What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 274 added, 258 removed, 1310 unchanged (29% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2022 December 31,

4 unchanged sentences

Total cash and cash equivalents 145,184 415,727

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)

Available-for-sale investment securities, at fair value (amortized cost of $ 1,349,800 at September 30, 2022 and $ 1,283,146 at December 31, 2021) (a)

1,169,844 1,275,493

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)

Held-to-maturity investment securities, at amortized cost (fair value of $ 326,457 at September 30, 2022 and $ 369,955 at December 31, 2021) (a)

407,801 374,129

19 unchanged sentences

Stockholders’ equity

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

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

Common stock, no par value, 50,000,000 shares authorized, 29,845,795 shares issued at September 30, 2022 and 29,814,401 shares issued at December 31, 2021, including at each date shares held in treasury

685,351 686,282

1 unchanged sentence

Accumulated other comprehensive loss, net of deferred income taxes ( 134,923 ) ( 11,619 )

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

Treasury stock, at cost, 1,638,574 shares at September 30, 2022 and 1,577,359 shares at December 31, 2021

( 39,750 ) ( 36,714 )

1 unchanged sentence

Total liabilities and stockholders’ equity $ 7,005,854 $ 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 June 30, 2022 and $ 0 and $ 286 , respectively, at December 31, 2021.

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $ 0 and $ 238 , respectively, at September 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."

4 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

11 unchanged sentences

Net interest income 67,051 42,578 182,829 117,816

(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

Provision for (recovery of) credit losses 1,776 8,994 ( 5,811 ) 7,333

Net interest income after provision for (recovery of) credit losses 65,275 33,584 188,640 110,483

Non-interest income:

Electronic banking income 5,261 4,326 15,933 12,655

Insurance income 3,646 3,335 8,377 8,556

Trust and investment income 3,954 4,158 12,476 12,223

Insurance income 3,618 3,367 11,995 11,923

Deposit account service charges 3,833 2,549 10,817 6,578

Mortgage banking income 352 820 788 1,960

Bank owned life insurance income 694 437 1,922 1,329

Mortgage banking income 328 766 1,116 2,726

Commercial loan swap fees 224 73 662 194

Net gain (loss) on investment securities 21 ( 166 ) 107 ( 704 )

Net loss on asset disposals and other transactions ( 35 ) ( 308 ) ( 314 ) ( 459 )

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

Other non-interest income 2,468 1,144 5,088 2,605

3 unchanged sentences

Net occupancy and equipment expense 4,813 3,551 14,669 10,167

Professional fees 2,280 3,565 5,952 7,033

Data processing and software expense 3,279 2,529 9,228 7,394

Professional fees 2,832 6,426 8,784 13,459

Electronic banking expense 2,648 2,037 8,134 6,006

Amortization of other intangible assets 2,023 1,279 5,765 3,267

FDIC insurance premiums 1,018 326 2,212 789

Marketing expense 1,136 1,223 2,991 2,810

Other loan expenses 445 494 1,277 956

Franchise tax expense 1,075 810 2,941 2,487

FDIC insurance premiums 709 807 2,921 1,596

Communication expense 599 411 1,873 1,079

Other loan expenses 511 487 1,788 1,443

Other non-interest expense 4,010 12,711 10,755 17,762

Total non-interest expense 52,253 57,860 153,781 135,746

Income before income taxes 31,735 12,494 61,273 31,737

Income tax expense 6,847 2,391 12,808 6,171

Net income $ 24,888 $ 10,103 $ 48,465 $ 25,566

Earnings per common share - basic $ 0.89 $ 0.52 $ 1.73 $ 1.32

Earnings per common share - diluted $ 0.88 $ 0.51 $ 1.72 $ 1.31

Income (loss) before income taxes 33,388 ( 7,930 ) 94,661 23,807

Income tax expense (benefit) 7,410 ( 2,172 ) 20,218 3,999

Net income (loss) $ 25,978 $ ( 5,758 ) $ 74,443 $ 19,808

Earnings (loss) per common share - basic $ 0.93 $ ( 0.28 ) $ 2.65 $ 0.99

Earnings (loss) per common share - diluted $ 0.92 $ ( 0.28 ) $ 2.65 $ 0.99

Weighted-average number of common shares outstanding - basic 27,865,416 20,640,519 27,929,720 19,751,853

6 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2022 2021 2022 2021

Net income $ 24,888 $ 10,103 $ 48,465 $ 25,566

Net income (loss) $ 25,978 $ ( 5,758 ) $ 74,443 $ 19,808

Other comprehensive (loss) income:

Available-for-sale investment securities:

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

Gross unrealized holding loss arising during the period ( 57,911 ) ( 7,685 ) ( 172,195 ) ( 16,738 )

Related tax benefit 13,484 1,592 40,170 3,493

Reclassification adjustment for net (gain) loss included in net income ( 21 ) 166 ( 107 ) 704

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

Related tax benefit (expense) 5 ( 44 ) 25 ( 157 )

Net effect on other comprehensive (loss) income ( 44,443 ) ( 5,971 ) ( 132,107 ) ( 12,698 )

4 unchanged sentences

Related tax expense ( 5 ) ( 5 ) ( 14 ) ( 18 )

Net effect on other comprehensive income 71 28 76 55

Recognition of gain due to settlement and curtailment 139 143 139 143

Related tax expense ( 32 ) ( 32 ) ( 32 ) ( 32 )

Net effect on other comprehensive (loss) income 280 1,537 356 1,592

Cash flow hedges:

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 )

Net gain arising during the period 3,388 858 10,948 4,800

Related tax expense ( 789 ) ( 90 ) ( 2,501 ) ( 918 )

Net effect on other comprehensive (loss) income 2,599 768 8,447 3,882

Total other comprehensive loss, net of tax ( 41,564 ) ( 3,666 ) ( 123,304 ) ( 7,224 )

Total comprehensive (loss) income $ ( 15,586 ) $ ( 9,424 ) $ ( 48,861 ) $ 12,584

6 unchanged sentences

(Dollars in thousands)

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

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

Net income — 25,978 — — 25,978

2 unchanged sentences

Reissuance of treasury stock for common share awards ( 219 ) — — 219 —

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 — — — ( 235 ) ( 235 )

4 unchanged sentences

Stock-based compensation 780 — — — 780

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

Balance, September 30, 2022 $ 685,351 $ 249,833 $ ( 134,923 ) $ ( 39,750 ) $ 760,511

Accumulated Other Comprehensive Loss Total Stockholders' Equity

13 unchanged sentences

Stock-based compensation 2,933 — — — 2,933

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

Accumulated Other Comprehensive (Loss) Income Total Stockholders' Equity

Balance, September 30, 2022 $ 685,351 $ 249,833 $ ( 134,923 ) $ ( 39,750 ) $ 760,511

Accumulated Other Comprehensive Loss Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(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

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

Net loss — ( 5,758 ) — — ( 5,758 )

Other comprehensive loss, net of tax — — ( 3,666 ) — ( 3,666 )

Cash dividends declared — ( 7,093 ) — — ( 7,093 )

6 unchanged sentences

Stock-based compensation 598 — — — 598

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

Issuance of common shares related to merger with Premier Financial Bancorp , Inc.

261,899 — — — 261,899

Balance, September 30, 2021 $ 685,428 $ 189,508 $ ( 5,888 ) $ ( 37,166 ) $ 831,882

Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

12 unchanged sentences

Stock-based compensation 2,382 — — — 2,382

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

Issuance of common shares related to merger with Premier Financial Bancorp , Inc.

261,899 — — — 261,899

Balance, September 30, 2021 $ 685,428 $ 189,508 $ ( 5,888 ) $ ( 37,166 ) $ 831,882

See Notes to the Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Six Months Ended

Nine Months Ended

September 30,

(Dollars in thousands) 2022 2021

18 unchanged sentences

Investment in limited partnership and tax credit funds ( 1,857 ) ( 2,900 )

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

Net cash (used in) provided by investing activities ( 201,572 ) 106,289

Financing activities:

Net increase in non-interest-bearing deposits 20,443 183,722

Net (decrease) increase in non-interest-bearing deposits ( 5,469 ) 69,557

Net increase in interest-bearing deposits 8,919 95,881

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

Net (decrease) increase in short-term borrowings ( 37,916 ) 32,625

Proceeds from long-term borrowings 19,001 —

5 unchanged sentences

Proceeds from issuance of common shares 878 655

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

Net cash (used in) provided by financing activities ( 171,471 ) 174,571

Net (decrease) increase in cash and cash equivalents ( 270,543 ) 347,582

17 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 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.

Management has evaluated all significant events and transactions that occurred after September 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):

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

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

2 unchanged sentences

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.

This ASU was early adopted by Peoples 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.

This ASU clarifies the guidance in the Accounting Standards Codification ("ASC") 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets.

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.

22 unchanged sentences

Recurring Fair Value Measurements at Reporting Date

June 30, 2022 December 31, 2021

September 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 June 30, 2022 and December 31, 2021.

Non-Recurring Fair Value Measurements at Reporting Date

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

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

3 unchanged sentences

Servicing rights (b)(c) $ — $ 25 $ — $ 22

(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.

(a) Loans held for sale are presented gross of a valuation allowance of $ 0 and $ 0 as of September 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) Peoples established a valuation allowance on servicing rights of $ 6 at September 30, 2022 and $ 12 at December 31, 2021.

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

19 unchanged sentences

Fair Value Measurements of Other Financial Instruments

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

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

Carrying Amount Fair Value Carrying Amount Fair Value

21 unchanged sentences

Long-term borrowings 2 104,196 105,490 99,475 101,664

(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.

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $ 238 and $ 286 as of September 30, 2022 and December 31, 2021, respectively.

(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 June 30, 2022

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

(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $ 52.9 million and $ 64.0 million as of September 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.

13 unchanged sentences

Accordingly, this value is not necessarily the value to Peoples if the notes were held to maturity.

Peoples considered interest rate, credit and market factors in estimating the fair value of loans and leases (Level 3).

Peoples considers interest rate, credit and market factors in estimating the fair value of loans and leases (Level 3).

Fair values for loans and leases are estimated using a discounted cash flow methodology.

3 unchanged sentences

Peoples recognizes tax-exempt income from the periodic increases in the cash surrender value of these policies and from death benefits.

The fair value of fixed-maturity certificates of deposit ("CDs") is estimated using a discounted cash flow calculation based on current rates offered for deposits of similar remaining maturities (Level 2).

Demand and other non-fixed-maturity deposits are estimated using a discounted cash flow calculation based on maturity, attrition and re-pricing assumptions.

The fair value of fixed-maturity certificates of deposit ("CDs") is estimated using a discounted cash flow calculation based on current rates offered for deposits of similar remaining maturities.

Demand and other non-fixed-maturity deposits are estimated using a discounted cash flow calculation based on maturity, attrition and re-pricing assumptions (Level 2).

Short-term Borrowings:

10 unchanged sentences

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

June 30, 2022

September 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 June 30 were as follows:

Three Months Ended Six Months Ended

June 30, June 30,

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

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2022 2021 2022 2021

1 unchanged sentence

Gross losses realized ( 8 ) ( 316 ) ( 82 ) ( 1,490 )

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

Net gain (loss) realized $ 21 $ ( 166 ) $ 107 $ ( 704 )

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

June 30, 2022

September 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 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.

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

At September 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 September 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 $ 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.

Interest receivable on investment securities was $ 7.3 million at September 30, 2022 and $ 5.5 million at December 31, 2021.

At September 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.

The remaining 1 %, or three positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004.

All three positions had a fair value of less than 90 % of its book value.

Management analyzed the underlying credit quality of these mortgage-

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 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 remaining 1 %, or four positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004.

Of the four positions, three positions had a fair value of less than 90 % of its book value.

Management analyzed the underlying credit quality of these mortgage-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.

treasury and government agencies, U.S.

government sponsored agencies, and obligations of states and political subdivisions were issued by the U.S.

Treasury Department or Federal government-sponsored entities.

The decline in fair values was attributable to changes in interest rates and not credit quality.

Therefore, management does not consider these impaired 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 September 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 September 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

June 30, 2022

September 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 six months ended June 30, 2022 or 2021.

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

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

1 unchanged sentence

government sponsored agencies.

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 June 30, 2022, and December 31, 2021.

Peoples analyzed these securities using cumulative default rate averages for

municipal securities.

Peoples recorded $ 238,000 and $ 286,000 of allowance for credit losses for held-to-maturity securities as of September 30, 2022, and December 31, 2021, respectively.

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

June 30, 2022

September 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 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.

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

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.

17 unchanged sentences

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

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

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

FHLB stock $ 14,683 $ 17,308

4 unchanged sentences

Total other investment securities $ 39,039 $ 33,987

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.

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

("Premier") on September 17, 2021.

During the three months ended September 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 gain of $ 6,000 and $ 18,000 , respectively.

For the nine months ended September 30, 2022 and 2021, Peoples recognized a loss of $ 12,000 and a gain of $ 91,000 , respectively, for the change in fair value of equity securities in "Other non-interest income".

At September 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) June 30, 2022 December 31, 2021

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

Securing public and trust department deposits, and repurchase agreements:

9 unchanged sentences

Peoples' loan portfolio consists of various types of loans and leases originated primarily as a result of lending opportunities within Peoples' footprint.

Peoples also originates insurance premium finance loans and leases nationwide through its Peoples Premium Finance and North Star Leasing divisions, and Vantage Financial, LLC ("Vantage") subsidiary, respectively.

Peoples also originates insurance premium finance loans nationwide through its Peoples Premium Finance division, and originates leases nationwide through its North Star Leasing division and its Vantage Financial, LLC ("Vantage") subsidiary.

Loans and leases throughout this document are referred to as "total loans" and "loans held for investment".

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) June 30,

(Dollars in thousands) September 30,

2022 December 31, 2021

11 unchanged sentences

On March 7, 2022, Peoples completed the acquisition of Vantage, which included $ 154.9 million of leases.

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.

During the first nine 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 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.

At September 30, 2022, the PPP loans had an amortized cost of $ 3.7 million, and were included in the commercial and industrial loan balances.

As of September 30, 2022, deferred loan origination fees, net of deferred origination costs, totaled $ 61,000 for PPP loans.

During the third quarter of 2022, Peoples recorded amortization of net deferred loan origination fees of $ 0.4 million on PPP loans compared to $ 3.8 million for the third 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 $ 12.0 million at both June 30, 2022 and December 31, 2021.

Total interest receivable on loans was $ 13.1 million at September 30, 2022 and $ 12.0 million at December 31, 2021.

Nonaccrual and Past Due Loans

2 unchanged sentences

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

September 30, 2022 December 31, 2021

(Dollars in thousands) Nonaccrual (a)

11 unchanged sentences

Total loans, at amortized cost $ 27,831 $ 8,424 $ 34,765 $ 3,723

(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.

(a) There were $ 2.0 million of nonaccrual loans for which there was no allowance for credit losses at September 30, 2022 and $ 2.6 million at December 31, 2021.

During the first nine 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.

As of September 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.

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 September 30, 2022.

The amount of interest income recognized on loans past due 90 days or more during the nine months ended September 30, 2022 was $ 1.1 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

June 30, 2022

September 30, 2022

Construction $ 334 $ 25 $ — $ 359 $ 215,262 $ 215,621

9 unchanged sentences

Total loans, at amortized cost $ 15,244 $ 7,746 $ 28,302 $ 51,292 $ 4,559,915 $ 4,611,207

Loans Past Due Current

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

December 31, 2021

10 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 98.8 % of Peoples' loan portfolio was considered “current” at June 30, 2022, compared to 98.8 % at December 31, 2021.

Delinquency trends remained stable, as 98.9 % of Peoples' loan portfolio was considered “current” at September 30, 2022, compared to 98.8 % at December 31, 2021.

Pledged Loans

2 unchanged sentences

Loans pledged are summarized as follows:

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

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

Loans pledged to FHLB $ 793,115 $ 769,863

1 unchanged sentence

Credit Quality Indicators

As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2021 Form 10-K, Peoples categorizes the majority of its loans into risk categories based upon an established risk grading matrix using a scale of 1 to 8.

grading matrix using a scale of 1 to 8.

Loan grades are assigned at the time a new loan or lending commitment is extended by Peoples and may be changed at any time when circumstances warrant.

17 unchanged sentences

Loans in this risk grade have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of current existing facts, conditions and values, highly questionable and improbable.

Possibility of loss is extremely high, but because of certain

important and reasonably specific factors that may work to the advantage and strengthening of the exposure, classification of each of these loans as an estimated loss is deferred until its more exact status may be determined.

Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, classification of each of these loans as an estimated loss is deferred until its more exact status may be determined.

“Loss” (grade 8):

6 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 June 30, 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 September 30, 2022:

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

9 unchanged sentences

Doubtful — — — — — 173 — — 173

Loss — — — — — 16 — — 16

Total 124,359 236,649 233,649 214,144 118,735 473,741 22,202 6,337 1,423,479

12 unchanged sentences

Total 141,929 103,719 40,688 20,017 4,981 1,513 — — 312,847

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

(Dollars in thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Total

Residential real estate

35 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

39 unchanged sentences

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

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

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

Construction $ 340 $ 1,291

4 unchanged sentences

Total collateral dependent loans $ 14,885 $ 50,119

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.

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

Troubled Debt Restructurings

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

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

Three Months Ended

1 unchanged sentence

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

June 30, 2022

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

September 30, 2022

Commercial and industrial 1 $ 20 $ 20 $ 19

5 unchanged sentences

Total 19 $ 561 $ 599 $ 591

June 30, 2021

September 30, 2021

Construction 1 $ 6 $ 6 $ 6

Commercial real estate, other 2 14 14 14

Commercial and industrial 3 327 327 327

Leases 2 182 184 178

7 unchanged sentences

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

Six Months Ended

Nine Months Ended

Recorded Investment (a)

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

June 30, 2022

September 30, 2022

Commercial real estate, other 3 $ 282 $ 282 $ 276

6 unchanged sentences

Total 69 $ 3,620 $ 3,708 $ 3,160

June 30, 2021

September 30, 2021

Construction 2 $ 350 $ 350 $ 350

Commercial real estate, other 3 37 37 37

Commercial and industrial 3 327 327 327

Leases 5 340 348 334

13 unchanged sentences

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 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 five loans totaling $ 202,000 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 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

As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2021 Form 10-K, Peoples' estimates the allowance for credit losses using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

In management's estimation of expected credit losses, Peoples' uses a one year reasonable and supportable period across all segments.

Following the reasonable and supportable period, Peoples' reverts the macroeconomic variables to their long run average over a four quarter reversion period.

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

(Dollars in thousands) Beginning Balance, June 30, 2022

Construction $ 1,531 $ — $ — $ ( 67 ) $ — $ — $ 1,464

12 unchanged sentences

(Dollars in thousands) Beginning Balance,

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

June 30, 2021 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, September 30, 2021

Construction $ 914 $ 2,127 $ 638 $ ( 243 ) $ — $ — $ 3,436

11 unchanged sentences

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

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

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

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

Construction $ 2,999 $ — $ — $ ( 1,535 ) $ — $ — $ 1,464

12 unchanged sentences

(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 $ 2,127 $ 638 $ ( 1,216 ) $ — $ — $ 3,436

12 unchanged sentences

(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.

During the third quarter of 2022, Peoples recorded a provision for credit losses for loans of $ 1.8 million, driven by a deterioration of macro-economic conditions, partially offset by a reduction in reserves for individually analyzed loans.

Leases designated as

purchased credit deteriorated ("PCD") acquired from Vantage increased the allowance for credit losses by $ 377,000 .

Net charge-offs for the third quarter of 2022 were $ 1.7 million, and included charge-offs of three leases aggregating $ 0.6 million.

Peoples had recorded an allowance for unfunded commitments of $ 2.1 million as of September 30, 2022, a decrease compared to $ 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) provision for credit losses" line of the Unaudited Consolidated Statements of Operations.

The change in the allowance for unfunded commitments is also reflected in the "Provision for (recovery of) 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) June 30, 2022 December 31, 2021

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

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

1 unchanged sentence

Goodwill, end of period $ 292,397 $ 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.

On March 11, 2022, Peoples Insurance Agency, LLC ("Peoples Insurance") entered into an Asset Purchase Agreement with Elite Agency, Inc.

("Elite"), and consummated the acquisition on April 1, 2022.

In the second quarter of 2022 , Peoples preliminarily recorded $ 2.3 million of 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 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.

In the first nine months of 2022, Peoples preliminarily recorded $ 27.2 million of goodwill related to this acquisition, which was offset partially by adjustments of $ 1.2 million to the goodwill balance related to the Premier Merger during the measurement period.

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

On May 4, 2021, Peoples Insurance recorded $ 46,000 of goodwill from the acquisition of an insurance agency.

On September 17, 2021, Peoples completed the merger with Premier, for which Peoples preliminarily recorded $ 66.9 million of goodwill.

On September 17, 2021, Peoples completed the merger with Premier, for which Peoples recorded $ 66.9 million of goodwill.

For additional information on these acquisitions, refer to "Note 13 Acquisitions."

Other Intangible Assets

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

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

(Dollars in thousands) Core Deposits Customer Relationships Total

June 30, 2022

September 30, 2022

Gross intangibles $ 26,464 $ 25,173 $ 51,637

14 unchanged sentences

(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.

$ 0.1 million of non-compete intangible assets related to the Elite 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 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 preliminarily recorded for the nine months ended September 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.

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 June 30, 2022:

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

(Dollars in thousands) Core Deposits Customer Relationships Total

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

Remaining three months of 2022 $ 382 $ 1,617 $ 1,999

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 June 30, 2022 and December 31, 2021:

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

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

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

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

4 unchanged sentences

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

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.

As of September 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

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

September 30, 2022 December 31, 2021

Minimum Maximum Minimum Maximum

1 unchanged sentence

Prepayment speeds 7.7 % 20.0 % 8.9 % 27.1 %

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

The fair value of servicing rights was $ 3.5 million and $ 2.6 million at September 30, 2022 and December 31, 2021, respectively.

Note 6 Deposits

Peoples’ deposit balances were comprised of the following:

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

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

$100 or more $ 269,145 $ 320,574

10 unchanged sentences

(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.

Time deposits that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") limit of $ 250,000 were $ 116.4 million and $ 121.3 million at September 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 six months ending December 31, 2022 (a) $ 354,213 $ 86,245 $ 440,458

Remaining three months ending December 31, 2022 (a) $ 114,371 $ 85,595 $ 199,966

Year ending December 31, 2023 258,615 494 259,109

5 unchanged sentences

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

At September 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 six months ended June 30, 2022:

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

Common Shares Treasury

12 unchanged sentences

Common shares issued under employee stock purchase plan

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

Shares at September 30, 2022 29,845,795 1,638,574

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

At September 30, 2022, Peoples had repurchased 254,519 common shares totaling $ 7.2 million under the share repurchase program.

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 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:

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

O n October 24, 2022, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.38 per common share, payable on November 21, 2022, to shareholders of record on November 7, 2022.

Th e following table details the cash dividends declared per common share during the four quarters of 2022 and the comparable periods of 2021:

First quarter $ 0.36 $ 0.35

1 unchanged sentence

Third quarter 0.38 0.36

Fourth quarter 0.38 0.36

Total dividends declared $ 1.50 $ 1.43

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)

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income for the nine months ended September 30, 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

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

Reclassification adjustments to net income:

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

Realized gain on sale of securities, net of tax ( 82 ) — — ( 82 )

Realized gain due to settlement and curtailment, net of tax — 107 — 107

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

( 132,025 ) 249 8,447 ( 123,329 )

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

Balance, September 30, 2022 $ ( 138,053 ) $ ( 1,525 ) $ 4,655 $ ( 134,923 )

Note 8 Employee Benefit Plans

15 unchanged sentences

The expected long-term rate of return on plan assets, which was determined as of January 1, 2022, is 7.0 %.

The following table details the components of the net periodic cost for the plan described above, which is included in salaries and employee benefit costs on the Unaudited Consolidated Statements of Operations:

The following table details the components of the net periodic cost for the noncontributory defined benefit pension plan described above, which is included in salaries and employee benefit costs on the Unaudited Consolidated Statements of Operations:

Pension Benefits

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2022 2021 2022 2021

2 unchanged sentences

Amortization of net loss 21 21 61 84

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

Settlement of benefit obligation 139 143 139 143

Net periodic income (loss) $ 57 $ 81 $ ( 107 ) $ ( 71 )

Under US GAAP, Peoples is required to recognize a settlement gain or loss when the aggregate amount of lump-sum distributions to participants equals or exceeds the sum of the service and interest cost components of the net periodic pension cost.

1 unchanged sentence

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 six months ended June 30, 2022 or June 30, 2021 under the noncontributory defined benefit pension plan.

Peoples recorded settlement charges under the noncontributory defined benefit pension plan of $ 139,000 during the three and nine months ended September 30, 2022 and $ 143,000 during the three and nine months ended September 30, 2021.

Note 9 Earnings Per Common Share

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

Three Months Ended Six Months Ended

June 30, June 30,

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

Three Months Ended Nine Months Ended

September 30, September 30,

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

Net income available to common shareholders $ 24,888 $ 10,103 $ 48,465 $ 25,566

Net income (loss) available to common shareholders $ 25,978 $ ( 5,758 ) $ 74,443 $ 19,808

Dividends paid on unvested common shares ( 102 ) ( 79 ) ( 252 ) ( 214 )

Undistributed loss allocated to unvested common shares ( 19 ) ( 5 ) ( 40 ) ( 15 )

Net earnings allocated to common shareholders $ 24,767 $ 10,017 $ 48,275 $ 25,401

Undistributed (loss) earnings allocated to unvested common shares ( 24 ) 21 ( 65 ) 2

Net earnings (loss) allocated to common shareholders $ 25,852 $ ( 5,816 ) $ 74,126 $ 19,596

Weighted-average common shares outstanding 27,865,416 20,640,519 27,929,720 19,751,853

1 unchanged sentence

Total weighted-average diluted common shares outstanding 27,973,255 20,789,271 28,009,263 19,890,672

Earnings per common share:

Earnings (loss) per common share:

Basic $ 0.93 $ ( 0.28 ) $ 2.65 $ 0.99

20 unchanged sentences

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

At September 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 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.

At September 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.

2 unchanged sentences

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 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 three months ended September 30, 2022, and 2021, Peoples had recorded reclassifications of losses to earnings of $ 0.2 million and $ 0.8 million, respectively.

For the nine months ended September 30, 2022 and 2021, Peoples recorded reclassifications of losses to earnings of $ 1.3 million and $ 2.3 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) June 30,

(Dollars in thousands) September 30,

2022 December 31,

4 unchanged sentences

Pre-tax unrealized gains (losses) included in AOCI $ 6,068 $ ( 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,

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 Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2022 2021 2022 2021

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

Amount of net gains recognized in AOCI, pre-tax $ ( 3,388 ) $ ( 858 ) $ ( 10,948 ) $ ( 4,800 )

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

September 30,

2022 December 31,

11 unchanged sentences

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 and six months ended June 30, 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 nine months ended September 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:

September 30,

2022 December 31,

6 unchanged sentences

Peoples pledges or receives collateral for all interest rate swaps.

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.

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 September 30, 2022 and December 31, 2021, Peoples had no cash pledged, while counterparties had $ 22.0 million of cash pledged at September 30, 2022 and none pledged at December 31, 2021.

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

Note 11 Stock-Based Compensation

11 unchanged sentences

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

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;

In the first nine 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 six months ended June 30, 2022:

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

Time-Based Vesting Performance-Based Vesting

4 unchanged sentences

Forfeited — — ( 3,647 ) 32.17

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.

Outstanding at September 30, 2022 134,918 $ 27.18 297,680 $ 32.20

For the nine months ended September 30, 2022, the total intrinsic value for restricted common shares released was $ 3.7 million compared to $ 2.6 million for the nine months ended September 30, 2021.

Stock-Based Compensation

2 unchanged sentences

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.

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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2022 2021 2022 2021

7 unchanged sentences

Net stock-based compensation expense $ 714 $ 527 $ 2,644 $ 2,134

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.

Restricted common shares were the primary form of stock-based compensation awards granted by Peoples in the nine months ended September 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 June 30, 2022, which will be recognized over a weighted-average period of 2.2 years.

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 4.8 million at September 30, 2022, which will be recognized over a weighted-average period of 2.1 years.

Note 12 Revenue

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2022 2021 2022 2021

22 unchanged sentences

Peoples records contract liabilities for payments received for commission income related to the sale of insurance policies, for which the performance obligations have not yet been fulfilled.

The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled, which is over the insurance policy period.

The contract liabilities are recognized as income over time, during the period in which the

performance obligations are fulfilled, which is over the insurance policy period.

Peoples also records contract liabilities for bonuses received related to electronic banking income, for which the performance obligations have not yet been fulfilled.

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 six-month period ended June 30, 2022:

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

Contract Assets Contract Liabilities

4 unchanged sentences

Recognition of income previously deferred — ( 95 )

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

Balance, September 30, 2022 $ 902 $ 5,203

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.

5 unchanged sentences

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

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.

Peoples recorded acquisition-related expenses during the three and nine months ended September 30, 2022 of $ 120,000 and $ 1.6 million related to the Vantage acquisition, respectively.

For the nine months ended September 30, 2022, the Vantage acquisition-related expenses included $ 1.3 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.

10 unchanged sentences

Other assets 1,506

(Dollars in thousands) Fair Value

Total assets $ 171,198

7 unchanged sentences

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.

The estimated fair values presented in the above table reflect additional information that was obtained during the three months ended September 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:

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

(Dollars in thousands) Change in fair value

Leases $ ( 2,215 )

Allowance for credit losses (on PCD leases) ( 377 )

Net leases $ ( 2,592 )

Bank premises and equipment ( 1,810 )

Other assets ( 97 )

Change in total assets $ ( 2,592 )

Borrowings ( 170 )

Accrued expenses and other liabilities 71

Change in total liabilities $ ( 170 )

2 unchanged sentences

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

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

Purchased credit deteriorated leases

4 unchanged sentences

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.

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

1 unchanged sentence

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 six months of 2022 of $ 427,000 .

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.

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

Valuations subject to change include loans and deferred tax assets and liabilities.

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

Peoples recorded acquisition-related expenses related to the Premier merger during the three and nine months ended September 30, 2022 of $ 18,000 and $ 445,000 .

The following table provides the purchase price calculation as of the date of the merger with Premier, and the assets acquired and liabilities assumed at their estimated fair values.

(Dollars in thousands) Unpaid Principal Balance Fair Value

12 unchanged sentences

Total investment securities 556,112

Loans and leases:

Construction 97,262 96,025

4 unchanged sentences

Consumer 20,961 21,513

Total loans 1,174,704 1,161,840

Total loans and leases 1,174,704 1,161,840

Allowance for credit losses (on PCD loans) ( 15,513 )

Net loans 1,146,327

Net loans and leases 1,146,327

Bank premises and equipment 30,098

11 unchanged sentences

Goodwill $ 66,940

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 June 30, 2022:

(Dollars in thousands) Change in fair value

Net loans $ 1,580

Other assets ( 353 )

Change in total assets $ 1,227

Change in net assets $ 1,227

Change in goodwill $ ( 1,227 )

Loans acquired by Peoples in a business combination that have evidence of more than insignificant credit deterioration, which includes loans that Peoples believes it is probable that Peoples will be unable to collect all contractually required payments, are considered "purchased credit deteriorated" loans.

28 unchanged sentences

Cash and due from banks $ 216

Net leases 82,833

Net loans and leases 82,833

Bank premises and equipment, net of accumulated depreciation 470

18 unchanged sentences

Fair value $ 4,840

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

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

Note 14 Leases

Peoples has elected certain practical expedients, in accordance with Accounting Standards Codification 842 - Leases ("ASC 842").

Peoples has elected certain practical expedients, in accordance with ASC 842 - Leases ("ASC 842").

As a lessor, Peoples has made an accounting policy election to exclude from consideration in the contract, and from variable payments not included in the consideration in the contract, all sales and other similar taxes assessed.

17 unchanged sentences

The table below details Peoples' lease income:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Interest and fees on leases (a) $ 9,628 $ 4,810 $ 26,271 $ 9,025

4 unchanged sentences

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

(Dollars in thousands) September 30, 2022

Lease payments receivable, at amortized cost $ 331,572

7 unchanged sentences

(Dollars in thousands) Balance

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

Remaining three months ending December 31, 2022 $ 19,853

Year ending December 31, 2023 76,972

9 unchanged sentences

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

At September 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.

4 unchanged sentences

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 Six Months Ended

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

Three Months Ended Nine Months Ended

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

Operating lease expense $ 630 $ 358 1,893 1,038

4 unchanged sentences

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) June 30, 2022 December 31, 2021

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

Other assets $ 7,975 $ 7,911

4 unchanged sentences

Weighted-average discount rate 2.72 % 2.36 %

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.

During the three months ended September 30, 2022 and 2021, Peoples paid cash of $ 0.7 million and $ 345,000 , respectively, for operating leases.

During the nine months ended September 30, 2022 and 2021, Peoples paid cash of $ 1.9 million and $ 1.0 million, respectively, for operating leases.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands) Balance

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

Remaining three months ending December 31, 2022 $ 834

Year ending December 31, 2023 2,066

6 unchanged sentences

Total lease liabilities $ 8,257

Note 15 Subsequent Events

The Company has evaluated all events occurring after September 30, 2022 through November 3, 2022, the date the interim unaudited financial statements for the period ending September 30, 2022 were available to be issued, to determine whether any event required either recognition or disclosure in the financial statements.

Merger Agreement

On October 25, 2022 Peoples announced the signing of a definitive agreement and plan of merger (the "Merger Agreement") pursuant to which Peoples will acquire, in an all-stock merger, Limestone Bancorp, Inc.

("Limestone"), a bank holding company headquartered in Louisville, Kentucky, and the parent company of Limestone Bank, Inc.

(“Limestone Bank”).

Under the terms of the Merger Agreement, Limestone will merge with and into Peoples (the “Limestone Merger”), and Limestone Bank will subsequently merge with and into Peoples’ wholly-owned subsidiary, Peoples Bank, in a transaction valued at approximately $ 208.2 million.

As of September 30, 2022, Limestone had, on a consolidated basis, $ 1.5 billion in total assets, which included $ 1.1 billion in total net loans, as well as $ 1.2 billion in total deposits.

According to the terms of the Merger Agreement, which has been unanimously approved by the Boards of Directors of both companies, shareholders of Limestone will receive 0.90 common shares of Peoples for each share of Limestone common stock, and the Merger is expected to qualify as a tax-free reorganization for Limestone shareholders.

The Merger is expected to close during the second quarter of 2023, subject to the satisfaction of customary closing conditions, including regulatory approvals and the approval of the shareholders of Peoples and of Limestone.

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