Peoples Bancorp Inc. (PEBO): 5 FORCES Analysis [Nov-2025 Updated]

You're digging into Peoples Bancorp Inc. now, trying to figure out the real fight for this $9.6 billion asset regional bank in late 2025's high-rate, digital-first environment. The picture is clear: depositors have the upper hand chasing yield, pushing funding costs up, while core tech suppliers hold you hostage with high switching costs. Plus, the rivalry with bigger banks and the steady creep of FinTech substitutes mean every basis point matters, especially with the Net Interest Margin hovering near 4.16% as of Q3 2025. To see exactly where Peoples Bancorp Inc. is most exposed-and where it can build defenses-you need to look closely at the pressure points mapped out by Porter's Five Forces below.

Peoples Bancorp Inc. (PEBO) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the suppliers for Peoples Bancorp Inc. (PEBO), and honestly, the power dynamics here are split between technology vendors and the people providing the money-the depositors. It's not a simple picture.

Core processing is an oligopoly; vendors like Fiserv have high switching costs and deconversion fees. For a regional bank like Peoples Bancorp Inc., the reliance on established core systems means that when you need an upgrade or integration, you're often negotiating from a position of relative weakness. We saw that in the year-to-date figures, where non-interest expense for the first nine months of 2025 grew partly due to higher data processing and software expenses compared to 2024. While Peoples Bancorp Inc. managed to decrease total non-interest expense by $0.5 million in Q3 2025 versus the linked quarter, the underlying cost of maintaining and modernizing essential, specialized technology remains a significant, non-negotiable input cost. The industry trend shows a push toward cloud-based solutions, but migrating a core system is a massive undertaking, effectively locking in the incumbent supplier for the near term. This vendor concentration translates directly into less favorable contract terms.

Depositors-the primary capital supplier-have high power due to competition for yield. This is where the rubber meets the road for Peoples Bancorp Inc.'s Net Interest Margin (NIM). As of September 30, 2025, Peoples Bancorp Inc. held total deposits of $7.6 billion. When market rates are competitive, depositors can easily move their funds to chase a better return, forcing Peoples Bancorp Inc. to raise its funding costs. This pressure is evident in the NIM movement; while the NIM improved slightly to 4.16% in Q3 2025 from 4.15% in Q2 2025, this was driven by higher investment securities yields, not necessarily cheaper funding. The competition for deposits is real, as seen by the $142.5 million increase in retail certificates of deposit and a $100.7 million increase in money market deposits when comparing Q3 2025 to Q3 2024.

The funding mix is shifting away from low-cost, non-interest-bearing deposits. This is a key indicator of depositor power. For Peoples Bancorp Inc., non-interest-bearing deposits stood at 20% of total deposits at the end of Q3 2025. This percentage was unchanged from the linked quarter, but the underlying dynamics show a shift toward interest-bearing products. For example, compared to Q3 2024, Peoples Bancorp Inc. saw an increase of $75.7 million in non-interest-bearing deposits, but this was dwarfed by the increases in interest-bearing retail CDs ($142.5 million) and money market deposits ($100.7 million). This signals that while Peoples Bancorp Inc. is growing its deposit base, a larger portion of that base is now price-sensitive, increasing the overall cost of funds.

Here's a quick look at the deposit structure as of September 30, 2025, which shows where the funding pressure is concentrated:

Regional banks face reduced negotiating power with major IT vendors for new technology integration. This is the flip side of the core processing point. When Peoples Bancorp Inc. needs to integrate new capabilities-say, for digital onboarding or AI analytics, which the market demands-the vendors offering these solutions are often the same ones providing the core. The industry is seeing a rapid shift to cloud-native, API-first platforms, but for an established institution, the cost and risk of ripping out a legacy system are immense. This means Peoples Bancorp Inc. has less leverage to demand lower pricing or more favorable service level agreements (SLAs) for new technology stacks, as the alternative is often a multi-year, high-cost migration project. The fact that data processing and software expenses contributed to the year-to-date non-interest expense growth underscores this reality.

The bargaining power of suppliers for Peoples Bancorp Inc. can be summarized by these key supplier groups:

• Core System Vendors: High power due to high switching costs.
• Depositors: High power due to yield competition.
• Brokered Deposits: Power reduced strategically, as evidenced by a $138.1 million decrease since year-end 2024.
• Other Vendors (e.g., professional services): Power appears lower, as Q3 2025 saw a $0.8 million decrease in professional fees quarter-over-quarter.

Finance: draft a sensitivity analysis on a 50 basis point increase in average deposit cost by Friday.

Peoples Bancorp Inc. (PEBO) - Porter's Five Forces: Bargaining power of customers

You're analyzing the pressure customers exert on Peoples Bancorp Inc., and honestly, in the current rate environment, that power is significant, especially on the funding side of the balance sheet. The ease with which depositors can shop around for better yields means Peoples Bancorp Inc. has to be constantly vigilant about its deposit pricing.

Customer switching costs for deposits are low, especially for digital-savvy consumers chasing better rates. While Peoples Bancorp Inc. has a strong regional presence with 129 full-service bank branches across Ohio, Kentucky, West Virginia, Virginia, Washington D.C., and Maryland as of December 31, 2024, the digital migration means physical proximity matters less for basic savings and money market accounts. This low friction encourages rate-shopping behavior.

Commercial and affluent clients, who are more rate-sensitive, drive deposit outflows to higher-yielding alternatives. We saw this pressure reflected in the balance sheet as of September 30, 2025. Total deposit balances decreased by $5.0 million compared to June 30, 2025, driven by decreases in brokered deposits and governmental deposit accounts. To be fair, retail certificates of deposit actually increased due to special promotional rates, but the overall movement suggests a sensitivity to external market rates among larger or more sophisticated depositors.

Here's a quick look at the key metrics framing this dynamic as of the end of Q3 2025:

Peoples Bancorp Inc.'s diversified offerings (insurance, specialty finance) help build relationship stickiness. The company operates through subsidiaries offering insurance, investment, trust solutions, premium financing, and equipment leasing. This cross-selling capability is a key lever to increase the overall 'stickiness' of a client relationship, making it harder for a competitor to win just one product line, like deposits, away from Peoples Bancorp Inc.

Intense competition for loans means pricing pressure, even with Q3 2025 Net Interest Margin at 4.16%. While the NIM expanded by one basis point sequentially to 4.16%, this was achieved alongside strong annualized loan growth of 8%. To grow loans at that pace, Peoples Bancorp Inc. is competing for assets, which can limit pricing power on the lending side. Still, the core NIM (excluding accretion income) expanded by 5 basis points, suggesting underlying strength in core lending yields, which is a positive offset to customer power in deposit gathering.

The bank expects a NIM of 4.2% for 2026, which suggests management anticipates continued, albeit tight, control over funding costs relative to asset yields. Finance: review the Q4 2025 deposit beta projections against competitor rate sheets by next Tuesday.

Peoples Bancorp Inc. (PEBO) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive fray Peoples Bancorp Inc. faces in the Mid-Atlantic and Midwest banking markets. Honestly, the rivalry here is fierce, especially when you stack up against the giants. Peoples Bancorp Inc., with total assets of $9.6 billion as of September 30, 2025, is definitely in the regional bank category, competing directly with peers like WesBanco, Inc., which reported total assets of $27.6 billion as of June 30, 2025. That size difference alone signals where the competitive pressure originates from larger national players.

The market Peoples Bancorp Inc. operates in is mature. This means competition isn't just about opening new territory; it's a grind for existing customers based on the fundamentals: price, service quality, and physical access. Peoples Bancorp Inc. maintains a network of 127 full-service bank branches across its operating footprint as of late 2025. In this environment, every basis point on a loan rate or every minute saved at a teller line matters. Here's the quick math on the intensity: Peoples Bancorp Inc. is fighting for share across a fixed number of physical touchpoints.

This fight for market share is being intensified by both external moves and internal targets. Peoples Bancorp Inc. is pushing hard on organic loan growth, projecting a full-year 2025 growth rate between 4% and 6%. To give you a sense of the current momentum, the annualized loan growth in the third quarter of 2025 hit 8%. Still, this organic push is happening alongside the constant threat of strategic acquisitions by larger regional players, which instantly changes the competitive map.

The post-2023 banking environment has shifted customer perception, which directly impacts rivalry. Business customers, perhaps more risk-averse now, are increasingly viewing the largest national banks as the default 'safer' option. This dynamic puts immediate, tangible pressure on regional banks like Peoples Bancorp Inc. to prove their stability and value proposition. The competition isn't just about rates anymore; it's about perceived security.

Consider the scale of the key players in this rivalry:

The competitive response from Peoples Bancorp Inc. to this rivalry is evident in their focus areas:

• Maintain projected organic loan growth of 4%-6% for 2025.
• Improve efficiency ratio to 57.1% in Q3 2025 from 59.3% in Q2 2025.
• Focus on originated loans over acquired balances.
• Reported Q3 2025 Net Interest Margin of 4.16%.

Peoples Bancorp Inc. (PEBO) - Porter's Five Forces: Threat of substitutes

You're looking at how external, non-traditional options are pulling business away from the core services Peoples Bancorp Inc. offers. This threat of substitutes is real, especially in lending and deposit gathering.

FinTech lenders are definitely capturing new business, which directly pressures Peoples Bancorp Inc.'s loan origination pipeline. Recent data from October 2025 shows that 75% of small businesses surveyed are bypassing traditional banks for non-bank or fintech lenders when seeking funding. This is a significant shift in small business preference that you need to track closely.

For the liability side of the balance sheet, money market funds (MMFs) and digital savings accounts act as direct substitutes for low-interest deposits, driving a mix shift. Peoples Bancorp Inc. saw customer deposits increase in Q3 2025, but this was specifically driven by higher money market and interest-bearing demand accounts, suggesting customers are actively seeking higher yields than standard checking or savings might offer. Historically, from 1995 to 2025, a one-percentage-point increase in bank deposits was associated with a 0.2-percentage-point decline in MMF assets, showing this substitution effect works both ways. Peoples Bancorp Inc.'s Net Interest Margin (NIM) for Q3 2025 stood at 4.16%, which sets the competitive hurdle for deposit pricing.

Peoples Bancorp Inc.'s specialty finance divisions, like North Star Leasing, are a direct countermeasure to substitution in niche markets. North Star Leasing, operating as a division of Peoples Bank, works with more than 10,000 equipment vendors, manufacturers, and resellers to provide specialized lease solutions. This specialized offering helps retain commercial clients who might otherwise look to independent leasing companies.

The trust and investment services face substitution from non-bank players as well. In the broader wealth management space, digital-direct managers have shown significant traction, capturing 41% of total industry net flows between 2016 and 2021, with their share of client assets growing from 21% to 27% over that period. Furthermore, the segment for 'others' in wealth management firms (which includes non-bank/non-traditional providers) is projected to be the fastest growing, with a Compound Annual Growth Rate (CAGR) of 12.1% during the 2020-2025 forecast period. This signals intense competition for investment advisory fees.

Here is a quick comparison of the competitive dynamics Peoples Bancorp Inc. faces from substitutes:

You should monitor the growth of non-FDIC insured cash alternatives, as Peoples Bancorp Inc.'s total assets were $9.62 billion as of September 30, 2025, with total deposits at $7.6 billion.

• Digital-direct wealth managers saw client asset share rise to 27%.
• The 'others' wealth manager segment has a projected CAGR of 12.1% (2020-2025).
• Peoples Bancorp Inc.'s NIM was 4.16% in Q3 2025.
• Customer deposits at Peoples Bancorp Inc. increased due to higher money market balances.

Finance: draft 13-week cash view by Friday.

Peoples Bancorp Inc. (PEBO) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers to entry for Peoples Bancorp Inc. (PEBO) in late 2025, and honestly, the landscape is a mix of high regulatory hurdles and surprisingly agile digital competition. For a company like Peoples Bancorp Inc., which held total assets of $9.62 billion as of September 30, 2025, the traditional barriers remain substantial, but the nature of those barriers is shifting.

Regulatory and capital requirements for a de novo bank at this scale-Peoples Bancorp Inc.'s scale-are a significant barrier, though recent regulatory shifts are creating nuances. While the massive capital burden for a bank of Peoples Bancorp Inc.'s size is a deterrent, recent regulatory actions show a bifurcated environment. For instance, a final rule issued on November 25, 2025, modifies capital standards, capping the enhanced supplementary leverage ratio for depository institution subsidiaries at one percent, making the overall requirement for those subsidiaries no more than four percent. This rule, taking effect April 1, 2026, is designed to reduce disincentives for lower-risk activities, but it still requires adherence to complex standards.

To give you a clearer picture of the capital environment, especially for new entrants or existing players facing new rules, here is a look at some recent regulatory figures:

Still, the threat from FinTech companies is real, and they are increasingly acquiring bank charters to enter the market at scale, bypassing traditional barriers. This isn't just theoretical; 2025 has emerged as a banner year for charter applications from non-traditional players. Here are the numbers showing that momentum:

• 20 charter filings submitted by fintechs/non-traditional applicants through October 3, 2025, an all-time high.
• Fintech acquisitions totaled 180 deals in H1 2025, a 15% year-over-year increase from H1 2024's $32.7 billion.
• Total value of fintech acquisitions in H1 2025 reached $37.6 billion.
• The AI in fintech market is projected to grow to $17.79 billion in 2025, up from $14.13 billion in 2024, fueling innovation that can be ported into a chartered entity.

Digital-only banks can enter the geographic market without the cost of Peoples Bancorp Inc.'s 127 physical branches across Ohio, West Virginia, Kentucky, Virginia, Washington D.C., and Maryland. That's a massive fixed cost advantage right out of the gate. They can target deposits and lending across state lines instantly with a digital platform, whereas Peoples Bancorp Inc. is physically anchored to those specific markets. For example, a new digital entrant avoids the overhead associated with maintaining those 127 locations, which include real estate, utilities, and local staffing costs.

The company's community bank focus and local relationships create a soft barrier, but digital platforms erode this defintely. Your local presence-the relationship-based lending and service that Peoples Bancorp Inc. prides itself on-is powerful, but it requires time and physical proximity to build. Digital platforms, however, can offer superior user experience and convenience, which often trumps local familiarity for transactional banking needs. If onboarding takes 14+ days, churn risk rises, even if the local banker is friendly.

Finance: draft 13-week cash view by Friday.