Peoples Bancorp Inc. (NASDAQ:PEBO) reported second-quarter earnings on Tuesday that came in below analyst expectations, as a sharp increase in credit provisions weighed on the bottom line, even as revenue edged past forecasts.
The Ohio-based bank posted diluted earnings per share of $0.59, missing the $0.77 consensus by $0.18. Revenue for the quarter reached $114.46 million, narrowly beating the projected $113.27 million.
Net income fell to $21.2 million, compared with $29.0 million during the same quarter last year. The earnings drop was largely driven by a significant jump in credit loss provisions, which rose to $16.6 million—nearly three times the $5.7 million recorded in Q2 2024.
“We are pleased with strong annualized loan growth and net interest margin expansion in the second quarter,” said Tyler Wilcox, President and Chief Executive Officer. “For our shareholders, we remain focused on driving sustainable growth and delivering strong returns.”
Loan balances at the end of the quarter were up by $173.1 million, or 11% on an annualized basis, compared to the prior quarter. Net interest margin improved slightly to 4.15% from 4.12%, supported by lower funding costs.
Meanwhile, non-interest income excluding net gains and losses fell by $0.3 million, or 1%, from the first quarter. The company’s efficiency ratio showed improvement, dropping to 59.3% from 60.7% in Q1.
The elevated provision for credit losses reflected several contributing factors, including net charge-offs, larger reserves for individually assessed loans and leases, additional reserves related to North Star Leasing, and an updated set of assumptions in the CECL loss model.
Despite the earnings miss, the company maintained solid capital strength, ending the quarter with a common equity tier 1 capital ratio of 11.95%.
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