Major merger drives growth
Peoples Bancorp Inc. posted steady financial results for 2024, with net income rising to $117.2 million, up from $113.4 million in 2023, despite a slight decrease in fourth-quarter net interest income.
Earnings per diluted share stood at $3.31 for the year, compared to $3.44 in 2023. While the company saw a 3% decline in net interest income for the fourth quarter, it achieved a 5% increase in non-interest income, driven by higher customer demand for swap fee services.
"2024 marked the third consecutive year of record net income for Peoples," said Tyler Wilcox, president and chief executive officer. "We are pleased with our accomplishments for the year and remain committed to our focus on our clients, shareholders, and community in 2025."
Net interest margin for the fourth quarter decreased from 4.27% to 4.15%, primarily due to lower accretion income.
The provision for credit losses for the fourth quarter was $6.3 million, compared to $6.7 million for the third quarter of 2024.
Period-end total loan and lease balances grew by 5% annualized from September 30, 2024, to December 31, 2024, driven by increases in commercial and industrial loans as well as residential real estate loans, partially offset by decreases in other commercial real estate loans and leases.
Criticized loans increased by one basis point as a percent of total loans, while classified loans decreased by nine basis points compared to the previous quarter.
Period-end total deposit balances rose by 2% from September 30, 2024, to December 31, 2024, with core deposits growing due to higher non-interest-bearing accounts and retail certificates of deposit. Total loan balances represented 84% of total deposit balances at both the end of the third and fourth quarters.
The completion of Peoples' merger with Limestone Bancorp, Inc. on April 30, 2023, played a key role in the company’s financial performance. Under the terms of the agreement, Limestone merged into Peoples, and Limestone Bank became part of Peoples' subsidiary, Peoples Bank, in a transaction valued at $177.9 million.
This merger contributed to a 3% increase in net interest income for the full year, driven by higher market interest rates and additional income from the transaction. However, rising borrowing costs partially offset these gains, leading to a 34-basis-point decline in net interest margin to 4.21%.
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