Peoples Bancorp (PEBO) Stock Forecast & Price Target

Peoples Bancorp Inc. has demonstrated a robust financial position, as evidenced by a 6% quarter-over-quarter annualized increase in total deposits, maintaining a steady loan-to-deposit ratio of 83.7%. The bank also achieved a modest increase in its core net interest margin, rising 4 basis points to 3.92%, alongside notable growth in noninterest-bearing deposits, which now comprise 20% of the deposit mix. Furthermore, while organic loan growth was slightly below expectations at 5.5% quarter-over-quarter annualized, ongoing strength in commercial and industrial loans contributes positively to the overall lending environment.

Peoples Bancorp has demonstrated a concerning decline in key financial metrics, with tangible book value (TBV) and tangible common equity (TCE) falling 2% and 24 basis points, respectively, primarily due to adverse changes in accumulated other comprehensive income (AOCI). Additionally, the bank faced significant challenges with its small ticket leasing portfolio, leading to total net charge-offs (NCOs) reaching 61 basis points in 4Q24, exacerbated by loans that were 90+ days past due dropping substantially yet remaining a point of concern. Furthermore, a lack of loan growth, evidenced by a 3.9% annual decrease in average loans, coupled with not achieving positive operating leverage targets, compounds the negative outlook on the company's financial stability and growth prospects.