Breaking Down Peoples Bancorp Inc. (PEBO) Financial Health: Key Insights for Investors

You're looking at Peoples Bancorp Inc. (PEBO) right now, trying to decide if its regional bank story still holds up in late 2025, and the answer is a qualified yes: the third quarter results defintely show momentum. The core takeaway is that the bank is effectively navigating the high-rate environment, evidenced by a Q3 2025 Net Income of $29.5 million, which translates to a solid $0.83 Earnings Per Share (EPS). That's a sharp rebound from the $21.2 million net income reported in the second quarter, plus the Net Interest Margin (NIM)-the key measure of lending profitability-actually ticked up to a healthy 4.16%. Here's the quick math: with total assets sitting at $9.62 billion as of September 30, 2025, the bank is showing improved asset quality, cutting its provision for credit losses significantly to just $7.3 million, down from $16.6 million in the prior quarter. The street is paying attention, too, with analysts maintaining a consensus Buy rating and an average price target of $34.79, so you need to understand what's driving this growth and where the near-term risks-like managing deposit costs-still lie.

Revenue Analysis

You need to know where Peoples Bancorp Inc. (PEBO)'s money is coming from, and the answer is simple: lending is the main engine, but the fee-based services are a crucial buffer. For the 2025 fiscal year, the story is about strong loan growth fighting against a drop in a specific, non-recurring income stream. The company's revenue for the last twelve months (LTM) ending Q3 2025 stood at $555.35 million, representing a solid year-over-year (YoY) growth of 10.92%.

The primary revenue stream for Peoples Bancorp Inc. (PEBO), like most regional banks, is Net Interest Income (NII)-the difference between what they earn on loans and investments and what they pay on deposits. Historically, this has accounted for about 74.5% of total revenue, and that trend holds true. For the third quarter of 2025, NII was $91.3 million, which was a 3% increase compared to the third quarter of 2024, driven by higher loan balances and investment securities yields. This growth in core lending is defintely a positive signal.

The secondary, but increasingly important, component is Non-Interest Income (NII), which totaled $23.8 million in Q3 2025. This revenue comes from diversified business segments, which is smart risk management.

• Net Interest Income: The dominant source, fueled by interest on loans and investment securities.
• Non-Interest Income: Includes fees from banking services, insurance income, and lease income from Vantage Financial, LLC.

Here's the quick math on the Q3 2025 revenue split, which shows the heavy reliance on lending:

What this estimate hides is a significant shift in the NII margin. The Net Interest Margin (NIM) for the first nine months of 2025 decreased 9 basis points to 4.15% compared to the same period in 2024. The main culprit? A sharp reduction in accretion income (the non-cash income from acquired loan portfolios). This income was only $7.8 million for the first nine months of 2025, a steep drop from $20.3 million in the same period of 2024. The company is moving past the immediate financial boost from its recent acquisitions, meaning future NII growth must be driven by organic loan growth and interest rate management, not one-time purchase accounting adjustments. If you want to dive deeper into the strategic direction underpinning these numbers, check out the Mission Statement, Vision, & Core Values of Peoples Bancorp Inc. (PEBO).

On the Non-Interest Income side, you also see volatility. While core non-interest income jumped 11% YoY in Q2 2025, the total in Q3 2025 saw a minor decline of 1% from the linked quarter, mainly due to a decrease in lease income. The insurance segment also has a seasonal bump, with a spike in commissions typically seen in the first quarter of the year. The action for you is to monitor the core NII growth and the stability of the non-interest segments, especially as the acquisition-related revenue fades.

Profitability Metrics

You want to know if Peoples Bancorp Inc. (PEBO) is making enough money, and the answer is yes, but the profitability picture is nuanced, which is typical for a regional bank navigating the 2025 rate environment. The key takeaway is that their core lending engine (Net Interest Margin) is healthy and their operational efficiency is improving, even as net profitability faces headwinds from credit loss provisions.

For a bank, we look at three core profitability concepts: Net Interest Margin (NIM) as a proxy for gross profit, Pre-Provision Net Revenue (PPNR) margin for operating profit, and Net Profit Margin for the bottom line. PEBO's third quarter 2025 results show a solid foundation, with a Net Interest Margin of 4.16% and a PPNR (operating) margin of approximately 40.7%, calculated from the $48.3 million in PPNR against $118.5 million in revenue. The reported Net Margin for Q3 2025 was 16.88%.

• Gross Profit Proxy (NIM): 4.16% (Q3 2025).
• Operating Profit Margin (PPNR): 40.7% (Q3 2025).
• Net Profit Margin: 16.88% (Q3 2025).

Profitability Trends and Industry Comparison

The trend in profitability throughout 2025 shows a recovery from a soft second quarter. Net income for Q3 2025 was $29.5 million, a significant jump from the $21.2 million reported in Q2 2025. This rebound was driven by a substantial decrease in the provision for credit losses, which dropped from $16.6 million in Q2 to $7.3 million in Q3. The core lending margin (NIM) has remained stable, hovering between 4.12% and 4.2% across the first three quarters of 2025.

When you compare this to the industry, PEBO looks competitive. The industry-wide Return on Assets (ROA) for FDIC-insured institutions in Q1 2025 was 1.16%. Peoples Bancorp Inc. exceeded this in Q3 2025 with a reported ROA of 1.22%. This tells you they are generating more profit per dollar of assets than the average bank. Still, the overall industry is expecting mid-to-high teens EPS growth in 2025 and 2026, so PEBO needs to keep its momentum.

Operational Efficiency Analysis

Operational efficiency is where Peoples Bancorp Inc. is showing clear, actionable improvement. The Efficiency Ratio (non-interest expense as a percentage of net operating revenue) is your best measure here, and lower is better. The company's ratio improved from 59.3% in Q2 2025 to a much stronger 57.1% in Q3 2025. This means they are spending less to generate each dollar of revenue.

The Q3 improvement was largely due to higher net interest income and a decrease in total non-interest expense, specifically lower professional service costs. This is defintely a good sign of management control. However, the year-to-date efficiency ratio for the first nine months of 2025 was 59.0%, which is still higher than the industry average of 56.2% reported in Q1 2025. The company is closing the gap, but they aren't best-in-class yet.

Here's the quick math on the Efficiency Ratio trend:

What this estimate hides is that non-interest expenses for the first nine months of 2025 grew 4% compared to 2024, driven by higher salaries and data processing costs, so the cost management is a continuous battle. For a deeper dive into the balance sheet, you can check out the full post: Breaking Down Peoples Bancorp Inc. (PEBO) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You want to know how Peoples Bancorp Inc. (PEBO) is funding its growth-is it leaning too heavily on debt, or is its equity base strong enough? The direct takeaway is that Peoples Bancorp Inc. maintains a balanced, healthy capital structure, keeping its Debt-to-Equity (D/E) ratio in line with the regional bank average and well within conservative limits for the sector.

As of June 30, 2025, Peoples Bancorp Inc.'s total interest-bearing debt stood at approximately $605.68 million. This debt primarily consists of notes and other borrowings, which is a relatively small component of the total balance sheet compared to customer deposits, which are a bank's main liability. By the end of the third quarter on September 30, 2025, the company's total stockholders' equity was robust at nearly $1.18 billion, supporting its $9.6 billion in total assets. This is a solid foundation.

Here's the quick math on leverage:

• Total Interest-Bearing Debt (June 30, 2025): $605.68 million
• Total Stockholders' Equity (Sept 30, 2025): $1.18 billion
• Debt-to-Equity Ratio (D/E, June 30, 2025): 0.5551

The D/E ratio of 0.5551 is right near the industry average of 0.5 for US Regional Banks as of November 2025, which is a good sign of controlled leverage. What this estimate hides is that for banks, the D/E ratio is less critical than regulatory capital ratios. Peoples Bancorp Inc.'s Tier 1 capital ratio of 12.54% as of Q3 2025 shows they are well-capitalized, comfortably exceeding the regulatory requirement to be deemed well capitalized. This is defintely a key metric for a bank.

The company balances its funding between debt and equity by prioritizing organic growth and maintaining strong capital ratios. While they use debt for operational funding, their focus on equity preservation is clear through capital management actions like their share buyback program, which saw $0.5 million in buybacks in 2025. This shows a commitment to returning capital to shareholders while still funding loan growth, which was 8% annualized in the third quarter of 2025. You can see more on who is investing in the company by Exploring Peoples Bancorp Inc. (PEBO) Investor Profile: Who's Buying and Why?

In terms of recent activity, Peoples Bancorp Inc. has demonstrated strong liquidity management rather than major debt issuances. As of March 31, 2025, the company reported a substantial borrowing capacity of $1.1 billion available through federal sources like the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank (FRB). This contingent liquidity acts as a buffer, reducing the need for new, expensive debt in a high-rate environment. Analyst sentiment reflects this stability, with Weiss Ratings reiterating a 'Hold (C)' rating as of November 2025, signaling financial stability but a neutral investment stance on the stock price.

The company is not aggressively leveraging up; it is using its equity base and maintaining access to contingent liquidity to support its organic loan growth. Finance: Monitor the cost of this contingent liquidity if it is drawn down.

Liquidity and Solvency

You need to know if Peoples Bancorp Inc. (PEBO) can cover its short-term obligations, and honestly, for a bank, the traditional Current and Quick Ratios are less helpful than their raw liquidity and borrowing capacity. The good news is that as of September 30, 2025, the company's liquidity position is strong, backed by substantial contingent funding sources. This is a bank that can defintely weather a short-term storm.

Peoples Bancorp Inc. reported total liquid and liquefiable assets of $735.2 million at the end of the third quarter of 2025. These assets are the real-world equivalent of your quick assets-cash, cash equivalents, and unpledged investment securities that can be sold fast. Plus, they had a total borrowing capacity of $985.2 million available through the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank (FRB).

Liquidity Positions and Working Capital Trends

While the standard Current Ratio (Current Assets / Current Liabilities) isn't the primary metric for a bank, some trailing-twelve-month (TTM) calculations still put it around 2.41, though this varies widely depending on how you classify bank assets and liabilities. The more relevant measure is their loan-to-deposit ratio, which stood at a conservative 88%. This ratio tells you they have $0.88 in loans for every $1.00 in deposits, showing they aren't overleveraged on their core funding base. This is a very clean signal.

Working capital trends, for a bank, are best seen in their cash and funding movements. Cash and cash equivalents decreased by $27.4 million from December 31, 2024, to September 30, 2025. Here's the quick math: this decrease happened even as total loan and lease balances increased by $127.1 million in Q3 2025 alone, which is an 8% annualized growth rate. This means they are actively deploying cash into higher-yielding loans, a positive sign of growth, but it naturally draws down the cash balance.

• Liquid Assets: $735.2 million (Q3 2025).
• Borrowing Capacity: $985.2 million (Q3 2025).
• Loan-to-Deposit Ratio: 88% (Q3 2025).

Cash Flow Statement Overview

Looking at the cash flow trends, we see a typical pattern for a growing regional bank. The latest annual figures show a strong baseline for cash flow from operations, which was $143.19 million in 2024. The key trends leading up to Q3 2025 show a significant use of cash in investing activities to fuel loan growth, which is exactly what a bank should be doing in an expansion phase.

The financing activities are also critical. The bank's deposit balances have been growing, which provides stable, low-cost funding. For instance, total deposit balances increased by 2% in Q1 2025, driven by money market and governmental accounts. This deposit growth is the primary source of cash flow for financing the loan growth you see in the investing section. The stability of their funding is further detailed in their Mission Statement, Vision, & Core Values of Peoples Bancorp Inc. (PEBO).

Potential Liquidity Strengths

The biggest strength here is the huge safety net. Peoples Bancorp Inc. has contingent sources of liquidity totaling a massive $4.0 billion. This includes additional unpledged securities and wholesale funding capacity. What this estimate hides, however, is the potential cost of activating that contingent liquidity in a crisis, but the sheer size of the reserve offers significant comfort to investors.

The fact that they are maintaining a Tier 1 capital ratio of 12.54% also shows they continue to exceed the capital required by the Federal Reserve Board to be deemed well capitalized. This strong capital base acts as the ultimate liquidity buffer, allowing them to absorb unexpected losses without jeopardizing operations. The takeaway? Their liquidity is not a near-term concern; it's a structural strength that supports their continued loan growth strategy.

Valuation Analysis

You want to know if Peoples Bancorp Inc. (PEBO) is a good buy right now, and the quick answer is that the market sees it as fairly priced but leaning toward undervalued based on key metrics, suggesting a decent margin of safety. The stock is currently trading near its 52-week low, but analysts see a clear path for a price increase.

As of mid-November 2025, Peoples Bancorp Inc. (PEBO) closed at $28.31 a share. This price sits just 8.01% above its 52-week low of $26.21, which was set back in April 2025, and well below its 52-week high of $37.07. This means you are buying into a regional bank that has already absorbed a significant amount of market pessimism over the last year. Honestly, a stock trading this close to its floor often signals a potential opportunity if the fundamentals are sound. To understand the long-term strategy that drives these numbers, you should review their Mission Statement, Vision, & Core Values of Peoples Bancorp Inc. (PEBO).

Is Peoples Bancorp Inc. (PEBO) Overvalued or Undervalued?

When we look at the core valuation multiples, Peoples Bancorp Inc. (PEBO) appears to be trading at a discount compared to historical averages and many peers. For a financial institution, the Price-to-Book (P/B) ratio is crucial because it compares the stock price to the company's net asset value-its book value. A P/B ratio below 1.0 often indicates undervaluation, and Peoples Bancorp Inc.'s P/B is currently around 0.89.

Here's the quick math on the key valuation ratios based on recent 2025 fiscal data:

• Price-to-Earnings (P/E) Ratio: 10.33. This is lower than the broader market average, suggesting the stock is inexpensive relative to its earnings.
• Price-to-Book (P/B) Ratio: 0.89. Trading below 1.0 means you are paying less than the stated book value per share, a classic sign of potential undervaluation in a bank.
• Enterprise Value-to-EBITDA (EV/EBITDA): 13.83. This multiple is used less often for banks, but provides a view of the total company value relative to its core operating profit.

The P/B ratio is the strongest signal here. You are buying a dollar of the bank's net assets for about 89 cents. What this estimate hides is the quality of those assets, particularly the loan portfolio, but the discount is notable.

Dividend Profile and Analyst Consensus

Peoples Bancorp Inc. (PEBO) offers a compelling income stream, which is a major draw for investors in the banking sector. The company has an annualized dividend of $1.64 per share. At the current stock price, this translates to a strong dividend yield of approximately 5.77%. The dividend payout ratio is manageable at about 54% of earnings, meaning they are only paying out just over half of their profits to shareholders, which leaves plenty of room for reinvestment or to cover any unexpected losses. This is defintely a sustainable payout for a regional bank.

The Wall Street consensus is cautious but sees upside. Out of six analysts covering the stock, the consensus rating is a Hold, with four analysts recommending a Hold and two recommending a Buy. The average 12-month price target is $33.13.

This average target suggests a potential upside of about 17.01% from the current $28.31 price. The market is saying 'wait and see' (Hold), but the price target is saying 'it should be worth more' (Buy). This disconnect is your opportunity. The market is waiting for a catalyst, maybe a clear path for interest rate stability or sustained loan growth, before pushing the price closer to the analysts' target.

Your next step should be to dig into the quality of their loan portfolio and deposit stability to confirm the P/B discount is justified by a temporary market fear, not a fundamental flaw.

Risk Factors

You're looking at Peoples Bancorp Inc. (PEBO) and seeing solid Q3 2025 results-Net Income of $29.5 million and an improved efficiency ratio of 57.1%-but you need to know what's on the horizon. The key risks for a regional bank like Peoples Bancorp Inc. (PEBO) right now are less about immediate failure and more about credit quality deterioration and market-driven margin pressure.

The biggest near-term risk is the potential for loan losses, which is a common concern across the regional banking sector. While the company's provision for credit losses decreased significantly to $7.3 million in Q3 2025 (down from $16.6 million in Q2 2025), the underlying credit quality still warrants attention. Specifically, we've seen an uptick in criticized and classified loans, which are loans showing signs of weakness, and net charge-offs (loans written off as uncollectible) for Q3 2025 stood at $6.83 million. This is a clear signal that economic uncertainty is starting to hit the loan book.

Here's a quick map of the core risks you should be tracking:

• Financial Risk: Rising criticized loans and net charge-offs.
• Strategic Risk: Margin compression from potential Federal Reserve rate cuts.
• External Risk: Exposure to Commercial Real Estate (CRE) in a softening market.

Operational and Strategic Headwinds

From an operational standpoint, the bank is managing two major external risks. First is the market-wide competition for deposits, which can lead to persistent deposit outflows. Peoples Bancorp Inc. (PEBO) has managed this relatively well, but it remains a constant pressure point on funding costs. Second, like many regional banks, Peoples Bancorp Inc. (PEBO) has exposure to Commercial Real Estate (CRE), especially non-owner-occupied office space, which is under stress due to work-from-home trends. This CRE exposure is a significant sensitivity to monitor, as a downturn could force higher credit loss provisions.

The strategic risk is a classic interest rate dilemma. While the bank's net interest margin (NIM) has been robust, future Federal Reserve rate cuts-a likely scenario in 2026-could compress that margin, making it harder to generate the same level of net interest income, which was $91.3 million in Q3 2025. Also, softening consumer markets could dampen the high loan growth momentum the bank has recently enjoyed.

The bank is defintely not sitting still, though. Their management is actively mitigating risk. They've been strategically reducing exposure to high-balance small-ticket leasing accounts, which were a source of credit challenges. This move appears to be working, as the net charge-off rate for that specific portfolio has declined from 14.56% at the end of 2024 to 11.49% in Q3 2025. Plus, their capital position is strong, with the tangible equity to tangible assets ratio improving to 8.53% as of September 30, 2025, giving them a solid buffer against unexpected losses.

For a deeper dive into who is betting on Peoples Bancorp Inc. (PEBO)'s ability to navigate these waters, you should read Exploring Peoples Bancorp Inc. (PEBO) Investor Profile: Who's Buying and Why?

Here's the quick math on the positive side: the bank's total stockholders' equity stood at a healthy $1.18 billion at the end of Q3 2025, which, combined with $735.2 million in liquid assets, shows they have the capacity to absorb shocks. The risk is real, but so is the financial resilience.

Growth Opportunities

You need to know where Peoples Bancorp Inc. (PEBO) is going, not just where it's been. The direct takeaway is this: PEBO is banking on disciplined, organic loan growth, particularly in commercial lending, plus a strategic focus on digital efficiency to drive its near-term earnings, which analysts project to grow at an average of 8.8% per year.

The company isn't chasing every deal, but is instead leveraging its strong regional footprint and superior net interest margin (NIM) to build value. This is a classic community bank strategy, but with a modern, defintely more efficient twist.

Core Growth Drivers & 2025 Projections

PEBO's growth engine for the 2025 fiscal year is clearly focused on core lending and operational excellence. The management team is guiding for full-year loan growth between 4% and 6%, with an emphasis on commercial and industrial loans and residential real estate. This focus is already paying off; the loan portfolio grew at an annualized rate of 8% in the third quarter of 2025. That's a solid pace.

Here's the quick math on profitability: The bank's Net Interest Margin (NIM)-the difference between interest income and interest expense-is projected to remain strong, guided between 4.00% and 4.20% for the full year 2025. To be fair, that's a significant competitive advantage (alpha) when compared to the regional banking sector average of just 3.25% in Q2 2025.

• Loan growth target: 4%-6% for full-year 2025.
• Q3 2025 Net Income: $29.5 million.
• Projected Stable EPS: $3.35 per share.

Strategic Edge and Future Moves

Peoples Bancorp Inc. has a clear competitive advantage (moat) rooted in its capital strength and operational efficiency. As of September 30, 2025, the company reported total assets of about $9.6 billion, built on a foundation of a strong capital buffer. Plus, they've been aggressively improving their efficiency ratio-a measure of overhead costs to revenue-which hit a strong 57.1% in Q3 2025, down from 59.3% in the prior quarter.

In terms of strategic initiatives, the focus is two-fold: technology and opportunistic M&A (Mergers and Acquisitions). The bank is investing in digital transformation to automate processes, which is what's driving that efficiency ratio improvement. Also, while there haven't been any major acquisitions in 2025 yet, management has signaled they are actively looking for the right opportunities to expand market share in their core regions-Ohio, Kentucky, and West Virginia. You can read more about their underlying philosophy in their Mission Statement, Vision, & Core Values of Peoples Bancorp Inc. (PEBO).

The table below summarizes the key financial metrics that underscore PEBO's strategic positioning and growth trajectory as of the third quarter of 2025.

Your next step is to monitor the Q4 2025 earnings call for any concrete news on an acquisition or a revised 2026 loan growth forecast.