PEOPLES BANCORP INC. ANNOUNCES RESULTS FOR THE FIRST QUARTER 2026

MARIETTA, Ohio, April 21, 2026 /PRNewswire/ -- Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for the quarter ended March 31, 2026. Net income totaled $29.0 million for the first quarter of 2026, representing earnings per diluted common share of $0.81. In comparison, Peoples reported net income of $31.8 million, representing earnings per diluted common share of $0.89, for the fourth quarter of 2025 and net income of $24.3 million, representing earnings per diluted common share of $0.68, for the first quarter of 2025.

"We are pleased with the results for the first quarter of 2026, with improvements in net interest margin and our tangible equity to tangible assets ratio increasing to 8.91% versus 8.79% for the prior quarter," said Tyler Wilcox, President and Chief Executive Officer. "We continue to remain focused on our commitment to delivering strong returns and value for our shareholders."

Quarterly Highlights:

Net Interest Income
Net interest income was $90.4 million for the first quarter of 2026, which was a decrease of $0.6 million compared to the linked quarter. Net interest margin was 4.16% for the first quarter of 2026, compared to 4.12% for the linked quarter. The decrease in net interest income was primarily driven by a decrease in accretion income coupled with fewer days in the quarter compared to the linked quarter. The increase in net interest margin was driven by a reduction in deposit costs.

Net interest income for the first quarter of 2026 increased $5.2 million, or 6%, compared to the first quarter of 2025. Net interest margin increased 4 basis points when compared to the first quarter of 2025. The increase in net interest income and net interest margin was primarily driven by lower deposit and borrowing costs.

Accretion income, net of amortization expense, from acquisitions was $1.3 million for the first quarter of 2026, $1.8 million for the linked quarter and $3.5 million for the first quarter of 2025, which added 6 basis points, 8 basis points and 17 basis points, respectively, to net interest margin. The decrease in accretion income for the first quarter of 2026 when compared to the first quarter of 2025 was driven by less accretion income recognized in the current period from the 2023 merger with Limestone Bancorp, Inc. ("Limestone Merger").

Provision for Credit Losses:
The provision for credit losses was $9.7 million for the first quarter of 2026, compared to $8.1 million for the linked quarter and $10.2 million for the first quarter of 2025. The provision for credit losses for the first quarter of 2026 was driven by net charge-offs and a deterioration in macro-economic conditions used within the current expected credit losses ("CECL") model. The provision for credit losses for the linked quarter was 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 first quarter of 2025 was primarily driven by net charge-offs.

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 $0.21 for the first quarter of 2026, $0.18 for the fourth quarter of 2026, and $0.22 for the first quarter of 2025.

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 first quarter of 2026 was $0.4 million, compared to a net loss of $2.0 million for the linked quarter, and a net loss of $0.4 million for the first quarter of 2025. The net losses for the first quarter of 2026 and for the first quarter of 2025 were driven by losses on repossessed assets. The net loss for the linked quarter was driven by a $0.9 million net loss on the sale of an other real estate owned ("OREO") property and a $0.8 million loss on the redemption of subordinated debt.

Total Non-interest Income, Excluding Net Gains and Losses:
Total non-interest income, excluding net gains and losses, for the first quarter of 2026 increased $0.4 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was primarily impacted by an increase of $1.1 million in insurance income, driven by annual performance-based commissions typically received in the first quarter of each year, partially offset by decreases of $0.4 million in electronic banking income and $0.4 million in deposit account service charges, which are seasonally higher in the fourth quarter of each year. Total non-interest income, excluding net gains and losses, for the first quarter of 2026 was 24% of total revenue (defined as net interest income plus total non-interest income excluding net gains and losses), consistent with the linked quarter.

Compared to the first quarter of 2025, total non-interest income, excluding net gains and losses, increased $1.2 million due to an increase of $1.1 million in lease income, driven by an increase in operating lease income and an increase of $0.5 million in trust and investment income, the latter driven by an increase in assets under administration and management, partially offset by a decrease of $0.5 million in insurance income, driven by lower annual performance-based commissions.

Total Non-interest Expense:
Total non-interest expense increased $0.3 million for the first quarter of 2026, compared to the linked quarter. The increase in total non-interest expense was primarily due to increases of $0.7 million in salaries and employee benefit costs, driven by up-front expenses on stock grants to retirement-eligible employees and employer health savings account contributions, $0.3 million in operating lease expense, which is driven by the increase in operating lease volume, and $0.2 million in net occupancy and equipment expense, driven by increased utilities. These increases were partially offset by decreases of $0.5 million in amortization of other intangible assets, which is driven by decreases in amortization on core deposits and customer relationship intangibles, and $0.4 million in professional fees, driven by lower legal expenses.

Compared to the first quarter of 2025, total non-interest expense increased $0.8 million. The increase in total non-interest expense was primarily driven by increases of $0.8 million in operating lease expense, which is driven by the increase in operating lease volume, $0.6 million in net occupancy and equipment expense, driven by higher property taxes, and $0.5 million in data processing and software expense due to costs associated with recent technology projects, partially offset by decreases of $0.5 million in amortization of other intangible assets and $0.5 million in other non-interest expense, driven by lower corporate expenses.

The efficiency ratio for the first quarter of 2026 was 58.6%, compared to 57.8% for the linked quarter and 60.7% for the first quarter of 2025. The efficiency ratio increased slightly compared to the linked quarter mainly as the result of higher non-interest expense, driven by increased salaries and employee benefits costs. 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 $8.3 million with an effective tax rate of 22.3% for the first quarter of 2026, compared to income tax expense of $6.2 million with an effective tax rate of 16.4% for the linked quarter and income tax expense of $7.0 million with an effective tax rate of 22.4% for the first quarter of 2025. The increases in income tax expense and the effective tax rate when compared to the linked quarter were impacted by updates to state apportionment in the fourth quarter of 2025, reducing expense by $0.9 million, and a $0.7 million benefit relating to tax credits purchased in the linked quarter. The increase in income tax expense when compared to March 31, 2025, was driven by higher pretax income.

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 March 31, 2026, increased $23.6 million when compared to at December 31, 2025, and decreased $65.7 million when compared to at March 31, 2025. The balances of unrealized losses, net of tax, on available-for-sale investment securities recognized within accumulated other comprehensive loss were $76.4 million, $71.0 million, and $96.6 million at March 31, 2026, at December 31, 2025, and at March 31, 2025, respectively. The increase in accumulated other comprehensive loss compared to the linked quarter 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 March 31, 2026, Peoples' investment securities represented approximately 20.3% of total assets, compared to 20.5% at December 31, 2025, and 20.3% at March 31, 2025.

The held-to-maturity investment securities balance at March 31, 2026, decreased $39.2 million when compared to at December 31, 2025, and increased $130.2 million when compared to at March 31, 2025. The decrease when compared to at December 31, 2025, was due to prepayments and maturities of collateralized mortgage obligations. The increase when compared to at March 31, 2025, 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 March 31, 2026, were approximately 5.86 and 7.71 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 a 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 March 31, 2026, Peoples had liquid and liquefiable assets totaling $713.2 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 March 31, 2026, Peoples had a total borrowing capacity of $945.3 million available through the Federal Home Loan Bank ("FHLB"), the Federal Reserve Bank ("FRB"), and federal funds. Additionally, at March 31, 2026, Peoples had contingent sources of liquidity totaling $4.2 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 increased $1.4 million when compared to December 31, 2025, as the level of cash may fluctuate given Peoples' total liquidity position.

Loans and Leases:
The period-end total loan and lease balances at March 31, 2026, increased $13.3 million, or 1% annualized, compared to at December 31, 2025. The increase in loans was driven by increases of $111.0 million in commercial and industrial loans, partially offset by decreases of $31.4 million in construction loans, $24.2 million in premium finance loans, $23.1 million in other commercial real estate loans, and $15.4 million in leases.

The period-end total loan and lease balances at March 31, 2026, increased $341.7 million, or 5%, compared to at March 31, 2025, driven by increases of $303.0 million in commercial and industrial loans, $110.3 million in other commercial real estate loans, $25.5 million in home equity lines of credit, and $19.6 million in indirect consumer loans. These were partially offset by decreases of $49.5 million in construction loans, $45.2 million in leases, and $35.2 million in premium finance loans.

Quarterly average total loan balances increased $13.3 million 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 $54.3 million in commercial and industrial loans, partially offset by decreases of $21.9 million in premium finance loans, and $20.2 million in residential real estate loans.

Asset Quality:
Key asset quality metrics largely improved during the first quarter of 2026. Delinquency trends improved as loans considered current comprised 98.9%, 98.6%, and 98.5% of the loan portfolio at March 31, 2026, at December 31, 2025, and at March 31, 2025, respectively. Total nonperforming assets at March 31, 2026, decreased $3.5 million, or 8%, compared to at December 31, 2025, and decreased $6.2 million, or 13%, compared to at March 31, 2025. Nonperforming assets improved compared to at December 31, 2025, as nonaccrual commercial and industrial loans decreased approximately $3.5 million. Compared to at March 31, 2025, nonperforming assets decreased 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 0.59% at March 31, 2026, compared to 0.64% at December 31, 2025, and 0.71% at March 31, 2025.

 Criticized loans, which are those categorized as special mention, substandard or doubtful, decreased $12.3 million, or 5%, compared to at December 31, 2025, and decreased $2.4 million, or 1%, compared to at March 31, 2025. As a percent of total loans, criticized loans were 3.31% at March 31, 2026, compared to 3.50% at December 31, 2025, and 3.52% at March 31, 2025. The decrease in the amount of criticized loans compared to at December 31, 2025, and at March 31, 2025, was driven by paydowns and loan upgrades.

Classified loans, which are those categorized as substandard or doubtful, decreased $5.2 million, or 4%, compared to at December 31, 2025, and increased $18.1 million, or 15%, compared to at March 31, 2025. As a percent of total loans, classified loans were 2.10% at March 31, 2026, compared to 2.18% at December 31, 2025, and 1.93% at March 31, 2025. The decrease in classified loans compared to at December 31, 2025, was primarily driven by paydowns and loan upgrades. Compared to at March 31, 2025, classified loans increased due to loan downgrades.

Annualized net charge-offs were 0.40% of average total loans for the first quarter of 2026, compared to 0.44% for the linked quarter, and 0.52% for the first quarter of 2025. Compared to the linked quarter and prior year first quarter, net charge-offs decreased, driven by a reduction in net charge-offs in leases originated by the North Star Leasing division.

At March 31, 2026, the allowance for credit losses increased $2.7 million when compared to at December 31, 2025, and increased $13.2 million when compared to at March 31, 2025. The ratio of the allowance for credit losses as a percent of total loans was 1.16% at March 31, 2026, compared to 1.12% at December 31, 2025, and 1.01% at March 31, 2025. The ratio of allowance for credit losses as a percentage of non-performing loans was 198.16% at March 31, 2026, compared to 175.82% at December 31, 2025, and 163.76% at March 31, 2025.

Deposits:
As of March 31, 2026, period-end core deposits increased $191.8 million compared to at December 31, 2025. The increase in core deposits was attributable to increases of $102.1 million governmental deposit accounts, $41.1 million in non-interest bearing deposits, $31.2 million in savings accounts, and $19.6 million in interest-bearing demand accounts. These increases in core deposits were partially offset by a decrease of $153.5 million in brokered deposits, which was the result of a strategic shift to other short-term funding sources available at lower rates.

Compared to at March 31, 2025, period-end deposit balances decreased $86.3 million. The decrease in total deposits was primarily driven by a decrease of $196.4 million in brokered deposits, partially offset by increases of  $60.2 million in non-interest bearing deposits, $24.7 million in interest-bearing demand accounts, and $24.0 million in savings accounts.

The total deposit balances attributable to retail deposits and commercial deposits were 77% and 23%, respectively, at March 31, 2026, 78% and 22%, respectively, at December 31, 2025, and 76% and 24%, respectively, at March 31, 2025.

Uninsured deposits were 28%, 26%, and 27% of total deposits at March 31, 2026, at December 31, 2025, and at March 31, 2025, 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 $678.1 million, or 32%, $615.6 million, or 31%, and $725.5 million, or 35%, of the uninsured deposit balances at March 31, 2026, at December 31, 2025, and at March 31, 2025, respectively.

Average deposit balances during the first quarter of 2026 decreased $145.3 million when compared to the linked quarter, and decreased $116.0 million when compared to the first quarter of 2025. The decrease over the linked quarter was driven by decreases of $111.4 million in brokered deposits, $34.0 million in money market deposit accounts, and $26.7 million in retail certificates of deposits, partially offset by an increase of $16.8 million in savings accounts. The decrease when compared to the first quarter of 2025 was driven by a decrease of $263.2 million in brokered deposits, partially offset by increases of $105.7 million, $33.7 million, and $23.7 million in non-interest bearing deposits, retail certificates of deposits, and savings accounts, respectively. Total demand deposit accounts comprised 35% of total deposits at March 31, 2026, 35% at December 31, 2025, and 34% at March 31, 2025.

Stockholders' Equity:
Total stockholders' equity at March 31, 2026, increased $9.4 million, or 1%, compared to at December 31, 2025. This change was primarily driven by net income of $29.0 million, partially offset by dividends paid of $14.6 million and an increase of $5.4 million in accumulated other comprehensive loss during the quarter. The increase 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 March 31, 2026, increased $78.2 million, or 7%, compared to at March 31, 2025, which was due to net income of $111.4 million for the last twelve months and a decrease in other comprehensive loss of $19.6 million, partially offset by dividends paid of $58.6 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 March 31, 2026, and 144 locations, including 127 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, Peoples Life 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 first quarter 2026 results of operations on April 21, 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:

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:

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 March 31, 2026 consolidated financial statements as part of its Quarterly Report on Form 10-Q 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.

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)

Expense

Expense

Expense

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:

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SOURCE Peoples Bancorp Inc.