What changed in this filing

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Item 9A. Controls and Procedures

2023-02-27 compared with 2022-03-15 · 493 added, 490 removed, 2266 unchanged (30% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Peoples’ management, with the participation and supervision of Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, has evaluated the effectiveness of Peoples’ disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2021.

Based upon that evaluation, Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer have concluded that our disclosure controls and procedures were not effective as of December 31, 2021 because of a material weakness in internal controls over financial reporting described in Management’s Annual Report on Internal Control Over Financial Reporting below.

Peoples’ management, with the supervision and participation of Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, has evaluated the effectiveness of Peoples’ disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2022.

Based upon that evaluation, Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer have concluded that:

(a) information required to be disclosed by Peoples in this Form 10-K and other reports Peoples files or submits under the Exchange Act would be accumulated and communicated to Peoples’ management, including its President and Chief Executive Officer and its Executive Vice President, Chief Financial Officer and Treasurer, as appropriate to allow timely decisions regarding required disclosure;

(b) information required to be disclosed by Peoples in this Form 10-K and other reports Peoples files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms;

Remediation of Material Weakness in Internal Control Over Financial Reporting

As previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, Peoples' management, including Peoples' President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, identified a material weakness in Peoples' internal control over financial reporting during the fiscal year ended December 31, 2021.

Control deficiencies were identified by Peoples’ management related to the accounting for loans acquired in the September 17, 2021 Premier Merger, specifically the designation of those acquired loans as either PCD or non-PCD, the designation of PCD loans as either pooled or individually assessed, and the estimation and calculation of expected credit losses on individually assessed loans.

Based upon an internal review by Peoples’ management, with the participation of Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, it was determined that the deficiencies in the design of internal controls supporting acquired PCD loan accounting and the related allowance for credit losses aggregated to a material weakness in internal control over financial reporting.

During the year ended December 31, 2022, management took the following actions to remediate the aforementioned internal control deficiencies:

• reviewed the then existing internal controls with respect to the business combination process and performed a risk assessment to ensure those internal controls were appropriately designed to address the respective risks of material misstatement to the financial statements;

• implemented changes to Peoples' internal controls, including enhancing Peoples' internal control documentation (i.e., critical internal control operator steps, precision, review procedures);

• implemented and performed additional internal controls, as necessary;

• engaged third-party advisors to assist with internal control design for the Vantage acquisition, which closed during the year ended December 31, 2022;

• prepared Control Support Summary memos for each executed business combination internal control.

Each of the Control Support Summary memos includes a description of all information used in the execution of the associated internal control and a detail of critical steps performed by the internal control operator while executing the internal control.

Peoples' management believes the measures described above have remediated the material weakness previously identified and has concluded Peoples' internal control over financial reporting was effective at a reasonable assurance level as of December 31, 2022.

Management's Annual Report on Internal Control Over Financial Reporting

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PCAOB Auditor Firm I.D.:

42 ), the independent registered public accounting firm that audited Peoples' consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2021.

The report, which expresses the opinion that management has not maintained effective internal control over financial reporting as of December 31, 2021, is included in the "Report of Independent Registered Public Accounting Firm"

42 ), the independent registered public accounting firm that audited Peoples' consolidated financial statements included in this Form 10-K, has issued an attestation report on the effectiveness of Peoples' internal control over financial reporting as of December 31, 2022.

The report, which expresses the opinion that Peoples' management has maintained effective internal control over financial reporting as of December 31, 2022, is included in the "Report of Independent Registered Public Accounting Firm"

Changes in Internal Control Over Financial Reporting

Except for the material weakness identified, there were no changes in Peoples’ internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, Peoples’ internal control over financial reporting.

However, as disclosed in the “Report of Management’s Assessment of Internal Control Over Financial Reporting”, Peoples’ management is in the process of implementing certain changes to Peoples’ internal controls to remediate the material weakness disclosed in the “Report of Management’s Assessment of Internal Control Over Financial Reporting.”

Except in connection with the remediation of the material weakness identified in 2021 as discussed above, there were no changes in Peoples’ internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, Peoples’ internal control over financial reporting.

ITEM 9B OTHER INFORMATION

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Peoples' internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation, integrity, and fair presentation of Peoples' Consolidated Financial Statements for external purposes in accordance with United States generally accepted accounting principles.

With the supervision and participation of Peoples' President and Chief Executive Officer and its Peoples' Executive Vice President, Chief Financial Officer and Treasurer, Peoples' management evaluated the effectiveness of Peoples' internal control over financial reporting as of December 31, 2021, using the Internal Control-Integrated Framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

With the supervision and participation of Peoples' President and Chief Executive Officer and Peoples' Executive Vice President, Chief Financial Officer and Treasurer, Peoples' management evaluated the effectiveness of Peoples' internal control over financial reporting as of December 31, 2022, using the Internal Control-Integrated Framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on the results of its evaluation, Peoples' management has concluded that Peoples' internal control over financial reporting was effective at a reasonable assurance level as of December 31, 2022

No matter how well designed, internal control over financial reporting may not prevent or detect all misstatements.

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Effective internal control over financial reporting can provide only a reasonable assurance with respect to financial statement preparation and financial reporting.

Control deficiencies were identified by Peoples’ management related to the accounting for loans acquired in the September 17, 2021 merger with Premier, specifically the designation of those acquired loans as either purchased credit deteriorated ("PCD") or non-PCD, the designation of PCD loans as either pooled or individually assessed, and the estimation and calculation of expected credit losses on individually assessed loans.

Based upon an internal review by Peoples’ management, with the participation of Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, it was determined that the deficiencies in the design of controls supporting acquired purchased credit deteriorated loan accounting and the related allowance for credit losses aggregated to a material weakness in internal control over financial reporting.

A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of Peoples’ annual or interim financial statements will not be prevented or detected on a timely basis.

To address the financial disclosure impact by the identified control deficiencies, Peoples recorded a reduction in "Goodwill" of $6.1 million, a decrease in "Other Assets" of $1.7 million, a decrease in the “Allowance for credit losses” of $3.7 million, an increase in “Loans and leases, net of deferred fees and costs” of $2.2 million, and a decrease in “Accrued expenses and other liabilities” of $0.4 million as of December 31, 2021, with an offsetting reduction in net income for the 2021 fiscal year of approximately $1.5 million.

The impact of the material weakness (and related control deficiencies) on Peoples’ consolidated financial statements for the interim periods ended September 30, 2021 and December 31, 2021 are not considered material.

To address the financial disclosure impact by the identified internal control deficiencies, Peoples recorded a reduction in "Goodwill" of $6.1 million, a decrease in "Other assets" of $1.7 million, a decrease in the “Allowance for credit losses” of $3.7 million, an increase in “Loans and leases, net of deferred fees and costs” of $2.2 million, and a decrease in “Accrued expenses and other liabilities” of $0.4 million as of December 31, 2021, with an offsetting reduction in net income for the 2021 fiscal year of approximately $1.5 million.

The impact of the material weakness (and related internal control deficiencies) on Peoples’ consolidated financial statements for the interim periods ended September 30, 2021 and December 31, 2021 were not considered material.

Materiality was evaluated both quantitatively and qualitatively in accordance with the guidance provided by Staff Accounting Bulletin No.

99 – Materiality.

As such, the material weakness (and related control deficiencies) did not result in a material misstatement in Peoples’ previously filed condensed consolidated financial statements for the periods ended September 30, 2021, and such financial statements can still be relied upon.

To remediate the material weakness, Peoples’ management is in the process of implementing certain changes to Peoples’ internal controls, and will implement additional internal controls during 2022 in order to remediate the control deficiencies that led to the material weakness.

Specifically, Peoples’ management plans to enhance documentation and review of the criteria used to support the aforementioned designations relating to PCD accounting, and engage independent third-party advisors to assess the reasonableness of the allowance for credit losses assigned to individually assessed PCD loans.

Peoples’ management believes these remediation measures will strengthen Peoples’ internal control over financial reporting and remediate the material weakness (and related control deficiencies) identified.

Peoples' management assessed the effectiveness of Peoples' internal control over financial reporting as of December 31, 2021, and, based on this assessment, has concluded Peoples' internal control over financial reporting was not effective at a reasonable assurance level as of that date due to the material weakness in internal control over financial reporting noted above.

As such, the material weakness (and related internal control deficiencies) did not result in a material misstatement in Peoples’ previously filed condensed consolidated financial statements for the periods ended September 30, 2021, and such financial statements can still be relied upon.

To address the material weakness described above, Peoples reviewed the then existing internal controls with respect to the business combination process and performed a risk assessment to ensure those internal controls were appropriately designed to address the respective risks of material misstatement to the financial statements.

Based on that review, Peoples' management implemented changes to Peoples' internal controls, enhanced Peoples' internal control documentation and implemented and performed additional internal control procedures as necessary.

Peoples' management will continue to monitor the effectiveness of these internal controls and will make any further changes management determines to be necessary or appropriate.

Peoples' management assessed the effectiveness of Peoples' internal control over financial reporting as of December 31, 2022, and, based on this assessment, has concluded Peoples' internal control over financial reporting was effective at a reasonable assurance level as of that date.

Peoples' independent registered public accounting firm, Ernst & Young LLP has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and has issued an audit report on Peoples' internal control over financial reporting.

5 unchanged sentences

Chief Financial Officer and Treasurer

March 15, 2022

February 27, 2023

Report of Independent Registered Public Accounting Firm

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and subsidiaries’ internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Peoples Bancorp Inc.

and subsidiaries (the Company) has not maintained effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness in controls related to the Company’s accounting for purchased credit deteriorated loans.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2021 consolidated financial statements, and this report does not affect our report dated March 15, 2022, which expressed an unqualified opinion thereon.

In our opinion, Peoples Bancorp Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 27, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Charleston, West Virginia

March 15, 2022

February 27, 2023

Report of Independent Registered Public Accounting Firm

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 15, 2022 expressed an adverse opinion thereon.

Adoption of New Accounting Standard

As discussed in Note 1 to the consolidated financial statements, the Company changed its method for accounting for the allowance for credit losses in 2020, due to the adoption of ASU 2016-13, Financial Instruments – Credit Losses (ASU 326):

Measurement of Credit Losses on Financial Statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Accounting for the Allowance for Credit Losses

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The methodology for determining the quantitative component includes (1) a pooled component for loans that exhibit similar risk characteristics and (2) a specific component for those loans that do not exhibit similar risk characteristics.

For loans exhibiting similar risk characteristics, the Company uses a loss driver method, which analyzes one or more economic variables to the change in default rate using a regression analysis, and a discounted cash flow methodology in determining an ACL for each segment.

Management applies judgment in determining the extent of qualitative factors used in the qualitative component to adjust the loss rates for loan segments to reflect the impact these factors may have on expected losses in the loan portfolio.

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The Company’s loan and lease portfolio totaled $4.71 billion as of December 31, 2022, and the associated ACL was $53.2 million.

Auditing management’s estimate of the ACL involves a high degree of subjectivity due to the judgment and estimates required in evaluating management’s determination of the qualitative factors applied to the ACL.

Management’s identification and measurement of qualitative factors specific to economic conditions and collateral is highly judgmental and could have a significant effect on the ACL.

How We Addressed the Matter in Our Audit

We obtained an understanding of the Company’s processes for establishing the ACL through the year ended December 31, 2021, including the qualitative factor adjustments made to the loss rates for each segment.

We evaluated the design and tested the operating effectiveness of controls over the Company’s ACL processes, which included, among others, management’s review and approval controls designed to assess the need and level of qualitative factors and the completeness and accuracy of the data utilized to support management’s assessment.

To test the qualitative factors, we performed audit procedures that included, among others, the evaluation of the appropriateness of management’s methodology and assessment of whether all relevant risks were reflected in the ACL and the basis for the qualitative factors.

Regarding the measurement of the qualitative factors, we evaluated the completeness, accuracy and relevance of the underlying internal and external market data utilized in management’s estimate and considered the existence of new or contrary information.

We evaluated the data by independently obtaining and comparing it to other third party macro-economic data.

We also compared the total ACL, inclusive of the qualitative factors, to the Company’s historical losses considering changes in the current economic environment to evaluate whether the ACL appropriately reflects losses expected in the portfolio.

Additionally, we evaluated whether the overall ACL, inclusive of the qualitative factors, appropriately reflected losses expected in the loan portfolio by comparing to peer bank data.

Accounting for Business Combinations

Description of the Matter

As discussed in Note 20 to the consolidated financial statements, the Company acquired Premier Financial Bancorp, Inc.

(Premier) on September 17, 2021 (Day 1) for total consideration of $261.9 million, consisting of 8.6 million common shares of Peoples Bancorp Inc.

The Company acquired $1.16 billion of loans, net of fair value adjustments, a portion of which were classified as purchased credit deteriorated (PCD) loans.

Management concluded that a portion of the PCD loans do not share similar risk characteristics with other PCD loans and identified these for individual analysis.

The Day 1 ACL for the individually analyzed PCD loans involved significant management judgment.

Auditing the Company's accounting for its acquisition of Premier was complex due to the estimation uncertainty in determining the Day 1 ACL for individually analyzed PCD loans, primarily due to the sensitivity of the ACL measurement to the significant underlying assumptions.

Auditing management’s estimate of the ACL involves a high degree of subjectivity due to the judgment required in assessing whether the economic forecast used is reasonable and supportable.

Management’s determination of the economic forecast used in calculating the modelled ACL is highly judgmental and has a significant effect on the ACL.

How We Addressed the Matter in Our Audit

To test the Day 1 ACL for the individually analyzed PCD loans, our audit procedures included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the analysis and significant assumptions.

We involved our specialists to assist with our evaluation of the methodology used by the Company and certain significant assumptions used in the Day 1 ACL.

We obtained an understanding of the Company’s processes for establishing the ACL through the year ended December 31, 2022.

We evaluated the design and tested the operating effectiveness of the Company’s controls over the ACL process, which included, among others, management’s review and approval controls designed to assess and challenge whether the economic forecast used is reasonable and supportable.

To test whether the economic forecast utilized by the Company in calculating the ACL was reasonable and supportable, our audit procedures included, among others, the following:

1) We obtained corroborative information, including employment statistics, economic reports and alternative economic forecasts, and considered any contrary evidence;

2) We evaluated the reliability of the external information source used by the Company in determining the economic forecast;

3) We verified the economic variables from the external information source were accurately input into the Company’s model used in estimating the ACL;

4) We compared the total ACL to the Company’s historical losses, considering changes in the current economic environment to evaluate whether the ACL appropriately reflected losses expected in the portfolio;

and 5) We evaluated whether the total ACL appropriately reflected losses expected in the loan portfolio by comparing to peer bank data.

/s/ Ernst & Young LLP

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Charleston, West Virginia

March 15, 2022

February 27, 2023

PEOPLES BANCORP INC.

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Retained earnings 265,936 207,076

Accumulated other comprehensive (loss) income, net of deferred income taxes ( 11,619 ) 1,336

Accumulated other comprehensive loss, net of deferred income taxes ( 127,136 ) ( 11,619 )

Treasury stock, at cost, 1,643,461 shares at December 31, 2022 and 1,577,359 shares at December 31, 2021

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Net interest income 253,442 172,553 138,923

Provision for credit losses (a) 731 26,254 2,504

(Recovery of) Provision for credit losses (a) ( 3,510 ) 731 26,254

Net interest income after provision for credit losses 256,952 171,822 112,669

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Deposit account service charges 14,583 10,143 9,418

Mortgage banking income 3,439 6,499 4,328

Lease income 4,267 1,293 —

Bank owned life insurance income 2,624 1,767 1,977

Net gain (loss) on asset disposals and other transactions 493 ( 290 ) ( 782 )

Commercial loan swap fees 543 1,741 2,228

Net (loss) gain on investment securities ( 862 ) ( 368 ) 164

Mortgage banking income 1,397 3,439 6,499

Net (loss) gain on asset disposals and other transactions ( 616 ) 493 ( 290 )

Net loss on investment securities ( 61 ) ( 862 ) ( 368 )

Other non-interest income (b) 3,430 2,894 4,486

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Net occupancy and equipment expense 19,516 14,918 12,808

Professional fees 15,783 6,912 7,095

Data processing and software expense 14,241 10,542 7,441

Professional fees 12,094 15,783 6,912

Electronic banking expense 9,231 8,885 7,777

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Marketing expense 3,728 3,658 2,101

FDIC insurance expense 3,702 1,976 1,302

Franchise tax expense 3,487 3,357 3,506

Other loan expenses 2,735 2,001 1,584

FDIC insurance expense 1,976 1,302 602

Communication expense 2,484 1,657 1,134

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27,999,602 21,959,883 19,843,806

(a) On January 1, 2020, Peoples adopted ASU 2016-13 and adopted the CECL model.

Prior to the adoption of the CECL model, the provision for credit losses was the

"provision for loan losses." The provision for credit losses includes changes related to the allowance for credit losses on loans, held-to-maturity investment securities, and the unfunded commitment liability.

(a) The provision for credit losses includes changes related to the allowance for credit losses on loans, held-to-maturity investment securities, and the unfunded commitment liability.

(b) Includes realized and unrealized gains on equity investment securities recorded in other non-interest income of $ 2 , $ 111 , and $ 660 for the years ended December 31, 2022, December 31, 2021, and December 31, 2020, respectively.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Dollars in thousands) 2022 2021 2020

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Gross unrealized holding (loss) gain arising in the period ( 161,730 ) ( 26,985 ) 11,394

Related benefit (expense) 5,777 ( 2,393 ) ( 4,123 )

Reclassification adjustment for net loss (gain) included in net income 862 368 ( 164 )

Related tax benefit (expense) 37,733 5,777 ( 2,393 )

Reclassification adjustment for net loss included in net income 61 862 368

Related tax expense ( 14 ) ( 192 ) ( 77 )

Net effect on other comprehensive (loss) income ( 123,950 ) ( 20,538 ) 9,292

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Related tax (expense) benefit ( 18 ) ( 518 ) 225

Amortization of unrecognized gain on service benefit plans 103 127 72

Related tax expense ( 23 ) ( 27 ) ( 15 )

Reclassification from accumulated other comprehensive income or loss ("AOCI") 143 1,054 —

Related tax expense ( 32 ) ( 221 ) —

Net effect on other comprehensive income (loss) 1,991 86 ( 247 )

Amortization of unrecognized loss on service benefit plans 63 103 127

Related tax benefit ( 15 ) ( 23 ) ( 27 )

Reclassification from accumulated other comprehensive income ("AOCI") 185 143 1,054

Related tax benefit ( 43 ) ( 32 ) ( 221 )

Net effect on other comprehensive income 248 1,991 86

Cash flow hedges:

Net income (loss) arising during the period 6,999 ( 8,376 ) ( 4,591 )

Net gains (losses) arising during the period 10,606 6,999 ( 8,376 )

Related tax (expense) benefit ( 2,421 ) ( 1,407 ) 1,759

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Total other comprehensive (loss) income, net of tax ( 115,517 ) ( 12,955 ) 2,761

Total comprehensive income $ 34,600 $ 37,528 $ 65,203

Total comprehensive (loss) income $ ( 14,225 ) $ 34,600 $ 37,528

See Notes to the Consolidated Financial Statements

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17 — — 360 377

Common shares issued under performance unit awards, net of tax

41 — — 138 179

Stock-based compensation

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( 24 ) — — 440 416

Issuance of common shares related to merger with First Prestonsburg Bancshares Inc.

("First Prestonsburg")

32,437 — — — 32,437

Impact of adoption of new accounting standard, net of taxes (a) $ — ( 3,709 ) $ — $ — ( 3,709 )

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

Net income — 47,555 — — 47,555

Other comprehensive income, net of tax

— — 2,761 — 2,761

Other comprehensive loss, net of tax — — ( 12,955 ) — ( 12,955 )

Cash dividends declared

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— — — ( 1,306 ) ( 1,306 )

Common shares repurchased under share repurchase program

— — — ( 29,281 ) ( 29,281 )

Common shares issued under dividend reinvestment plan

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98 — — 276 374

Common shares issued under performance unit awards, net of tax

41 — — 138 179

Stock-based compensation 3,436 — — — 3,436

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143 — — 392 535

Impact of adoption of new accounting standard, net of taxes (a) — ( 3,709 ) — — ( 3,709 )

Issuance of common shares related to the Premier Merger 261,899 — — — 261,899

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

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— — — ( 1,745 ) ( 1,745 )

Common shares repurchased under share repurchase program

— — — ( 7,407 ) ( 7,407 )

Common shares issued under dividend reinvestment plan

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Stock-based compensation 3,707 — — — 3,707

Issuance of common shares related to merger with Premier 261,899 — — — 261,899

Balance, December 31, 2022 $ 686,450 $ 265,936 $ ( 127,136 ) $ ( 39,922 ) $ 785,328

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Depreciation, amortization and accretion, net 17,319 24,643 25,639

Provision for credit losses 731 26,254 2,504

(Recovery of) provision for credit losses ( 3,510 ) 731 26,254

Bank owned life insurance income ( 2,624 ) ( 1,767 ) ( 1,977 )

Net loss (gain) on investment securities 862 368 ( 164 )

Net loss on investment securities 61 862 368

Fair value adjustment on equity investment securities ( 2 ) ( 111 ) ( 660 )

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Deferred income tax expense (benefit) 18,566 2,874 ( 8,101 )

Increase in accrued expenses 2,433 799 366

Decrease (increase) in interest receivable 1,435 ( 865 ) 613

Increase (decrease) in other assets 2,874 1,006 ( 1,227 )

Non cash lease expense 48 47 55

(Decrease) increase in accrued expenses ( 4,692 ) 2,433 799

(Increase) decrease in interest receivable ( 5,836 ) 1,435 ( 865 )

Increase in other assets 1,629 2,874 1,006

Change in lease right-of-use assets and lease liabilities ( 38 ) 509 48

Other, net ( 3,693 ) 14,181 7,262

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Proceeds from sales 5,784 9,299 12,180

Proceeds from insurance claim — — 26

Net (increase) decrease in loans held for investment ( 58,142 ) 113,467 ( 444,128 )

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Proceeds from sales of other real estate owned 572 2,073 269

Investment in bank owned life insurance ( 30,000 ) — —

Proceeds from bank owned life insurance 689 — 108

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Investment in limited partnership and tax credit funds ( 1,857 ) ( 4,125 ) ( 12 )

Net cash (used in) provided by investing activities ( 74,433 ) ( 393,919 ) 1,053

Net cash used in investing activities ( 414,214 ) ( 74,433 ) ( 393,919 )

Financing activities:

Net increase in non-interest-bearing deposits 150,986 326,115 4,832

Net increase in interest-bearing deposits 49,774 292,822 72,841

Net (decrease) increase in non-interest-bearing deposits ( 52,020 ) 150,986 326,115

Net (decrease) increase in interest-bearing deposits ( 93,082 ) 49,774 292,822

Net increase (decrease) in short-term borrowings 328,611 14,414 ( 263,716 )

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Contingent consideration payments made after a business acquisition — — ( 296 )

Net cash provided by (used in) financing activities 181,640 345,343 ( 30,629 )

Net increase in cash, cash equivalents and restricted cash 263,627 36,907 37,581

Cash, cash equivalents and restricted cash at beginning of period 152,100 115,193 77,612

Cash, cash equivalents, and restricted cash at end of period $ 415,727 $ 152,100 $ 115,193

Net cash provided by financing activities 32,670 181,640 345,343

Net (decrease) increase in cash and cash equivalents ( 261,705 ) 263,627 36,907

Cash and cash equivalents at beginning of period 415,727 152,100 115,193

Cash and cash equivalents at end of period $ 154,022 $ 415,727 $ 152,100

PEOPLES BANCORP INC.

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Transfers from loans to other real estate owned $ 110 $ 298 $ 296

Lease right-of-use assets obtained in exchange for lessee operating lease liabilities 75 — 4

Noncash recognition of new leases 880 2,482 62

See Notes to the Consolidated Financial Statements

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is a financial holding company that offers a full range of financial services and products primarily offered through its 129 financial service offices and ATMs, including 113 full-service branches in Ohio, West Virginia, Kentucky, Virginia, Washington, D.C.

and Maryland, as well as through online resources that are web-based and mobile-based.

and Maryland as of December 31, 2022, as well as through online resources that are web-based and mobile-based.

Peoples' insurance, premium financing and equipment leasing services are offered nationwide.

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Peoples' business activities are currently confined to one reportable operating segment, which is community banking.

As a community banking entity, Peoples offers its customers a full range of products including a complete line of banking, insurance, investment and trust solutions.

As a community banking entity, Peoples offers its customers a full range of products including a complete line of banking, leasing, insurance, investment and trust solutions.

Cash and Cash Equivalents:

Cash and cash equivalents include cash on hand, balances due from other banks, interest-bearing deposits in other banks, federal funds sold and other short-term investments with original maturities of ninety days or less.

Peoples had no restricted funds at December 31, 2021, and $ 41.0 million of restricted funds at December 31, 2020, held in interest-bearing deposits in other banks, which were being used as collateral and not available for withdrawal.

During 2021, Peoples began collateralizing with investment securities in lieu of cash and cash equivalents held in other banks.

Peoples had no restricted funds at December 31, 2022 or December 31, 2021 held in interest-bearing deposits in other banks, which were being used as collateral and not available for withdrawal.

During 2021, Peoples began collateralizing its hedging relationships with investment securities in lieu of cash and cash equivalents held in other banks.

Investment Securities:

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government sponsored agency securities) to determine if the unrealized loss was credit-related.

An allowance for credit losses is recorded to the extent that the unrealized losses are credit-related and likely to be permanent.

An allowance for credit losses is recorded to the extent that the unrealized loss was credit-related and likely to be permanent.

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

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Loans and Leases:

Loans originated that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, purchase premiums and discounts, charge-offs and an allowance for credit losses.

Loans originated by Peoples that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, purchase premiums and discounts, charge-offs and an allowance for credit losses.

Leases originated by Peoples are reported at the net investment of the lease, net of initial direct costs, charge-offs and an allowance for credit losses.

Throughout this Form 10-K, loans and leases are referred to as "total loans" and "loans held for investment".

The foreseeable future is based upon current market conditions and business strategies, as well as balance sheet management and liquidity.

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Loans and 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.

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

These loans are recorded at the purchase price, and an allowance for credit losses is determined using the same methodology as for other loans or leases.

The initial allowance for credit losses determined on a collective basis is allocated to individual loans or leases.

The total of the purchase price and allowance for credit losses is the net amount expected to be collected for purchased credit deteriorated loans or leases.

The total of the purchase price and allowance for credit losses is the net amount expected to be collected for PCD loans or leases.

The variance between the initial amortized cost basis and the par value of the loan is considered an interest premium or discount, which is amortized or accreted into interest income on a level yield method over the life of the loan.

The variance between the initial amortized cost basis and the fair value of a lease is considered an interest premium or discount, which is amortized or accreted into interest income on a level yield method over the life of the lease.

Loans and leases acquired in a business combination that are not considered purchased credit deteriorated are recorded at fair value and the difference between the acquisition date fair value and the contractual amounts due at the acquisition date represents the discount or premium to each loan's or lease's cost basis and is accreted or amortized to interest income over the loan's or lease's remaining life using the level yield method.

At acquisition date, Peoples records provision for credit losses to establish the allowance for credit losses for these acquired loans.

Loans and leases acquired in a business combination that are not considered PCD are recorded at fair value and the difference between the acquisition date fair value and the contractual amounts due at the acquisition date represents the discount or premium to each loan's or lease's cost basis and is accreted or amortized to interest income over the loan's or lease's remaining life using the level yield method.

At the acquisition date, Peoples records provision for credit losses to establish the allowance for credit losses for these acquired loans and leases.

Loans Held for Sale:

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

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

Gains and losses on sales of loans held for sale are included in mortgage banking income.

Loans originated with the intent to be held in the portfolio are subsequently transferred to held for sale when a decision is made to sell these loans.

Loans originated by Peoples with the intent to be held in the portfolio are subsequently transferred to held for sale when a decision is made to sell these loans.

At the time of a loan's transfer to the held for sale classification, the loan is recorded at the lower of cost or its fair value.

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Allowance for Credit Losses:

The allowance for credit losses includes both the allowance for credit losses for loans and the allowance for credit losses on lending-related commitments.

The allowance for credit losses includes both the allowance for credit losses for loans and leases and the allowance for credit losses on lending-related commitments.

The allowance for credit losses is a valuation reserve established through the provision for credit losses charged against income.

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Peoples identified 19 segments for which it believes there are similar risk characteristics and utilized a discounted cash flow methodology in determining an allowance for credit losses for each segment.

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.

In estimating credit losses, Peoples uses a loss driver method, which analyzes one or more economic variables to the change in default rate using a regression analysis.

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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.

Loans to borrowers with an aggregate unpaid principal balance in excess of $ 1 million are reviewed at least on an annual basis for possible credit deterioration.

Loan relationships whose aggregate credit exposure to Peoples is equal to or less than $ 1 million are reviewed at least on an event driven basis.

Commercial loans to borrowers with an aggregate unpaid principal balance in excess of $ 1.0 million are reviewed at least on an annual basis for possible credit deterioration.

Commercial leases, as well as loan relationships whose aggregate credit exposure to Peoples is equal to or less than $ 1.0 million are reviewed at least on an event driven basis.

Triggers for review include knowledge of adverse events affecting the borrower's business, receipt of financial statements indicating deteriorating credit quality or other similar events.

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The primary factors considered when assigning a risk grade to a loan include (1) reliability and sustainability of the primary source of repayment, (2) past, present and projected financial condition of the borrower, and (3) current economic and industry conditions.

Other factors that could influence the risk grade assigned include the type and quality of collateral and the strength of any guarantors.

Other factors that could influence the risk grade assigned include the type and quality of collateral and the strength of

any guarantors.

The primary source of repayment for commercial real estate loans and commercial and industrial loans is normally the operating cash flow of the business available to repay debt.

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The restructuring of a loan is considered a TDR if both (1) the borrower is experiencing financial difficulties and (2) the creditor has granted a concession.

Loans acquired that are restructured after acquisition are not considered TDRs if the loans evidenced credit deterioration as of the acquisition date and are accounted for in pools of purchased credit deteriorated loans.

Loans acquired that are restructured after acquisition are not considered TDRs if the loans evidenced credit deterioration as of the acquisition date and are accounted for in pools of PCD loans.

In assessing whether or not a borrower is experiencing financial difficulties, Peoples considers information currently available regarding the financial condition of the borrower.

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

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

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On August 3, 2020, federal and state banking regulators issued a joint statement, encouraging financial institutions to consider prudent accommodation options to mitigate losses for the borrower and financial institution beyond the initial accommodation period.

In this guidance, institutions should also provide consumers with available options for repaying missed payments at the end of their accommodation to avoid delinquencies, as well as options for changes to terms to support sustainable and affordable payments for the long term.

Under this guidance, institutions should also provide consumers with available options for repaying missed payments at the end of their accommodation to avoid delinquencies, as well as options for changes to terms to support sustainable and affordable payments for the long term.

These considerations should also include prudent risk management practices at the financial institution based on the credit risk of the borrower.

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Interest received on nonaccrual loans is included in income only if principal recovery is reasonably assured.

Under the Coronavirus Aid, Relief and Economic Security ("CARES") Act, which was subsequently extended under legislation enacted in December 2020, borrowers who were making payments as required and were not considered past due prior to becoming affected by COVID-19 and then received payment accommodations as a result of the effects of COVID-19 generally would not be reported as past due.

Under the CARES Act, which was subsequently extended under legislation enacted in December 2020, borrowers who were making payments as required and were not considered past due prior to becoming affected by COVID-19 and then received payment accommodations as a result of the effects of COVID-19 generally would not be reported as past due.

If Peoples agrees to a payment deferral for a borrower under the CARES Act, this may result in no contractual payments being past due, and the loans are not considered past due during the period of the deferral.

guidance, during the time that Peoples maintains these short-term arrangements with borrowers, it should not report the loans as nonaccrual.

Under the CARES Act, during the time that Peoples maintains these short-term arrangements with borrowers, it should not report the loans as nonaccrual.

This program expired as of January 1, 2022.

Bank Premises and Equipment:

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Goodwill and Other Intangible Assets:

Goodwill represents the excess of the cost of an acquisition or business combination over the fair value of the net assets acquired in the business combination.

Goodwill represents the excess of the cost of an acquisition or business combination over the fair value of the net assets acquired in the acquisition or business combination.

Goodwill is not amortized but is tested for impairment when indicators of impairment exist, or at least annually on October 1.

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Amounts reported in AOCI related to derivatives are reclassified to interest income or expense as interest payments are made or received on Peoples' variable-rate assets or liabilities.

For derivative financial instruments designated as cash flow hedges, the effective portion of changes in the fair value of each derivative financial instrument is reported in AOCI (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative financial instrument is recognized directly in earnings.

Peoples assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transaction.

If the derivative financial instruments designated as cash flow hedges are deemed effective, changes in the fair value of each derivative financial instrument are reported in AOCI (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings.

If the derivative financial instruments designated as cash flow hedges are deemed ineffective, changes in the fair value of the derivative financial instrument are recognized directly in earnings.

Interest Rate Lock Commitments:

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A best efforts commitment generally terminates once the loan is sold, the commitment period expires or the borrower decides not to contract for the loan.

These commitments are considered derivatives, which are generally accounted for by recognizing their estimated fair value on the Consolidated Balance Sheets in either "Other assets" or "Accrued expenses and other liabilities".

These commitments are considered derivatives.

The valuation of such commitments considers the servicing release premium, but does not consider other expected cash flows related to the servicing of the future loan.

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These investments are considered variable interest entities for which Peoples is not the primary beneficiary.

Peoples generally utilizes the effective yield method to account for these investments with the tax credits, net of the amortization of the investment, reflected in the Consolidated Statements of Income as a reduction in income tax expense.

unamortized amount of the investments is recorded in other assets and totaled $ 16.6 million and $ 13.0 million at December 31, 2021 and 2020, respectively.

Peoples generally utilizes the effective yield method to account for these investments with the tax credits, net of the

amortization of the investment, reflected in the Consolidated Statements of Income as a reduction in income tax expense.

The unamortized amount of the investments is recorded in "Other assets" and totaled $ 15.1 million and $ 16.6 million at December 31, 2022 and 2021, respectively.

Other Real Estate Owned ("OREO"):

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OREO obtained in satisfaction of a loan is recorded at the lower of cost or estimated fair value, less estimated costs to sell the property.

Peoples had OREO totaling $ 9.5 million at December 31, 2021 and $ 134,000 at December 31, 2020.

Peoples had OREO totaling $ 8.9 million at December 31, 2022 and $ 9.5 million at December 31, 2021.

Securities Sold Under Agreements to Repurchase ("Repurchase Agreements"):

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Trust and investment income is recognized over time, which reflects the duration of the contract period for which services have been provided.

Trust and investment income is variable as it is based on the value of assets under administration and management, and specific transactions.

Peoples estimates the variable consideration

based upon the most likely amount method, and does not expect or anticipate a significant reversal of revenue in future periods.

Trust and investment income is variable as it is based on

the value of assets under administration and management, and specific transactions.

Peoples estimates the variable consideration based upon the most likely amount method, and does not expect or anticipate a significant reversal of revenue in future periods.

Payment is due from the customer when billed, which is typically a monthly or quarterly billing for services rendered in the most recent period, for which the performance obligation has been satisfied.

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Payment is due from the customer at the time of completion of the requested transaction.

Commercial Loan Swap Fees:

Commercial loan swap fees consist of income related to transactions in which Peoples Bank originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples Bank on terms that match the terms of the loan.

By entering into the interest rate swap with the customer, Peoples Bank effectively provides the customer with a fixed rate loan while creating a variable rate asset for Peoples Bank.

Peoples Bank offsets its exposure in the swap by entering into an offsetting interest rate swap with an unaffiliated institution.

Commercial loan swap fees are recognized at a point in time, when the transaction has been completed, and there is no recourse or further performance obligation required of Peoples.

Commercial loan swap fees are variable as these fees are a certain percentage of the total swap fee collected on a completed transaction.

Peoples estimates the variable consideration based upon the most likely amount method, and does not expect or anticipate a significant reversal of revenue in future periods.

Payment is due from the customer at the time of completion of the requested transaction.

Lease income:

Peoples acquired its lease portfolio in the NSL and Vantage acquisitions.

Lease income presented in "Non-interest income" consists of gains or losses, including residual asset gains and losses, on (i) the termination of leases, (ii) syndicated leases, and (iii) other fees.

Gains on the early termination of leases are recognized at a point in time, which is at the completion of the relevant transaction.

Gains on syndicated leases and other fees are recognized over time on a monthly basis.

Other Non-Interest Income:

Other non-interest income includes certain revenues that are transactional-based, such as wire transfer fees, money order fees and other ancillary fees or services.

These transactional-based fees are recognized as income at a

point in time, at the completion of the relevant transaction.

These transactional-based fees are recognized as income at a point in time, at the completion of the relevant transaction.

Transactional-based fee income is variable as these fees are directly related to a service request from the customer.

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Payment is due from the customer at the time of completion of the requested transaction.

Also included in other non-interest income are commercial loan swap fees, which consist of income related to transactions in which Peoples Bank originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples Bank on terms that match the terms of the loan.

By entering into the interest rate swap with the customer, Peoples Bank effectively provides the customer with a fixed rate loan while creating a variable rate asset for Peoples Bank.

Peoples Bank offsets its exposure in the swap by entering into an offsetting interest rate swap with an unaffiliated financial institution.

Commercial loan swap fees are recognized at a point in time, when the transaction has been completed, and there is no recourse or further performance obligation required of Peoples Bank.

Commercial loan swap fees are variable as these fees are a certain percentage of the total swap fee collected on a completed transaction.

Peoples Bank estimates the variable consideration based upon the most likely amount method, and does not expect or anticipate a significant reversal of revenue in future periods.

Payment is due from the customer at the time of completion of the requested transaction.

Stock-Based Compensation:

Stock-based compensation for restricted stock awards is measured at the fair value of these awards on their grant date.

Stock-based compensation is recognized over the restriction period for restricted stock awards.

Stock-based compensation for restricted common share awards is measured at the fair value of these awards on their grant date.

Stock-based compensation is recognized over the restriction period for restricted common share awards.

Only the expense for the portion of the awards expected to vest is recognized.

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Penalties and interest incurred under the applicable tax law are classified as income tax expense.

The amount of Peoples' uncertain income tax positions and unrecognized benefits are disclosed in "Note 13 Income Taxes."

The amounts of Peoples' uncertain income tax positions and unrecognized benefits are disclosed in "Note 13 Income Taxes."

Earnings per Share ("EPS"):

Basic and diluted EPS are calculated using the two-class method since Peoples has issued share-based payment awards considered participating securities because they entitle holders the rights to dividends during the vesting term.

Basic EPS and diluted EPS are calculated using the two-class method since Peoples has issued share-based payment awards considered participating securities because they entitle holders the rights to dividends during the vesting term.

The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.

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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 Update ("ASU") 2020-10 - Codification Improvements.

This guidance provides clarification of the Codification or correct unintended application of guidance that are not expected to have a significant effect on current accounting practice or create significant administrative cost to most entities.

This update is effective for annual periods beginning after December 15, 2020 (effective January 1, 2021 for Peoples).

Peoples has reviewed and applied the improvements as applicable.

ASU 2020-04 - Reference Rate Reform (Topic 848):

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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 did 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 2019-12 - Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

This guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The amendments improve consistent application of and simplify US GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

This update is effective for fiscal years beginning after December 15, 2021.

Peoples adopted this guidance as of December 31, 2021, and it did not have a material impact on Peoples' Consolidated Financial Statements.

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

The FASB further updated the guidance with ASU 2022-06, which deferred the sunset date of ASC Topic 848, Reference Rate Reform (Topic 848) from December 31, 2022 to December 31, 2024.

This ASU was early adopted by Peoples as of September 30, 2021, and did 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.

Peoples established a working group, consisting of key stakeholders from throughout the company, to monitor developments relating to LIBOR changes and to guide the transition.

This team has worked to successfully ensure that technology systems are prepared for the transition, loan documents that reference LIBOR-based rates have been appropriately amended to reference other methods of interest rate determinations and internal and external stakeholders have been apprised of the transition.

Based on the transition progress to date, Peoples ceased originating LIBOR-based products and began originating SOFR indexed products.

Peoples will continue to transition all remaining LIBOR-based products to SOFR-based products.

Peoples will also continue to evaluate the transition process and align its trajectory with regulatory guidelines regarding the cessation of LIBOR as well as monitor new developments for transitioning to alternative reference rates, if necessary and as needed.

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

Measurement of Credit Losses on Financial Instruments.

This accounting guidance replaced the "incurred loss" model for recognizing credit losses with an "expected loss" model, referred to as the Current Expected Credit Loss ("CECL") methodology.

Under the CECL methodology, Peoples is required to present certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity investment securities, at the net amount expected to be collected.

ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Accounting Standards Codification ("ASC") 326-20, and should be accounted for according to ASC 842.

The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.

The measurement takes place at the time the financial asset is first added to the balance sheet and periodically thereafter.

This differs significantly from the "incurred loss" model under previous US GAAP accounting guidance, which delayed recognition until it was probable a loss had been incurred.

Peoples adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost on January 1, 2020.

Reporting periods beginning after December 31, 2019 are presented as required by ASU 2016-13, while prior period amounts continue to be reported in accordance with previously applicable US GAAP requirements.

Peoples used the prospective transition approach for financial assets purchased with credit deterioration that were previously classified as purchased credit impaired assets and accounted for under ASC 310-30.

As of January 1, 2020, Peoples recorded a one-time cumulative-effect adjustment to reduce retained earnings by $ 3.7 million, net of statutory corporate federal income taxes, an increase in allowance for credit losses of $ 5.8 million and an increase in unfunded commitment liability of $ 1.5 million.

On January 1, 2020, the amortized cost basis of the purchased credit deteriorated assets was adjusted to reflect the addition of $ 2.6 million to establish the allowance for credit losses.

The remaining interest-related discount is being accreted into interest income at the effective interest rate beginning on January 1, 2020.

As of January 1, 2020, Peoples did not record an allowance for credit losses for available-for-sale investment securities, as all unrealized losses on these securities were deemed to be non-credit in nature, with no credit deterioration upon review by Peoples.

Peoples recorded an allowance for credit losses for held-to-maturity securities of $ 7,000 as of January 1, 2020.

The following table illustrates the impact on the allowance for credit losses from the adoption of ASU 2016-13:

(Dollars in thousands) As Reported Under ASC 326 January 1, 2020 Pre-ASC 326 Adoption December 31, 2019 Impact of ASC 326 Adoption

Loans, at amortized cost $ 2,876,147 $ 2,873,525 $ 2,622

Allowance for credit losses on loans:

Construction 651 1,188 ( 537 )

Commercial real estate, other 8,549 6,560 1,989

Commercial and industrial 5,820 8,568 ( 2,748 )

Residential real estate 4,360 1,296 3,064

Home equity lines of credit 1,572 612 960

Consumer, indirect 5,389 2,942 2,447

Consumer, direct 890 296 594

Deposit account overdrafts 94 94 —

Allowance for credit losses on loans 27,325 21,556 5,769

Allowance for credit losses for unfunded commitments $ 1,495 $ — $ 1,495

Troubled Debt Restructurings ("TDRs") and Vintage Disclosures.

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.

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 as, the amendments in ASU 2022-02 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and will be effective for Peoples as of January 1, 2023.

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

The guidance will not have a material impact on Peoples' financial condition or results of operations.

Note 2 Fair Value of Financial Instruments

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Those transfers are recognized on the date of the event that prompted the transfer.

There were no transfers of assets or

liabilities required to be measured at fair value on a recurring basis between levels of the fair value hierarchy during the periods presented in the Consolidated Financial Statements.

There were no transfers of assets or liabilities required to be measured at fair value on a recurring basis between levels of the fair value hierarchy during the periods presented in the Consolidated Financial Statements.

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

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Available-for-Sale Investment Securities:

The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, LIBOR yield curves, credit spreads and prices from market makers and live trading systems (Level 2).

Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, SOFR and LIBOR (or other relevant) yield curves, credit spreads and prices from market makers and live trading systems (Level 2).

Management reviews the valuation

methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

Equity Investment Securities:

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

Loans held for sale $ 3,813 $ — $ 4,733 $ —

OREO — 9,496 — 134

Servicing rights (a)(b) — 2,609 — 2,591

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

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

(b) Peoples established a valuation allowance on servicing rights of $ 12 at December 31, 2021 and $ 161 at December 31, 2020, as the fair value of the servicing rights was less than the carrying value.

Collateral dependent loans $ — $ 10,354 $ — $ 430

Loans held for sale (a) 1,254 — 418 —

Other real estate owned ("OREO") — 55 — 87

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

(a) Loans held for sale are presented gross of a valuation allowance of $ 105 and $ 0 at December 31, 2022 and December 31, 2021, respectively.

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

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

(c) Peoples established a valuation allowance on servicing rights of $ 1 at December 31, 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.

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).

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Commercial mortgage-backed securities 2 101,861 85,354 75,588 74,145

Commercial mortgage-backed securities 3 4,748 3,361 — —

Total held-to-maturity securities 560,453 478,509 374,415 369,955

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Long-term borrowings 2 101,093 101,992 99,475 101,664

(a) Held-to-maturity investment securities are presented gross of allowance for credit losses of $ 286 and $ 60 , as of December 31, 2021 and December 31, 2020, respectively.

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

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $ 241 and $ 286 , at December 31, 2022 and December 31, 2021, respectively.

(b) Nonqualified deferred compensation includes underlying investments in mutual funds.

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

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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 $64.0 million and $50.4 million, as of December 31,2021 and December 31,2020, respectively.

(d) Loans and leases, net of deferred fees and cost are presented gross of an allowance for credit losses of $ 53.2 million and $ 64.0 million, as of December 31, 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.

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The fair values used by Peoples are obtained from an independent pricing service and represent fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, relevant yield curves, credit spreads and prices from market makers and live trading systems (Level 2).

When observable market data is absent, the independent pricing service estimates prices based on underlying cash flow characteristics and discount rates and compare to similar securities (Level 3).

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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 (Level 3).

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

The discount rates take into account interest rates currently being offered to customers for loans with similar terms, the credit risk associated with the loans and other market factors, including liquidity.

Peoples considered 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.

The discount rates take into account interest rates currently being offered to customers for loans and leases with similar terms, the credit risk associated with the loans and leases and other market factors, including liquidity.

Bank Owned Life Insurance:

2 unchanged sentences

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.

Short-term Borrowings:

19 unchanged sentences

Obligations of:

Treasury and government agencies $ 35,609 $ 12 $ ( 17 ) $ 35,604

government sponsored agencies 83,019 58 ( 1,338 ) 81,739

33 unchanged sentences

Obligations of:

Treasury and government agencies

$ 16,914 $ 17 6 $ — $ — — $ 16,914 $ 17

government sponsored agencies

72,406 1,192 13 4,854 146 1 77,260 1,338

States and political subdivisions 101,397 2,075 71 30,853 1,301 11 132,250 $ 3,376

1 unchanged sentence

573,139 9,051 113 51,103 2,325 14 624,242 11,376

Commercial mortgage-backed securities

60,134 1,494 21 — — — 60,134 1,494

Bank-issued trust preferred securities

1 unchanged sentence

Total $ 826,981 $ 13,838 225 $ 87,688 $ 3,894 27 $ 914,669 $ 17,732

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

At December 31, 2021, management concluded no individual securities at an unrealized loss position required an allowance for credit losses.

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

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

At December 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.

2 unchanged sentences

Interest receivable on investment securities was $ 7.8 million at December 31, 2022 and $ 5.5 million at December 31, 2021.

At December 31, 2021, approximately 99 % of the fair value of mortgage-backed securities that had been at an unrealized loss position for twelve months or more were issued by U.S.

At December 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.

government sponsored agencies.

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

Neither of the two positions had a fair value of less than 90 % of its book value.

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 their respective 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 number of loans underlying these securities.

The unrealized losses with respect to the one bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at December 31, 2021 were primarily attributable to the subordinated nature of the debt.

The unrealized losses with respect to the two bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at December 31, 2022 were primarily 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 December 31, 2022.

The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a statutory federal corporate income tax rate of 21%.

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 %.

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.

28 unchanged sentences

Obligations of:

government sponsored agencies $ 36,431 $ — $ 86 $ ( 1,004 ) $ 35,513

States and political subdivisions 151,688 ( 286 ) 1,006 ( 2,270 ) 150,138

2 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 the years ended December 31, 2021 and December 31, 2020.

There were no sales of held-to-maturity securities during the years ended December 31, 2022 and December 31, 2021.

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

The majority of Peoples' held-to-maturity investment securities are issued by U.S.

government sponsored agencies.

The remaining securities are obligations of state and political subdivisions.

The majority of Peoples' held-to-maturity investment securities are residential mortgage-backed securities.

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

17 unchanged sentences

Obligations of:

government sponsored agencies $ 17,328 $ 504 6 $ 14,635 $ 500 2 $ 31,963 $ 1,004

States and political subdivisions

61,954 1,041 34 27,328 1,229 6 89,282 2,270

Residential mortgage-backed securities

88,937 919 17 — — — 88,937 919

Commercial mortgage-backed securities

67,338 1,625 21 — — — 67,338 1,625

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 December 31, 2022.

The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a statutory federal corporate income tax rate of 21%.

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 %.

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.

26 unchanged sentences

Peoples purchased $ 11.9 million and $ 3.8 million of additional FHLB stock during 2022 and 2021, respectively, as a result of the FHLB's capital requirements on FHLB advances during the year.

During 2021, Peoples recorded the change in the fair value of equity investment securities held at December 31, 2021 in other non-interest income, resulting in a realized net gain of $ 111,000 .

During the year ended December 31, 2022, Peoples purchased $ 7.9 million of FRB stock as requested by the FRB as a result of the Premier Merger on September 17, 2021.

During 2022, Peoples recorded the change in the fair value of equity investment securities held at December 31, 2022 in "Other non-interest income", resulting in an unrealized gain of $ 2,000 .

During 2021, Peoples recorded the change in the fair value of equity investment securities held at December 31, 2021 in "Other non-interest income", resulting in unrealized gain of $ 111,000 .

Net realized gains on sales of equity investment securities included in other non-interest income during 2020 consisted of a realized gain of $ 680,000 related to the sale of restricted Class B Visa stock, which had been held at a carrying cost and fair value of zero due to the litigation liability associated with the stock.

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

2 unchanged sentences

At December 31, 2022 and 2021, Peoples had pledged available-for-sale investment securities and held-to-maturity investment securities to secure public and trust department deposits, and repurchase agreements in accordance with federal and state requirements.

Peoples also pledged available-for-sale investment securities and held-to-maturity securities as collateral for cash flow hedge swaps and to secure additional borrowing capacity at the FHLB and the FRB.

Peoples also pledged available-for-sale investment securities and held-to-maturity investment securities to secure additional borrowing capacity at the FHLB and the FRB as well as to derivative counterparties as collateral on unrealized interest rate swaps.

The following table summarizes the carrying value of Peoples' pledged investment securities as of December 31:

12 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, respectively.

Loans and leases throughout this Form 10-K are referred to as "total loans" and "loans held for investment".

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.

The major classifications of loan balances (in each case, net of deferred fees and costs) excluding loans held for sale, were as follows at December 31:

12 unchanged sentences

Net deferred loan origination costs were $ 20.5 million and $ 13.5 million at December 31, 2022 and 2021, respectively.

On September 17, 2021, Peoples completed the merger with Premier effective after the close of the business day.

Peoples acquired $ 1.1 billion in net loans, of which $ 176.2 million were considered purchased credit deteriorated loans.

Effective after the close of business on March 31, 2021, Peoples acquired $ 83.3 million in leases from NS Leasing, LLC ("NSL"), of which $ 5.2 million were considered purchase d credit d eteriorated leases.

Refer to "Note 20 Acquisitions" for more detail on the loans acquired from Premier and of leases acquired from NSL.

Peoples began participating as a Small Business Administration ("SBA") Paycheck Protection Program ("PPP") lender during the second quarter of 2020, and originated $ 488.9 million of PPP loans during 2020 and $159.1 million during 2021.

On March 7, 2022, Peoples completed the acquisition of Vantage, which included $ 154.9 million of leases, of which $ 3.4 million were considered PCD.

Effective after the close of business on September 17, 2021, Peoples completed the Premier Merger, which included $ 1.1 billion in net loans, of which $ 147.9 million were considered PCD loans.

Effective after the close of business on March 31, 2021, Peoples acquired $ 83.3 million in leases from NSL, of which $ 5.2 million were considered PCD leases.

Refer to "Note 20 Acquisitions" for more detail on the leases acquired from Vantage, the loans acquired in the Premier Merger, and the leases acquired from NSL.

Peoples began participating as a SBA PPP lender during the second quarter of 2020, and originated $ 488.9 million of PPP loans during 2020 and $ 159.1 million during 2021.

At December 31, 2022, the PPP loans had an amortized cost of $ 2.4 million, and were included in commercial and industrial loan balances.

Peoples recorded deferred loan origination fees related to the PPP loans, net of deferred loan origination costs, which totaled $ 2.2 million at December 31, 2021.

Peoples recorded deferred loan origination fees related to the PPP loans, net of deferred loan origination costs, which totaled $ 27,000 at December 31, 2022.

During 2022 and 2021, Peoples recorded accretion of net deferred loan origination fees of $ 2.2 million and $ 13.0 million, respectively, on PPP loans.

21 unchanged sentences

Total loans, at amortized cost $ 31,473 $ 4,842 $ 34,765 $ 3,723

(a) There were $ 2.6 million of nonaccrual loans for which there was no allowance for credit losses as of December 31, 2021 and $ 1.3 million of such loans at December 31, 2020.

As of December 31, 2021, Peoples had made short-term modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment for current borrowers, in amounts which were insignificant.

Under 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 as of December 31, 2021 and 2020.

(a) There were $ 1.4 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2022 and $ 2.6 million of such loans at December 31, 2021.

The amount of interest income recognized on loans past due 90 days or more during 2022 and 2021 was $ 1.7 million and $ 1.3 million, respectively.

18 unchanged sentences

Premium finance 751 266 865 1,882 134,254 136,136

Leases 426 247 1,581 2,254 120,254 122,508

Residential real estate 8,276 2,241 5,188 15,705 756,013 771,718

8 unchanged sentences

Peoples also has pledged commercial loans to secure borrowings with the FRB.

Loans pledged are summarized as follows at December 31:

Loans pledged at December 31 are summarized in the following table:

(Dollars in thousands) 2022 2021

9 unchanged sentences

Balance, December 31, 2021 $ 28,079

Acquired loans 14,868

New loans and disbursements 19,938

Repayments ( 20,579 )

Other changes ( 66 )

Balance, December 31, 2022 $ 27,372

2 unchanged sentences

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.

Loans to borrowers with an aggregate unpaid principal balance in excess of $ 1.0 million are reviewed at least on an annual basis for possible credit deterioration.

Loan relationships whose aggregate credit exposure to Peoples is equal to or less than $ 1.0 million are reviewed on an event driven basis.

Commercial loans to borrowers with an aggregate unpaid principal balance in excess of $ 1.0 million are reviewed at least on an annual basis for possible credit deterioration.

Commercial leases, as well as loan relationships whose aggregate credit exposure to Peoples is equal to or less than $ 1.0 million are reviewed on an event driven basis.

Triggers for review include knowledge of adverse events affecting the borrower's business, receipt of financial statements indicating deteriorating credit quality or other similar events.

Adversely classified loans are reviewed on a quarterly basis.

A description of the general characteristics of the risk grades used by Peoples is as follows:

A description of the general characteristics of the risk grades used by Peoples follows:

"Pass" (grades 1 through 4):

15 unchanged sentences

Loans in this risk category are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted.

This does not mean each such loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future.

This does not mean each such loan has absolutely no recovery value, but

rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future.

Charge-offs against the allowance for credit losses are taken in the period in which the loan becomes uncollectable.

2 unchanged sentences

All other loans not evaluated individually, nor meeting the regulatory conditions to be categorized as described above, would be considered as being "not rated."

The following tables summarize the risk category of Peoples' loan portfolio based upon the most recent analysis performed at December 31, 2021:

The following tables summarize the risk category of Peoples' loan portfolio based upon the then most recent analysis performed at December 31, 2022:

Term Loans at Amortized Cost by Origination Year

9 unchanged sentences

Doubtful — — — — — 66 — — 66

Loss — — — — — 23 — — 23

Total 165,282 233,243 231,489 209,762 114,971 441,150 27,621 5,407 1,423,518

19 unchanged sentences

Pass 41,781 35,768 19,863 14,820 13,800 50,291 334 2,096 176,657

Substandard — 60 — 53 126 958 — — 1,197

Loss — — — — — 4 — — 4

Total 41,781 35,828 19,863 14,873 13,926 51,253 334 2,096 177,858

1 unchanged sentence

Pass 305,814 149,445 100,027 35,988 22,789 12,741 — — 626,804

Substandard 384 811 659 266 304 193 — — 2,617

Loss — 5 — — — — — — 5

Total 306,198 150,261 100,686 36,254 23,093 12,934 — — 629,426

1 unchanged sentence

Pass 50,889 28,351 14,558 6,333 3,725 3,975 — — 107,831

Substandard 97 63 138 46 21 150 — — 515

Loss — — — — — 17 — — 17

Total 50,986 28,414 14,696 6,379 3,746 4,142 — — 108,363

1 unchanged sentence

Total loans, at amortized cost $ 1,255,907 $ 960,198 $ 576,884 $ 423,955 $ 230,800 $ 991,453 $ 267,953 $ 11,917 $ 4,707,150

The following tables summarize the risk category of Peoples' loan portfolio based upon the most recent analysis performed at December 31, 2020:

The following tables summarize the risk category of Peoples' loan portfolio based upon the then most recent analysis performed at December 31, 2021:

Term Loans at Amortized Cost by Origination Year

9 unchanged sentences

Doubtful — — — — — 542 — — 542

Loss — — — — — 23 — — 23

Total 253,416 263,504 226,637 147,624 153,391 483,818 21,691 12,026 1,550,081

8 unchanged sentences

Total 135,896 240 — — — — — — 136,136

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

Special mention 34 29 22 159 4 — — — 248

Substandard 196 438 462 479 6 — — — 1,581

Total 78,278 26,421 13,852 3,610 347 — — — 122,508

Residential real estate

39 unchanged sentences

Total collateral dependent loans $ 10,354 $ 50,119

The increase in collateral dependent loans at December 31, 2021 compared to December 31, 2020, was primarily due to $ 37.1 million in collateral dependent loans acquired from Premier.

The following table summarizes the loans that were modified as TDRs during the years ended 2021 and 2020.

The decrease in collateral dependent loans at December 31, 2022 compared to December 31, 2021, was primarily due to $ 29.7 million in collateral dependent loans acquired from Premier that were no longer considered collateral dependent at December 31, 2022.

The following table summarizes the loans that were modified as TDRs during the years ended December 31, 2022 and 2021.

Recorded Investment (a)

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

Construction 1 $ 344 $ 344 $ 344

Commercial real estate, other 8 $ 1,191 $ 1,191 $ 1,179

6 unchanged sentences

Total 91 $ 5,154 $ 5,242 $ 4,640

Construction 1 $ 344 $ 344 $ 344

Commercial real estate, other 7 218 218 217

8 unchanged sentences

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

The following table presents those loans modified into a TDR during year that subsequently defaulted (i.e., 90 days or more past due following a modification during the year).

The following table presents those loans modified into a TDR during the year that subsequently defaulted (i.e., 90 days or more past due following a modification during the year).

(Dollars in thousands) Number of Contracts Recorded Investment (a)

1 unchanged sentence

Commercial real estate, other 1 $ 65 $ — — $ — $ —

Commercial and Industrial 1 43 — — — —

Residential real estate 2 64 — 3 156 —

Consumer, indirect 1 7 — 1 26 —

Consumer, direct 1 2 — — — —

Total 6 $ 181 $ — 4 $ 182 $ —

5 unchanged sentences

(Dollars in thousands) Beginning Balance,

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

January 1, 2022 Initial Allowance for Acquired PCD Assets (a) (Recovery of) Provision for Credit Losses (b) Charge-offs Recoveries Ending Balance, December 31, 2022

Construction $ 2,999 $ — $ ( 1,733 ) $ ( 16 ) $ — $ 1,250

9 unchanged sentences

Total $ 63,967 $ ( 629 ) $ ( 2,904 ) $ ( 8,755 ) $ 1,483 $ 53,162

(a) Amount does not include the provision for unfunded commitment liability.

(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 unfunded commitment liability.

Changes in the allowance for credit losses for 2021 are summarized below:

(Dollars in thousands) Beginning Balance,

January 1, 2020 Impact of CECL Implementation for Purchased Credit Deteriorated Assets Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, December 31, 2020

January 1, 2021 Initial Allowance for Acquired PCD Assets (Recovery of) Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, December 31, 2021

Construction $ 1,887 $ 2,006 $ ( 894 ) $ — $ — $ 2,999

2 unchanged sentences

Premium finance 1,095 — ( 671 ) ( 45 ) — 379

Leases — 493 5,399 ( 1,434 ) 339 4,797

Residential real estate 6,044 1,206 225 ( 385 ) 143 7,233

5 unchanged sentences

(a) Amount does not include the provision for unfunded commitment liability.

During 2021, the increase in allowance for credit loss was largely due to the Premier and North Star Leasing acquisitions, and the related need to establish an allowance for credit losses on those portfolios, coupled with organic growth in loan balances.

The North Star Leasing acquisition added $ 3.3 million in allowance for credit losses at the acquisition date, of which $ 0.5 million was established for purchased credit deteriorated loans as part of the acquisition accounting, and the remainder was established using provision for credit losses.

The Premier acquisition added $ 28.6 million to the allowance for credit losses during the third quarter of 2021, of which $16.9 million was established for purchased credit deteriorated loans as part of the acquisition accounting, and the remainder was established using provision for credit losses.

Also during 2021, economic factors and loss drivers improved compared to 2020, and had a positive impact on the CECL model.

The allowance for credit losses as a percent of total loans decreased slightly during 2021, compared to 2020.

There were no purchased credit deteriorated loans acquired in the acquisition of Premium Finance.

As of December 31, 2021, Peoples had recorded an unfunded commitment liability of $ 2.5 million, a decrease compared to the $ 2.9 million that was recorded as of December 31, 2020.

During 2022, the decline in the allowance balance when compared to 2021 was driven by decreases in the allowances for individually analyzed loans, as well as changes in qualitative factors period-over-period and the use of updated prepayment speeds.

Those decreases were partially offset by loan growth and deterioration in the economic forecast.

The Vantage acquisition added $ 0.8 million in allowance for credit losses at the acquisition date for PCD loans as part of the acquisition accounting.

During 2022, the allowance established for PCD loans from the Premier Merger was adjusted, decreasing the allowance by $ 1.4 million.

The allowance for credit losses as a percent of total loans declined from 1.43 % to 1.13 % from December 31, 2021 to December 31, 2022.

At December 31, 2022, Peoples had recorded an unfunded commitment liability of $ 2.0 million, a decrease compared to the $ 2.5 million that was recorded 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 Consolidated Balance Sheets.

During 2021, Peoples recorded a recovery of credit losses on unfunded commitments of $360,000, compared to a provision for credit losses on unfunded commitments of $ 1.4 million for 2020.

For 2022, Peoples recorded a recovery of credit losses on unfunded commitments of $ 0.6 million, compared to a recovery for credit losses on unfunded commitments of $ 360,000 for 2021.

The change in the allowance for unfunded commitments is reflected in the "Provision for credit losses" line of the Consolidated Statements of Income.

Note 5 Bank Premises and Equipment

The major categories of bank premises and equipment, net of accumulated depreciation, at December 31 are summarized as follows:

The major categories of bank premises and equipment, net of accumulated depreciation, at December 31 were as follows:

(Dollars in thousands) 2022 2021

13 unchanged sentences

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.

The leases acquired 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.

Peoples began originating leases with the acquisition of leases from NSL and increased its portfolio with the acquisition of Vantage.

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.

The leases acquired from Vantage were determined to be sales-type leases, as the payment structure and term triggered that accounting treatment, whereby either (i) the lease is structured as a fair market value buyout, whereby the lessee has the option to purchase the leased equipment at its fair market value at maturity of the lease, or (ii) the lessee purchases the leased equipment for one dollar at maturity of the lease.

Originated leases continue to be classified as sales-type leases.

2 unchanged sentences

These sales-type leases do not typically contain residual value guarantees;

however, if a lease contains a residual value guarantee, Peoples reduces its residual asset risk by obtaining a security deposit from the lessee.

Other non-interest income noted in the table below includes gain on the early termination of leases, syndicated leases, and other fees.

however, the risk associated with residuals is mitigated by obtaining security deposits from lessees.

Other non-interest income noted in the table below includes gains on the early termination of leases, referral fee income, and other fee income.

Lease income also includes gains and losses on residual assets.

Additional information regarding Peoples' sales-type leases can be found in "Note 4 Loans and Leases".

The table below details Peoples' lease income at December 31:

The table below details Peoples' lease income for the years ended December 31, 2022 and 2021:

(Dollars in thousands) 2022 2021

4 unchanged sentences

For additional

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

information, see "Note 4 Loans and Leases.".

The following table summarizes the net investments in sales-type leases, which are included in "Loans and leases, net of deferred costs" on the Consolidated Balance Sheets at December 31:

15 unchanged sentences

Certain leases may include options to extend or terminate the lease.

Only those renewal and termination options which Peoples is reasonably certain of exercising are included in the calculation of the

lease liability.

Only those renewal and termination options which Peoples is reasonably certain of exercising are included in the calculation of the lease liability.

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.

5 unchanged sentences

Operating lease ROU assets exclude lease incentives and nonlease components.

The table below details Peoples' lease expense, which is included in "Net occupancy and equipment expense" in the Consolidated Statements of Income at December 31:

The table below details Peoples' lease expense, which is included in "Net occupancy and equipment expense" in the Consolidated Statements of Income for the years ended December 31:

(Dollars in thousands) 2022 2021

14 unchanged sentences

Cash paid during the year for operating leases $ 2,560 $ 1,585

Additions for right-of-use assets obtained during the year ended $ 2,482 $ 62

Additions for right-of-use assets obtained during the year $ 880 $ 2,482

The following table summarizes the future lease payments of operating leases:

10 unchanged sentences

Goodwill, end of year $ 292,397 $ 264,193

Peoples performed a qualitative assessment of goodwill as of October 1, 2021, and concluded it was not more likely than not that the fair value of Peoples' reporting unit was less than its carrying amount.

On April 1, 2021, Peoples preliminarily recorded $ 24.7 million of goodwill related to the acquisition of NSL.

Peoples performed a qualitative assessment of goodwill as of October 1, 2022, and management does not believe it is more likely than not that the fair value of Peoples' reporting unit is less its carrying amount.

On March 11, 2022, Peoples Insurance entered into an Asset Purchase Agreement with Elite, and consummated the acquisition on April 1, 2022.

In 2022, Peoples 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.

Peoples recorded $ 27.2 million of goodwill related to this acquisition.

During 2022, Peoples also recorded a $ 1.3 million reduction of the goodwill recognized in the Premier Merger due to changes in the fair value of loans acquired from Premier.

On April 1, 2021, Peoples recorded $ 24.7 million of goodwill related to the acquisition of 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 $ 68.2 million of goodwill.

On January 1, 2020, Peoples Insurance acquired a property and casualty-focused independent insurance agency, for which Peoples recorded $ 0.1 million of goodwill.

On July 1, 2020, Peoples completed its acquisition of Triumph Premium Finance, for which Peoples recorded $ 5.5 million of goodwill.

For additional information on these acquisitions, refer to "Note 20 Acquisitions."

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

Other intangible assets

Other intangible assets were comprised of the following at December 31:

(Dollars in thousands) Core Deposits Customer Relationships Total

(Dollars in thousands) Core Deposits Customer Relationships Indefinite-Lived Trade Names Total

Gross intangibles $ 26,464 $ 25,173 $ 1,274 $ 52,911

3 unchanged sentences

Servicing rights 1,816

Indefinite-lived trade name intangible 1,274

Total other intangibles $ 33,932

Gross intangibles $ 22,233 $ 12,495 $ — $ 34,728

Intangibles recorded from acquisitions — 5,015 5,015

Intangibles recorded from acquisitions (a) 4,233 13,014 1,274 18,521

Accumulated amortization ( 19,048 ) ( 9,603 ) — ( 28,651 )

3 unchanged sentences

(a) Peoples included in customer relationship intangibles an intangible asset related to a non-compete agreement in the

amount of $ 0.3 million

amount of $ 1.3 million and $ 0.3 million at December 31, 2022 and December 31, 2021, respectively

Peoples performed other intangible assets impairment testing as of October 1, 2022 and concluded there was no impairment in the recorded value of other intangible assets as of October 1, 2022.

During the annual impairment test, Peoples assessed qualitative factors, including relevant events and circumstances, to determine that it was more-likely-than-not that the fair value of other intangible assets exceeded the carrying value.

Other intangible assets recorded from the above mentioned acquisitions in 2021 were $ 12.7 million of customer relationship intangible assets and $ 4.2 million of core deposit intangible assets.

Other intangible assets recorded from the above-mentioned acquisitions in 2022 were $ 10.8 million of customer relationship intangible assets, $ 1.2 million of non-compete intangible assets, and $ 1.2 million of indefinite-lived trade name 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 20 Acquisitions" for additional information.

Other intangible assets recorded in 2020 included $ 5.0 million of customer relationship intangible assets from the Premium Finance and Peoples Insurance acquisitions.

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

13 unchanged sentences

Servicing rights originated 180 519 1,026

Servicing rights acquired — — —

Valuation allowance ( 12 ) ( 161 ) —

Change in valuation allowance 12 149 ( 161 )

Balance, end of year $ 1,816 $ 2,218 $ 2,486

As of December 31, 2021 and 2020, Peoples recorded a valuation allowance of $ 12,000 and $ 161,000 related to the decrease in the fair value of servicing rights.

For the years ended December 31, 2022 and 2021, Peoples recorded reductions of $ 12,000 and $ 149,000 , respectively, to the valuation allowance due to increases in the fair value of servicing rights.

During 2020, Peoples established a valuation allowance of $ 161,000 related to the decrease in the fair value of servicing rights to less than the carrying value.

The following is the breakdown of the discount rates and prepayment speeds of servicing rights for the years ended December 31:

2 unchanged sentences

Prepayment speeds 6.5 % 23.8 % 8.9 % 27.1 %

The fair value of servicing rights was $ 2.6 million at both December 31, 2021 and 2020.

The fair value of servicing rights was $ 3.4 million at December 31, 2022 and $ 2.6 million at December 31, 2021.

Note 8 Deposits

12 unchanged sentences

Total deposits $ 5,716,941 $ 5,862,552

Time deposits that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") limit of $ 250,000 , or otherwise uninsured, were $ 121.3 million and $ 89.0 million at December 31, 2021 and 2020, respectively, and are broken out below by time remaining until maturity.

Uninsured deposits were $ 1.6 billion and $ 1.7 billion at December 31, 2022 and 2021, respectively.

Uninsured amounts are estimated based on the portion of account balances that met or exceeded the FDIC limit of $250,000.

Uninsured time deposits are broken out below by time remaining until maturity.

(Dollars in thousands) 2022 2021

4 unchanged sentences

Total $ 100,752 $ 121,292

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

The contractual maturities of CDs for each of the next five years and thereafter are as follows:

(Dollars in thousands) Retail Brokered Total

2022 (a) $ 453,610 $ 104,252 $ 557,862

2023 $ 316,073 $ 125,580 $ 441,653

2 unchanged sentences

2026 22,127 — 22,127

2027 26,978 — 26,978

Thereafter 90 — 90

Total CDs $ 530,236 $ 125,580 $ 655,816

(a) Brokered includes $ 100.0 million of brokered demand and savings deposits.

Deposits from related parties were $ 8.5 million and $ 12.6 million at December 31, 2022 and 2021, respectively.

As of December 31, 2021, 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 deposits.

In the fourth quarter of 2021, Peoples terminated three interest rate swap agreements with an aggregate notional value of $ 25.0 million, of which $ 15 million were brokered deposits that were not immediately terminated, but instead allowed to mature.

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

Brokered deposits used to fund interest rate swaps are expected to be extended every 90 days through the maturity dates of the swaps.

28 unchanged sentences

Peoples’ borrowing capacity with the FHLB is based on the amount of collateral pledged and the amount of FHLB common stock owned.

Peoples reclassified $ 15.0 million and $ 20.0 million of FHLB advances from long-term borrowings to short-term borrowings in 2021 and 2020, respectively, due to maturity dates of less than one year.

Peoples had no reclassifications in 2022 and reclassified $ 15.0 million of FHLB advances from long-term borrowings to short-term borrowings in 2021, due to maturity dates of less than one year.

Peoples' FHLB advances of $ 55.0 million and $ 70.0 million matured in 2022 and 2021, respectively.

5 unchanged sentences

At December 31, 2022, Peoples had available Federal Reserve Discount Window credit of $ 264.1 million .

As of April 3, 2019, Peoples entered into a Loan Agreement (the “U.S.

As of April 3, 2019, Peoples entered into the U.S.

Bank Loan Agreement with U.S.

Bank National Association.

Bank Loan Agreement has a one-year term, which was renewed as of April 1, 2021, and provides Peoples with a revolving line of credit in the maximum aggregate principal amount of $ 20.0 million that may be used:

Bank Loan Agreement initially had an one-year term, which has subsequently been renewed, most recently as of March 31, 2022 for an additional year, and currently provides Peoples with a revolving line of credit in the maximum aggregate principal amount of $ 30.0 million that may be used:

(i) for working capital purposes;

5 unchanged sentences

As of December 31, 2022, Peoples was in compliance with the applicable covenants imposed by the U.S.

Bank Loan Agreement, as amended by the Fourth Amendment to the U.S.

Bank Loan Agreement.

7 unchanged sentences

FHLB amortizing, fixed rate advances 4,158 1.79 % 5,825 1.77 %

Vantage non-recourse borrowings 53,147 4.75 % — — %

Junior subordinated debt securities 13,788 8.66 % 13,650 3.37 %

Long-term borrowings $ 99,475 1.71 % $ 110,568 1.72 %

Long-term borrowings (a) $ 101,093 $ 99,475

(a) The average interest rates on total long-term borrowings at December 31, 2022 and December 31, 2021 were 4.27 % and 1.69 %, respectively.

Peoples continually evaluates its overall balance sheet position given the interest rate environment.

2 unchanged sentences

Outstanding long-term FHLB amortizing, fixed rate advances, which have interest rates ranging from 1.25 % to 3.83 %, mature between 2026 and 2031.

Peoples also reclassified one long-term FHLB non-amortizing advance during 2021 totaling $ 15.0 million to short-term borrowings as the time to maturity became less than one year.

The FHLB putable, non-amortizing, fixed rate advances have maturities ranging from five to nine years that may be repaid prior to maturity, subject to the payment of termination fees.

The FHLB putable, non-amortizing, fixed rate advances have maturities ranging from three to four years that may be repaid prior to maturity, subject to the payment of termination fees.

The FHLB has the option, at its sole discretion, to terminate each advance after the initial fixed rate period of three months , requiring full repayment of the advance by Peoples, prior to the stated maturity.

1 unchanged sentence

These advances require monthly interest payments, with no repayment of principal until the earlier of either an option to terminate being exercised by the FHLB or the stated maturity.

The FHLB amortizing, fixed rate advances have a fixed rate for the term of each advance, with maturities ranging fro m five to ten years .

The FHLB amortizing, fixed rate advances have a fixed rate for the term of each advance, with maturities ranging from three to nine years .

Th ese advances require monthly principal and interest payments, with some having a constant prepayment rate requiring an additional principal payment annually.

1 unchanged sentence

Long-term FHLB advances are collateralized by assets owned by Peoples.

Non-recourse borrowings are used by Vantage to fund leases.

Certain non-recourse borrowings acquired from Vantage were paid off subsequent to the acquisition.

The Vantage non-recourse borrowings have interest rates ranging from 2.12 % to 8.75 % with various maturities, the latest being in 2029.

Payments received from customers on non-recourse leases are used to fund repayment of these borrowings.

In the event of default, the non-recourse borrowing is forgiven.

The “Junior subordinated debt securities” are comprised of two trust preferred securities assumed from two prior acquisitions.

On March 6, 2015, Peoples completed its acquisition of NB&T Financial Group, Inc.

(“NB&T”), which included a trust preferred security due in 2037 with a $ 9 million par value and a $ 6.6 million fair value at acquisition.

As of December 31, 2021, this trust preferred security had a carrying value of $ 7.8 million with a yield of 3.52 %, inclusive of the impact of fair value adjustments.

On September 17, 2021, Peoples completed its acquisition of Premier, which included a trust preferred security due in 2034 with a $ 6.2 million par value and a $ 6.1 million fair value at acquisition.

As of December 31, 2021, this trust preferred security had a carrying value of $ 5.9 million and a yield of 3.18 %, inclusive of the impact of fair value adjustments.

(“NB&T”), which included a trust preferred security du e in 2037 with a $ 9 million par value and a $ 6.6 million fair value at acquisition.

As of December 31, 2022, this trust preferred security had a carrying value of $ 7.9 million with an interest rate of 9.27 %, inclusive of the impact of fair value adjustments.

On September 17, 2021, Peoples completed the Premier Merger, which included a trust preferred security due in 2034 with a $ 6.2 million par value and a $ 6.1 million fair value at acquisition.

As of December 31, 2022, this trust preferred security had a carrying value of $ 5.9 million and an interest rate of 7.83 %, inclusive of the impact of fair value adjustments.

These trust preferred securities are considered tier 1 capital (with certain limitations applicable) under current regulatory guidelines.

At December 31, 2022, the aggregate minimum annual retirements of long-term borrowings in future periods were as follows:

(Dollars in thousands) Balance Weighted-Average Rate (a)

2022 $ 1,528 1.53 %

2023 1,150 1.49 %

2024 856 1.46 %

2025 627 1.42 %

(Dollars in thousands) Balance

2023 $ 10,343

1 unchanged sentence

Total long-term borrowings $ 101,093

(a) The weighted-average rate includes the impact of accreting the current book value of the junior subordinated debt securities to face value over the period.

The weighted-average rates for the FHLB advances are 1.72 % in 2022, 1.73 % in 2023, 1.74 % in 2024, 1.76 % in 2025, 2.16 % in 2026, and 1.18 % thereafter.

Note 11 Stockholders’ Equity

6 unchanged sentences

Cancellation of restricted common shares — 33,689

Grant of common shares — ( 5,130 )

Grant of unrestricted common shares — ( 23,482 )

Changes related to deferred compensation plan for Boards of Directors:

4 unchanged sentences

Common shares issued under compensation plan for Boards of Directors — ( 11,553 )

Common shares issued under performance unit awards — ( 6,127 )

Common shares issued under employee stock purchase plan — ( 18,872 )

Issuance of common shares related to acquisition of First Prestonsburg 1,005,478 —

Shares at December 31, 2020 21,193,402 1,686,046

3 unchanged sentences

Cancellation of restricted common shares — 8,129

Grant of common shares — ( 23,482 )

Grant of unrestricted common shares — ( 21,587 )

Changes related to deferred compensation plan for Boards of Directors:

1 unchanged sentence

Disbursed out of treasury stock — ( 2,983 )

Common shares repurchased under repurchase program — 1,299,577

Common shares issued under dividend reinvestment plan 31,314 —

Common shares issued under compensation plan for Boards of Directors — ( 7,589 )

Common shares issued under performance unit awards — (6,127)

Common shares issued under employee stock purchase plan — ( 17,093 )

Issuance of common shares related to the Premier Merger 8,589,685 —

Shares at December 31, 2021 29,814,401 1,577,359

3 unchanged sentences

Cancellation of restricted common shares — 5,452

Grant of common shares ( 21,587 )

Grant of unrestricted common shares ( 1,500 )

Changes related to deferred compensation plan for Boards of Directors:

1 unchanged sentence

Disbursed out of treasury stock — ( 3,039 )

Common shares repurchased under repurchase program — 263,183

Common shares issued under dividend reinvestment plan 43,519 —

Common shares issued under compensation plan for Boards of Directors — ( 17,626 )

Common shares issued under performance unit awards — —

Common shares issued under employee stock purchase plan — ( 18,832 )

Issuance of common shares related to acquisition of Premier 8,589,685 —

Shares at December 31, 2022 29,857,920 1,643,461

had authorized Peoples to purchase up to an aggregate of $ 40.0 million of its outstanding common shares.

During 2021, Peoples did not repurchase any common shares under the share repurchase program authorized on January 28, 2021.

On February 27, 2020, Peoples' Board of Directors authorized a share repurchase program authorizing Peoples to purchase up to an aggregate of $ 40.0 million of its outstanding common shares, replacing the previous share repurchase program which had authorized Peoples to purchase up to an aggregate of $ 20 million of its outstanding common shares.

An aggregate of $ 6.3 million of Peoples' common shares were purchased under the previous share repurchase program from inception through its termination date, which was February 27, 2020.

During 2020, Peoples purchased an aggregate of $ 29.3 million of its outstanding common shares, $ 843,000 of which were purchased under the previous share repurchase program and $ 28.5 million of which were purchased under the share repurchase program authorized on February 27, 2020 and later terminated on January 28, 2021.

During 2019, Peoples purchased an aggregate of 26,427 of its common shares through the then-authorized share repurchase program.

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, replacing the February 27, 2020 share repurchase program which had authorized Peoples to purchase up to an aggregate of $ 40.0 million of Peoples' outstanding common shares.

Peoples purchased an aggregate of 263,183 of Peoples' outstanding common shares totaling $ 7.4 million during 2022 and did not repurchase any common shares during 2021 under the share repurchase program authorized on January 28, 2021.

On February 27, 2020, Peoples' Board of Directors authorized a share repurchase program authorizing Peoples to purchase up to an aggregate of $ 40.0 million of Peoples' outstanding common shares, replacing the then previous share repurchase program which had authorized Peoples to purchase up to an aggregate of $ 20 million of Peoples' outstanding common shares.

An aggregate of $ 6.3 million of Peoples' outstanding common shares were purchased under the then previous share repurchase program from inception through its termination date, which was February 27, 2020.

During 2020, Peoples purchased an aggregate of $ 29.3 million of Peoples' outstanding common shares, $ 843,000 of which were purchased under the then previous share repurchase program and $ 28.5 million of which were purchased under the share repurchase program authorized on February 27, 2020 and later terminated on January 28, 2021.

Under its 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 December 31, 2021, Peoples had no preferred shares issued or outstanding.

At December 31, 2022 and 2021, Peoples had no preferred shares issued or outstanding.

The following table details the cash dividends declared per common share for the year ended December 31:

6 unchanged sentences

The following details the change in the components of Peoples’ accumulated other comprehensive (loss) income for the years ended December 31:

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

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

Balance, December 31, 2019 $ 5,300 $ ( 3,958 ) $ ( 2,767 ) $ ( 1,425 )

1 unchanged sentence

Realized loss on sale of securities, net of tax 291 — — 291

Realized loss due to settlement and curtailment, net of tax — 833 — 833

Other comprehensive income (loss), net of reclassifications and tax 9,001 ( 747 ) ( 6,617 ) 1,637

1 unchanged sentence

Reclassification adjustments to net income:

Realized gain on sale of securities, net of tax 291 — — 291

Realized loss on sale of securities, net of tax 670 — — 670

Realized loss due to settlement and curtailment, net of tax — 111 — 111

Other comprehensive income (loss), net of reclassifications and tax 9,001 ( 747 ) ( 6,617 ) 1,637

Other comprehensive (loss) income, net of reclassifications and tax ( 21,208 ) 1,880 5,592 ( 13,736 )

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 670 — — 670

Realized loss on sale of securities, net of tax 47 — — 47

Realized loss due to settlement and curtailment, net of tax — 142 — 142

17 unchanged sentences

Peoples’ policy is to fund the cost of the benefits as they arise.

The following tables provide a reconciliation of the changes in the benefit obligations and fair value of assets of the plans for the years ended December 31, 2021 and 2020, and a statement of the funded status as of December 31, 2021 and 2020:

The following tables provide a reconciliation of the changes in the benefit obligations and fair value of assets of the plans for the years ended December 31, 2022 and 2021, and a statement of the funded status at December 31, 2022 and 2021:

Pension Benefits Post-retirement Benefits

10 unchanged sentences

Fair value of plan assets at January 1 $ 11,718 $ 10,852 $ — $ —

Actual return on plan assets 1,605 1,378 — —

Actual (loss) return on plan assets ( 1,746 ) 1,605 — —

Employer contributions 2 — 11 12

31 unchanged sentences

The health care trend rate assumption does not have a significant effect on the contributory defined benefit postretirement plan;

therefore, a one percentage point increase or decrease in the trend rate is not material in the determination of the accumulated postretirement benefit obligation or the ongoing expense.

therefore, an one percentage point increase or decrease in the trend rate is not material in the determination of the accumulated postretirement benefit obligation or the ongoing expense.

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.

There were $ 143,000 in settlement charges recorded in 2021, compared to $ 1.1 million recorded in 2020, and none recorded in 2019.

There were $ 185,000 in settlement charges recorded in 2022, compared to $ 143,000 recorded in 2021, and $ 1.1 million recorded in 2020.

Determination of Expected Long-term Rate of Return

18 unchanged sentences

Total fair value of pension assets $ 11,428 $ 11,428

Pension plan assets also included cash and cash equivalents of $ 284,000 and accrued income of $ 1,000 at December 31, 2021.

Pension plan assets also included cash and cash equivalents of $ 375,000 and no accrued income at December 31, 2022.

Cash and cash equivalents were $ 284,000 and accrued income was $ 1,000 at December 31, 2021.

1 unchanged sentence

Equity securities held as investments in Peoples' pension plan did not include any securities of Peoples or related parties in 2022 or 2021.

Peoples expects to make between $ 10,000 to $ 15,000 of contributions to its pension plan in 2022;

Peoples does not expect to make contributions to its pension plan in 2023;

however, actual contributions are made at the discretion of the Retirement Plan Committee and Peoples' Board of Directors.

8 unchanged sentences

From January 1, 2011, until December 31, 2019, matching contributions equaled 100 % of participants' contributions that did not exceed 3 % of the participants' compensation, plus 50 % of participants' contributions between 3 % and 5 % of the participants' compensation.

Matching contributions made by Peoples totaled $ 3.5 million in 2021, $ 2.5 million in 2020 and $ 2.0 million in 2019.

Beginning January 1, 2020, Peoples began matching 100% of participants' contributions that did not exceed 4 % of the participants' compensation, plus 50% of participants' contributions between 4 % and 6 % of the participants' compensation.

Beginning January 1, 2020, Peoples matched 100 % of participants' contributions that did not exceed 4 % of the participants' compensation, plus 50 % of participants' contributions between 4 % and 6 % of the participants' compensation.

As of January 1, 2021, Peoples began matching 100 % of participants' contributions up to 6 % of the participants' compensation.

Matching contributions made by Peoples totaled $ 4.4 million in 2022, $ 3.5 million in 2021 and $ 2.5 million in 2020.

Note 13 Income Taxes

4 unchanged sentences

Differences in rate resulting from:

State taxes, net of federal benefit 2,277 1.8 % 119 0.2 % 62 0.1 %

Investment securities impairment 431 0.3 % — — % — — %

Nondeductible acquisition costs 42 — % 269 0.5 % — — %

Stock awards 74 0.1 % ( 5 ) — % ( 135 ) ( 0.2 ) %

Common share awards 12 — % 74 0.1 % ( 5 ) — %

Bank owned life insurance ( 551 ) ( 0.4 ) % ( 371 ) ( 0.6 ) % ( 415 ) ( 1.0 ) %

13 unchanged sentences

Deferred tax assets:

Available-for-sale securities $ 39,425 $ 1,905

Allowance for credit losses 12,827 13,575

Nonaccrual loan interest income 4,366 3,898

Accrued employee benefits 3,391 2,161

Lease obligation 1,757 1,960

Available-for-sale securities 1,905 —

Net operating loss carryforward 158 223

Tax credit investments — 1,096

Derivative instruments — 1,088

Net operating loss carryforward 223 —

Other 899 561

Gross deferred tax assets $ 62,823 $ 26,467

2 unchanged sentences

Deferred tax liabilities:

Bank premises and equipment $ 3,838 $ 3,274

Equipment leases $ 16,316 $ —

Deferred loan income 5,512 5,249

Purchase accounting adjustments 4,431 3,166

Bank premises and equipment 3,206 3,838

Lease right-of-use assets 1,588 1,788

Available-for-sale securities — 3,886

Derivative instruments 1,302 —

Other 2,259 662

Total deferred tax liabilities $ 34,614 $ 14,703

Net deferred tax asset (liability) $ 11,606 $ 6,437

As of December 31, 2021, Peoples acquired a net operating loss carryforward of approximately $ 0.3 million related to the Premier merger, net of a valuation allowance of $158,000, which will be available to offset future taxable income.

The federal income tax benefit from sales of investment securities was $ 181,000 in 2021 and $ 77,000 in 2020.

The federal income tax expense from sale of investment securities was $ 34,000 in 2019.

Net deferred tax asset $ 28,051 $ 11,606

At December 31, 2022, Peoples had $ 2.2 million of state net operating loss carryforwards which are unlikely to be utilized, resulting in a valuation allowance against the net tax benefit of approximately $ 158,000 .

The federal income tax benefit from sales of investment securities was $ 14,000 in 2022, $ 192,000 in 2021, and $ 77,000 in 2020.

Income tax benefits are recognized in the Consolidated Financial Statements for a tax position only if it is considered "more-likely-than-not" of being sustained in an audit, based solely on the technical merits of the income tax position.

15 unchanged sentences

Net income available to common shareholders $ 101,292 $ 47,555 $ 34,767

Dividends paid on unvested shares ( 295 ) ( 367 ) ( 348 )

Undistributed earnings (loss) allocated to unvested shares ( 26 ) ( 5 ) ( 47 )

Dividends paid on unvested common shares ( 354 ) ( 295 ) ( 367 )

Undistributed loss allocated to unvested common shares ( 96 ) ( 26 ) ( 5 )

Net earnings allocated to common shareholders $ 100,842 $ 47,234 $ 34,395

25 unchanged sentences

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

As of December 31, 2021, Peoples had entered into thirteen interest rate swaps with an aggregate notional value of $ 125.0 million.

At December 31, 2022, Peoples had entered into thirteen interest rate swaps 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 brokered demand deposits, which will continue to be rolled through the life of the swaps.

At December 31, 2021, 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.

In the fourth quarter of 2021, Peoples terminated three interest rate swap agreements with an aggregate notional value of $ 25.0 million which were designated as cash flow hedges.

The terminations resulted in a pre-tax loss of $ 0.2 million.

The associated

$ 10.0 million in FHLB advances and $ 15.0 million in brokered demand deposits were not immediately terminated but instead allowed to mature.

For derivative financial instruments designated as cash flow hedges, the effective and ineffective portions of changes in the fair value of each derivative financial instrument is reported in AOCI (outside of earnings), net of tax, and are reclassified to interest expense as interest payments are made or received on Peoples' variable-rate liabilities.

Peoples assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the hedging derivative financial instrument with the changes in cash flows of the designated hedged transaction.

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 years ended December 31, 2021 and December 31, 2020, Peoples had reclassifications of loss to earnings of $ 3.5 million and gains to interest expense of $ 2.0 million, respectively.

The interest received on the floating rate component is intended to offset the interest paid on rolling three-month brokered deposits which will continue to be rolled through the life of the swaps.

At December 31, 2022, the interest rate swaps were designated as cash flow hedges of $ 125.0 million in brokered deposits, which are expected to be extended every 90 days through the maturity dates of the swaps.

For derivative financial instruments designated as cash flow hedges and assessed as effective, the changes in the fair value of each derivative financial instrument is reported in AOCI (outside of earnings), net of tax, and are reclassified to interest expense as interest payments are made or received on Peoples' variable-rate liabilities.

Peoples assesses the effectiveness of each hedging relationship by

comparing the changes in cash flows of the hedging derivative financial instrument with the changes in cash flows of the designated hedged transaction.

The reset dates and the payment dates on the 90-day advances or brokered deposits 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 years ended December 31, 2022 and December 31, 2021, Peoples had reclassifications of changes in fair value to interest expense of $ 0.8 million and $ 0.7 million, respectively.

The following table summarizes information about the interest rate swaps designated as cash flow hedges at December 31:

4 unchanged sentences

Weighted average maturity 2.6 years 3.6 years

Pre-tax unrealized losses included in AOCI ( 4,879 ) ( 11,879 )

The following table presents net losses or gains recorded in AOCI and in the Consolidated Statements of Income related to the cash flow hedges for the years ended December 31:

Pre-tax changes in fair value included in AOCI 5,727 ( 4,879 )

The following table presents changes in fair value recorded in AOCI and in the Consolidated Statements of Income related to the cash flow hedges for the years ended December 31:

(Dollars in thousands)

Amount of loss recognized in AOCI, pre-tax $ 6,999 $ 8,376

The following table reflects the cash flow hedges, which are included in the Consolidated Balance Sheets at fair value, at December 31:

Amount of income recognized in AOCI, pre-tax $ 10,606 $ 6,999

The following table reflects the cash flow hedges, which were included in the Consolidated Balance Sheets at fair value, at December 31:

(Dollars in thousands)

Notional Amount Fair Value Notional Amount Fair Value

Included in "Other assets":

Interest rate swaps related to debt $ 125,000 $ 5,594 $ — $ —

Total included in "Other assets" $ 125,000 $ 5,594 $ — $ —

Included in "Accrued expenses and other liabilities":

8 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 operation or financial condition at the year ended December 31,2021 and 2020.

The following table reflects the non-designated hedges, which are included in the Consolidated Balance Sheets at fair value, at December 31:

These interest rate swaps did not have a material impact on Peoples' results of operation or financial condition for the years ended December 31, 2022 and 2021.

The following table reflects the non-designated hedges, which were included in the Consolidated Balance Sheets at fair value, at December 31:

(Dollars in thousands)

9 unchanged sentences

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

At December 31, 2021 and December 31, 2020, Peoples had $ 28.1 million and zero , respectively, in investment securities pledged.

At December 31, 2021 and December 31, 2020, Peoples had zero and $ 41.0 million, respectively, of cash pledged.

Cash pledged is included in "Interest-bearing deposits in other banks" on the Consolidated Balance Sheets.

At each of December 31, 2022 and December 31, 2021, Peoples had no cash pledged while the counterparties had pledged $ 20.9 million at December 31, 2022 and none at December 31, 2021.

At December 31, 2022 and December 31, 2021, Peoples had zero and $ 28.1 million, respectively, in investment securities pledged, while counterparties had $ 2.5 million of investment securities pledged at December 31, 2022 and none pledged at December 31, 2021.

Investment securities pledged are included in "Available-for-sale investment securities" and "Held-to-maturity investment securities" on the Consolidated Balance Sheets.

21 unchanged sentences

Peoples Bank is required to maintain a minimum level of reserves, consisting of cash on hand and non-interest-bearing balances with the FRB of Cleveland, based on the amount of total deposits.

Average required reserve balances were $ 0 and $ 3.7 million in 2021 and 2020, respectively.

Average required reserve balances were $ 0 and $ 0 in 2022 and 2021, respectively.

Limits on Dividends

10 unchanged sentences

Peoples and Peoples Bank met all capital adequacy requirements at December 31, 2022.

As of December 31, 2021, the most recent notification from the banking regulatory agencies categorized Peoples Bank as well capitalized under the regulatory framework for prompt corrective action applicable to Peoples Bank.

At December 31, 2022, the most recent notification from the banking regulatory agencies categorized Peoples Bank as well capitalized under the regulatory framework for prompt corrective action applicable to Peoples Bank.

Peoples maintained the capital required by the Federal Reserve Board to be deemed well capitalized and remain a financial holding company.

1 unchanged sentence

There are no conditions or events since this notification that management believes have changed Peoples' or Peoples Bank's category.

Peoples' and Peoples Bank's actual capital amounts and ratios as of December 31 are also presented in the following table:

Peoples' and Peoples Bank's actual capital amounts and ratios at December 31 are also presented in the following table:

(Dollars in thousands) Amount Ratio Amount Ratio

66 unchanged sentences

Stock-Based Compensation

Peoples recognizes stock-based compensation, which is included as a component of Peoples’ salaries and employee benefit costs, for restricted common shares and performance unit awards, as well as purchases made by participants in the employee stock purchase plan.

Peoples recognizes stock-based compensation expense, which is included as a component of Peoples’ salaries and employee benefit costs, for restricted common shares and performance unit awards, as well as purchases made by participants in the employee stock purchase plan.

For restricted common shares, Peoples recognizes stock-based compensation based on the estimated fair value of the awards expected to vest on the grant date.

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Employee stock purchase plan expense 112 79 63

Performance stock unit (benefit) expense — ( 12 ) 130

Performance stock unit benefit — — ( 12 )

Total employee stock-based compensation expense 3,819 3,515 3,607

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Performance-based commissions (b) 1,424 2,044

Trust and investment income (a) 16,456 13,662

Trust and investment income:

Fiduciary income (a) 10,048 10,490

Brokerage income (a) 6,343 5,966

Electronic banking income:

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Peoples also records contract liabilities for bonuses received related to electronic banking income, for which income is recognized during the period in which the performance obligations are fulfilled.

The following table details the changes in Peoples' contract assets and contract liabilities for the period ended December 31, 2021:

The following table details the changes in Peoples' contract assets and contract liabilities for the year ended December 31, 2022:

(Dollars in thousands) Contract Assets Contract Liabilities

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Additional income receivable 551 —

Receipt of income previously receivable ( 701 ) —

Additional deferred income — 939

Recognition of income previously deferred — ( 116 )

Balance, December 31, 2022

$ 1,294 $ 5,634

For more information on Peoples' revenue recognition policies, see "Note 1 Summary of Significant Accounting Policies."

Note 20 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, pursuant to an Asset Purchase Agreement between Peoples Insurance and Elite.

Total consideration for this transaction was $ 4.4 million.

Peoples recognized 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, a nationwide provider of equipment financing headquartered in Excelsior, Minnesota.

Peoples Bank acquired assets comprising Vantage's lease business, including $ 154.9 million in leases and certain third-party debt in the amount of $ 106.9 million.

Under the terms of the agreement, Peoples Bank paid cash consideration of $ 54.0 million, and also repaid $ 28.9 million in recourse debt on behalf of Vantage, for total consideration of $ 82.9 million.

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

Peoples recorded acquisition-related expenses of $ 1.6 million related to the Vantage acquisition, which included $ 1.3 million in professional fees.

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

(Dollars in thousands) Fair Value

Total purchase price $ 82,893

Net assets at fair value

Cash and due from banks $ 1,444

Leases 155,726

Allowance for credit losses (on PCD leases) ( 801 )

Net leases 154,925

Bank premises and equipment 116

Other intangible assets 13,207

Other assets 1,506

Total assets $ 171,198

Borrowings $ 106,919

Accrued expenses and other liabilities 8,550

Total liabilities $ 115,469

Net assets $ 55,729

Goodwill $ 27,164

The goodwill recorded in connection with the Vantage acquisition is related to expected synergies to be gained from the combination of Vantage with Peoples' operations.

The employees retained from the Vantage acquisition should allow Peoples to continue to grow the lease portfolio, along with Peoples' resources, and should benefit Peoples in future periods.

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

Peoples recorded other intangible assets, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction.

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

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

Leases $ 3,412 $ ( 801 ) $ 1,120 $ 3,731

Fair value $ 3,412 $ ( 801 ) $ 1,120 $ 3,731

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.

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.

Peoples completed the merger in an effort to diversify and expand its franchise, and further enhance its size and scale.

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 common 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.

Peoples completed the Premier Merger in an effort to diversify and expand its franchise, and further enhance its size and scale.

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

Peoples recorded acquisition-related expenses of $19.5 million related to the Premier merger, which included $ 9.7 million in other non-interest expense;

$ 5.1 million in professional fees;

$ 3.8 million in salaries and employee benefit costs;

$0.4 million in net occupancy and equipment expense, $ 0.2 million in marketing expense;

$ 66,000 in net occupancy and equipment expense;

$ 62,000 in data processing and software expense;

and $ 54,000 in communication expense.

The estimated fair values below were considered preliminary as of December 31, 2021, and are subject to adjustment for up to one year after September 17, 2021.

Valuations subject to change include, but are not limited to, loans, including the designation of such as PCD, deferred tax assets and liabilities, and certain other assets and other 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 of $ 0.7 million related to the Premier Merger during 2022, which included $ 0.2 million in professional fees.

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

(Dollars in thousands) Unpaid Principal Balance Fair Value

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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 December 31, 2021, 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 December 31, 2021:

(Dollars in thousands) Change in fair value

Cash and cash equivalents $ ( 3,403 )

Total investment securities ( 11,341 )

Net loans 10,857

Bank premises and equipment, net of accumulated depreciation ( 3,737 )

Other assets 7,664

Deposits 4,579

Accrued expenses and other liabilities ( 1,777 )

Change in goodwill $ 2,822

The recorded goodwill associated with the Premier Merger is related to expected synergies and operational efficiencies to be gained from the combination of Premier with Peoples' operations.

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Loans were grouped together according to similar characteristics when applying various valuation techniques.

The discount rates used for loans are based on current market rates at the acquisition date for new originations for comparable loans and include adjustments for liquidity.

The discount rate does not include a factor for credit losses as that has been

included as a reduction to the estimated cash flows.

The discount rates used for loans were based on current market rates at the acquisition date for new originations for comparable loans and included adjustments for liquidity.

The discount rates did not include a factor for credit losses as that had been included as a reduction to the estimated cash flows.

Fair values for loans that were individually assessed were based on third-party valuations.

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Customer Deposit Intangible:

The customer deposit intangible represents the low cost of funding acquired core deposits provide relative to a marginal cost of funds.

The customer deposit intangible represented the low cost of funding acquired core deposits provide relative to a marginal cost of funds.

The fair value was estimated based on a discounted cash flow methodology that gave consideration to expected customer attrition rates, the net maintenance cost of the deposit base, the alternative cost of funds, and the interest costs associated with customer deposits.

The customer deposit intangible is being amortized over 10 years based upon the period over which estimated economic benefits are estimated to be received.

The fair values used for the demand and savings deposits equal the amount payable on demand at the acquisition date.

The fair values for time deposits were estimated using a discounted cash flow calculation that applies interest rates being offered at the acquisition date to the contractual interest rates on such time deposits.

Short-term borrowings consist of overnight repurchase agreements, and given their short-term nature book value approximated fair value.

The fair values of long-term borrowings, including trust preferred securities, are estimated using discounted cash flow analyses, based on incremental borrowing rates at acquisition date for similar types of instruments.

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.

Acquired purchased credit deteriorated loans are reported net of the unamortized fair value adjustment.

The fair values used for the demand and savings deposits equaled the amount payable on demand at the acquisition date.

The fair values for time deposits were estimated using a discounted cash flow calculation that applied interest rates being offered at the acquisition date to the contractual interest rates on such time deposits.

Short-term borrowings consisted of overnight repurchase agreements, and given their short-term nature book value approximated fair value.

The fair values of long-term borrowings, including trust preferred securities, were estimated

using discounted cash flow analyses, based on incremental borrowing rates at acquisition date for similar types of instruments.

Acquired PCD loans are reported net of the unamortized fair value adjustment.

These loans are recorded at the purchase price, and an allowance for credit losses is determined based upon discrete credit marks, along with discounted cash flow models based upon similar pools of loans, using a similar methodology as for other loans.

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

The following table details the fair value adjustment for acquired PCD loans as of the acquisition date:

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

Purchased credit deteriorated loans

Construction $ 20,143 $ ( 2,005 ) $ ( 214 ) $ 17,924

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

Peoples' operating results for 2021 include the operating results of the acquired assets and assumed liabilities of Premier subsequent to the acquisition on September 17, 2021.

Due to the conversion of Premier systems during the third quarter of 2021, as well as other streamlining and integration of the operating activities into those of Peoples, historical reporting for the former Premier operations is impracticable and the disclosures of revenue from the assets acquired and income before income taxes is impracticable for the period subsequent to the acquisition.

The following table presents unaudited pro forma information as if the acquisition of Premier had occurred on January 1, 2020.

The pro forma adjustments include any changes in interest income due to the accretion of discounts, or amortization of premiums, associated with the fair value adjustments to acquired loans, interest-bearing deposits, long-term borrowings, trust preferred securities and customer deposit intangibles that would have resulted had the assets and liabilities been acquired as of January 1, 2020.

The pro forma information excludes Peoples' acquisition-related expenses, which primarily included, but were not limited to, salaries and employee benefit costs, severance costs, professional fees, marketing expenses and deconversion costs.

Those acquisition-related expenses totaled $ 19.0 million and $ 0.9 million for 2021 and 2020, respectively.

The pro forma information also excludes a provision of credit losses of $12.1 million recorded to establish an allowance for credit losses for non-purchased credit deteriorated loans of $ 11.7 million, and a liability for unfunded commitments of $ 0.4 million, both relating to the acquired loans.

The pro forma information does not necessarily reflect the results of operations that would have occurred had Peoples acquired Premier on January 1, 2020.

Additionally, cost savings and other business synergies related to the acquisition are not reflected in the pro forma amounts.

Unaudited Pro Forma For

Twelve Months Ended

(Dollars in thousands) December 31,

2021 December 31,

Net interest income $ 240,143 $ 209,065

Non-interest income 79,540 72,118

Net income 91,394 58,663

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

Peoples Bank entered into an Asset Purchase Agreement, dated March 24, 2021 with NS Leasing, LLC, which is headquartered in Burlington, Vermont, and does business as “North Star Leasing”.

Peoples Bank entered into an Asset Purchase Agreement, dated March 24, 2021 with NSL, which is headquartered in Burlington, Vermont, and does business as “North Star Leasing”.

The transaction closed after the end of business on March 31, 2021 and Peoples Bank began operating the acquired business as a division of Peoples Bank on April 1, 2021.

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Peoples Bank acquired $ 83.3 million in leases and satisfied, on behalf of NSL, certain third-party debt in the amount of $ 69.1 million.

NSL underwrites, originates and services equipment leases and equipment financing agreements to businesses throughout the United States.

Peoples recorded preliminary goodwill in the amount of $ 24.7 million and preliminary other intangibles of $ 14.0 million, which included a customer relationship intangible, trade name intangible and non-compete agreements related to this transaction.

Peoples recorded an additional $ 0.7 million in non-interest expense during the third and fourth quarters of 2021 related to an update to the estimated earn-out provision of $ 3.0 million.

The bonus earn-out provision recorded by Peoples related to the NSL acquisition was determined based on a weighting of probability of outcomes, at present value.

Peoples predominately weighted the outcomes of the factors at approximately 100% payout expectation of the base earn-out, which is $ 2.5 million in total.

Adjusting weighting into the bonus earn-out expectation in the third and fourth quarter resulted in an additional $ 0.7 million of potential payout.

NSL met the minimums for the base earn-out payment and the targets set at acquisition for a 100% payout of the base earn-out.

As of December 31, 2021, leases had grown to $ 122.5 million.

NSL underwrites, originates and services equipment leases and equipment financing agreements to businesses throughout the U.S.

Peoples recorded goodwill in the amount of $ 24.7 million and other intangibles of $ 14.0 million, which included a customer relationship intangible, trade name intangible and non-compete agreements related to this transaction.

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

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

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

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

(Dollars in thousands)

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Goodwill $ 24,720

(a) Includes preliminary contingent consideration related to the bonus earn-out provision of $ 2.3 million.

Peoples recorded an additional $ 0.7 million in non-interest expense related to an update to the estimated earn-out provision.

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

(a) Includes estimated contingent consideration related to the bonus earn-out provision of $ 2.3 million.

Peoples recorded an additional $ 0.7 million in non-interest expense in 2021 related to an update to the estimated earn-out provision.

These leases are recorded at the purchase price, and an allowance for credit losses is determined using the same methodology as for other leases.

Acquired purchased credit deteriorated leases are reported net of the unamortized fair value adjustment.

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

Acquired PCD leases are reported net of the unamortized fair value adjustment.

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

(Dollars in thousands) NSL

Purchased credit deteriorated leases

Par value $ 5,248

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Fair value $ 4,840

Peoples recorded acquisition-related expenses related to the NSL acquisition which included $ 2.1 million in professional fees;

$ 0.2 million in other non-interest expense;

$ 3,000 in salaries and employee benefit costs;

$ 3,000 in data processing and software expense;

$ 2,000 in net occupancy and equipment expense;

and $ 2,000 in marketing expense.

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

Note 21 Parent Company Only Financial Information

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Net cash used in financing activities ( 50,297 ) ( 31,402 ) ( 56,867 )

Net increase (decrease) in cash and cash equivalents 889 ( 5,781 ) 6,344

Net (decrease) increase in cash and cash equivalents ( 241 ) 889 ( 5,781 )

Cash and cash equivalents at the beginning of year 15,252 14,363 20,144

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("Peoples"), (b) the procedures by which shareholders of Peoples may recommend nominees to Peoples' Board of Directors, (c) the Audit Committee of Peoples' Board of Directors and (d) the Board of Directors' determination that Peoples has an "audit committee financial expert" serving on its Audit Committee required by Items 401, 407(c)(3), 407(d)(4) and 407(d)(5) of SEC Regulation S-K will be included in the sections captioned "PROPOSAL NUMBER 1:

ELECTION OF DIRECTORS," "THE BOARD AND COMMITTEES OF THE BOARD" and "NOMINATING PROCEDURES" of the definitive Proxy Statement of Peoples Bancorp Inc.

ELECTION OF DIRECTORS," "THE BOARD AND COMMITTEES OF THE BOARD" and "CORPORATE GOVERNANCE AND BOARD MATTERS - Nominating Procedures" of the definitive Proxy Statement of Peoples Bancorp Inc.

relating to the Annual Meeting of Shareholders to be held on April 27, 2023 ("Peoples' Definitive Proxy Statement"), which sections are incorporated herein by reference.

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The Board of Directors of Peoples has adopted charters for each of the Audit Committee, the Compensation Committee, the Executive Committee, the Governance and Nominating Committee, and the Risk Committee.

In accordance with the requirements of Rule 5610 of the Nasdaq Stock Market Corporate Governance Requirements, the Board of Directors of Peoples has adopted a Code of Ethics covering the directors, officers and employees of Peoples and its subsidiaries, including, without limitation, the principal executive officer, the principal financial officer, the principal accounting officer and the controller of Peoples.

In accordance with the requirements of Rule 5610 of the Nasdaq Stock Market Corporate Governance Requirements, the Board of Directors of Peoples has adopted a Code of Ethics covering the directors, officers and employees of Peoples and Peoples' subsidiaries, including, without limitation, the principal executive officer, the principal financial officer, the principal accounting officer and the controller of Peoples.

Peoples intends to disclose the following events, if they occur, in a Current Report on Form 8-K and on the "Investor Relations" page of Peoples' Internet website at www.peoplesbancorp.com within four business days following their occurrence:

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No amount is included for potential future allocations to participants' bookkeeping accounts under the Directors' Deferred Compensation Plan since the terms of the Directors' Deferred Compensation Plan do not provide for a specified limit on the number of common shares which may be allocated to participants' bookkeeping accounts.

Additional information regarding Peoples' stock-based compensation plans can be found in "Note 18 Stock-Based Compensation" of the Notes to the Consolidated Financial Statements.

Additional information regarding Peoples' stock-based compensation plans can be found in "Note 18 Stock-Based Compensation."

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item 13 will be included in the sections captioned "TRANSACTIONS WITH RELATED PERSONS," "PROPOSAL NUMBER 1:

ELECTION OF DIRECTORS," "THE BOARD AND COMMITTEES OF THE BOARD" and "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" of Peoples' Definitive Proxy Statement, which sections are incorporated by reference.

ELECTION OF DIRECTORS," "THE BOARD AND COMMITTEES OF THE BOARD," "CORPORATE GOVERNANCE AND BOARD MATTERS - Independence of Directors," and "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" of Peoples' Definitive Proxy Statement, which sections are incorporated by reference.

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

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Report of Independent Registered Public Accounting Firm (Ernst & Young LLP) on Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Balance Sheets at December 31, 2022 and 2021

Consolidated Statements of Income for each of the fiscal years in the three-year period ended December 31, 2022

Consolidated Statements of Comprehensive Income for each of the fiscal years in the three-year period ended December 31, 2021

Consolidated Statements of Comprehensive (Loss) Income for each of the fiscal years in the three-year period ended December 31, 2022

Consolidated Statements of Stockholders’ Equity for each of the fiscal years in the three-year period ended December 31, 2022

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(a)(2) Financial Statement Schedules

All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.

All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable and, therefore, have been omitted.

(a)(3) Exhibits

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on Form S-4/A filed on January 19, 2018 (Registration No.

Agreement and Plan of Merger, dated as of October 29, 2018, as amended on December 18, 2018, between Peoples Bancorp Inc.

and First Prestonsburg Bancshares Inc.

Included as Annex A to the preliminary proxy statement/prospectus which forms a part of the Registration Statement of Peoples Bancorp Inc.

on Form S-4/A filed on December 20, 2018 (Registration No.

Agreement and Plan of Merger, dated as of March 26, 2021, between Peoples Bancorp Inc.

and Premier Financial Bancorp, Inc.

Included as Annex A to the preliminary proxy statement/prospectus which forms a part of the Registration Statement of Peoples Bancorp Inc.

Included as Annex A to the preliminary joint proxy statement/prospectus which forms a part of the Registration Statement of Peoples Bancorp Inc.

on Form S-4/A filed on June 1, 2021 (Registration No.

Agreement and Plan of Merger, dated as of October 24, 2022, between Peoples Bancorp Inc.

and Limestone Bancorp, Inc.

Included as Annex A to the preliminary joint proxy statement/prospectus which forms a part of the Registration Statement of Peoples Bancorp Inc.

on Form S-4/A filed on January 6, 2023 (Registration No.

3.1(a) Amended Articles of Incorporation of Peoples Bancorp Inc.

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Exhibit Location

Amended Articles of Incorporation of Peoples Bancorp Inc.

(representing the Amended Articles of Incorporation in compiled form incorporating all amendments) [For purposes of SEC reporting compliance only - not filed with Ohio Secretary of State] Incorporated herein by reference to Exhibit 3.1(h) to Peoples' June 30, 2021 Form 10-Q

3.2(a) Code of Regulations of Peoples Bancorp Inc.

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Incorporated herein by reference to Exhibit 4.2(b) to Peoples' June 30, 2015 Form 10-Q

Notice of Removal of Administrator and Appointment of Replacement, dated February 11, 2021, delivered to Wilmington Trust Company by the Continuing Administrators and the Successor Administrator named therein and Peoples Bancorp Inc.

Incorporated herein by reference to Exhibit 4.3(c) to the Annual Report on Form 10-K of Peoples Bancorp Inc.

for the fiscal year ended December 31, 2020 (File No.

P Peoples Bancorp Inc.

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Exhibit Location

Incorporated herein by reference to Exhibit 4.3(c) to the Annual Report on Form 10-K of Peoples Bancorp Inc.

for the fiscal year ended December 31, 2020 (File No.

Guarantee Agreement, dated as of June 25, 2007, between NB&T Financial Group, Inc.

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Description of Common Shares of Peoples Bancorp Inc.

Filed herewith

Incorporated herein by reference to Exhibit 4.9 to the Annual Report of Form 10-K of Peoples Bancorp Inc.

for the fiscal year ended December 31, 2021 (File No.

Exhibit Location

Peoples Bancorp Inc.

Third Amended and Restated Deferred Compensation Plan for Directors of Peoples Bancorp Inc.

and Subsidiaries (Amended and Restated Effective June 26, 2014)* Incorporated herein by reference to Exhibit 10.1(a) the Annual Report on Form 10-K of Peoples Bancorp Inc.

and Subsidiaries (Amended and Restated Effective June 26, 2014)* Incorporated herein by reference to Exhibit 10.1(a) to the Annual Report on Form 10-K of Peoples Bancorp Inc.

for the fiscal year ended December 31, 2015 (File No.

*Management Compensation Plan or Agreement

Exhibit Location

Rabbi Trust Agreement, made January 6, 1998, between Peoples Bancorp Inc.

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for the fiscal year ended December 31, 2007 (File No.

Summary of Peoples Bancorp Inc.

Annual Incentive Program for Executive Officers and other employees of Peoples Bancorp Inc.

[Effective beginning with the fiscal year beginning January 1, 2012 and ending with the fiscal year ended December 31, 2019]* Incorporated herein by reference to Exhibit 10.2(c)

to the Annual Report on Form 10-K of Peoples Bancorp Inc.

for the fiscal year ended December 31,

2011 (File No.

Rabbi Trust Agreement, entered into effective on September 1, 2022, between Peoples Bancorp Inc.

and Reliance Trust Company, a state chartered trust company, as Trustee* Filed herewith

Summary of Peoples Bancorp Inc.

Annual Incentive Program for Executive Officers and other employees of Peoples Bancorp Inc.

[Effective for fiscal year ended December 31, 2020]* Incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K of Peoples Bancorp Inc.

[Effective for the fiscal year ended December 31, 2020]* Incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K of Peoples Bancorp Inc.

for the fiscal year ended December 31, 2019 (File No.

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Annual Incentive Program for Executive Officers and other employees of Peoples Bancorp Inc.

[Effective beginning with the fiscal year beginning January 1, 2021]* Incorporated herein by reference to Exhibit 10.4 to the Annual Report on Form 10-K of Peoples Bancorp Inc.

[Effective beginning with the fiscal year beginning January 1, 2021 and ending with the fiscal year ended December 31, 2022]* Incorporated herein by reference to Exhibit 10.4 to the Annual Report on Form 10-K of Peoples Bancorp Inc.

for the fiscal year ended December 31, 2020 (File No.

Summary of Peoples Bancorp Inc.

Annual Incentive Program for Executive Officers and other employees of Peoples Bancorp Inc.

[Effective beginning with the fiscal year beginning January 1, 2023]* Filed herewith

Summary of Perquisites for Executive Officers of Peoples Bancorp Inc.* Filed herewith

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on Form 8-K dated and filed on April 30, 2018 (File No.

First Amendment to the Peoples Bancorp Inc.

Third Amended and Restated 2006 Equity Plan (adopted and approved by the Board of Directors of Peoples Bancorp Inc.

on January 26, 2023)* Filed herewith

Peoples Bancorp Inc.

9 unchanged sentences

for the quarterly period ended June 30, 2019 (File No.

First Amendment to Peoples Bancorp Inc.

Amended and Restated Nonqualified Deferred Compensation Plan (effective as of May 17, 2021)* Filed herewith

*Management Compensation Plan or Agreement

Exhibit Location

Second Amendment to Peoples Bancorp Inc.

Amended and Restated Nonqualified Deferred Compensation Plan (effective as of September 1, 2022)* Filed herewith

Peoples Bancorp Inc.

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0-16772) ("Peoples' March 31, 2017 Form 10-Q")

*Management Compensation Plan or Agreement

Exhibit Location

Form of Peoples Bancorp Inc.

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Rule 13a-14(a)/15d-14(a) Certifications [President and Chief Executive Officer] Filed herewith

*Management Compensation Plan or Agreement

Exhibit Location

Rule 13a-14(a)/15d-14(a) Certifications [Executive Vice President, Chief Financial Officer and Treasurer] Filed herewith

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101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Submitted electronically herewith #

*Management Compensation Plan or Agreement

Exhibit Location

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Submitted electronically herewith #

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(ii) Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020;

(iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019;

(iii) Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020;

(iv) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2022, 2021 and 2020;

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PEOPLES BANCORP INC.

March 15, 2022 By:

February 27, 2023 By:

/s/ CHARLES W.

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JAMES* Director 2/27/2023

REEVES* Director 3/15/2022

RECTOR* Chairman of the Board and Director 2/27/2023

/s/ DOUGLAS V.

REYNOLDS* Director 3/15/2022

REEVES* Director 2/27/2023

SCHNEEBERGER* Director 2/27/2023

/s/ FRANCES A.

7 unchanged sentences

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-K

Item 9A. Controls and Procedures