Regional banking company Peoples Bancorp (NASDAQ: PEBO) announced better-than-expected revenue in Q2 CY2025, with sales up 3.2% year on year to $115 million. Its GAAP profit of $0.59 per share was 23.7% below analysts’ consensus estimates.
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Peoples Bancorp (PEBO) Q2 CY2025 Highlights:
- Net Interest Income: $87.58 million vs analyst estimates of $86.84 million (1.1% year-on-year growth, 0.9% beat)
- Net Interest Margin: 4.2% vs analyst estimates of 4.1% (3 basis point year-on-year decrease, in line)
- Revenue: $115 million vs analyst estimates of $113.1 million (3.2% year-on-year growth, 1.7% beat)
- Efficiency Ratio: 59.3% vs analyst estimates of 60.8% (1.5 percentage point beat)
- EPS (GAAP): $0.59 vs analyst expectations of $0.77 (23.7% miss)
- Market Capitalization: $1.10 billion
"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.
Company Overview
Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ: PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.
Sales Growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions.
Luckily, Peoples Bancorp’s revenue grew at an incredible 17.3% compounded annual growth rate over the last five years. Its growth beat the average bank company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Peoples Bancorp’s annualized revenue growth of 9.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Peoples Bancorp reported modest year-on-year revenue growth of 3.2% but beat Wall Street’s estimates by 1.7%.
Net interest income made up 74.5% of the company’s total revenue during the last five years, meaning lending operations are Peoples Bancorp’s largest source of revenue.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
Peoples Bancorp’s TBVPS was flat over the last five years. However, TBVPS growth has accelerated recently, growing by 11.9% annually over the last two years from $16.90 to $21.18 per share.
Over the next 12 months, Consensus estimates call for Peoples Bancorp’s TBVPS to grow by 8.4% to $22.96, decent growth rate.
Key Takeaways from Peoples Bancorp’s Q2 Results
It was encouraging to see Peoples Bancorp beat analysts’ revenue and efficiency ratio expectations this quarter. We were also happy its net interest income narrowly outperformed Wall Street’s estimates. On the other hand, its EPS missed significantly. Overall, this quarter could have been better. The stock remained flat at $31.55 immediately after reporting.
Peoples Bancorp’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
