Results of Operations

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: October 29, 2021 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 October 26, 2021, management of Peoples Bancorp Inc. (“Peoples”) conducted a facilitated conference call at approximately 11:00 a.m., Eastern Daylight Time, to discuss results of operations for the quarter ended September 30, 2021. 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. Peoples also uses the non-US GAAP financial measures for calculating incentive compensation. The following tables summarize the non-US GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, (Dollars in thousands) 2021 2021 2020 2021 2020 Core non-interest expense: Total non-interest expense $ 57,860 $ 39,899 $ 34,315 $ 135,746 $ 100,445 Less: acquisition-related expenses 16,209 2,400 335 20,520 412 Less: pension settlement charges 143 — 531 143 1,050 Less: severance expenses — 14 192 63 284 Less: COVID-19-related expenses 181 210 148 683 1,206 Less: Peoples Bank Foundation, Inc. contribution — — — 500 — Less: contract negotiation expenses 1,851 — — 1,851 — Core non-interest expense $ 39,476 $ 37,275 $ 33,109 $ 111,986 $ 97,493 Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, (Dollars in thousands) 2021 2021 2020 2021 2020 Efficiency ratio: Total non-interest expense 57,860 $ 39,899 34,315 135,746 100,445 Less: amortization of other intangible assets 1,279 1,368 857 3,267 2,314 Adjusted non-interest expense $ 56,581 $ 38,531 $ 33,458 $ 132,479 $ 98,131 Total non-interest income $ 16,346 $ 15,821 $ 16,770 $ 49,070 $ 47,171 Less: net gain on investment securities — — 2 — 383 Add: net loss on investment securities (166) (202) — (704) — Add: net loss on asset disposals and other transactions (308) (124) (28) (459) (237) Total non-interest income, excluding net gains and losses $ 16,820 $ 16,147 $ 16,796 $ 50,233 $ 47,025 Net interest income $ 42,578 $ 39,660 $ 35,119 $ 117,816 $ 104,615 Add: fully tax-equivalent adjustment (a) 351 324 262 970 803 Net interest income on a fully tax-equivalent basis $ 42,929 $ 39,984 $ 35,381 $ 118,786 $ 105,418 Adjusted revenue $ 59,749 $ 56,131 $ 52,177 $ 169,019 $ 152,443 Efficiency ratio 94.7 % 68.64 % 64.12 % 78.38 % 64.37 % Efficiency ratio adjusted for non-core items: Core non-interest expense $ 39,476 $ 37,275 $ 33,109 $ 111,986 $ 97,493 Less: amortization of other intangible assets 1,279 1,368 857 3,267 2,314 Adjusted core non-interest expense $ 38,197 $ 35,907 $ 32,252 $ 108,719 $ 95,179 Adjusted revenue $ 59,749 $ 56,131 $ 52,177 $ 169,019 $ 152,443 Efficiency ratio adjusted for non-core items 63.93 % 63.97 % 61.81 % 64.32 % 62.44 % (a) Tax effect is calculated using a 21% statutory federal corporate income tax rate. NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued) (Dollars in thousands, except per share data) September 30, June 30, March 31 December 31, September 30, 2021 2021 2021 2020 2020 Tangible equity: Total stockholders' equity $ 831,882 $ 585,505 $ 578,893 $ 575,673 $ 566,856 Less: goodwill and other intangible assets 295,415 221,576 184,007 184,597 185,397 Tangible equity $ 536,467 $ 363,929 $ 394,886 $ 391,076 $ 381,459 Tangible assets: Total assets $ 7,059,752 $ 5,067,634 $ 5,143,052 $ 4,760,764 $ 4,911,807 Less: goodwill and other intangible assets 295,415 221,576 184,007 184,597 185,397 Tangible assets $ 6,764,337 $ 4,846,058 $ 4,959,045 $ 4,576,167 $ 4,726,410 Tangible book value per common share: Tangible equity $ 536,467 $ 363,929 $ 394,886 $ 391,076 $ 381,459 Common shares outstanding 28,265,791 19,660,877 19,629,633 19,563,979 19,721,783 Tangible book value per common share $ 18.98 $ 18.51 $ 20.12 $ 19.99 $ 19.34 Tangible equity to tangible assets ratio: Tangible equity $ 536,467 $ 363,929 $ 394,886 $ 391,076 $ 381,459 Tangible assets $ 6,764,337 $ 4,846,058 $ 4,959,045 $ 4,576,167 $ 4,726,410 Tangible equity to tangible assets 7.93 % 7.51 % 7.96 % 8.55 % 8.07 % Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, (Dollars in thousands, except per share data) 2021 2021 2020 2021 2020 Pre-provision net revenue: (Loss) income before income taxes $ (7,930) $ 12,494 $ 12,846 $ 23,807 $ 17,810 Add: provision for credit losses 8,994 3,088 4,728 7,333 33,531 Add: loss on OREO 32 — — 32 17 Add: loss on investment securities 316 499 — 1,490 2 Add: loss on other assets 363 238 115 687 258 Add: net loss on other transactions 6 — — 6 — Less: gain on OREO — 8 15 8 16 Less: gain on investment securities 150 297 2 786 385 Less: gain on other assets 93 106 72 258 22 Pre-provision net revenue $ 1,538 $ 15,908 $ 17,600 $ 32,303 $ 51,195 Total average assets $ 5,475,147 $ 5,183,146 $ 4,906,614 $ 5,192,183 $ 4,706,153 Pre-provision net revenue to total average assets (annualized) 0.11 % 1.23 % 1.43 % 0.83 % 1.45 % Weighted-average common shares outstanding – diluted 20,789,271 19,461,934 19,637,689 19,890,672 19,998,353 Pre-provision net revenue per common share – diluted $0.07 $0.81 $0.90 $1.61 $2.55 NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, (Dollars in thousands) 2021 2021 2020 2021 2020 Annualized net (loss) income adjusted for non-core items: Net (loss) income $ (5,758) $ 10,103 $ 10,210 $ 19,808 $ 14,194 Add: net loss on investment securities 166 202 — 704 — Less: tax effect of loss on investment securities (a) 35 42 — 148 — Less: net gain on investment securities — — 2 — 383 Add: tax effect of net gain on investment securities (a) — — — — 80 Add: net loss on asset disposals and other transactions 308 124 28 459 237 Less: tax effect of net loss on asset disposals and other transactions (a) 65 26 6 96 50 Add: acquisition-related expenses 16,209 2,400 335 20,520 412 Less: tax effect of acquisition-related expenses (a) 3,404 504 70 4,309 87 Add: pension settlement charges 143 — 531 143 1,050 Less: tax effect of pension settlement charges (a) 30 — 112 30 221 Add: severance expenses — 14 192 63 284 Less: tax effect of severance expenses (a) — 3 40 13 60 Add: COVID-19-related expenses 181 210 148 683 1,206 Less: tax effect of COVID-19-related expenses (a) 38 44 31 143 253 Add: Peoples Bank Foundation, Inc. contribution — — — 500 — Less: tax effect of Peoples Bank Foundation, Inc. contribution — — — 105 — Add: contract negotiation expenses 1,851 — — 1,851 — Less: tax effect of contract negotiation expenses 389 $ — $ — $ 389 $ — Net income adjusted for non-core items (after tax) $ 9,139 $ 12,434 $ 11,183 $ 39,498 $ 16,409 Days in the period 92 91 92 273 274 Days in the year 365 365 366 365 366 Annualized net (loss) income $ (22,844) $ 40,523 $ 40,618 $ 26,483 $ 18,960 Annualized net income adjusted for non-core items (after tax) $ 36,258 $ 49,873 $ 44,489 $ 52,809 $ 21,919 Return on average assets: Annualized net (loss) income $ (22,844) $ 40,523 $ 40,618 $ 26,483 $ 18,960 Total average assets $ 5,475,147 $ 5,183,146 $ 4,906,614 $ 5,192,183 $ 4,706,153 Return on average assets (0.42) % 0.78 % 0.83 % 0.51 % 0.4 % Return on average assets adjusted for non-core items: Annualized net income adjusted for non-core items (after tax) $ 36,258 $ 49,873 $ 44,489 $ 52,809 $ 21,919 Total average assets $ 5,475,147 $ 5,183,146 $ 4,906,614 $ 5,192,183 $ 4,706,153 Return on average assets adjusted for non-core items 0.66 % 0.96 % 0.91 % 1.02 % 0.47 % (a) Tax effect is calculated using a 21% statutory federal corporate income tax rate. NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued) Three Months Ended At or For the Nine Months Ended September 30, June 30, September 30, September 30, (Dollars in thousands) 2021 2021 2020 2021 2020 Annualized net (loss) income excluding amortization of other intangible assets: Net (loss) income $ (5,758) $ 10,103 $ 10,210 $ 19,808 $ 14,194 Add: amortization of other intangible assets 1,279 1,368 857 3,267 2,314 Less: tax effect of amortization of other intangible assets (a) 269 287 180 686 486 Net (loss) income excluding amortization of other intangible assets (after tax) $ (4,748) $ 11,184 $ 10,887 $ 22,389 $ 16,022 Days in the period 92 91 92 273 274 Days in the year 365 365 366 365 366 Annualized net (loss) income $ (22,844) $ 40,523 $ 40,618 $ 26,483 $ 18,960 Annualized net (loss) income excluding amortization of other intangible assets (after tax) $ (18,837) $ 44,859 $ 43,311 $ 29,934 $ 21,402 Average tangible equity: Total average stockholders' equity $ 627,783 $ 581,831 $ 567,055 $ 595,918 $ 578,439 Less: average goodwill and other intangible assets 232,361 222,553 185,816 213,232 180,291 Average tangible equity $ 395,422 $ 359,278 $ 381,239 $ 382,686 $ 398,148 Return on average stockholders' equity ratio: Annualized net (loss) income $ (22,844) $ 40,523 $ 40,618 $ 26,483 $ 18,960 Average stockholders' equity $ 627,783 $ 581,831 $ 567,055 $ 595,918 $ 578,439 Return on average stockholders' equity (3.64) % 6.96 % 7.16 % 4.44 % 3.28 % Return on average tangible equity ratio: Annualized net (loss) income excluding amortization of other intangible assets (after tax) $ (18,837) $ 44,859 $ 43,311 $ 29,934 $ 21,402 Average tangible equity $ 395,422 $ 359,278 $ 381,239 $ 382,686 $ 398,148 Return on average tangible equity (4.76) % 12.49 % 11.36 % 7.82 % 5.38 % (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 which follows: INDEX TO EXHIBITS Exhibit Number Description 99.1 Transcript of conference call conducted by management of Peoples Bancorp Inc. on July 20, 2021 to discuss results of operations for the quarter ended June 30, 2021 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) * 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: October 29, 2021 By:/s/ KATIE BAILEY Katie Bailey Executive Vice President, Chief Financial Officer and Treasurer