What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-04 compared with 2022-11-03 · 334 added, 548 removed, 1036 unchanged (46% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2023 December 31,

4 unchanged sentences

Total cash and cash equivalents 157,154 154,022

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

Available-for-sale investment securities, at fair value (amortized cost of $ 1,196,521 at March 31, 2023 and $ 1,300,719 at December 31, 2022) (a)

1,049,497 1,131,399

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

Held-to-maturity investment securities, at amortized cost (fair value of $ 624,436 at March 31, 2023 and $ 478,509 at December 31, 2022) (a)

694,072 560,212

19 unchanged sentences

Stockholders’ equity

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

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

Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2023 and at December 31, 2022

Common shares, no par value, 50,000,000 shares authorized, 29,868,456 shares issued at March 31, 2023 and 29,857,920 shares issued at December 31, 2022, including at each date shares held in treasury

684,367 686,450

1 unchanged sentence

Accumulated other comprehensive loss, net of deferred income taxes ( 110,979 ) ( 127,136 )

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

Treasury stock, at cost, 1,457,611 shares at March 31, 2023 and 1,643,461 shares at December 31, 2022

( 35,616 ) ( 39,922 )

1 unchanged sentence

Total liabilities and stockholders’ equity $ 7,311,520 $ 7,207,304

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $ 0 and $ 238 , respectively, at September 30, 2022 and $ 0 and $ 286 , respectively, at December 31, 2021.

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $ 0 and $ 241 , respectively, at March 31, 2023 and December 31, 2022.

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

4 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands, except per share data) 2023 2022

15 unchanged sentences

Electronic banking income 5,443 5,253

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

Insurance income 5,425 4,731

Trust and investment income 4,084 4,276

Deposit account service charges 3,523 3,426

Lease income 1,077 775

Bank owned life insurance income 707 431

Mortgage banking income 314 436

Commercial loan swap fees 224 73 662 194

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

Net loss on asset disposals and other transactions ( 246 ) ( 127 )

Net (loss) gain on investment securities ( 1,935 ) 130

Other non-interest income 668 719

5 unchanged sentences

Professional fees 2,881 3,672

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

Amortization of other intangible assets 1,871 1,708

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

Electronic banking expense 1,491 2,759

Franchise tax expense 1,034 764

FDIC insurance premiums 709 807 2,921 1,596

Communication expense 599 411 1,873 1,079

Marketing expense 930 995

FDIC insurance expense 801 1,194

Other loan expenses 739 832

Communication expense 613 625

Other non-interest expense 4,574 3,347

Total non-interest expense 56,479 51,629

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

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

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

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

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

Income before income taxes 33,606 29,538

Income tax expense 7,046 5,961

Net income $ 26,560 $ 23,577

Earnings per common share - basic $ 0.95 $ 0.84

Earnings per common share - diluted $ 0.94 $ 0.84

Weighted-average number of common shares outstanding - basic 27,891,760 28,006,165

5 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

Three Months Ended

(Dollars in thousands) 2023 2022

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

Other comprehensive (loss) income:

Net income $ 26,560 $ 23,577

Other comprehensive income (loss):

Available-for-sale investment securities:

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

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

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

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

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

Gross unrealized holding gain (loss) arising during the period 20,362 ( 71,637 )

Related tax (expense) benefit ( 4,647 ) 16,448

Reclassification adjustment for net loss (gain) included in net income 1,935 ( 130 )

Related tax (expense) benefit ( 452 ) 30

Net effect on other comprehensive income (loss) 17,198 ( 55,289 )

Defined benefit plan:

Net gain arising during the period 203 1,818 264 1,826

Related tax expense ( 48 ) ( 407 ) ( 62 ) ( 408 )

Amortization of unrecognized gain and service cost on benefit plans 23 20 61 81

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

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

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

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

Net loss arising during the period — ( 14 )

Related tax benefit — 3

Amortization of unrecognized loss and service cost on benefit plans 2 21

Related tax benefit — ( 5 )

Net effect on other comprehensive income (loss) 2 5

Cash flow hedges:

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

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

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

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

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

Net (loss) gain arising during the period ( 1,356 ) 5,456

Related tax benefit (expense) 313 ( 1,220 )

Net effect on other comprehensive income (loss) ( 1,043 ) 4,236

Total other comprehensive gain (loss), net of tax 16,157 ( 51,048 )

Total comprehensive income (loss) $ 42,717 $ ( 27,471 )

See Notes to the Unaudited Condensed Consolidated Financial Statements

5 unchanged sentences

(Dollars in thousands)

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

Net income — 25,978 — — 25,978

Other comprehensive loss, net of tax — — ( 41,564 ) — ( 41,564 )

Cash dividends declared — ( 10,753 ) — ( 10,753 )

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

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 235 ) ( 235 )

Common shares repurchased under share repurchase program then in effect — — — ( 1,168 ) ( 1,168 )

Common shares issued under dividend reinvestment plan 320 — — — 320

Common shares issued under compensation plan for Boards of Directors 20 — — 106 126

Common shares issued under employee stock purchase plan 34 — — 169 203

Stock-based compensation 780 — — — 780

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

Accumulated Other Comprehensive Loss Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(Dollars in thousands)

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

Net income — 26,560 — — 26,560

Other comprehensive loss, net of tax — — ( 123,304 ) — ( 123,304 )

Other comprehensive gain, net of tax — — 16,157 — 16,157

Cash dividends declared — ( 10,725 ) — — ( 10,725 )

Reissuance of treasury stock for common share awards ( 4,685 ) — — 4,685 —

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

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 920 ) ( 920 )

Common shares repurchased under share repurchase program then in effect — — — ( 7,155 ) ( 7,155 )

Common shares issued under dividend reinvestment plan 402 — — — 402

2 unchanged sentences

Stock-based compensation 2,150 — — — 2,150

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

Balance, March 31, 2023 $ 684,367 $ 281,771 $ ( 110,979 ) $ ( 35,616 ) $ 819,543

Accumulated Other Comprehensive Loss Total Stockholders' Equity

1 unchanged sentence

(Dollars in thousands)

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

Net loss — ( 5,758 ) — — ( 5,758 )

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

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

Reissuance of treasury stock for common share awards ( 51 ) — — 51 —

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

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 78 ) ( 78 )

Common shares issued under dividend reinvestment plan 277 — — — 277

Common shares issued under compensation plan for Boards of Directors 16 — — 44 60

Common shares issued under employee stock purchase plan 37 — — 101 138

Stock-based compensation 598 — — — 598

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

261,899 — — — 261,899

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

Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(Dollars in thousands)

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

3 unchanged sentences

Reissuance of treasury stock for common share awards ( 3,998 ) — — 3,998 —

Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 74 74

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 1,230 ) ( 1,230 )

3 unchanged sentences

Stock-based compensation 1,577 — — — 1,577

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

261,899 — — — 261,899

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

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

See Notes to the Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended

September 30,

Three Months Ended

(Dollars in thousands) 2023 2022

11 unchanged sentences

Proceeds from sales 3,746 237

Net decrease in loans held for investment 36,158 156,598

Net (increase) decrease in loans held for investment ( 52,386 ) 75,740

Net expenditures for premises and equipment ( 2,757 ) ( 2,053 )

Proceeds from sales of other real estate owned 107 124

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

Proceeds from bank owned life insurance contracts 689 —

Business acquisitions, net of cash received ( 200 ) ( 80,532 )

Investment in limited partnership and tax credit funds ( 267 ) ( 1,151 )

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

Net cash used in investing activities ( 89,983 ) ( 127,361 )

Financing activities:

1 unchanged sentence

Net increase in interest-bearing deposits 105,991 115,255

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

Net decrease in short-term borrowings ( 9,468 ) ( 27,252 )

Proceeds from long-term borrowings 2,899 —

1 unchanged sentence

Cash dividends paid ( 10,993 ) ( 10,438 )

Purchase of treasury stock under share repurchase program ( 7,155 ) —

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

1 unchanged sentence

Proceeds from issuance of common shares 397 282

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

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

Net cash provided by financing activities 45,118 101,603

Net increase (decrease) in cash and cash equivalents 3,132 ( 10,048 )

Cash and cash equivalents at beginning of period 154,022 415,727

5 unchanged sentences

Transfers from total loans to other real estate owned — 36

Lease right-of-use assets obtained in exchange for lessee operating lease liabilities 27 101

Noncash recognition of new leases 336 726

See Notes to the Unaudited Condensed Consolidated Financial Statements

8 unchanged sentences

Accordingly, these financial statements do not contain all of the information and footnotes required by US GAAP for annual financial statements and should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2022 ("Peoples' 2022 Form 10-K").

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

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

The accounting and reporting policies followed in the presentation of the accompanying Unaudited Condensed Consolidated Financial Statements are consistent with those described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2022 Form 10-K, as updated by the information contained in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 (this "Form 10-Q").

Management has evaluated all significant events and transactions that occurred after March 31, 2023 for potential recognition or disclosure in these unaudited condensed consolidated financial statements.

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

8 unchanged sentences

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

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

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

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

1 unchanged sentence

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

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

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

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

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

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

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

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.

ASU 2020-04 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-indexed 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):

1 unchanged sentence

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

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.

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

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

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

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

Effective January 1, 2023, Peoples adopted the amendments within ASU 2022-02, using the prospective transition method.

The adoption of this guidance did not have a material impact on Peoples' consolidated financial statements.

Pursuant to the guidance in ASU 2022-02, when a loan is restructured, Peoples continues to measure the allowance for credit losses on the loan using a discounted cash flow approach that utilizes a prepayment-adjusted discount rate based on the loan’s restructured terms.

Under the TDR accounting model, Peoples modeled a 12-month extension of the contractual terms for TDRs that were to mature within the next 12 months.

As Peoples has elected a prospective transition, the extension on a loan that was previously restructured and accounted for as a TDR will continue to be measured as it had been historically in Peoples' allowance for credit losses until the loan is paid off, sold, liquidated, or subsequently restructured.

Refer to "Note 4 Loans and Leases" for additional information.

Note 2 Fair Value of Assets and Liabilities

11 unchanged sentences

Recurring Fair Value Measurements at Reporting Date

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

24 unchanged sentences

The fair values of Peoples' equity investment securities are obtained from q uoted prices in active exchange markets for identical assets or liabilities (Level 1) or quoted prices in less active markets (Level 2).

Derivative Assets and Liabilities :

Derivative assets and liabilities are recognized on the Unaudited Consolidated Balance Sheets at their fair value within "Other assets" and "Accrued expenses and other liabilities", respectively.

Derivative Assets and Derivative Liabilities :

Derivative assets and derivative liabilities are recognized on the Unaudited Consolidated Balance Sheets at their fair value within "Other assets" and "Accrued expenses and other liabilities", respectively.

The fair value for derivative financial instruments is determined based on market prices, broker-dealer quotations on similar products, or other related input parameters (Level 2).

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

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy at September 30, 2022 and December 31, 2021.

Non-Recurring Fair Value Measurements at Reporting Date

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

1 unchanged sentence

Loans held for sale (a) $ 1,251 $ — $ 1,254 $ —

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

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

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

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

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

(c) Peoples established a valuation allowance on servicing rights of $ 6 at September 30, 2022 and $ 12 at December 31, 2021.

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

Other real estate owned $ — $ — $ — $ 55

(a) Loans held for sale are presented gross of a valuation allowance of $ 99 and $ 105 at March 31, 2023 and at December 31, 2022, respectively.

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).

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

Loans Held for Sale:

1 unchanged sentence

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

Other Real Estate Owned:

OREO, included in "Other assets" on the Unaudited Consolidated Balance Sheets, is comprised primarily of commercial and residential real estate properties acquired by Peoples in satisfaction of a loan.

Other Real Estate Owned ("OREO"):

, included in "Other assets" on the Unaudited Consolidated Balance Sheets, is comprised primarily of commercial and residential real estate properties acquired by Peoples in satisfaction of a loan.

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.

10 unchanged sentences

Fair Value Measurements of Other Financial Instruments

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

(Dollars in thousands) Fair Value Hierarchy Level March 31, 2023 December 31, 2022

Carrying Amount Fair Value Carrying Amount Fair Value

6 unchanged sentences

Commercial mortgage-backed securities 2 105,002 89,919 101,861 85,354

Commercial mortgage-backed securities 3 4,748 3,502 4,748 3,361

Total held-to-maturity securities 694,313 624,436 560,453 478,509

3 unchanged sentences

Federal Reserve Bank ("FRB") stock N/A 21,231 21,231 21,231 21,231

Banker's Bank of Kentucky ("BBKY") stock N/A 355 355 355 355

Total other investment securities at cost 48,967 48,967 48,191 48,191

8 unchanged sentences

Long-term borrowings 2 95,629 96,822 101,093 101,992

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

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $ 241 at both March 31, 2023 and December 31, 2022.

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

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

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at March 31, 2023

and at December 31, 2022, which are reported in the Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis

table above and not included in this table.

(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $ 52.9 million and $ 64.0 million as of September 30, 2022 and December 31, 2021, respectively.

(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $ 53.3 million and $ 53.2 million at March 31, 2023 and at December 31, 2022, respectively.

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

3 unchanged sentences

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.

The carrying amount for cash on hand and balances due from banks is a reasonable estimate of fair value (Level 1).

The carrying amount for cash and cash equivalents balances are a reasonable estimate of fair value (Level 1).

Held-to-Maturity Investment Securities:

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).

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.

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

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.

Other Investment Securities:

19 unchanged sentences

customer relationships, the deposit base, and other information required to compute Peoples’ aggregate fair value, which are not included in the above information.

Accordingly, the above fair values are not intended to represent the aggregate fair value of Peoples.

Accordingly, the fair values described above are not intended to represent the aggregate fair value of Peoples.

Note 3 Investment Securities

2 unchanged sentences

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

September 30, 2022

March 31, 2023

Obligations of:

15 unchanged sentences

Total available-for-sale securities $ 1,300,719 $ 1,104 $ ( 170,424 ) $ 1,131,399

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

Three Months Ended Nine Months Ended

September 30, September 30,

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

Three Months Ended

(Dollars in thousands) 2023 2022

1 unchanged sentence

Gross losses realized ( 2,013 ) ( 16 )

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

Net (loss) gain realized $ ( 1,935 ) $ 130

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

The following table presents a summary of available-for-sale investment securities that had been in a continuous unrealized loss position:

The following table presents a summary of available-for-sale investment securities that had been in a continuous unrealized loss position for the periods identified:

Less than 12 Months 12 Months or More Total

5 unchanged sentences

Unrealized Loss

September 30, 2022

March 31, 2023

Obligations of:

26 unchanged sentences

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

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

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

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

At March 31, 2023, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses.

At March 31, 2023, Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery.

Further, the unrealized losses at both March 31, 2023 and December 31, 2022 were largely attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit-related losses.

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

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

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

Interest receivable on investment securities was $ 6.7 million at March 31, 2023 and $ 7.8 million at December 31, 2022.

At March 31, 2023, 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 four positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004.

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

Management analyzed the underlying credit quality of these mortgage-backed securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these

investments and the low remaining number of loans underlying these securities.

treasury and government agencies, U.S.

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

Management analyzed the underlying credit quality of these mortgage-backed securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities.

Obligations of the U.S.

treasury and government agencies, obligations of U.S.

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

1 unchanged sentence

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

Therefore, management does not consider these impaired securities.

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

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

Therefore, management does not consider these to be impaired securities.

The unrealized loss with respect to the four bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at March 31, 2023 was attributable to the subordinated nature of the debt.

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at March 31, 2023.

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

22 unchanged sentences

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

September 30, 2022

March 31, 2023

Obligations of:

11 unchanged sentences

Total held-to-maturity securities $ 560,453 $ ( 241 ) $ 536 $ ( 82,239 ) $ 478,509

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

There were no sales of held-to-maturity securities for either of the three months ended March 31, 2023 or 2022.

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 obligations of states and political subdivisions with the remaining securities issued by U.S.

government sponsored agencies.

Peoples analyzed these securities using cumulative default rate averages for

municipal securities.

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

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

Peoples has determined that the loss given default for U.S.

government sponsored enterprise investment securities is zero , due to the fact that it is unlikely the ultimate guarantor (the U.S.

government) would not perform on its implicit guarantee in the event of default.

The remaining securities are included in the calculation of the allowance for credit losses for held-to-maturity investment securities.

Peoples recorded $ 241,000 of allowance for credit losses for held-to-maturity securities at both March 31, 2023, and December 31, 2022.

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

Less than 12 Months 12 Months or More Total

5 unchanged sentences

Value Unrealized Loss

September 30, 2022

March 31, 2023

Obligations of:

15 unchanged sentences

Total $ 161,946 $ 5,277 49 $ 265,877 $ 76,962 120 $ 427,823 $ 82,239

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

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

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at March 31, 2023.

The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a blended federal and state corporate income tax rate of 23.3 % and 23.3 % for the three months ended March 31, 2023 and December 31, 2022, respectively.

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

15 unchanged sentences

Other Investment Securities

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

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

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

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

(Dollars in thousands) March 31, 2023 December 31, 2022

FHLB stock $ 27,381 $ 26,605

4 unchanged sentences

Total other investment securities $ 52,763 $ 51,609

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

("Premier") on September 17, 2021.

During the three months ended September 30, 2022 and 2021, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in an unrealized gain of $ 6,000 and $ 18,000 , respectively.

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

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

During the three months ended March 31, 2023, Peoples redeemed $ 3.7 million of FHLB stock in order to be in compliance with the requirements of the FHLB.

Peoples purchased $ 4.5 million of additional FHLB stock during the three months ended March 31, 2023, as a result of the FHLB's capital requirements on FHLB advances during the first quarter.

During the three months ended March 31, 2023 and 2022, Peoples recognized a gain of $ 21,000 and a loss of $ 7,000 , respectively, for the change in fair value of equity investment securities in "Other non-interest income".

At March 31, 2023, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies.

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

2 unchanged sentences

Peoples has also pledged available-for-sale 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 securities:

The following table summarizes the carrying amount of Peoples' pledged securities:

Carrying Amount

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

(Dollars in thousands) March 31, 2023 December 31, 2022

Securing public and trust department deposits, and repurchase agreements:

1 unchanged sentence

Held-to-maturity 372,372 312,921

Securing collateral for cash flow hedge swaps:

Available-for-sale — 18,208

Held-to-maturity — 9,936

Securing additional borrowing capacity at the FHLB and the FRB:

3 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 nationwide through its Peoples Premium Finance division, and originates leases nationwide through its North Star Leasing division and its Vantage Financial, LLC ("Vantage") subsidiary.

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

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

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

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

(Dollars in thousands) September 30,

(Dollars in thousands) March 31,

2023 December 31, 2022

10 unchanged sentences

Total loans, at amortized cost $ 4,759,718 $ 4,707,150

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

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

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

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

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

During the third quarter of 2022, Peoples recorded amortization of net deferred loan origination fees of $ 0.4 million on PPP loans compared to $ 3.8 million for the third quarter of 2021.

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

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

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

Total interest receivable on loans was $ 15.4 million at March 31, 2023 and December 31, 2022.

Nonaccrual and Past Due Loans

2 unchanged sentences

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(Dollars in thousands) Nonaccrual (a)

11 unchanged sentences

Total loans, at amortized cost $ 29,980 $ 4,014 $ 31,473 $ 4,842

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

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

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

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

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

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

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

(a) There were $ 3.4 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2023 and $ 1.4 million at December 31, 2022.

During the first three months of 2023, nonaccrual loans declined compared to at December 31, 2022, which was primarily due to $ 0.9 million of residential real estate being loans on nonaccrual status as of December 31, 2022 that were accruing as of March 31, 2023.

The decrease in accruing loans 90+ days past due at March 31, 2023 when compared to at December 31, 2022, was primarily due to reductions of $ 0.7 million and $ 0.6 million in residential real estate loans and leases, respectively.

The amount of interest income recognized on loans past due 90 days or more and accruing during the three months ended March 31, 2023 was $ 0.5 million.

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

1 unchanged sentence

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

September 30, 2022

March 31, 2023

Loans Past Due Current

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

Construction $ — $ — $ 1 $ 1 $ 232,295 $ 232,296

21 unchanged sentences

Total loans, at amortized cost $ 29,386 $ 7,633 $ 27,650 $ 64,669 $ 4,642,481 $ 4,707,150

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

Delinquency trends remained stable, as 98.8 % of Peoples' loan portfolio was considered “current” at March 31, 2023, compared to 98.6 % at December 31, 2022.

Pledged Loans

2 unchanged sentences

Loans pledged are summarized as follows:

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

(Dollars in thousands) March 31, 2023 December 31, 2022

Loans pledged to FHLB $ 918,075 $ 783,843

1 unchanged sentence

Credit Quality Indicators

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

grading matrix using a scale of 1 to 8.

As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2022 Form 10-K, Peoples categorizes the majority of its loans into risk categories based upon an established risk grading matrix using a scale of 1 to 8.

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 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.

Adversely classified loans are reviewed on a quarterly basis.

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

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

“Pass” (grades 1 through 4):

17 unchanged sentences

Consequently, Peoples typically does not maintain a recorded investment in loans within this category.

Consumer loans and other smaller-balance loans are evaluated and categorized as “substandard,” or “loss” consistent with the regulatory definitions and requirements of these classes.

Consumer loans and other smaller-balance loans are evaluated and categorized as "substandard," "doubtful" or "loss" based upon the regulatory definition of these classes and consistent with regulatory requirements.

Leases are categorized as "special mention", "substandard", or "loss" based upon delinquency status and the prospect of collecting the remaining net investment balance owed under the lease.

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

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

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 table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at March 31, 2023:

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

4 unchanged sentences

Total 5,388 103,319 87,280 23,208 3,241 9,860 — — 232,296

Current period gross charge-offs — — 9 — — — 9

Commercial real estate, other

4 unchanged sentences

Total 76,569 173,133 229,413 226,757 221,242 528,145 25,803 — 1,481,062

Current period gross charge-offs — — — — — 33 33

Commercial and industrial

4 unchanged sentences

Total 31,962 166,428 160,413 84,418 74,681 135,074 238,163 — 891,139

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

(Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Total

Current period gross charge-offs — — — — — 1 1

Premium finance

1 unchanged sentence

Total 79,103 79,160 — — — — — — 158,263

Current period gross charge-offs 23 — — — — — 23

Pass 68,756 151,048 79,901 29,306 13,233 3,398 — — 345,642

2 unchanged sentences

Total 68,899 153,951 84,079 30,189 13,650 3,873 — — 354,641

Current period gross charge-offs — 108 189 100 58 14 469

Residential real estate

3 unchanged sentences

Total 10,786 77,494 136,307 58,096 42,582 387,337 — — 712,602

Current period gross charge-offs — — — — — 41 41

Home equity lines of credit

1 unchanged sentence

Substandard — — 72 21 63 1,105 — — 1,261

Loss — — — — — 4 — — 4

Total 4,830 43,159 34,183 18,873 13,837 59,387 114 635 174,383

Current period gross charge-offs — — — — — 19 19

Consumer, indirect

Pass 67,265 293,761 135,301 88,220 31,003 28,840 — — 644,390

Substandard — 566 849 590 315 423 — — 2,743

Loss — 33 10 1 — — — — 44

Total 67,265 294,360 136,160 88,811 31,318 29,263 — — 647,177

Current period gross charge-offs 18 471 279 90 21 50 929

Consumer, direct

Pass 11,420 46,431 24,731 12,561 5,345 6,566 — — 107,054

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

(Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Total

Substandard — 12 35 91 32 167 — — 337

Loss — — — — — 15 — — 15

Total 11,420 46,443 24,766 12,652 5,377 6,748 — — 107,406

Current period gross charge-offs — 40 12 34 10 8 104

Deposit account overdrafts 749 — — — — — — — 749

Current period gross charge-offs 227 — — — — — 227

Total loans, at amortized cost 356,971 1,137,447 892,601 543,004 405,928 1,159,687 264,080 635 4,759,718

Total current period gross charge-offs $ 268 $ 619 $ 489 $ 224 $ 89 $ 166 $ 1,855

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

10 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

13 unchanged sentences

Residential real estate

Term Loans at Amortized Cost by Origination Year

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

Pass 78,313 138,860 58,869 42,840 28,174 364,635 — — 711,691

4 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

Special mention — — — — — — — — —

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

19 unchanged sentences

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

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

Construction $ 340 $ 1,291

(Dollars in thousands) March 31, 2023 December 31, 2022

Commercial real estate, other 7,862 8,362

1 unchanged sentence

Residential real estate 528 536

Home equity lines of credit 379 391

Total collateral dependent loans $ 8,860 $ 10,354

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

Troubled Debt Restructurings

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

Three Months Ended

Recorded Investment (a)

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

September 30, 2022

The decrease in collateral dependent loans at March 31, 2023, compared to December 31, 2022, was primarily due to two large relationships that were paid in full during the three months ended March 31, 2023.

Modifications for Borrowers Experiencing Financial Difficulty Subsequent to the Adoption of ASU 2022-02

As part of Peoples' loss mitigation activities, Peoples may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty.

The most common modifications to the contractual terms of a loan to a borrower experiencing financial difficulty include an extension of the maturity date, a reduction in the interest rate for the remaining life of the loan, a temporary period of interest-only payments, and a reduction in the contractual payment amount for either a short period or the remaining term of the loan.

In addition to loan modifications, Peoples also provides other loss mitigation options, such as forbearance and repayment plans, to assist borrowers who experience financial difficulties.

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

This information includes, but is not limited to, whether (1) the borrower is currently in payment default on any of the borrower's debt;

(2) a payment default is probable in the foreseeable future without the modification;

(3) the borrower has declared or is in the process of declaring bankruptcy;

and (4) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification.

The following table displays the amortized cost of loans that were restructured during the three months ended March 31, 2023, presented by loan classification.

For the Three Months Ended March 31, 2023

Payment Delay (Only)

(Dollars in thousands) Forbearance Plan Payment Deferral Term Extension Forbearance Plan and Term Extension Total Percentage of Total by Loan Category (a)(b)

Construction $ — $ 1,600 $ — $ — $ 1,600 0.69 %

Commercial real estate 200 — — — 200 0.01 %

Commercial and industrial — — 9 335 344 0.04 %

Residential real estate — — 221 — 221 0.03 %

Home equity lines of credit 2 119 119 119

Consumer, indirect — — 28 — 28 — %

Consumer, direct 3 20 20 20

Consumer 9 99 99 99

Total $ 200 $ 1,600 $ 258 $ 335 $ 2,393 0.05 %

September 30, 2021

Construction 1 $ 6 $ 6 $ 6

Commercial real estate, other 2 14 14 14

(a) Based on the amortized cost basis as of period end, divided by the period end amortized cost basis of the corresponding class of financing receivable.

(b) Each with "--%" not meaningful.

The following table summarizes the financial impacts of loan modifications and payment deferrals made to loans during the three months ended March 31, 2023, presented by loan classification.

For the Three Months Ended March 31, 2023

Weighted-Average Term Extension

(in months) Average Amount Capitalized as a Result of a Payment Delay (a)

Commercial and industrial 12 $ —

Leases 2 182 184 178

Residential real estate 210 8,969

Home equity lines of credit 5 55 55 55

Consumer, indirect 2 —

Consumer, direct 3 9 9 9

Consumer 12 104 104 104

Total 71 $ 2,640 $ 2,646 $ 2,639

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

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

Nine Months Ended

Recorded Investment (a)

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

September 30, 2022

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

(a) Represents the average amount of delinquency-related amounts that were capitalized as part of the loan balance.

Amounts are in whole dollars.

As of March 31, 2023, there were no loans that were modified for borrowers experiencing financial difficulty since the adoption of ASU 2022-02 on January 1, 2023, and subsequently defaulted during the period.

For purposes of this disclosure, Peoples defines loans that had a payment default as loans that are 90 days or more past due following a modification through the three months ended March 31, 2023.

The following table displays an aging analysis of loans that were modified on or after January 1, 2023, the date Peoples adopted ASU 2022-02, through March 31, 2023, presented by classification and class of financing receivable.

As of March 31, 2023

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

Construction $ — $ — $ — $ — $ 1,600 $ 1,600

Commercial real estate — — — — 200 200

Commercial and industrial — — — — 344 344

Residential real estate — — — — 221 221

Home equity lines of credit 5 251 251 247

Consumer, indirect 28 — — 28 — 28

Consumer, direct 6 63 63 63

Consumer 25 300 300 300

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

September 30, 2021

Total loans modified (a)

$ 28 $ — $ — $ 28 $ 2,365 $ 2,393

(a) Represents the amortized cost basis as of period end.

Troubled Debt Restructurings Disclosures Prior to the Adoption of ASU 2022-02

Prior to the adoption of ASU 2022-02, Peoples accounted for a modification to the contractual terms of a loan that resulted in granting a concession to a borrower experiencing financial difficulties as a TDR.

See “Note 1 Summary of Significant Accounting Policies” in Peoples' 2022 Form 10-K for more information on our TDR policy and the COVID-19 relief from TDR accounting and disclosure requirements, and “Note 1, Summary of Significant Accounting Policies” in this report for more information on the adoption of ASU 2022-02.

The following table summarizes the loans that were modified as TDRs during the three months ended March 31, 2022:

Three Months Ended

Recorded Investment (a)

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

March 31, 2022

Construction 1 $ 344 $ 344 $ 343

1 unchanged sentence

Commercial and industrial 1 4 4 4

Leases 5 340 348 334

Residential real estate 10 493 502 501

12 unchanged sentences

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

Peoples had five loans totaling $ 202,000 that were modified as TDRs during the past twelve months that subsequently defaulted (i.e., 90 days or more past due following a modification during the year).

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

Allowance for Credit Losses

2 unchanged sentences

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

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

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

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

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

Commercial real estate, other 18,708 — — ( 995 ) ( 57 ) 39 17,695

Commercial and industrial 8,572 — — 72 ( 36 ) 3 8,611

Premium finance 311 — — 279 ( 38 ) 1 553

Leases 7,585 377 — 560 ( 731 ) 99 7,890

Residential real estate 6,332 — — 264 ( 168 ) 36 6,464

Home equity lines of credit 1,699 — — ( 50 ) ( 5 ) — 1,644

Consumer, indirect 6,234 — — 1,207 ( 600 ) 71 6,912

Consumer, direct 1,321 — — 343 ( 81 ) 9 1,592

Deposit account overdrafts 53 — — 218 ( 274 ) 44 41

Total $ 52,346 $ 377 $ — $ 1,831 $ ( 1,990 ) $ 302 $ 52,866

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

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

(Dollars in thousands) Beginning Balance,

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

Changes in the allowance for credit losses for the three months ended March 31, 2023 and March 31, 2022 are summarized below:

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

Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, March 31, 2023

Construction $ 1,250 $ — $ 32 $ ( 9 ) $ — $ 1,273

10 unchanged sentences

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

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

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

(Dollars in thousands) Beginning Balance,

December 31, 2021 Initial Allowance for Acquired PCD Assets (a) (Recovery of) Provision for Credit Losses (b) Charge-offs Recoveries Ending Balance, March 31, 2022

Construction $ 2,999 $ — $ ( 268 ) $ — $ — $ 2,731

11 unchanged sentences

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

(Dollars in thousands) Beginning Balance,

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

Construction $ 1,887 $ 2,127 $ 638 $ ( 1,216 ) $ — $ — $ 3,436

Commercial real estate, other 17,536 13,374 5,384 ( 325 ) ( 161 ) 8 35,816

Commercial and industrial 12,763 4,286 1,059 ( 3,800 ) ( 952 ) 22 13,378

Premium finance 1,095 — — 72 ( 30 ) — 1,137

Leases — 493 3,288 1,450 ( 956 ) 230 4,505

Residential real estate 6,044 2,394 2,645 ( 1,305 ) ( 313 ) 103 9,568

Home equity lines of credit 1,860 41 674 ( 196 ) ( 196 ) 41 2,224

Consumer, indirect 8,030 — — ( 891 ) ( 1,190 ) 211 6,160

Consumer, direct 1,081 112 180 ( 252 ) ( 96 ) 54 1,079

Deposit account overdrafts 63 — — 208 ( 327 ) 135 79

Total $ 50,359 $ 22,827 $ 13,868 $ ( 6,255 ) $ ( 4,221 ) $ 804 $ 77,382

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

s adopted ASU 2016-13 - Financial Instruments

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

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

Leases designated as

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

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

Peoples had recorded an allowance for unfunded commitments of $ 2.1 million as of September 30, 2022, a decrease compared to $ 2.5 million at December 31, 2021.

During the first quarter of 2023, Peoples recorded a provision for credit losses for loans of $ 1.7 million, largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for

individually analyzed loans.

Net charge-offs for the first quarter of 2023 were $ 1.5 million, primarily due to net charge-offs of indirect consumer loans of $ 0.9 million.

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

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

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

Peoples had recorded an allowance for unfunded commitments of $ 2.1 million as of March 31, 2023, an increase compared to $ 2.0 million at December 31, 2022.

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

2 unchanged sentences

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

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

(Dollars in thousands) March 31, 2023 December 31, 2022

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

1 unchanged sentence

Goodwill, end of period $ 292,597 $ 292,397

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

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

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

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

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

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

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

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

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

On January 3, 2023, Peoples acquired a trust and investment business, for which it recognized $ 200,000 in goodwill.

On March 7, 2022, Peoples Bank purchased 100 % of the equity of Vantage pursuant to an Equity Purchase Agreement, dated February 16, 2022, at which point Vantage became a legal subsidiary of Peoples Bank.

In 2022, Peoples recorded $ 27.2 million of goodwill related to this acquisition, which was offset partially by an adjustment of $ 1.3 million to the goodwill balance related to the merger with Premier Financial Bancorp, Inc.

(“Premier” and the "Premier Merger").

Other Intangible Assets

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

(Dollars in thousands) Core Deposits Customer Relationships Total

September 30, 2022

Other intangible assets were comprised of the following at March 31, 2023, and at December 31, 2022:

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

March 31, 2023

Gross intangibles $ 26,464 $ 39,241 $ 2,491 $ 68,196

Intangibles recorded from acquisitions (a) — 14,067 14,067

Accumulated amortization ( 20,983 ) ( 16,968 ) — ( 37,951 )

1 unchanged sentence

Servicing rights 1,720

Indefinite-lived intangibles (b) 2,491

Total other intangibles $ 31,965

1 unchanged sentence

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

Intangibles recorded from acquisitions (c) 4,233 13,014 17,247

Intangibles recorded from acquisitions — 14,067 1,217 15,284

Accumulated amortization ( 20,667 ) ( 15,412 ) — ( 36,079 )

1 unchanged sentence

Servicing rights 1,816

Indefinite-lived intangibles (d) 1,274

Total other intangibles $ 33,932

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

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

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

intangible assets related to the NSL acquisition.

(c) Customer relationship intangible assets consisted of $ 0.3 million of non-compete intangible assets related to the NSL acquisition.

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

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

Peoples recorded no other intangible assets for the three months ended March 31, 2023.

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 13 Acquisitions" for additional information.

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

The following table details estimated aggregate future amortization of other intangible assets at March 31, 2023:

(Dollars in thousands) Core Deposits Customer Relationships Total

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

Remaining nine months of 2023 $ 942 $ 4,705 $ 5,647

2024 1,058 5,325 6,383

5 unchanged sentences

The weighted average amortization period of other intangible assets is 7.2 years.

Servicing Rights

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

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

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

Amortization ( 460 ) ( 775 )

Servicing rights originated 153 519

Change in valuation allowance 6 ( 12 )

Balance, end of period $ 1,917 $ 2,218

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

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

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

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

September 30, 2022 December 31, 2021

Minimum Maximum Minimum Maximum

Discount rates 11.3 % 13.8 % 8.3 % 10.8 %

Prepayment speeds 7.7 % 20.0 % 8.9 % 27.1 %

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

Note 6 Deposits

Peoples’ deposit balances were comprised of the following:

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

(Dollars in thousands) March 31, 2023 December 31, 2022

$100 or more $ 331,912 $ 263,341

5 unchanged sentences

Governmental deposit accounts 649,303 625,965

Brokered deposit accounts (a) 86,089 104,745

Brokered CDs 273,156 125,580

Total interest-bearing deposits 4,233,463 4,127,539

1 unchanged sentence

Total deposits $ 5,788,527 $ 5,716,941

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

Time deposits that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") limit of $ 250,000 were $ 116.4 million and $ 121.3 million at September 30, 2022 and December 31, 2021, respectively.

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

Uninsured deposits were $ 1.7 billion and $ 1.6 billion at March 31, 2023 and December 31, 2022, respectively.

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

Peoples pledges investment securities against certain governmental deposit accounts, which covered over $ 698.9 million of the uninsured deposit balances at March 31, 2023.

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

(Dollars in thousands) March 31, 2023 December 31, 2022

3 months or less $ 16,476 $ 19,282

Over 3 to 6 months 18,190 14,871

Over 6 to 12 months 32,554 14,383

Over 12 months 64,405 52,216

Total $ 131,625 $ 100,752

The contractual maturities of CDs for each of the next five years, including the remainder of 2023, and thereafter are as follows:

(Dollars in thousands) Retail Brokered Total

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

Remaining nine months ending December 31, 2023 $ 270,212 $ 273,156 $ 543,368

Year ending December 31, 2024 271,410 — 271,410

4 unchanged sentences

Total CDs $ 622,091 $ 273,156 $ 895,247

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

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

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

At March 31, 2023, 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 CDs.

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

Additional information regarding Peoples' interest rate swaps can be found in "Note 10 Derivative Financial Instruments."

Note 7 Stockholders’ Equity

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

The following table details the progression in Peoples’ common shares and treasury stock during the three months ended March 31, 2023:

Common Shares Treasury

8 unchanged sentences

Disbursed out of treasury stock — ( 730 )

Common shares repurchased under share repurchase program — 254,519

Common shares issued under dividend reinvestment plan 10,536 —

1 unchanged sentence

Common shares issued under employee stock purchase plan

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

Shares at March 31, 2023 29,868,456 1,457,611

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

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

At March 31, 2023, Peoples had repurchased 263,183 common shares totaling $ 7.4 million under the share repurchase program.

There were no common shares repurchased during the first three months of 2023 .

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

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

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

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

At March 31, 2023, Peoples had no preferred shares issued or outstanding.

On January 23, 2023 , Peoples' Board of Directors declared a quarterly cash dividend of $ 0.38 per common share, payable on February 21, 2023, to shareholders of record on February 6, 2023.

On April 24, 2023, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.39 per common share, payable on May 22, 2023, to shareholders of record on May 8, 2023.

The following table details the cash dividends declared per common share during the first two quarters of 2023 and the comparable periods of 2022:

First quarter $ 0.38 $ 0.36

Second quarter 0.39 0.38

Third quarter 0.38 0.36

Fourth quarter 0.38 0.36

Total dividends declared $ 0.77 $ 0.74

Accumulated Other Comprehensive (Loss) Income

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

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

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income for the three months ended March 31, 2023:

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

Balance, December 31, 2022 $ ( 129,896 ) $ ( 1,633 ) $ 4,393 $ ( 127,136 )

Reclassification adjustments to net income:

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

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

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

Realized loss on sale of securities, net of tax 1,483 — — 1,483

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

15,715 2 ( 1,043 ) 14,674

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

Balance, March 31, 2023 $ ( 112,698 ) $ ( 1,631 ) $ 3,350 $ ( 110,979 )

Note 8 Employee Benefit Plans

17 unchanged sentences

Pension Benefits

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands) 2023 2022

3 unchanged sentences

Settlement of benefit obligation — —

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

Net periodic loss $ ( 76 ) $ ( 82 )

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

1 unchanged sentence

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

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

Peoples did no t record a settlement charge during the three months ended March 31, 2023 or March 31, 2022 under the noncontributory defined benefit pension plan.

Note 9 Earnings Per Common Share

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

Three Months Ended Nine Months Ended

September 30, September 30,

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

Three Months Ended

(Dollars in thousands, except per common share data) 2023 2022

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

Net income available to common shareholders $ 26,560 $ 23,577

Dividends paid on unvested common shares ( 102 ) ( 48 )

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

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

Undistributed loss allocated to unvested common shares ( 34 ) ( 21 )

Net earnings allocated to common shareholders $ 26,424 $ 23,508

Weighted-average common shares outstanding 27,891,760 28,006,165

1 unchanged sentence

Total weighted-average diluted common shares outstanding 28,021,879 28,129,131

Earnings (loss) per common share:

Earnings per common share:

Basic $ 0.95 $ 0.84

20 unchanged sentences

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

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

At March 31, 2023, Peoples had entered into thirteen interest rate swap contracts with an aggregate notional value of $ 125.0 million.

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

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

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

through the maturity dates of the swaps.

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

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

At March 31, 2023 and at December 31, 2022, the interest rate swaps were designated as cash flow hedges of $ 125.0 million in brokered CDs, 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, the effective and ineffective portions of changes in the fair value of each derivative financial instrument is reported in accumulated other comprehensive (loss) income ("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 three months ended September 30, 2022, and 2021, Peoples had recorded reclassifications of losses to earnings of $ 0.2 million and $ 0.8 million, respectively.

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

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

During the three months ended March 31, 2023, and 2022, Peoples had recorded reclassifications of gains to earnings of $ 0.1 million and reclassifications of losses to earnings of $ 0.6 million, respectively.

During the next twelve months, Peoples estimates that $ 1.3 million of AOCI will be reclassified as a reduction to interest expense.

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

(Dollars in thousands) September 30,

(Dollars in thousands) March 31,

2023 December 31,

3 unchanged sentences

Weighted average maturity 2.3 years 2.6 years

Pre-tax unrealized gains (losses) included in AOCI $ 6,068 $ ( 4,879 )

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

Three Months Ended Nine Months Ended

September 30, September 30,

Pre-tax changes in fair value included in AOCI $ 4,370 $ 5,727

The following table presents changes in fair value recorded in AOCI and in the Consolidated Statements of Operations related to the cash flow hedges for three months ended March 31, 2023, and 2022:

Three Months Ended

(Dollars in thousands) 2023 2022

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

Amount of (losses) gains recorded in AOCI, pre-tax $ ( 1,356 ) $ 5,456

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

September 30,

2023 December 31,

2 unchanged sentences

Interest rate swaps related to debt $ 125,000 $ 4,239 $ 125,000 $ 5,594

Included in "Accrued expenses and other liabilities":

Interest rate swaps related to debt $ — $ — $ 125,000 $ 5,020

Non-Designated Hedges

5 unchanged sentences

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

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

These interest rate swaps did not have a material impact on Peoples' results of operations or financial condition at or for the three months ended March 31, 2023 and as of or for the year ended December 31, 2022.

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

September 30,

2023 December 31,

7 unchanged sentences

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

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

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

At March 31, 2023 and December 31, 2022, Peoples had no cash pledged, while counterparties had $ 16.7 million of cash pledged at March 31, 2023 and $ 20.9 million of cash pledged at December 31, 2022.

Peoples had no pledged investment securities at March 31, 2023 or at December 31, 2022, while the counterparties had pledged investment securities in the amounts of $ 2.4 million at March 31, 2023 and $ 2.5 million at December 31, 2022.

Note 11 Stock-Based Compensation

4 unchanged sentences

Since February 2009, Peoples has granted restricted common shares to employees, and periodically to non-employee directors, subject to the terms and conditions prescribed by the 2006 Equity Plan.

Additionally, in 2021, Peoples granted unrestricted common shares to non-employee directors (in addition to their directors' fees paid in common shares).

In general, common shares issued in connection with stock-based awards are issued from treasury shares to the extent available.

4 unchanged sentences

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

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

In the first three months of 2023, Peoples granted an aggregate of 188,372 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date;

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

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

The following table summarizes the changes to Peoples’ restricted common shares for the three months ended March 31, 2023:

Time-Based Vesting Performance-Based Vesting

Number of Common Shares Weighted-Average Grant Date Fair Value Number of Common Shares Weighted-Average Grant Date Fair Value

Outstanding at January 1, 2022 88,922 $ 25.44 247,346 $ 32.19

Oustanding at January 1, 2023 138,522 $ 27.25 295,875 $ 32.20

Awarded 8,341 28.70 188,372 30.30

1 unchanged sentence

Forfeited — — ( 4,557 ) 31.46

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

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

Outstanding at March 31, 2023 141,547 $ 27.18 409,232 $ 31.21

For the three months ended March 31, 2023, the total intrinsic value for restricted common shares released was $ 2.3 million compared to $ 3.3 million for the three months ended March 31, 2022.

Stock-Based Compensation

2 unchanged sentences

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

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

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

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

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands) 2023 2022

7 unchanged sentences

Net stock-based compensation expense $ 1,782 $ 1,333

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

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

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

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 7.0 million at March 31, 2023, which will be recognized over a weighted-average period of 2.2 years.

Note 12 Revenue

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

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands) 2023 2022

2 unchanged sentences

Fees related to third-party administration services (a) 82 72

Three Months Ended

(Dollars in thousands) 2023 2022

Performance-based commissions (b) 1,527 1,346

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

Trust and investment income:

Fiduciary income (a) 2,457 1,965

Brokerage income (a) 1,627 2,311

Electronic banking income:

16 unchanged sentences

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

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

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

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

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

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

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

The following table details the changes in Peoples' contract assets and contract liabilities for the three-month period ended March 31, 2023:

Contract Assets Contract Liabilities

2 unchanged sentences

Additional income receivable 50 —

Additional deferred income — 487

Recognition of income previously deferred — ( 70 )

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

Balance, March 31, 2023 $ 1,344 $ 5,564

Note 13 Acquisitions

Elite Agency, Inc

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

Total consideration for this transaction was $ 3.8 million.

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

Vantage Financial, LLC

3 unchanged sentences

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

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

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

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

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

Peoples recorded acquisition-related expenses during the three months ended March 31, 2023 and 2022 of $ 45,000 and $ 0.8 million, respectively, in professional fees related to the Vantage acquisition.

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

3 unchanged sentences

Leases 155,726

Allowance for credit losses (on PCD leases) ( 801 )

Allowance for credit losses (on purchased credit deteriorated leases) ( 801 )

Net leases 154,925

2 unchanged sentences

Other assets 1,506

(Dollars in thousands) Fair Value

Total assets $ 171,198

7 unchanged sentences

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

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

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

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

(Dollars in thousands) Change in fair value

Leases $ ( 2,215 )

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

Net leases $ ( 2,592 )

Change in total assets $ ( 2,592 )

Borrowings ( 170 )

Change in total liabilities $ ( 170 )

Change in net assets $ ( 2,422 )

Change in goodwill $ 2,422

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 purchased credit deteriorated leases as of the acquisition date:

3 unchanged sentences

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 operated 48 branches in Kentucky, Maryland, Ohio, Virginia, West Virginia and Washington, D.C., merged into Peoples’ wholly-owned subsidiary, Peoples Bank.

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

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.

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

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

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

(Dollars in thousands) Unpaid Principal Balance Fair Value

Premier common shares 14,811,200

Number of common shares of Peoples issued for each common share of Premier 0.58

Price per Peoples common share, based at closing date $ 30.49

Common share consideration 261,899

Cash paid in lieu of fractional common shares 25

Total consideration $ 261,924

Net assets at fair value

Cash and due from banks $ 248,360

Interest-bearing deposits in other banks 1,025

Total cash and cash equivalents 249,385

Available-for-sale investment securities 551,953

Other investment securities 4,159

Total investment securities 556,112

Loans and leases:

Construction 97,262 96,025

Commercial real estate, other 544,950 534,869

Commercial and industrial 132,293 131,979

Residential real estate 332,269 331,544

Home equity lines of credit 46,969 45,910

Consumer 20,961 21,513

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

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

Net loans and leases 1,146,327

Bank premises and equipment 30,098

Other intangible assets 4,233

Other assets 26,982

Total assets $ 2,024,218

Non-interest-bearing $ 733,157

Interest-bearing 1,018,387

Total deposits 1,751,544

Short-term borrowings 63,807

Long-term borrowings 6,070

Accrued expenses and other liabilities 7,813

Total liabilities 1,829,234

Net assets 194,984

Goodwill $ 66,940

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.

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:

(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

Commercial real estate, other 97,193 ( 9,053 ) ( 2,123 ) 86,017

Commercial and industrial 9,948 ( 3,630 ) 113 6,431

Residential real estate 18,349 ( 696 ) ( 251 ) 17,402

Home equity lines of credit 1,291 ( 55 ) ( 72 ) 1,164

Consumer 929 ( 74 ) 37 892

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

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”.

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.

Peoples Bank acquired assets comprising NSL’s equipment finance business and assumed from NSL certain specified liabilities for total cash consideration of $ 116.5 million, plus a potential earnout payment to NSL of up to $ 3.1 million.

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 goodwill in the amount of $ 24.7 million and other intangibles of $ 14.0 million, which included a customer relationship intangible, a 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.

The recorded goodwill associated with the NSL acquisition is related to expected synergies and operational efficiencies to be gained from the combination of NSL with Peoples' operations.

The employees retained from the NSL 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.

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 recorded fair values.

(Dollars in thousands)

Total purchase price (a) $ 118,846

Net assets at fair value

Cash and due from banks $ 216

Net loans and leases 82,833

Bank premises and equipment, net of accumulated depreciation 470

Other intangible assets 14,009

Other assets 1,225

Total assets $ 98,753

Accrued expenses and other liabilities $ 4,627

Total liabilities $ 4,627

Net assets $ 94,126

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.

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:

(Dollars in thousands) NSL

Purchased credit deteriorated leases

Par value $ 5,248

Allowance for credit losses ( 493 )

Non-credit premium 85

Fair value $ 4,840

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

Note 14 Leases

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

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

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

Peoples has also made an accounting policy election to account for each separate lease component of a contract and its associated non-lease components as a single lease component for all leases subject to ASC 842.

3 unchanged sentences

Upon detection of the reduced ability of a lessee to meet cash flow obligations, leases are typically charged down to the net realizable value, with the residual balance placed on nonaccrual status.

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.

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

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

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

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

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

4 unchanged sentences

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

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

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

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

1 unchanged sentence

The table below details Peoples' lease income:

Three Months Ended Nine Months Ended

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

Three Months Ended

(Dollars in thousands) March 31, 2023 March 31, 2022

Interest and fees on leases (a) $ 9,643 $ 6,102

1 unchanged sentence

Total lease income $ 10,720 $ 6,877

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

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

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

of Operations.

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

the Unaudited Condensed Consolidated Financial Statements.

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

(Dollars in thousands) September 30, 2022

(Dollars in thousands) March 31, 2023 December 31, 2022

Lease payments receivable, at amortized cost $ 381,549 $ 367,681

7 unchanged sentences

(Dollars in thousands) Balance

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

Remaining nine months ending December 31, 2023 $ 68,772

Year ending December 31, 2024 87,814

9 unchanged sentences

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

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

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

Operating lease ROU assets and liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the remaining lease term.

At March 31, 2023, Peoples did not have any leases that met the criteria for finance leases.

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

make lease payments arising from the lease.

Operating lease ROU assets and lease liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the remaining lease term.

Operating lease ROU assets include lease payments made at or before the commencement date and initial indirect costs.

2 unchanged sentences

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

Three Months Ended Nine Months Ended

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

Three Months Ended

(Dollars in thousands) March 31, 2023 March 31, 2022

Operating lease expense 695 603

4 unchanged sentences

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

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

(Dollars in thousands) March 31, 2023 December 31, 2022

Other assets $ 7,181 $ 6,825

4 unchanged sentences

Weighted-average discount rate 2.67 % 2.70 %

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

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

During the three months ended March 31, 2023 and 2022, Peoples paid cash of $ 0.7 million and $ 0.6 million, respectively, for operating leases.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands) Balance

Remaining three months ending December 31, 2022 $ 834

Remaining nine months ending December 31, 2023 $ 2,008

Year ending December 31, 2024 1,650

6 unchanged sentences

Total lease liabilities $ 7,880

Note 15 Subsequent Events

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

Merger Agreement

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

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

(“Limestone Bank”).

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

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

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

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

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

What changed 10-Q

Item 1. Financial Statements