Peoples Bancorp's Q1 2025: Unpacking Contradictions in Loan Growth, Deposit Strategies, and M&A Outlook

Loan growth expectations, deposit rates and repricing, small ticket leasing charge-offs and production adjustments, M&A strategy and approach, and fee income guidance and drivers are the key contradictions discussed in Peoples Bancorp's latest 2025Q1 earnings call.



Loan Growth and Asset Quality:
- Peoples Bancorp reported 4% annualized loan growth for the first quarter, with increases in commercial real estate loans and residential real estate loans.
- The growth was driven by improvements in asset quality metrics, such as reductions in the annualized net charge-off rate, non-performing assets, and criticized and classified loans.

Deposit and Expense Management:
- Deposit balances grew by 2%, with higher money market and governmental deposit account balances, while brokered CDs were reduced by $96 million.
- The bank managed expenses by implementing one-time costs and focusing on productivity improvements, including reducing stock-based compensation expenses.

Net Interest Income and Margin Performance:
- The net interest income was down 1%, with a net interest margin decline of 3 basis points compared to the linked quarter.
- However, on a core basis (excluding accretion income), net interest income grew, and the net interest margin expanded by 3 basis points.

Dividend Increase and Capital Position:
- Peoples Bancorp announced an increase in its quarterly dividend for the 10th consecutive year, with a new rate of $0.41 per share, resulting in an annualized yield of 5.95%.
- The strong capital position, with tangible equity to tangible assets ratio improving to 8.34%, supports this dividend increase.