non-core items:
Net income $ 14,860    $ 14,868    $ 13,897    $ 53,695    $ 46,255   
Add: net loss on investment securities —    —    —    —    146   
Less: tax effect of loss on investment securities (a) —    —    —    —    31   
Less: net gain on investment securities 94    97    —    164    —   
Add: tax effect of net gain on investment securities (a) 20    20    —    34    —   
Add: net loss on asset disposals and other transactions 229    78    15    782    334   
Less: tax effect of net loss on asset disposals and other transactions (a) 48    16    3    164    70   
Add: acquisition-related expenses 65    199    382    7,287    7,262   
Less: tax effect of acquisition-related expenses (a) 14    42    80    1,530    1,525   
Add: severance expenses 270    —    —    270    —   
Less: tax effect of severance expenses (a) 57    —    —    57    —   
Add: pension settlement charges —    —    91    —    267   
Less: tax effect of pension settlement charges (a) —    —    19    —    56   
Less: release of deferred tax asset valuation allowance —    —    —    —    805   
Less: impact of Tax Cuts and Jobs Act on remeasurement of deferred tax assets and deferred tax liabilities —    —    705    —    705   
Net income adjusted for non-core items $ 15,231    $ 15,010    $ 13,578    $ 60,153    $ 51,072   
Days in the period 92    92    92    365    365   
Days in the year 365    365    365    365    365   
Annualized net income $ 58,955    $ 58,987    $ 55,135    $ 53,695    $ 46,255   
Annualized net income adjusted for non-core items $ 60,427    $ 59,551    $ 53,869    $ 60,153    $ 51,072   
Return on average assets:
Annualized net income $ 58,955    $ 58,987    $ 55,135    $ 53,695    $ 46,255   
Total average assets $ 4,350,769    $ 4,311,389    $ 3,990,331    $ 4,222,540    $ 3,871,832   
Return on average assets 1.36  % 1.37  % 1.38  % 1.27  % 1.19  %
Return on average assets adjusted for non-core items:
Annualized net income adjusted for non-core items $ 60,427    $ 59,551    $ 53,869    $ 60,153    $ 51,072   
Total average assets $ 4,350,769    $ 4,311,389    $ 3,990,331    $ 4,222,540    $ 3,871,832   
Return on average assets adjusted for non-core items 1.39  % 1.38  % 1.35  % 1.42  % 1.32  %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.



NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
For the Three Months Ended For the Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands) 2019 2019 2018 2019 2018
Annualized net income excluding amortization of other intangible assets:
Net income $ 14,860    $ 14,868    $ 13,897    $ 53,695    $ 46,255   
Add: amortization of other intangible assets 888    953    861    3,359    3,338   
Less: tax effect of amortization of other intangible assets (a) 186    200    181    705    701   
Net income excluding amortization of other intangible assets $ 15,562    $ 15,621    $ 14,577    $ 56,349    $ 48,892   
Days in the period 92    92    92    365    365   
Days in the year 365    365    365    365    365   
Annualized net income $ 58,955    $ 58,987    $ 55,135    $ 53,695    $ 46,255   
Annualized net income excluding amortization of other intangible assets $ 61,741    $ 61,975    $ 57,833    $ 56,349    $ 48,892   
Average tangible equity:
Total average stockholders' equity $ 591,112    $ 583,269    $ 507,890    $ 566,123    $ 488,139   
Less: average goodwill and other intangible assets 178,494    179,487    162,790    173,768    158,115   
Average tangible equity $ 412,618    $ 403,782    $ 345,100    $ 392,355    $ 330,024   
Return on average stockholders' equity ratio:
Annualized net income $ 58,955    $ 58,987    $ 55,135    $ 53,695    $ 46,255   
Average stockholders' equity $ 591,112    $ 583,269    $ 507,890    $ 566,123    $ 488,139   
Return on average stockholders' equity 9.97  % 10.11  % 10.86  % 9.48  % 9.48  %
Return on average tangible equity ratio:
Annualized net income excluding amortization of other intangible assets $ 61,741    $ 61,975    $ 57,833    $ 56,349    $ 48,892   
Average tangible equity $ 412,618    $ 403,782    $ 345,100    $ 392,355    $ 330,024   
Return on average tangible equity 14.96  % 15.35  % 16.76  % 14.36  % 14.81  %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.

Item 9.01  Financial Statements and Exhibits

a) - c)
Not applicable

d) Exhibits
See Index to Exhibits below.

INDEX TO EXHIBITS

Exhibit Number Description
99
Transcript of conference call conducted by management of Peoples Bancorp Inc. on January 21, 2020 to discuss results of operations for the quarter and twelve months ended December 31, 2019

* Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedules or exhibits will be furnished supplementally to the SEC upon its request.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


PEOPLES BANCORP INC.
Date: January 24, 2020 By:/s/ JOHN C. ROGERS
John C. Rogers
Executive Vice President,
Chief Financial Officer and Treasurer


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