What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-06 · 356 added, 220 removed, 1212 unchanged (32% of the section changed)

9 unchanged sentences

Total cash and cash equivalents 398,385 415,727

Available-for-sale investment securities, at fair value (amortized cost of $ 1,381,259 at March 31, 2022 and $ 1,283,146 at December 31, 2021) (a)

Available-for-sale investment securities, at fair value (amortized cost of $ 1,389,621 at June 30, 2022 and $ 1,283,146 at December 31, 2021) (a)

1,267,598 1,275,493

Held-to-maturity investment securities, at amortized cost (fair value of $ 347,978 at March 31, 2022 and $ 369,955 at December 31, 2021) (a)

Held-to-maturity investment securities, at amortized cost (fair value of $ 341,088 at June 30, 2022 and $ 369,955 at December 31, 2021) (a)

400,720 374,129

19 unchanged sentences

Stockholders’ equity

Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2022 and at December 31, 2021

Common stock, no par value, 50,000,000 shares authorized, 29,824,684 shares issued at March 31, 2022 and 29,814,401 shares issued at December 31, 2021, including at each date shares held in treasury

Preferred shares, no par value, 50,000 shares authorized, no shares issued at June 30, 2022 and at December 31, 2021

Common stock, no par value, 50,000,000 shares authorized, 29,836,491 shares issued at June 30, 2022 and 29,814,401 shares issued at December 31, 2021, including at each date shares held in treasury

684,416 686,282

1 unchanged sentence

Accumulated other comprehensive loss, net of deferred income taxes ( 93,359 ) ( 11,619 )

Treasury stock, at cost, 1,434,441 shares at March 31, 2022 and 1,577,359 shares at December 31, 2021

Treasury stock, at cost, 1,610,525 shares at June 30, 2022 and 1,577,359 shares at December 31, 2021

( 38,841 ) ( 36,714 )

1 unchanged sentence

Total liabilities and stockholders’ equity $ 7,278,292 $ 7,063,521

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $ 0 and $ 286 , respectively, at March 31, 2022 and $ 0 and $ 286 , respectively, at December 31, 2021.

(b) Also referred to throughout this document as "total loans" and "loans held for investment."

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $ 0 and $ 286 , respectively, at June 30, 2022 and $ 0 and $ 286 , respectively, at December 31, 2021.

(b) Also referred to throughout this Quarterly Report on Form 10-Q as "total loans" and "loans held for investment."

See Notes to the Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands, except per share data) 2022 2021 2022 2021

11 unchanged sentences

Net interest income 61,468 39,660 115,778 75,238

Recovery of credit losses ( 6,807 ) ( 4,749 )

Net interest income after recovery of credit losses 61,117 40,327

(Recovery of) provision for credit losses ( 780 ) 3,088 ( 7,587 ) ( 1,661 )

Net interest income after (recovery of) provision for credit losses 62,248 36,572 123,365 76,899

Non-interest income:

7 unchanged sentences

Net loss on asset disposals and other transactions ( 152 ) ( 124 ) ( 279 ) ( 151 )

Net gain (loss) on investment securities 130 ( 336 )

Net (loss) gain on investment securities ( 44 ) ( 202 ) 86 ( 538 )

Other non-interest income 1,294 803 2,620 1,461

27 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2022 2021 2022 2021

2 unchanged sentences

Available-for-sale investment securities:

Gross unrealized holding loss arising during the period ( 71,637 ) ( 12,578 )

Related tax benefit 16,448 2,642

Reclassification adjustment for net (loss) gain included in net income ( 130 ) 336

Gross unrealized holding (loss) gain arising during the period ( 42,648 ) 3,525 ( 114,284 ) ( 9,053 )

Related tax benefit (expense) 10,238 ( 741 ) 26,686 1,901

Net effect on other comprehensive loss ( 55,289 ) ( 9,671 )

Reclassification adjustment for net gain (loss) included in net income 44 202 ( 86 ) 538

Related tax (expense) benefit ( 10 ) ( 42 ) 20 ( 113 )

Net effect on other comprehensive (loss) income ( 32,376 ) 2,944 ( 87,664 ) ( 6,727 )

Defined benefit plan:

Net (loss) gain arising during the period ( 14 ) 5

Related tax benefit (expense) 3 ( 1 )

Net gain arising during the period 75 3 61 8

Related tax expense ( 17 ) — ( 14 ) ( 1 )

Amortization of unrecognized gain and service cost on benefit plans 17 31 38 61

2 unchanged sentences

Cash flow hedges:

Net gain arising during the period 5,456 4,236

Related tax expense ( 1,220 ) ( 890 )

Net effect on other comprehensive income 4,236 3,346

Total other comprehensive loss, net of tax ( 51,048 ) ( 6,298 )

Net gain (loss) arising during the period 2,104 ( 294 ) 7,560 3,942

Related tax (expense) benefit ( 492 ) 62 ( 1,712 ) ( 828 )

Net effect on other comprehensive income (loss) 1,612 ( 232 ) 5,848 3,114

Total other comprehensive (loss) income, net of tax ( 30,693 ) 2,740 ( 81,740 ) ( 3,558 )

Total comprehensive (loss) income $ ( 5,805 ) $ 12,843 $ ( 33,275 ) $ 22,008

6 unchanged sentences

(Dollars in thousands)

Balance, March 31, 2022 $ 684,243 $ 220,477 $ ( 62,666 ) $ ( 33,713 ) $ 808,341

Net income — 24,888 — — 24,888

Other comprehensive loss, net of tax — — ( 30,693 ) — ( 30,693 )

Cash dividends declared — ( 10,757 ) — ( 10,757 )

Reissuance of treasury stock for common share awards ( 727 ) — — 727 —

Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 78 78

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 206 ) ( 206 )

Common shares repurchased under share repurchase program then in effect — — — ( 5,987 ) ( 5,987 )

Common shares issued under dividend reinvestment plan 296 — — — 296

Common shares issued under compensation plan for Boards of Directors 13 — — 115 128

Common shares issued under employee stock purchase plan 15 — — 145 160

Stock-based compensation 576 — — — 576

Balance, June 30, 2022 $ 684,416 $ 234,608 $ ( 93,359 ) $ ( 38,841 ) $ 786,824

Accumulated Other Comprehensive Loss Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(Dollars in thousands)

Balance, December 31, 2021 $ 686,282 $ 207,076 $ ( 11,619 ) $ ( 36,714 ) $ 845,025

3 unchanged sentences

Reissuance of treasury stock for common share awards ( 4,725 ) — — 4,725 —

Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 78 78

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 1,436 ) ( 1,436 )

Common shares repurchased under share repurchase program then in effect — — — ( 5,987 ) ( 5,987 )

Common shares issued under dividend reinvestment plan 601 — — — 601

2 unchanged sentences

Stock-based compensation 2,153 — — — 2,153

Balance, March 31, 2022 $ 684,243 $ 220,477 $ ( 62,667 ) $ ( 33,713 ) $ 808,340

Balance, June 30, 2022 $ 684,416 $ 234,608 $ ( 93,359 ) $ ( 38,841 ) $ 786,824

Accumulated Other Comprehensive (Loss) Income Total Stockholders' Equity

1 unchanged sentence

(Dollars in thousands)

Balance, March 31, 2021 $ 422,370 $ 199,321 $ ( 4,962 ) $ ( 37,836 ) $ 578,893

Net income — 10,103 — — 10,103

Other comprehensive income, net of tax — — 2,740 — 2,740

Cash dividends declared — ( 7,065 ) — — ( 7,065 )

Reissuance of treasury stock for common share awards ( 432 ) — — 432 —

Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 72 72

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 87 ) ( 87 )

Common shares issued under dividend reinvestment plan 90 — — — 90

Common shares issued under compensation plan for Boards of Directors 12 — — 43 55

Common shares issued under employee stock purchase plan 26 — — 92 118

Stock-based compensation 586 — — — 586

Balance, June 30, 2021 $ 422,652 $ 202,359 $ ( 2,222 ) $ ( 37,284 ) $ 585,505

Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(Dollars in thousands)

Balance, December 31, 2020 $ 422,536 $ 190,691 $ 1,336 $ ( 38,890 ) $ 575,673

9 unchanged sentences

Stock-based compensation 1,784 — — — 1,784

Balance, March 31, 2021 $ 422,370 $ 199,321 $ ( 4,962 ) $ ( 37,836 ) $ 578,893

Balance, June 30, 2021 $ 422,652 $ 202,359 $ ( 2,222 ) $ ( 37,284 ) $ 585,505

See Notes to the Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended

Six Months Ended

(Dollars in thousands) 2022 2021

11 unchanged sentences

Proceeds from sales 3,101 5,696

Net decrease (increase) in loans held for investment 75,740 ( 7,749 )

Net decrease in loans held for investment 70,872 116,441

Net expenditures for premises and equipment ( 3,462 ) ( 2,850 )

Proceeds from sales of other real estate owned 307 113

Purchase of bank owned life insurance ( 30,000 ) —

Proceeds from bank owned life insurance contracts 248 —

Business acquisitions, net of cash received ( 85,793 ) ( 116,644 )

(Investment in) proceeds from limited partnership and tax credit funds ( 1,151 ) 4

Investment in limited partnership and tax credit funds ( 1,151 ) ( 4,996 )

Net cash used in investing activities ( 196,003 ) ( 230,007 )

2 unchanged sentences

Net increase in interest-bearing deposits 46,485 138,442

Net decrease in short-term borrowings ( 27,252 ) ( 5,393 )

Net increase (decrease) in short-term borrowings 154,915 ( 21,765 )

Proceeds from long-term borrowings 11,255 —

Payments on long-term borrowings ( 89,217 ) ( 563 )

Cash dividends paid ( 21,081 ) ( 13,898 )

Purchase of treasury stock under share repurchase program ( 5,987 ) —

Purchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock

1 unchanged sentence

Proceeds from issuance of common shares 576 365

Contingent consideration payments made after a business acquisition — ( 116 )

Net cash provided by financing activities 115,953 285,305

4 unchanged sentences

Interest paid $ 6,585 $ 7,374

Income taxes paid 1,797 5,250

Supplemental noncash disclosures:

Transfers from loans to other real estate owned 36 —

Transfers from total loans to other real estate owned 55 210

Lease right-of-use assets obtained in exchange for lessee operating lease liabilities 27 79

9 unchanged sentences

Accordingly, these financial statements do not contain all of the information and footnotes required by US GAAP for annual financial statements and should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2021 ("Peoples' 2021 Form 10-K").

The accounting and reporting policies followed in the presentation of the accompanying Unaudited Condensed Consolidated Financial Statements are consistent with those described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2021 Form 10-K, as updated by the information contained in this quarterly report on Form 10-Q for the quarterly period ended March 31, 2022 (this "Form 10-Q").

Management has evaluated all significant events and transactions that occurred after March 31, 2022 for potential recognition or disclosure in these unaudited condensed consolidated financial statements.

The accounting and reporting policies followed in the presentation of the accompanying Unaudited Condensed Consolidated Financial Statements are consistent with those described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2021 Form 10-K, as updated by the information contained in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 (this "Form 10-Q").

Management has evaluated all significant events and transactions that occurred after June 30, 2022 for potential recognition or disclosure in these unaudited condensed consolidated financial statements.

In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly such information for the periods and at the dates indicated.

8 unchanged sentences

Unless otherwise discussed, management believes the impact of any recently issued standards, including those issued but not yet effective, will not have a material impact on Peoples' financial statements taken as a whole.

Accounting Standards Updated ("ASU") ASU 2020-04 - Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

This guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

This guidance was further updated by ASU 2021-01.

This update is effective as of March 12, 2020 through December 31, 2022.

This ASU was early adopted as of September 30, 2021, and does not have a significant impact on Peoples' Consolidated Financial Statements, but is expected to reduce the accounting burden of assessing contracts impacted by reference rate reform.

ASU 2022-01 - Fair Value Hedging - Portfolio Layer Method - Derivatives and Hedging (Topic 815).

This ASU clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets.

The update expands and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layer and multiple-layer hedges.

This ASU expands and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layer and multiple-layer hedges.

For entities that have already adopted ASU 2017-12, as Peoples has, the amendments in ASU 2022-01 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The amendments in the ASU may also be early adopted, including adoption in any interim period.

Peoples is currently evaluating the impact of the amendments in the ASU on Peoples' consolidated financial statements.

The amendments in this ASU may also be early adopted, including adoption in any interim period.

Peoples is currently evaluating the impact of the amendments in this ASU on Peoples' consolidated financial statements.

ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326):

1 unchanged sentence

This ASU eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors and amends the guidance on disclosures to include current-period gross write-offs by year of origination.

The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty.

This ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty.

For entities that have already adopted ASU 2016-13, as Peoples has, the amendments in ASU 2022-02 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The amendments in the ASU may also be early adopted, including adoption in any interim period.

Peoples is currently evaluating the impact of the amendments in the ASU on Peoples' consolidated financial statements.

The amendments in this ASU may also be early adopted, including adoption in any interim period.

Peoples is currently evaluating the impact of the amendments in this ASU on Peoples' consolidated financial statements.

Note 2 Fair Value of Assets and Liabilities

11 unchanged sentences

Recurring Fair Value Measurements at Reporting Date

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(Dollars in thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

28 unchanged sentences

Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy at March 31, 2022 and December 31, 2021.

Non-Recurring Fair Value Measurements at Reporting Date

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(Dollars in thousands) Level 2 Level 3 Level 2 Level 3

3 unchanged sentences

Servicing rights (b)(c) $ — $ 24 $ — $ 22

(a) Loans held for sale are presented gross of allowance for credit losses of $ 24 and $ 0 as of March 31,2022 and December 31,2021, respectively.

(a) Loans held for sale are presented gross of a valuation allowance of $ 52 and $ 0 as of June 30, 2022 and December 31, 2021, respectively.

(b) Included in "Other intangible assets" on the Unaudited Consolidated Balance Sheets.

Servicing rights are carried at the lower of cost or market value.

(c) As of March 31, 2022, Peoples recorded a minimal addition to the valuation allowance related to changes in the fair value of servicing rights.

Peoples established a valuation allowance on servicing rights of $ 12 at March 31, 2022 and December 31, 2021.

The fair value of the servicing rights was less than the carrying value on 10 year fixed rate loans.

The fair value of the servicing rights on 10-year fixed rate loans was less than the carrying value.

Collateral Dependent Loans:

Loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty are considered collateral dependent.

Peoples utilizes outside third-party appraisal services to value the underlying collateral, for which Peoples uses to report the loans at their fair value (Level 3).

Loans Held for Sale:

Loans originated and intended to be sold in the secondary market, generally 1-4 family residential loans, are carried, in aggregate, at the lower of cost or estimated fair value.

Loans originated and intended to be sold in the secondary market, generally one-to-four family residential loans, are carried, in aggregate, at the lower of cost or estimated fair value.

Peoples uses a valuation model using quoted market prices of similar instruments in arriving at the fair value (Level 2).

13 unchanged sentences

Fair Value Measurements of Other Financial Instruments

(Dollars in thousands) Fair Value Hierarchy Level March 31, 2022 December 31, 2021

(Dollars in thousands) Fair Value Hierarchy Level June 30, 2022 December 31, 2021

Carrying Amount Fair Value Carrying Amount Fair Value

21 unchanged sentences

Long-term borrowings 2 123,687 124,728 99,475 101,664

(a) Held-to-maturity investment securities are presented gross of allowance for credit losses of $ 286 as of March 31, 2022 and December 31, 2021.

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $ 286 as of June 30, 2022 and December 31, 2021.

(b) Nonqualified deferred compensation includes mutual funds as part of the investment.

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at March 31, 2022

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at June 30, 2022

and at December 31, 2021, which are reported in the Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis

table above and not included in this table.

(d) Loans and leases, net of deferred fees and cost are presented gross of allowance for credit losses of $ 54.8 million and $ 64.0 million, as of March 31, 2022 and December 31, 2021, respectively.

(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $ 52.3 million and $ 64.0 million as of June 30, 2022 and December 31, 2021, respectively.

For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument.

33 unchanged sentences

(Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

March 31, 2022

June 30, 2022

Obligations of:

15 unchanged sentences

Total available-for-sale securities $ 1,283,146 $ 10,079 $ ( 17,732 ) $ 1,275,493

The gross gains and losses realized by Peoples from sales of available-for-sale securities for the periods ended March 31 were as follows:

Three Months Ended

The gross gains and losses realized by Peoples from sales of available-for-sale securities for the periods ended June 30 were as follows:

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2022 2021 2022 2021

1 unchanged sentence

Gross losses realized ( 58 ) ( 499 ) ( 74 ) ( 1,174 )

Net gain (loss) realized $ 130 $ ( 336 )

Net (loss) gain realized $ ( 44 ) $ ( 202 ) $ 86 $ ( 538 )

The cost of investment securities sold, and any resulting gain or loss, were based on the specific identification method and recognized as of the trade date.

7 unchanged sentences

Unrealized Loss

March 31, 2022

June 30, 2022

Obligations of:

26 unchanged sentences

Management evaluates available-for-sale investment securities for an allowance for credit losses on a quarterly basis.

At March 31, 2022, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses.

At March 31, 2022, Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery.

Further, the unrealized losses at both March 31, 2022 and December 31, 2021 were largely attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit related losses.

At June 30, 2022, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses.

At June 30, 2022, Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery.

Further, the unrealized losses at both June 30, 2022 and December 31, 2021 were largely attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit-related losses.

Accrued interest receivable is not included in investment securities balances, and is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses.

Interest receivable on investment securities was $ 7.0 million at March 31, 2022 and $ 5.5 million at December 31, 2021.

At March 31, 2022, approximately 99 % of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S.

Interest receivable on investment securities was $ 6.3 million at June 30, 2022 and $ 5.5 million at December 31, 2021.

At June 30, 2022, approximately 99 % of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S.

government sponsored agencies.

3 unchanged sentences

backed securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities.

The unrealized loss with respect to the one bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at March 31, 2022 were attributable to the subordinated nature of the debt.

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at March 31, 2022.

The unrealized loss with respect to the one bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at June 30, 2022 was attributable to the subordinated nature of the debt.

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at June 30, 2022.

The weighted-average yields are based on the amortized cost.

22 unchanged sentences

(Dollars in thousands) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value

March 31, 2022

June 30, 2022

Obligations of:

11 unchanged sentences

Total held-to-maturity securities $ 374,415 $ ( 286 ) $ 1,644 $ ( 5,818 ) $ 369,955

There were no sales of held-to-maturity securities for either of the three months ended March 31, 2022 or 2021.

There were no sales of held-to-maturity securities for either of the six months ended June 30, 2022 or 2021.

Management evaluates held-to-maturity investment securities for an allowance for credit losses on a quarterly basis.

2 unchanged sentences

Peoples analyzed these securities using cumulative default rate averages for investment grade municipal securities.

Peoples recorded $ 286,000 of allowance for credit losses for held-to-maturity securities at each of March 31, 2022, and December 31, 2021.

Peoples recorded $ 286,000 of allowance for credit losses for held-to-maturity securities at each of June 30, 2022, and December 31, 2021.

The following table presents a summary of held-to-maturity investment securities that had been in a continuous unrealized loss position:

6 unchanged sentences

Value Unrealized Loss

March 31, 2022

June 30, 2022

Obligations of:

15 unchanged sentences

Total $ 235,557 $ 4,089 78 $ 41,963 $ 1,729 8 $ 277,520 $ 5,818

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at March 31, 2022.

The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a blended federal and state corporate income tax rate of 22.9 % and 22.3 % for the periods ending March 31, 2022 and December 31, 2021, respectively.

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at June 30, 2022.

The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a blended federal and state corporate income tax rate of 23.3 % and 22.3 % for the periods ending June 30, 2022 and December 31, 2021, respectively.

In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.

15 unchanged sentences

Other Investment Securities

Peoples' other investment securities on the Unaudited Consolidated Balance Sheets consist largely of shares of FHLB and FRB stock.

Peoples' other investment securities on the Unaudited Consolidated Balance Sheets consist largely of shares of FHLB stock and FRB stock.

The following table summarizes the carrying value of Peoples' other investment securities:

(Dollars in thousands) March 31, 2022 December 31, 2021

(Dollars in thousands) June 30, 2022 December 31, 2021

FHLB stock $ 17,308 $ 17,308

4 unchanged sentences

Total other investment securities $ 41,655 $ 33,987

During the three months ended March 31, 2022, Peoples purchased $ 7.9 million of FRB stock as requested by the FRB as a result of the Premier acquisition.

During the three months ended March 31, 2022 and 2021, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in an unrealized loss of $ 7,000 and an unrealized gain of $ 31,000 .

At March 31, 2022, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies.

During the six months ended June 30, 2022, Peoples purchased $ 7.9 million of FRB stock as requested by the FRB as a result of the Premier Financial Bancorp, Inc.

("Premier") acquisition on September 17, 2021.

During the three months ended June 30, 2022 and 2021, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in an unrealized loss of $ 11,000 and an unrealized gain of $ 18,000 .

For the six months ended June 30, 2022 and 2021, Peoples recognized a loss of $ 18,000 and a gain of $ 73,000 , respectively, for the change in fair value of equity securities in "Other non-interest income".

At June 30, 2022, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies.

There were no equity investment securities of a single issuer that exceeded 10% of Peoples' stockholders' equity.

4 unchanged sentences

Carrying Amount

(Dollars in thousands) March 31, 2022 December 31, 2021

(Dollars in thousands) June 30, 2022 December 31, 2021

Securing public and trust department deposits, and repurchase agreements:

12 unchanged sentences

The major classifications of loan balances (in each case, net of deferred fees and costs) excluding loans held for sale, were as follows:

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2022 December 31, 2021

11 unchanged sentences

On March 7, 2022, Peoples completed the acquisition of Vantage, which included $ 157.5 million of leases.

During the first quarter of 2022, Peoples experienced elevated levels of payoffs and amortization of previously-acquired loans, which partially offset loan growth.

During the first six months of 2022, Peoples experienced elevated levels of payoffs and amortization of previously-acquired loans, which partially offset organic loan growth.

Peoples is a Small Business Administration ("SBA") Paycheck Protection Program ("PPP") lender.

At March 31, 2022, the PPP loans had an amortized cost of $ 41.9 million, and were included in the commercial and industrial loan balances.

As of March 31, 2022, deferred loan origination fees, net of deferred origination costs, totaled $ 1.0 million for PPP loans.

During the first quarter of 2022, Peoples recorded amortization of net deferred loan origination fees of $ 1.2 million on PPP loans compared to $ 4.7 million for the first quarter of 2021.

At June 30, 2022, the PPP loans had an amortized cost of $ 15.2 million, and were included in the commercial and industrial loan balances.

As of June 30, 2022, deferred loan origination fees, net of deferred origination costs, totaled $ 0.4 million for PPP loans.

During the second quarter of 2022, Peoples recorded amortization of net deferred loan origination fees of $ 0.6 million on PPP loans compared to $ 3.4 million for the second quarter of 2021.

The remaining net deferred loan origination fees will be amortized over the life of the respective loans, or until forgiven by the SBA, and will be recognized in "Net interest income".

Accrued interest receivable is not included within the loan balances, but is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses.

Total interest receivable on loans was $ 11.2 million at March 31, 2022 and $ 12.0 million at December 31, 2021.

Total interest receivable on loans was $ 12.0 million at both June 30, 2022 and December 31, 2021.

Nonaccrual and Past Due Loans

1 unchanged sentence

A loan may be placed on nonaccrual status regardless of whether or not such loan is considered past due.

The amortized cost of loans on nonaccrual status and of loans delinquent for 90 days or more and accruing were as follows:

March 31, 2022 December 31, 2021

The amortized cost of loans on nonaccrual status and of loans delinquent for 90 days or more and accruing was as follows:

June 30, 2022 December 31, 2021

(Dollars in thousands) Nonaccrual (a)

11 unchanged sentences

Total loans, at amortized cost $ 29,488 $ 8,236 $ 34,765 $ 3,723

(a) There were $ 3.0 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2022 and $ 2.6 million at December 31, 2021.

During the first three months of 2022, nonaccrual loans declined compared to December 31, 2021, which was due to the payoff of one commercial relationship, coupled with other smaller reductions.

The increase in accruing loans 90+ days past due, compared to December 31, 2021, was the result of the additional leases acquired from Vantage, the majority of which related to in-process renewals.

As of March 31, 2022, the short-term modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment for current borrowers, Peoples had made were insignificant.

Under the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), borrowers that are considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented.

As such, these modifications made in accordance with the CARES Act were not included in Peoples' nonaccrual or accruing loans 90+ days past due at March 31, 2022.

The amount of interest income recognized on loans past due 90 days or more during the three months ended March 31, 2022 was $ 0.3 million.

(a) There were $ 2.3 million of nonaccrual loans for which there was no allowance for credit losses at June 30, 2022 and $ 2.6 million at December 31, 2021.

During the first six months of 2022, nonaccrual loans declined compared to December 31, 2021, which was primarily due to the payoff of one commercial relationship, coupled with other smaller reductions.

The increase in accruing loans 90+ days past due, compared to December 31, 2021, was the result of the additional leases acquired in the Vantage acquisition, the majority of which related to in-process renewals.

As of June 30, 2022, the short-term modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment for current borrowers Peoples had made were insignificant.

Under the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), borrowers are considered current if they are less than 30 days past due on their contractual payments at the time a modification program is implemented.

As such, these modifications made in accordance with the CARES Act were not included in Peoples' nonaccrual or accruing loans 90+ days past due at June 30, 2022.

The amount of interest income recognized on loans past due 90 days or more during the six months ended June 30, 2022 was $ 0.7 million.

The following table presents the aging of the amortized cost of past due loans:

1 unchanged sentence

(Dollars in thousands) 30 - 59 days 60 - 89 days 90 + Days Total

March 31, 2022

June 30, 2022

Construction $ 5 $ — $ — $ 5 $ 202,583 $ 202,588

23 unchanged sentences

Total loans, at amortized cost $ 19,948 $ 7,281 $ 25,320 $ 52,549 $ 4,429,051 $ 4,481,600

Delinquency trends remained stable, as 98.9 % of Peoples' loan portfolio was considered “current” at March 31, 2022, compared to 98.8 % at December 31, 2021.

Delinquency trends remained stable, as 98.8 % of Peoples' loan portfolio was considered “current” at June 30, 2022, compared to 98.8 % at December 31, 2021.

Pledged Loans

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Loans pledged are summarized as follows:

(Dollars in thousands) March 31, 2022 December 31, 2021

(Dollars in thousands) June 30, 2022 December 31, 2021

Loans pledged to FHLB $ 797,689 $ 769,863

7 unchanged sentences

Adversely classified loans are reviewed on a quarterly basis.

A description of the general characteristics of the risk grades used by Peoples, including loans acquired from Premier Financial Bancorp, Inc.

("Premier"), is as follows:

A description of the general characteristics of the risk grades used by Peoples, including loans and leases acquired from Vantage and Premier, is as follows:

“Pass” (grades 1 through 4):

21 unchanged sentences

All other loans not evaluated individually, nor meeting the regulatory conditions to be categorized as described above, would be considered as “pass" for disclosure purposes.

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at March 31, 2022:

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at June 30, 2022:

Term Loans at Amortized Cost by Origination Year Revolving Loans Converted to Term

33 unchanged sentences

Pass 18,117 37,484 21,488 16,056 14,615 60,756 419 4,443 168,935

Substandard — — — — — 400 — — 400

Total 18,117 37,484 21,488 16,056 14,615 61,156 419 4,443 169,335

7 unchanged sentences

Total loans, at amortized cost $ 670,188 $ 1,085,446 $ 687,918 $ 475,120 $ 264,300 $ 1,145,693 $ 247,240 $ 39,263 $ 4,575,905

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at December 31, 2021:

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the then most recent analysis performed at December 31, 2021:

Term Loans at Amortized Cost by Origination Year

17 unchanged sentences

Total 299,664 119,450 89,394 59,352 27,309 110,465 185,758 16,364 891,392

Term Loans at Amortized Cost by Origination Year

(Dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Total

Premium finance

1 unchanged sentence

Total 135,896 240 — — — — — — 136,136

Term Loans at Amortized Cost by Origination Year

(Dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Total

Pass 78,048 25,954 13,368 2,972 337 — — — 120,679

36 unchanged sentences

The following table details Peoples' amortized cost of collateral dependent loans:

(Dollars in thousands) March 31, 2022 December 31, 2021

(Dollars in thousands) June 30, 2022 December 31, 2021

Construction $ 342 $ 1,291

4 unchanged sentences

Total collateral dependent loans $ 16,179 $ 50,119

The decrease in collateral dependent loans at March 31, 2022, compared to December 31, 2021, was primarily due to three large commercial relationships that were no longer considered collateral dependent at March 31, 2022.

The decrease in collateral dependent loans at June 30, 2022, compared to December 31, 2021, was primarily due to three large commercial relationships that were no longer considered collateral dependent at June 30, 2022.

Troubled Debt Restructurings

The following tables summarize the loans that were modified as TDRs during the three months ended March 31:

The following tables summarize the loans that were modified as TDRs during the three and six months ended June 30:

Three Months Ended

1 unchanged sentence

(Dollars in thousands) Number of Contracts Pre-Modification Post-Modification Remaining Recorded Investment

March 31, 2022

Construction 1 $ 344 $ 344 $ 343

June 30, 2022

Commercial real estate, other 2 $ 184 $ 184 $ 184

6 unchanged sentences

Total 28 $ 2,293 $ 2,322 $ 1,921

March 31, 2021

June 30, 2021

Commercial real estate, other 1 $ 23 $ 23 $ 23

Leases 4 225 233 233

Residential real estate 5 245 245 245

Home equity lines of credit 4 260 260 258

Consumer, indirect 6 62 62 62

Consumer, direct 5 38 38 38

Consumer 11 100 100 100

Total 25 $ 853 $ 861 $ 859

(a) The amounts shown are inclusive of all partial paydowns and charge-offs.

Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Six Months Ended

Recorded Investment (a)

(Dollars in thousands) Number of Contracts Pre-Modification Post-Modification Remaining Recorded Investment

June 30, 2022

Commercial real estate, other 3 $ 287 $ 287 $ 284

Commercial and industrial 5 1,422 1,427 1,031

Residential real estate 26 1,333 1,378 1,367

Home equity lines of credit 4 178 178 177

Consumer, indirect 16 210 210 210

Consumer, direct 3 44 44 44

Consumer 19 254 254 254

Total 57 $ 3,474 $ 3,524 $ 3,113

June 30, 2021

Construction 1 $ 344 $ 344 344

Commercial real estate, other 1 23 23 $ 23

Leases 4 225 233 233

Residential real estate 8 415 419 416

6 unchanged sentences

Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Three Months Ended

On March 22, 2020, federal and state government banking regulators issued a joint statement, with which the FASB concurred as to the approach, regarding accounting for loan modifications for borrowers affected by COVID-19.

1 unchanged sentence

This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment which are insignificant.

Under the guidance, borrowers that are considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented.

Under the guidance, the borrowers that are considered to be current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented.

In addition, modification or deferral programs mandated by the U.S.

federal government or any state government related to COVID-19 are not in the scope of accounting for TDRs, as defined in ASC 310-40.

Peoples did not have any loans that were modified as a TDR during the first three months ended March 31, 2022 or March 31, 2021 that subsequently defaulted (i.e., 90 days or more past due following a modification during the year).

Peoples had two loans totaling $ 16,000 that were modified as TDRs during the past twelve months that subsequently defaulted (i.e., 90 days or more past due following a modification during the year).

Peoples had no commitments to lend additional funds to borrowers whose loan terms have been modified in a TDR.

Allowance for Credit Losses

Changes in the allowance for credit losses for the three months ended March 31, 2022 and March 31, 2021 are summarized below:

(Dollars in thousands) Beginning Balance, December 31, 2021

Initial Allowance for Acquired Purchased Credit Deteriorated Assets (Recovery of) Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, March 31, 2022

Changes in the allowance for credit losses for the three and six months ended June 30, 2022 and June 30, 2021 are summarized below:

(Dollars in thousands) Beginning Balance, March 31, 2022

Initial Allowance for Acquired Purchased Credit Deteriorated Assets (a) Provision for Credit Losses for Acquired Non-Purchased Credit Deteriorated Assets (Recovery of) Provision for Credit Losses (b) Charge-offs Recoveries Ending Balance, June 30, 2022

Construction $ 2,731 $ — $ — $ ( 1,200 ) $ — $ — $ 1,531

9 unchanged sentences

Total $ 54,768 $ ( 183 ) $ — $ ( 698 ) $ ( 1,951 ) $ 410 $ 52,346

(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(a) Includes purchase price adjustments related to acquisitions previously completed but within the 12-month measurement period.

(b) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(Dollars in thousands) Beginning Balance,

December 31, 2020 (Recovery of) Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, March 31, 2021

March 31, 2021 Initial Allowance for Acquired Purchased Credit Deteriorated Assets Provision for Credit Losses for Acquired Non-Purchased Credit Deteriorated Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2021

Construction $ 829 $ — $ — $ 85 $ — $ — $ 914

2 unchanged sentences

Premium finance 1,160 — — ( 155 ) ( 7 ) — 998

Leases — 493 3,288 349 ( 525 ) 110 3,715

Residential real estate 4,935 — — ( 2 ) ( 136 ) 40 4,837

5 unchanged sentences

(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(Dollars in thousands)

(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(Dollars in thousands)

(a) Peoples adopted ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326) on January 1, 2020.

Changes in the allowance for credit losses for the six months ended June 30, 2022 and June 30, 2021 are summarized below:

(Dollars in thousands) Beginning Balance, December 31, 2021

Construction $ 2,999 $ — $ — $ ( 1,468 ) $ — $ — $ 1,531

Commercial real estate, other 29,147 ( 451 ) — ( 9,913 ) ( 300 ) 225 18,708

Commercial and industrial 11,063 ( 418 ) — ( 1,196 ) ( 883 ) 6 8,572

Premium finance 379 — — ( 32 ) ( 44 ) 8 311

Leases 4,797 424 — 3,090 ( 966 ) 240 7,585

Residential real estate 7,233 ( 509 ) — ( 64 ) ( 356 ) 28 6,332

Home equity lines of credit 2,005 ( 11 ) — ( 283 ) ( 41 ) 29 1,699

Consumer, indirect 5,326 ( 41 ) — 1,614 ( 834 ) 169 6,234

Consumer, direct 961 — — 534 ( 196 ) 22 1,321

Deposit account overdrafts 57 — — 554 ( 664 ) 106 53

Total $ 63,967 $ ( 1,006 ) $ — $ ( 7,164 ) $ ( 4,284 ) $ 833 $ 52,346

(a) Includes purchase price adjustments related to acquisitions previously completed but were within the 12-month measurement period.

(b) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

During the first quarter of 2022, Peoples recorded a recovery of credit losses of $ 6.8 million driven by a continued improvement in economic factors and changes in loss drivers used in the CECL model.

Leases designated as purchased-credit deteriorated ("PCD") acquired from Vantage increased the allowance for credit losses by $ 132,000 .

Net charge-offs for the first quarter of 2022 were $ 1.9 million, and included charge-offs of two commercial and industrial loans aggregating $ 0.7 million.

At March 31, 2022, Peoples had recorded an allowance for unfunded commitments of $ 2.2 million, a decrease compared to $ 2.5 million at December 31, 2021.

(Dollars in thousands) Beginning Balance,

December 31, 2020 Initial Allowance for Acquired Purchased Credit Deteriorated Assets Provision for Credit Losses for Acquired Non-Purchased Credit Deteriorated Assets (Recovery of) Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2021

Construction $ 1,887 $ — $ — $ ( 973 ) $ — $ — $ 914

Commercial real estate, other 17,536 — — ( 146 ) ( 161 ) 4 17,233

Commercial and industrial 12,763 — — ( 3,797 ) ( 298 ) 18 8,686

Premium finance 1,095 — — ( 74 ) ( 23 ) — 998

Leases — 493 3,288 349 ( 525 ) 110 3,715

Residential real estate 6,044 — — ( 993 ) ( 269 ) 55 4,837

Home equity lines of credit 1,860 — — ( 344 ) ( 16 ) 4 1,504

Consumer, indirect 8,030 — — 1,417 ( 774 ) 168 8,841

Consumer, direct 1,081 — — 110 ( 67 ) 37 1,161

Deposit account overdrafts 63 — — 84 ( 192 ) 98 53

Total $ 50,359 $ 493 $ 3,288 $ ( 4,367 ) $ ( 2,325 ) $ 494 $ 47,942

(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

s adopted ASU 2016-13 - Financial Instruments

(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments

During the second quarter of 2022, Peoples recorded a recovery of credit losses for loans of $ 0.7 million driven by a reduction in allowance for individually analyzed loans, as well as changes in loss drivers used in the CECL model.

Leases designated as purchased

credit deteriorated ("PCD") acquired from Vantage increased the allowance for credit losses by $ 292,000 .

Net charge-offs for the second quarter of 2022 were $ 1.5 million, and included charge-offs of three leases aggregating $ 0.5 million.

At June 30, 2022, Peoples had recorded an allowance for unfunded commitments of $ 2.1 million, a decrease compared to $ 2.2 million at March 31, 2022 and $ 2.5 million at December 31, 2021.

The allowance for unfunded commitments (also referred to as "unfunded commitment liability") is presented in the “Accrued expenses and other liabilities” line of the Unaudited Consolidated Balance Sheets.

The change in the allowance for unfunded commitments is also reflected in the "Recovery of credit losses" line of the Unaudited Consolidated Statements of Operations.

The change in the allowance for unfunded commitments is also reflected in the "(Recovery of) provision for credit losses" line of the Unaudited Consolidated Statements of Operations.

Note 5 Goodwill and Other Intangible Assets

The following table details changes in the recorded amount of goodwill:

(Dollars in thousands) March 31, 2022 December 31, 2021

(Dollars in thousands) June 30, 2022 December 31, 2021

Goodwill, beginning of year $ 264,193 $ 171,260

1 unchanged sentence

Goodwill, end of period $ 289,976 $ 264,193

On March 11, 2022, Peoples Insurance Agency, Inc.

entered into an Asset Purchase Agreement with Elite Insurance Agency and consummated the acquisition on April 1, 2022.

In the second quarter of 2022 , Peoples recorded $ 2.3 million of preliminary goodwill related to this acquisition.

Peoples Bank entered into an Asset Purchase Agreement, dated March 7, 2022 with Vantage, at which point Vantage became a legal subsidiary of Peoples Bank.

In the current quarter, Peoples preliminarily recorded $ 40.4 million of goodwill related to this acquisition, which was offset by adjustments to Premier's goodwill balance during the measurement period.

In the first half of 2022, Peoples preliminarily recorded $ 24.7 million of goodwill related to this acquisition, which was offset partially by adjustments of $ 1.2 million to Premier's goodwill balance during the measurement period.

On April 1, 2021, Peoples recorded $ 24.7 million of goodwill related to the acquisition of NS Leasing, LLC ("NSL").

3 unchanged sentences

Other Intangible Assets

Other intangible assets were comprised of the following at end of period, March 31, 2022, and end of year, December 31, 2021:

Other intangible assets were comprised of the following at June 30, 2022, and at December 31, 2021:

(Dollars in thousands) Core Deposits Customer Relationships Total

March 31, 2022

June 30, 2022

Gross intangibles $ 26,466 $ 25,173 $ 51,639

13 unchanged sentences

Total other intangibles $ 26,816

(a) Customer Relationship intangible assets included $ 1.2 million of non-compete intangible assets related to the Vantage acquisition.

(a) Customer relationship intangible assets included $ 1.2 million of non-compete intangible assets related to the Vantage acquisition and

$ 0.1 million of non-compete intangible assets related to the Elite insurance agency acquisition.

(b) Included $ 1.2 million of trade name intangible assets related to the Vantage acquisition and $ 1.3 million of trade name

2 unchanged sentences

(d) Included $ 1.3 million of trade name intangible assets related to the NSL acquisition.

Other intangible assets preliminarily recorded for the three months ended March 31, 2022 included $ 10.8 million of customer relationship intangible assets, $ 1.2 million of trade name intangible assets, and $ 1.2 million of non-compete intangible assets related to the Vantage acquisition.

Other intangible assets preliminarily recorded for the six months ended June 30, 2022 included $ 10.8 million of customer relationship intangible assets, and $ 1.2 million of non-compete intangible assets related to the Vantage acquisition.

Peoples also recorded $ 2.0 million of customer relationship intangible assets and $ 0.1 million of non-compete intangible assets related to the acquisition of Elite Insurance Agency.

Other intangible assets recorded in 2021 included $ 12.7 million of customer relationship intangible assets related to the NSL acquisition, $ 4.2 million of core deposit intangible assets related to the Premier merger, and $ 0.3 million of non-compete intangible assets, and $ 1.3 million of trade name intangible assets, both related to the NSL acquisition.

Refer to "Note 13 Acquisitions" for additional information.

The following table details estimated aggregate future amortization of other intangible assets at March 31, 2022:

The following table details estimated aggregate future amortization of other intangible assets at June 30, 2022:

(Dollars in thousands) Core Deposits Customer Relationships Total

2022 $ 1,204 $ 4,558 $ 5,762

Remaining six months of 2022 $ 788 $ 3,234 $ 4,022

2023 1,257 6,269 7,526

6 unchanged sentences

Servicing Rights

The following is an analysis of activity of servicing rights for the periods ended March 31, 2022 and December 31, 2021:

(Dollars in thousands) March 31, 2022 December 31, 2021

The following is an analysis of activity of servicing rights for the periods ended June 30, 2022 and December 31, 2021:

(Dollars in thousands) June 30, 2022 December 31, 2021

Balance, beginning of year $ 2,218 $ 2,486

1 unchanged sentence

Servicing rights originated 110 519

Valuation allowance — ( 12 )

Change in valuation allowance 6 ( 12 )

Balance, end of period $ 2,016 $ 2,218

Peoples accounts for its servicing rights under the amortization method, recognizing a valuation allowance when amortized cost exceeds fair value.

As of March 31, 2022, Peoples recorded a minimal addition to the valuation allowance related to changes in the fair value of servicing rights.

During 2021, Peoples recorded a valuation allowance of $ 12,000 related to the decrease in the fair value of servicing rights.

The following is the breakdown of the discount rates and prepayment speeds of servicing rights for the periods ended March 31, 2022 and December 31, 2021:

March 31, 2022 December 31, 2021

As of June 30, 2022, Peoples recorded a reduction to the valuation allowance of $ 6,000 related to changes in the fair value of servicing rights.

During 2021, Peoples had recorded a valuation allowance of $ 12,000 related to the decrease in the fair value of servicing rights.

The following is the breakdown of the discount rates and prepayment speeds of servicing rights for the periods ended June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

Minimum Maximum Minimum Maximum

1 unchanged sentence

Prepayment speeds 7.8 % 23.2 % 8.9 % 27.1 %

The fair value of servicing rights was $ 3.0 million and $ 2.6 million at March 31, 2022 and December 31, 2021, respectively.

The fair value of servicing rights was $ 3.3 million and $ 2.6 million at June 30, 2022 and December 31, 2021, respectively.

Note 6 Deposits

Peoples’ deposit balances were comprised of the following:

(Dollars in thousands) March 31, 2022 December 31, 2021

(Dollars in thousands) June 30, 2022 December 31, 2021

$100 or more $ 293,783 $ 320,574

9 unchanged sentences

Total deposits $ 5,929,225 $ 5,862,552

Time deposits that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") limit of $ 250,000 were $ 118.1 million and $ 121.3 million at March 31, 2022 and December 31, 2021, respectively.

The contractual maturities of retail CDs, brokered CDs and demand deposits for each of the next five years and thereafter are as follows:

(a) Brokered deposit accounts include $ 85.0 million of brokered demand deposits.

Time deposits that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") limit of $ 250,000 were $ 129.8 million and $ 121.3 million at June 30, 2022 and December 31, 2021, respectively.

The contractual maturities of retail CDs, brokered CDs and demand deposits for each of the next five years, including the remainder of 2022, and thereafter are as follows:

(Dollars in thousands) Retail Brokered Total

Remaining nine months ending December 31, 2022 (a) $ 366,748 $ 86,901 $ 453,649

Remaining six months ending December 31, 2022 (a) $ 354,213 $ 86,245 $ 440,458

Year ending December 31, 2023 110,249 494 110,743

5 unchanged sentences

(a) Brokered deposit accounts include $ 85.0 million of brokered demand deposits.

At March 31, 2022, Peoples had thirteen effective interest rate swaps, with an aggregate notional value of $ 125.0 million, of which $ 85.0 million were funded by brokered demand and savings deposits.

At June 30, 2022, Peoples had thirteen effective interest rate swaps, with an aggregate notional value of $ 125.0 million, of which $ 85.0 million were funded by brokered demand and savings deposits.

Brokered demand deposits hedged by interest rate swaps are expected to be extended every 90 days through the maturity dates of the swaps.

1 unchanged sentence

Note 7 Stockholders’ Equity

The following table details the progression in Peoples’ common shares and treasury stock during the three months ended March 31, 2022:

The following table details the progression in Peoples’ common shares and treasury stock during the six months ended June 30, 2022:

Common Shares Treasury

7 unchanged sentences

Purchase of treasury stock — 6,459

Disbursed out of treasury stock — ( 3,039 )

Common shares repurchased under share repurchase program — 214,220

Common shares issued under dividend reinvestment plan 22,090 —

1 unchanged sentence

Common shares issued under employee stock purchase plan

Shares at March 31, 2022 29,824,684 1,434,441

Shares at June 30, 2022 29,836,491 1,610,525

On January 28, 2021, Peoples' Board of Directors approved a share repurchase program authorizing Peoples to purchase up to an aggregate of $ 30.0 million of Peoples' outstanding common shares.

At March 31, 2022, Peoples had no t repurchased any common shares under the share repurchase program authorized on January 28, 2021.

At June 30, 2022, Peoples had repurchased 214,220 common shares totaling $ 6.0 million under the share repurchase program authorized on January 28, 2021.

Under Peoples' Amended Articles of Incorporation, Peoples is authorized to issue up to 50,000 preferred shares, in one or more series, having such voting powers, designations, preferences, rights, qualifications, limitations and restrictions as determined by Peoples' Board of Directors.

At March 31, 2022, Peoples had no preferred shares issued or outstanding.

On April 25, 2022, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.38 per common share, payable on May 23, 2022, to shareholders of record on May 9, 2022.

The following table details the cash dividends declared per common share during the two quarters of 2022 and the comparable periods of 2021:

At June 30, 2022, Peoples had no preferred shares issued or outstanding.

On July 25, 2022 , Peoples' Board of Directors declared a quarterly cash dividend of $ 0.38 per common share, payable on August 22, 2022 , to shareholders of record on August 8, 2022 .

The following table details the cash dividends declared per common share during the three quarters of 2022 and the comparable periods of 2021:

First quarter $ 0.36 $ 0.35

Second quarter 0.38 0.36

Third quarter 0.38 0.36

Total dividends declared $ 1.12 $ 1.07

Accumulated Other Comprehensive (Loss) Income

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income for the three months ended March 31, 2022:

(Dollars in thousands) Unrealized Loss on Securities Unrecognized Net Pension and Postretirement Costs Unrealized (Loss) Gain on Cash Flow Hedge Accumulated Other Comprehensive (Loss) Income

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income for the six months ended June 30, 2022:

(Dollars in thousands) Unrealized Loss on Securities Unrecognized Net Pension and Postretirement Costs (Benefit) Unrealized (Loss) Gain on Cash Flow Hedge Accumulated Other Comprehensive (Loss)

Balance, December 31, 2021 $ ( 5,946 ) $ ( 1,881 ) $ ( 3,792 ) $ ( 11,619 )

Reclassification adjustments to net income:

Realized gain on sale of securities, net of tax ( 100 ) — — ( 100 )

Realized loss on sale of securities, net of tax ( 66 ) — — ( 66 )

Other comprehensive (loss) income, net of reclassifications and tax

( 87,598 ) 76 5,848 ( 81,674 )

Balance, March 31, 2022 $ ( 61,235 ) $ ( 1,876 ) $ 444 $ ( 62,667 )

Balance, June 30, 2022 $ ( 93,610 ) $ ( 1,805 ) $ 2,056 $ ( 93,359 )

Note 8 Employee Benefit Plans

17 unchanged sentences

Pension Benefits

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2022 2021 2022 2021

2 unchanged sentences

Amortization of net loss 20 32 40 63

Settlement of benefit obligation — —

Net periodic income $ ( 82 ) $ ( 76 ) $ ( 164 ) $ ( 152 )

2 unchanged sentences

In general, both the projected benefit obligation and the fair value of plan assets are required to be remeasured in order to determine the settlement gain or loss.

Peoples did not record a settlement charge for the three months ended March 31, 2022 or March 31, 2021 under the noncontributory defined benefit pension plan.

Peoples did not record a settlement charge for the six months ended June 30, 2022 or June 30, 2021 under the noncontributory defined benefit pension plan.

Note 9 Earnings Per Common Share

The calculations of basic and diluted earnings per common share were as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands, except per common share data) 2022 2021 2022 2021

15 unchanged sentences

The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

The fair value of derivative financial instruments is included in the "Other assets" and the "Accrued expenses and other liabilities" lines in the accompanying Unaudited Consolidated Balance Sheets, while cash activity related to these derivatives is included in the activity in "Net cash provided by operating activities" in the Unaudited Condensed Consolidated Statements of Cash Flows.

The fair value of derivative financial instruments is included in the "Other assets" and the "Accrued expenses and other liabilities" lines in the accompanying Unaudited Consolidated Balance Sheets, while cash activity related to these derivative financial instruments is included in the activity in "Net cash provided by operating activities" in the Unaudited Condensed Consolidated Statements of Cash Flows.

Derivative Financial Instruments and Hedging Activities - Risk Management Objective of Using Derivative Financial Instruments

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These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for Peoples making fixed payments.

At March 31, 2022, Peoples had entered into thirteen interest rate swap contracts with an aggregate notional value of $ 125.0 million.

At June 30, 2022, Peoples had entered into thirteen interest rate swap contracts with an aggregate notional value of $ 125.0 million.

Peoples will pay a fixed rate of interest for up to ten years while receiving a floating rate component of interest equal to the three-month LIBOR rate.

The interest received on the floating rate component is intended to offset the interest paid on rolling three-month brokered CDs and 90-day FHLB Advances, which will continue to be rolled through the life of the swaps.

At March 31, 2022, the interest rate swaps were designated as cash flow hedges of $ 85.0 million in brokered demand deposits, which are expected to be extended every 90 days through the maturity dates of the swaps.

At June 30, 2022, the interest rate swaps were designated as cash flow hedges of $ 85.0 million in brokered demand deposits, which are expected to be extended every 90 days through the maturity dates of the swaps.

The remaining $ 40.0 million of interest rate swaps were designated as cash flow hedges of 90-day FHLB Advances.

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The reset dates and the payment dates on the 90-day advances or brokered CDs are matched to the reset dates and payment dates on the receipt of the three-month LIBOR floating portion of the swaps to ensure effectiveness of the cash flow hedge.

During the three months ended March 31, 2022, and March 31, 2021, Peoples had reclassifications of losses to earnings of $ 0.6 million and $ 0.8 million, respectively.

During the next twelve months, based on interest rates, yield curves, and notional amounts, Peoples estimates that approximately $ 1.0 million of AOCI will be reclassified to interest expense.

During the three months ended June 30, 2022, and 2021, Peoples had recorded reclassifications of losses to earnings of $ 0.4 million and $ 0.8 million, respectively.

For the six months ended June 30, 2022 and 2021, Peoples recorded reclassifications of losses to earnings of $ 1.0 million and $ 1.6 million, respectively.

During the next twelve months, Peoples estimates that $ 1.2 million of AOCI will be reclassified as a reduction to interest expense.

The following table summarizes information about the interest rate swaps designated as cash flow hedges:

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2022 December 31,

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Weighted average maturity 3.1 years 3.6 years

Pre-tax unrealized gain (losses) included in AOCI $ 577 $ ( 4,879 )

The following table presents net gains recorded in AOCI and in the Unaudited Consolidated Statements of Operations related to the cash flow hedges:

Three Months Ended

Pre-tax unrealized gains (losses) included in AOCI $ 2,680 $ ( 4,879 )

The following table presents net (gains) losses recorded in AOCI and in the Unaudited Consolidated Statements of Operations related to the cash flow hedges:

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2022 2021 2022 2021

Amount of gains recognized in AOCI, pre-tax $ 5,456 $ 4,236

Amount of (gains) losses recognized in AOCI, pre-tax $ ( 2,104 ) $ 294 $ ( 7,560 ) $ ( 3,942 )

The following table reflects the cash flow hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

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therefore, each swap is accounted for as a standalone derivative financial instrument.

These interest rate swaps did not have a material impact on Peoples' results of operations or financial condition at or for the three months ended March 31, 2022 and as of or for the year ended December 31, 2021.

These interest rate swaps did not have a material impact on Peoples' results of operations or financial condition at or for the three and six months ended June 30, 2022 and as of or for the year ended December 31, 2021.

The following table reflects the non-designated hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

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Peoples pledges or receives collateral for all interest rate swaps.

When the fair value of Peoples' interest rate swaps is in a net liability position, Peoples must pledge collateral, and, when the fair value of Peoples' interest rate swaps is in a net asset position, the respective counterparties must pledge collateral.

At March 31, 2022 and December 31, 2021, Peoples had zero cash pledged, while the counterparties had no amount of cash pledged at either date.

Peoples had pledged $ 5.7 million and $ 28.1 million in investment securities at March 31, 2022 and December 31, 2021, respectively.

When the fair value of Peoples' interest rate swaps is in a net liabilit y position, Peoples must pledge collateral, and, when the fair value of Peoples' interest rate swaps is in a net asset position, the respective counterparties must pledge collateral.

At June 30, 2022 and December 31, 2021, Peoples had no cash pledged, while the counterparties had $ 10.0 million of cash pledged at June 30, 2022 and none pledged at December 31, 2021.

Peoples had no pledged investment securities and $ 28.1 million in investment securities at June 30, 2022 and December 31, 2021, respectively, while the counterparties had pledged $ 3.2 million at June 30, 2022 and none at December 31, 2021.

Note 11 Stock-Based Compensation

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Since 2018, common shares awarded to non-employee directors have vested immediately upon grant with no restrictions.

In the first three months of 2022, Peoples granted an aggregate of 154,645 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date;

In the first six months of 2022, Peoples granted an aggregate of 154,645 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date;

provided that in order for the restricted common shares to vest in full, Peoples must have reported positive net income and maintained a well-capitalized status by regulatory standards for each of the three fiscal years preceding the vesting date.

The following table summarizes the changes to Peoples’ restricted common shares for the three months ended March 31, 2022:

The following table summarizes the changes to Peoples’ restricted common shares for the six months ended June 30, 2022:

Time-Based Vesting Performance-Based Vesting

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Forfeited — — ( 1,880 ) 32.15

Outstanding at March 31, 2022 105,776 $ 26.39 300,523 $ 32.19

For the three months ended March 31, 2022, the total intrinsic value for restricted common shares released was $ 3.3 million compared to $ 2.4 million for the three months ended March 31, 2021.

Outstanding at June 30, 2022 129,317 $ 27.28 300,020 $ 32.19

For the six months ended June 30, 2022, the total intrinsic value for restricted common shares released was $ 3.5 million compared to $ 2.5 million for the six months ended June 30, 2021.

Stock-Based Compensation

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The estimated fair value is then expensed over the vesting period, which is normally three years.

For performance unit awards, Peoples recognizes stock-based compensation over the performance period, based on the portion of the awards that was expected to vest based on the expected level of achievement of the two performance goals.

Peoples also has an

employee stock purchase plan whereby employees can purchase Peoples' common shares at a discount of 15 %.

For performance unit awards, Peoples recognizes stock-based compensation over the performance period, based on the portion of the

awards that was expected to vest based on the expected level of achievement of the two performance goals.

Peoples also has an employee stock purchase plan whereby employees can purchase Peoples' common shares at a discount of 15 %.

The following table summarizes the amount of stock-based compensation expense and related tax benefit recognized for each period:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2022 2021 2022 2021

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Net stock-based compensation expense $ 561 $ 520 $ 1,896 $ 1,634

Restricted common shares were the primary form of stock-based compensation awards granted by Peoples in the three months ended March 31, 2022 and 2021.

Restricted common shares were the primary form of stock-based compensation awards granted by Peoples in the six months ended June 30, 2022 and 2021.

The fair value of restricted common share awards on the grant date is the market price of Peoples' common shares on that date.

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 5.3 million at March 31, 2022, which will be recognized over a weighted-average period of 2.3 years.

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 5.3 million at June 30, 2022, which will be recognized over a weighted-average period of 2.2 years.

Note 12 Revenue

The following table details Peoples' revenue from contracts with customers:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2022 2021 2022 2021

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Ongoing maintenance fees for deposit accounts (a) 1,307 853 2,618 1,664

Transactional-based fees (b) 2,115 1,175

Transaction-based fees (b) 2,251 1,191 4,366 2,366

Commercial loan swap fees (b) 270 61 438 121

Other non-interest income transactional-based fees (b) 257 144

Other non-interest income transaction-based fees (b) 315 249 572 393

Total revenue from contracts with customers $ 17,454 $ 14,327 $ 35,294 $ 29,494

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The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled related to electronic banking income.

The following table details the changes in Peoples' contract assets and contract liabilities for the three-month period ended March 31, 2022:

The following table details the changes in Peoples' contract assets and contract liabilities for the six-month period ended June 30, 2022:

Contract Assets Contract Liabilities

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Additional income receivable 149 —

Additional deferred income — 305

Recognition of income previously deferred — ( 63 )

Balance, March 31, 2022 $ 817 $ 4,462

Balance, June 30, 2022 $ 892 $ 5,053

Note 13 Acquisitions

Elite Agency, Inc

On April 1, 2022, Peoples Insurance acquired substantially all of the assets and rights of an insurance agency with five locations in eastern Kentucky and certain rights to related customer accounts, which were previously developed and maintained by Elite Agency, Inc.

("Elite"), pursuant to an Asset Purchase Agreement between Peoples Insurance and Elite.

Total consideration for this transaction was $ 3.8 million.

Peoples recognized preliminary intangibles of $ 2.1 million, primarily comprised of a customer relationship intangible.

Vantage Financial, LLC

On March 7, 2022, Peoples Bank purchased 100 % of the equity of Vantage Financial, LLC (“Vantage”), a nationwide provider of equipment financing headquartered in Excelsior, Minnesota.

On March 7, 2022, Peoples Bank purchased 100 % of the equity of Vantage, a nationwide provider of equipment financing headquartered in Excelsior, Minnesota.

Peoples Bank acquired assets comprising Vantage's lease business, including $ 157.5 million in leases and certain third-party debt in the amount of $ 107.1 million.

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Vantage offers mid-ticket equipment leases, primarily for business essential information technology equipment across a wide-array of industries.

Peoples recorded acquisition-related expenses related to the Vantage acquisition, which included $ 0.8 million in professional fees.

The following table provides the preliminary purchase price calculation as of the date of the acquisition of Vantage, and the assets acquired and liabilities assumed at their estimated fair values.

Peoples recorded the estimates of fair value based on initial valuations available at March 7, 2022.

Due to the timing of the transaction closing date and the filing date for this Form 10-Q, these estimated fair values were considered preliminary as of March 31, 2022, and are subject to adjustment for up to one year after March 7, 2022.

Peoples recorded acquisition-related expenses during the first six months of 2022 of $ 1.5 million related to the Vantage acquisition, which included $ 1.1 million in professional fees.

The following table provides the preliminary purchase price calculation as of the date of the acquisition of Vantage, and the assets acquired and liabilities assumed at their estimated fair values, and the amounts are subject to adjustment for up to one year after March 7, 2022.

Valuations subject to change include leases, other intangible assets and borrowings.

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Leases 157,941

Allowance for credit losses ( 132 )

Allowance for credit losses (on PCD leases) ( 424 )

Net leases 157,517

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During Peoples' evaluation of intangible assets, it was determined that an assembled workforce intangible asset was not separately recognizable and was included in goodwill.

The estimated fair values presented in the above table reflect additional information that was obtained during the three months ended June 30, 2022, which resulted in changes to certain fair value estimates made as of the date of acquisition.

Adjustments to acquisition date estimated fair values are recorded during the period in which they occur and, as a result, previously recorded results have changed.

The below table reflects the changes in the estimated fair value as they impact goodwill at June 30, 2022:

(Dollars in thousands) Change in fair value

Net leases $ 17,303

Bank premises and equipment ( 1,810 )

Other assets ( 97 )

Change in total assets $ 15,396

Borrowings ( 320 )

Accrued expenses and other liabilities 71

Change in total liabilities $ ( 249 )

Change in net assets $ 15,645

Change in goodwill $ ( 15,645 )

The following table details the fair value adjustment for acquired purchased credit deteriorated leases as of the acquisition date:

(Dollars in thousands) Par Value Allowance for Credit Losses Non-Credit (Discount) Premium Fair Value

Purchased credit deteriorated leases

Leases $ 3,501 $ ( 424 ) $ 737 $ 3,814

Fair value $ 3,501 $ ( 424 ) $ 737 $ 3,814

Premier Financial Bancorp, Inc.

On September 17, 2021, Peoples completed its merger with Premier.

Premier merged into Peoples, and Premier’s wholly-owned subsidiaries, Premier Bank, Inc., and Citizens Deposit Bank and Trust, Inc., which combined operate 48 branches in Kentucky, Maryland, Ohio, Virginia, West Virginia and Washington, D.C., merged into Peoples’ wholly-owned subsidiary, Peoples Bank.

Premier merged into Peoples, and Premier’s wholly-owned subsidiaries, Premier Bank, Inc., and Citizens Deposit Bank and Trust, Inc., which combined operated 48 branches in Kentucky, Maryland, Ohio, Virginia, West Virginia and Washington, D.C., merged into Peoples’ wholly-owned subsidiary, Peoples Bank.

As consideration, Premier shareholders were paid 0.58 common shares of Peoples for each full share of Premier that was owned at the acquisition date, resulting in the issuance of 8,589,685 common shares by Peoples, or $ 261.9 million.

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Peoples believes the growth potential, and attractive market areas will benefit its future financial performance.

Peoples recorded acquisition-related expenses related to the Premier merger during the first quarter of 2022 of $ 137,000 .

Peoples recorded the estimate of fair value based on initial valuations available at September 17, 2021, and has revised fair values of the acquired assets and liabilities in the periods since based on subsequent information obtained where those facts and

circumstances existed as of the acquisition date.

Peoples recorded acquisition-related expenses related to the Premier merger during the first six months of 2022 of $ 427,000 .

The estimates of fair value are subject to adjustment for up to one year after September 17, 2021.

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Goodwill $ 66,940

The estimated fair values presented in the above table reflect additional information that was obtained during the three months ended March 31, 2022, which resulted in changes to certain fair value estimates made as of the date of acquisition.

The estimated fair values presented in the above table reflect additional information that was obtained during the six months ended June 30, 2022, which resulted in changes to certain fair value estimates made as of the date of acquisition.

Adjustments to acquisition date estimated fair values are recorded during the period in which they occur and, as a result, previously recorded results have changed.

The below table reflects the changes in the estimated fair value as they impact goodwill at March 31, 2022:

The below table reflects the changes in the estimated fair value as they impact goodwill at June 30, 2022:

(Dollars in thousands) Change in fair value

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Other assets ( 353 )

Change in total assets $ 1,227

Change in net assets $ 1,227

Change in goodwill $ ( 1,227 )

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Fair value $ 147,853 $ ( 15,513 ) $ ( 2,510 ) $ 129,830

Pikeville, Kentucky Insurance Agency

On May 4, 2021, Peoples Insurance acquired substantially all of the assets and rights of an insurance agency located in Pikeville, Kentucky and certain rights to related customer accounts, which were previously developed and maintained by Justice & Stamper Insurance Agency, Inc.

Total consideration for this transaction was $ 325,000 .

Peoples accounted for this transaction as a business combination under the acquisition method.

NS Leasing, LLC

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Peoples also recorded and paid an earn-out provision of approximately $ 3.0 million.

As of March 31, 2022, leases had grown to $ 136.6 million.

Peoples accounted for this transaction as a business combination under the acquisition method.

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Fair value $ 4,840

Peoples recorded acquisition-related expenses related to the NSL acquisition during the first quarter of 2022, which included $ 89,000 in professional fees.

Peoples recorded acquisition-related expenses related to the NSL acquisition during the first six months of 2022 of $ 90,000 .

Note 14 Leases

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Leases deemed to be uncollectable are charged against the allowance for credit losses, while recoveries of previously charged-off amounts are credited to the allowance for credit losses.

Peoples began originating leases with the acquisition of leases from NSL in the second quarter of 2021, and expanded its lease portfolio with the acquisition of Vantage in the current quarter.

Peoples began originating leases with the acquisition of leases from NSL in the second quarter of 2021, and expanded its lease portfolio with the acquisition of Vantage in the first quarter of 2022.

The leases acquired from NSL were determined to be sales-type leases, as the premise for the leases is dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment.

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As a lessor, Peoples originates commercial equipment leases either directly to the customer or indirectly through vendor programs.

Equipment leases consist of automotive, construction, healthcare, manufacturing, office, restaurant, information technology and other equipment.

Equipment leases consist of automotive, construction, health care, manufacturing, office, restaurant, information technology and other equipment.

These leases include estimated residual value, which are assessed for impairment as part of the allowance for credit losses.

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The table below details Peoples' lease income:

Three Months Ended

(Dollars in thousands) March 31, 2022

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Interest and fees on leases (a) $ 10,541 $ 4,215 $ 16,643 $ 4,215

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(a) Included in "Interest and fees on loans and leases" on the Unaudited Consolidated Statements of Operations.

For additional information, see "Note 4 Loans and Leases" of the Notes to the Unaudited Condensed

Consolidated Financial Statements.

The following table summarizes the net investments in leases, which are included in "Loans and leases, net of deferred costs" on the Unaudited Consolidated Balance Sheets:

(Dollars in thousands) March 31, 2022

For additional information, see "Note 4 Loans and Leases" of the Notes to the Unaudited Condensed Consolidated Financial Statements.

The following table summarizes the net investment in leases, which is included in "Loans and leases, net of deferred costs" on the Unaudited Consolidated Balance Sheets:

(Dollars in thousands) June 30, 2022

Lease payments receivable, at amortized cost $ 325,643

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Deferred revenue ( 50,841 )

Total leases, at amortized cost 267,068

Allowance for credit losses - leases ( 5,875 )

Net investment in leases 314,522

Allowance for credit losses - leases ( 7,585 )

Net investment in leases, after allowance for credit losses $ 306,937

The following table summarizes the contractual maturities of leases:

(Dollars in thousands) Balance

Remaining nine months ending December 31, 2022 $ 56,604

Remaining six months ending December 31, 2022 $ 52,258

Year ending December 31, 2023 73,212

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Certain leases contain rent escalation clauses calling for rent increases over the term of the lease, which are included in the calculation of the lease liability.

At March 31, 2022, Peoples did not have any leases that met the criteria for finance leases.

At June 30, 2022, Peoples did not have any leases that met the criteria for finance leases.

Right of Use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease.

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The table below details Peoples' lease expense, which is included in "Net occupancy and equipment expense" in the Unaudited Consolidated Statements of Operations:

Three Months Ended

(Dollars in thousands) March 31, 2022 March 31, 2021

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Operating lease expense $ 660 $ 350 1,263 680

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The following table details the ROU assets, the lease liabilities and other information related to Peoples' operating leases at the dates shown:

(Dollars in thousands) March 31, 2022 December 31, 2021

(Dollars in thousands) June 30, 2022 December 31, 2021

Other assets $ 7,501 $ 7,911

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Weighted-average discount rate 2.37 % 2.36 %

During the three months ended March 31, 2022 and March 31, 2021, Peoples paid cash of $ 590,000 and $ 320,000 , respectively, for operating leases.

During the three months ended June 30, 2022 and 2021, Peoples paid cash of $ 650,000 and $ 340,000 , respectively, for operating leases.

For the six months ended June 30, 2022 and 2021, Peoples paid cash of $ 1.2 million and $ 0.7 million, respectively, for operating leases.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands) Balance

Remaining nine months ending December 31, 2022 $ 2,090

Remaining six months ending December 31, 2022 $ 1,483

Year ending December 31, 2023 2,033

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements