What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 391 added, 209 removed, 1161 unchanged (34% of the section changed)

9 unchanged sentences

Total cash and cash equivalents 148,482 154,022

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)

Available-for-sale investment securities, at fair value (amortized cost of $ 1,292,331 at June 30, 2023 and $ 1,300,719 at December 31, 2022) (a)

1,133,439 1,131,399

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)

Held-to-maturity investment securities, at amortized cost (fair value of $ 594,268 at June 30, 2023 and $ 478,509 at December 31, 2022) (a)

673,925 560,212

19 unchanged sentences

Stockholders’ equity

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

Preferred shares, no par value, 50,000 shares authorized, no shares issued at June 30, 2023 or at December 31, 2022

Common shares, no par value, 50,000,000 shares authorized, 36,711,075 shares issued at June 30, 2023 and 29,857,920 shares issued at December 31, 2022, including at each date shares held in treasury

862,960 686,450

1 unchanged sentence

Accumulated other comprehensive loss, net of deferred income taxes ( 118,920 ) ( 127,136 )

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

Treasury stock, at cost, 1,415,639 shares at June 30, 2023 and 1,643,461 shares at December 31, 2022

( 34,578 ) ( 39,922 )

1 unchanged sentence

Total liabilities and stockholders’ equity $ 8,786,635 $ 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 $ 241 , respectively, at March 31, 2023 and December 31, 2022.

(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 June 30, 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

Three Months Ended Six Months Ended

June 30, June 30,

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

28 unchanged sentences

Net occupancy and equipment expense 5,380 4,768 10,335 9,856

Data processing and software expense 4,562 2,916

Professional fees 7,438 2,280 10,319 5,952

Data processing and software expense 4,728 3,033 9,290 5,949

Amortization of other intangible assets 2,800 2,034 4,671 3,742

Electronic banking expense 1,832 2,727 3,323 5,486

Franchise tax expense 1,034 764

Marketing expense 1,357 860 2,287 1,855

FDIC insurance expense 1,464 1,018 2,265 2,212

Other loan expenses 739 832

Franchise tax expense 872 1,102 1,906 1,866

Communication expense 724 649 1,337 1,274

Other loan expenses 538 445 1,277 1,277

Other non-interest expense 5,465 3,398 10,039 6,745

13 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2023 2022 2023 2022

Net income $ 21,096 $ 24,888 $ 47,656 $ 48,465

Other comprehensive income (loss):

Other comprehensive (loss) income:

Available-for-sale investment securities:

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

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

Gross unrealized holding (loss) gain arising during the period ( 12,034 ) ( 42,648 ) 8,328 ( 114,284 )

Related tax benefit (expense) 3,154 10,238 ( 1,493 ) 26,686

Reclassification adjustment for net loss (gain) included in net income 166 44 2,101 ( 86 )

Related tax (expense) benefit ( 43 ) ( 10 ) ( 495 ) 20

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

Net effect on other comprehensive (loss) income ( 8,757 ) ( 32,376 ) 8,441 ( 87,664 )

Defined benefit plan:

Net loss arising during the period — ( 14 )

Related tax benefit — 3

Net gain arising during the period — 75 — 61

Related tax expense — ( 17 ) — ( 14 )

Amortization of unrecognized loss and service cost on benefit plans 7 17 9 38

Related tax benefit ( 2 ) ( 4 ) ( 2 ) ( 9 )

Net effect on other comprehensive income (loss) 2 5

Net effect on other comprehensive income 5 71 7 76

Cash flow hedges:

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

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

Net gain (loss) arising during the period 1,073 2,104 ( 283 ) 7,560

Related tax (expense) benefit ( 262 ) ( 492 ) 51 ( 1,712 )

Net effect on other comprehensive income (loss) 811 1,612 ( 232 ) 5,848

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

Total other comprehensive (loss) gain, net of tax ( 7,941 ) ( 30,693 ) 8,216 ( 81,740 )

Total comprehensive income (loss) $ 13,155 $ ( 5,805 ) $ 55,872 $ ( 33,275 )

6 unchanged sentences

(Dollars in thousands)

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

Net income — 21,096 — — 21,096

Other comprehensive loss, net of tax — — ( 7,941 ) — ( 7,941 )

Cash dividends declared — ( 13,422 ) — ( 13,422 )

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

Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 115 115

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 134 ) ( 134 )

Common shares issued under dividend reinvestment plan 350 — — — 350

Common shares issued under compensation plan for Boards of Directors 11 — — 124 135

Common shares issued under employee stock purchase plan 19 — — 208 227

Stock-based compensation 1,009 — — — 1,009

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

177,929 — — — 177,929

Balance, June 30, 2023 $ 862,960 $ 289,445 $ ( 118,920 ) $ ( 34,578 ) $ 998,907

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

3 unchanged sentences

Reissuance of treasury stock for common share awards ( 5,410 ) — — 5,410 —

Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 115 115

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 1,054 ) ( 1,054 )

3 unchanged sentences

Stock-based compensation 3,159 — — — 3,159

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

177,929 — — — 177,929

Balance, June 30, 2023 $ 862,960 $ 289,445 $ ( 118,920 ) $ ( 34,578 ) $ 998,907

Accumulated Other Comprehensive Loss Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(Dollars in thousands)

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

Net income — 24,888 — — 24,888

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

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

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

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

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

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

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

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

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

Stock-based compensation 576 — — — 576

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

Accumulated Other Comprehensive Loss Total Stockholders' Equity

6 unchanged sentences

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

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

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

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

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

2 unchanged sentences

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

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

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

See Notes to the Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended

Six Months Ended

(Dollars in thousands) 2023 2022

14 unchanged sentences

Proceeds from sales of other real estate owned 106 307

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

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

Proceeds from bank owned life insurance contracts — 248

Business acquisitions, net of cash received (paid) 91,793 ( 85,793 )

Investment in limited partnership and tax credit funds ( 1,699 ) ( 1,151 )

3 unchanged sentences

Net increase in interest-bearing deposits 178,373 46,485

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

Net increase in short-term borrowings 9,797 154,915

Proceeds from long-term borrowings 5,004 11,255

1 unchanged sentence

Cash dividends paid ( 24,276 ) ( 21,081 )

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

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

1 unchanged sentence

Proceeds from issuance of common shares 726 576

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

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

Net cash (used in) provided by financing activities ( 17,551 ) 115,953

Net decrease in cash and cash equivalents ( 5,540 ) ( 17,342 )

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

16 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’ 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.

Management has evaluated all significant events and transactions that occurred after June 30, 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.

12 unchanged sentences

This guidance was further updated by ASU 2021-01.

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

This update was effective from 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.

Peoples established a working group, consisting of key stakeholders from throughout the company, to monitor developments relating to London Inter-Bank Offered Rate ("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.

Peoples ceased originating LIBOR-based products after December 31, 2021 and began originating SOFR-indexed products.

Any LIBOR-based products originated prior to December 31, 2021, but maturing after June 30, 2023, are based on SOFR-indexed products as of July 1, 2023.

The transition did not have a material impact on Peoples' consolidated financial statements.

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

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

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

This ASU eliminates the accounting guidance on TDRs for creditors and amends the guidance on disclosures to include current-period gross charge-offs by year of origination.

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.

19 unchanged sentences

Recurring Fair Value Measurements at Reporting Date

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

21 unchanged sentences

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

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

As of June 30, 2023, Peoples had one available-for-sale investment security for which quoted market prices or observable market data was unavailable.

Therefore, a broker estimated market value based on the price an interested buyer would be willing to pay (Level 3).

Management reviews the valuation methodology and quality controls utilized by the pricing services or broker in management's overall assessment of the

reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

Equity Investment Securities:

4 unchanged sentences

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

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy at March 31, 2023 and December 31, 2022.

Non-Recurring Fair Value Measurements at Reporting Date

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

2 unchanged sentences

Other real estate owned $ — $ 7,118 $ — $ 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.

(a) Loans held for sale are presented gross of a valuation allowance of $ 138 and $ 105 at June 30, 2023 and at December 31, 2022, respectively.

Collateral Dependent Loans:

5 unchanged sentences

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, 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 March 31, 2023 December 31, 2022

(Dollars in thousands) Fair Value Hierarchy Level June 30, 2023 December 31, 2022

Carrying Amount Fair Value Carrying Amount Fair Value

23 unchanged sentences

Long-term borrowings 2 123,579 126,390 101,093 101,992

(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.

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $ 241 at both June 30, 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 March 31, 2023

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at June 30, 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 $ 53.3 million and $ 53.2 million at March 31, 2023 and at December 31, 2022, respectively.

(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $ 61.2 million and $ 53.2 million at June 30, 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.

28 unchanged sentences

Certain financial assets and financial liabilities that are not required to be measured or reported at fair value can be subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

These financial assets and liabilities include the following:

These financial assets and financial liabilities include the following:

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

4 unchanged sentences

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

March 31, 2023

June 30, 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 March 31 were as follows:

Three Months Ended

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

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2023 2022 2023 2022

3 unchanged sentences

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 for the periods identified:

The following table presents a summary of available-for-sale investment securities that have 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

March 31, 2023

June 30, 2023

Obligations of:

26 unchanged sentences

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

At March 31, 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.

At June 30, 2023, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses.

At June 30, 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 June 30, 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 $ 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.

Interest receivable on investment securities was $ 9.8 million at June 30, 2023 and $ 7.8 million at December 31, 2022.

At June 30, 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 their book values.

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

Of the five 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.

2 unchanged sentences

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

Treasury Department or Federal government-sponsored entities.

Treasury Department, Federal, state or local government-sponsored entities.

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

Therefore, management does not consider these 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 unrealized loss with respect to the three bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at June 30, 2023 was attributable to the subordinated nature of the trust preferred securities.

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

March 31, 2023

June 30, 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 three months ended March 31, 2023 or 2022.

There were no sales of held-to-maturity securities during either of the six months ended June 30, 2023 or 2022.

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

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 sponsored agencies 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.

Peoples reported $ 0.2 million of allowance for credit losses for held-to-maturity securities at both June 30, 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:

6 unchanged sentences

Value Unrealized Loss

March 31, 2023

June 30, 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 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.

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at June 30, 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 23.6 % and 23.3 % at June 30, 2023 and at 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.

17 unchanged sentences

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

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

(Dollars in thousands) June 30, 2023 December 31, 2022

FHLB stock $ 31,564 $ 26,605

4 unchanged sentences

Total other investment securities $ 63,579 $ 51,609

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.

During the six months ended June 30, 2023, Peoples redeemed $ 9.6 million of FHLB stock in order to be in compliance with the requirements of the FHLB.

Peoples purchased $ 7.6 million of additional FHLB stock during the six months ended June 30, 2023, as a result of the FHLB's capital requirements on FHLB advances during the first six months.

During the three months ended June 30, 2023 and 2022, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in an unrealized loss of $ 138,000 and an unrealized loss of $ 11,000 , respectively.

For the six months ended June 30, 2023 and 2022, Peoples recognized a unrealized loss of $ 117,000 and an unrealized loss of $ 18,000 , respectively, for the change in fair value of equity investment securities in "Other non-interest income".

At June 30, 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.

1 unchanged sentence

Peoples has pledged available-for-sale investment securities and held-to-maturity investment securities to secure public and trust department deposits, and repurchase agreements in accordance with federal and state requirements.

Peoples 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.

Peoples has also pledged available-for-sale investment securities to secure additional borrowing capacity at the FHLB and the FRB.

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

Carrying Amount

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

(Dollars in thousands) June 30, 2023 December 31, 2022

Securing public and trust department deposits, and repurchase agreements:

9 unchanged sentences

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

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2023 December 31, 2022

11 unchanged sentences

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 $ 15.4 million at March 31, 2023 and December 31, 2022.

Total interest receivable on loans was $ 20.0 million at June 30, 2023 and $ 15.4 million at 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:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(Dollars in thousands) Nonaccrual (a)

11 unchanged sentences

Total loans, at amortized cost $ 28,796 $ 5,924 $ 31,473 $ 4,842

(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.

(a) There were $ 1.3 million of nonaccrual loans for which there was no allowance for credit losses at June 30, 2023 and $ 1.4 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2022.

During the first six months of 2023, nonaccrual loans declined compared to at December 31, 2022, which was primarily due to $ 3.1 million of commercial real estate loans being on nonaccrual status as of December 31, 2022 that were accruing as of March 31, 2023.

The increase in accruing loans 90+ days past due at June 30, 2023 when compared to at December 31, 2022, was primarily due to increases of $ 0.5 million and $ 0.8 million in premium finance loans and leases, respectively.

The amount of interest income recognized on loans past due 90 days or more and accruing during the six months ended June 30, 2023 was $ 0.9 million.

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

1 unchanged sentence

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

March 31, 2023

Loans Past Due Current

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

June 30, 2023

Construction $ — $ — $ — $ — $ 418,741 $ 418,741

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

Delinquency trends remained stable, as 99.0 % of Peoples' loan portfolio was considered “current” at June 30, 2023, compared to 98.6 % at December 31, 2022.

Pledged Loans

2 unchanged sentences

Loans pledged are summarized as follows:

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

(Dollars in thousands) June 30, 2023 December 31, 2022

Loans pledged to FHLB $ 1,268,215 $ 783,843

30 unchanged sentences

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

The following 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:

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at June 30, 2023:

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

122 unchanged sentences

• Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property.

• Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage.

• Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage, on residential real property.

• Home equity lines of credit are generally secured by second mortgages on residential real estate property.

4 unchanged sentences

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

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

(Dollars in thousands) June 30, 2023 December 31, 2022

Commercial real estate, other 5,581 8,362

2 unchanged sentences

Total collateral dependent loans $ 6,561 $ 10,354

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.

The decrease i n collateral dependent loans at June 30, 2023, compared to December 31, 2022, was primarily due to three large relationships that were paid in full during the six months ended June 30, 2023.

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

7 unchanged sentences

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

The following table displays the amortized cost of loans that were restructured during the three months and the six months ended June 30, 2023, presented by loan classification.

During the Three Months Ended June 30, 2023

(Dollars in thousands) Term Extension Total Percentage of Total by Loan Category (a)(b)

Commercial real estate $ 48 $ 48 — %

Commercial and industrial 3,319 3,319 0.29 %

Total $ 3,367 $ 3,367 0.06 %

During the Six Months Ended June 30, 2023

Payment Delay (Only)

4 unchanged sentences

Residential real estate — — 220 — 220 0.03 %

Consumer, indirect — — 28 — 28 — %

Total $ 194 $ 1,600 $ 3,593 $ 306 $ 5,693 0.10 %

1 unchanged sentence

(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

The following table summarizes the financial impacts of loan modifications and payment deferrals made to loans during the three months and the six months ended June 30, 2023, presented by loan classification.

During the Three Months Ended June 30, 2023

Weighted-Average Term Extension

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

Commercial real estate 12 $ —

Commercial and industrial 5 —

During the Six Months Ended June 30, 2023

Weighted-Average Term Extension

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

Commercial real estate 12 $ —

Commercial and industrial 5 —

Residential real estate 210 8,969

2 unchanged sentences

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

The following table displays the amortized cost of loans that received a completed modification or payment deferral on or after January 1, 2023, the date Peoples adopted ASU 2022-02, through June 30, 2023 and that defaulted in the period presented.

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 June 30, 2023.

For the Six Months Ended June 30, 2023

Payment Delay as a Result of a Payment Deferral (Only) Total

Consumer, indirect $ 11 $ 11

(1) Represents the sum of amortized cost and gross charge-off as of period end.

Excludes loans that liquidated either through foreclosure, deed-in-lieu of foreclosure, or a short sale.

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 June 30, 2023, presented by classification and class of financing receivable.

As of June 30, 2023

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

3 unchanged sentences

Residential real estate — — — — 220 220

Consumer, indirect 28 — — 28 — 28

Total loans modified (a)

3 unchanged sentences

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:

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 Form 10-Q 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 and the six months ended June 30, 2022:

Three Months Ended

1 unchanged sentence

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

March 31, 2022

Construction 1 $ 344 $ 344 $ 343

June 30, 2022

Commercial real estate, other 2 184 184 184

8 unchanged sentences

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

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

In this guidance, short-term modifications, made on a good faith basis in response to COVID-19, to borrowers who were current prior to any relief, are not considered TDRs.

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

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

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

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

Six Months Ended

Recorded Investment (a)

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

June 30, 2022

Commercial real estate, other 3 287 287 284

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

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

Home equity lines of credit 4 178 178 177

Consumer, indirect 16 210 210 210

Consumer, direct 3 44 44 44

Consumer 19 254 254 254

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

(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.

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 March 31, 2023 and March 31, 2022 are summarized below:

Changes in the allowance for credit losses for the three months and the six months ended June 30, 2023 and June 30, 2022 are summarized below:

Beginning Balance, March 31, 2023

Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2023

Construction $ 1,273 $ — $ 223 $ — $ — $ 1,496

Commercial real estate, other 16,474 280 2,968 ( 7 ) 16 19,731

Commercial and industrial 8,307 376 1,905 ( 11 ) 451 11,028

Premium finance 433 — 18 ( 23 ) 3 431

Leases 9,109 — 1,783 ( 604 ) 89 10,377

Residential real estate 6,504 254 ( 656 ) ( 59 ) 69 6,112

Home equity lines of credit 1,717 13 1 ( 55 ) — 1,676

Consumer, indirect 7,781 — 641 ( 941 ) 129 7,610

Consumer, direct 1,619 85 981 ( 78 ) 35 2,642

Deposit account overdrafts 86 — 232 ( 263 ) 53 108

Total $ 53,303 $ 1,008 $ 8,096 $ ( 2,041 ) $ 845 $ 61,211

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

Beginning Balance,

March 31, 2022 Initial Allowance for Acquired PCD Assets (a) (Recovery of) Provision for Credit Losses (b) Charge-offs Recoveries Ending Balance, June 30, 2022

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

Commercial real estate, other 21,055 ( 234 ) ( 2,267 ) ( 22 ) 176 18,708

Commercial and industrial 10,114 ( 253 ) ( 871 ) ( 420 ) 2 8,572

Premium finance 345 — ( 12 ) ( 30 ) 8 311

Leases 5,875 292 1,847 ( 493 ) 64 7,585

Residential real estate 6,495 12 ( 142 ) ( 47 ) 14 6,332

Home equity lines of credit 1,894 — ( 170 ) ( 25 ) — 1,699

Consumer, indirect 5,172 — 1,428 ( 449 ) 83 6,234

Consumer, direct 1,036 — 334 ( 60 ) 11 1,321

Deposit account overdrafts 51 — 355 ( 405 ) 52 53

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

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

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

(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

Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2023

Construction $ 1,250 $ — $ 255 $ ( 9 ) $ — $ 1,496

11 unchanged sentences

(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

December 31, 2021 Initial Allowance for Acquired PCD Assets (a) (Recovery of) Provision for Credit Losses (b) Charge-offs Recoveries Ending Balance, June 30, 2022

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

13 unchanged sentences

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

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.

During the second quarter of 2023, Peoples recorded a total provision for credit losses for loans of $ 8.0 million, largely attributable to a provision of $ 9.4 million for the non-purchased credit deteriorated loans acquired in the Limestone Merger, partially offset by the release of reserves of $ 1.7 million on individually analyzed loans and a recovery of $ 1.0 million due to improvements in macro-economic conditions.

Net charge-offs for the second quarter of 2023 were $ 1.2 million, primarily due to net charge-offs of indirect consumer loans of $ 0.8 million.

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

Leases designated as purchased-credit

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

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

Peoples had recorded an allowance for unfunded commitments of $ 2.0 million as of both June 30, 2023 and 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) March 31, 2023 December 31, 2022

(Dollars in thousands) June 30, 2023 December 31, 2022

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

1 unchanged sentence

Goodwill, end of period $ 356,397 $ 292,397

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

As of the close of business on April 30, 2023, Peoples completed its merger with Limestone Bancorp, Inc.

("Limestone") pursuant to an Agreement and Plan of Merger dated October 24, 2022, at which point Limestone merged with and into Peoples (the "Limestone Merger"), and Limestone Bank, Inc., the subsidiary bank of Limestone, merged immediately thereafter with and into Peoples' wholly-owned subsidiary, Peoples Bank.

Peoples preliminarily recorded goodwill from the Limestone Merger as of June 30, 2023 totaling $ 63.4 million.

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

A further adjustment of $ 381,000 was recognized on May 31, 2023.

The goodwill recorded from this acquisition totaled $ 581,000 as of June 30, 2023.

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").

During 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 (the "Premier Merger") of Peoples with Premier Financial Bancorp, Inc.

(“Premier”) on September 17, 2021.

Other Intangible Assets

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

Other intangible assets were comprised of the following at June 30, 2023, and at December 31, 2022:

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

March 31, 2023

June 30, 2023

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

Intangibles recorded from acquisitions 27,722 — — 27,722

Accumulated amortization ( 22,226 ) ( 18,522 ) — ( 40,748 )

9 unchanged sentences

Total other intangibles $ 33,932

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.

As of the close of business on April 30, 2023 , Peoples preliminarily recorded $ 27.7 million of core deposit intangibles related to the merger with Limestone.

Refer to "Note 13 Acquisitions" for additional information.

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

Other intangible assets recorded 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 Agency, Inc.

Refer to "Note 13 Acquisitions" for additional information.

The following table details estimated aggregate future amortization of other intangible assets at June 30, 2023:

(Dollars in thousands) Core Deposits Customer Relationships Total

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

Remaining six months of 2023 $ 3,418 $ 3,151 $ 6,569

2024 5,881 5,325 11,206

7 unchanged sentences

Peoples’ deposit balances were comprised of the following:

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

(Dollars in thousands) June 30, 2023 December 31, 2022

Retail certificates of deposits ("CDs"):

$100 or more $ 527,846 $ 263,341

9 unchanged sentences

Total deposits $ 6,959,869 $ 5,716,941

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

Uninsured deposits were $ 2.0 billion and $ 1.6 billion at June 30, 2023 and at 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.

Peoples pledges investment securities against certain governmental deposit accounts, which covered o ver $ 749.9 million o f the uninsured deposit balances at June 30, 2023.

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

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

(Dollars in thousands) June 30, 2023 December 31, 2022

3 months or less $ 20,277 $ 19,282

5 unchanged sentences

(Dollars in thousands) Retail Brokered Total

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

Remaining six months ending December 31, 2023 $ 371,553 $ 559,955 $ 931,508

Year ending December 31, 2024 477,235 — 477,235

4 unchanged sentences

Total CDs $ 950,783 $ 559,955 $ 1,510,738

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.

At June 30, 2023, Peoples had twelve effective interest rate swaps, with an aggregate notional value of $ 115.0 million, of which $ 115.0 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.

1 unchanged sentence

Note 7 Stockholders’ Equity

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

The following table details the progression in Peoples’ common shares and treasury stock during the six months ended June 30, 2023:

Common Shares Treasury

11 unchanged sentences

Common shares issued under employee stock purchase plan

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

Issuance of common shares related to the Limestone Merger

Shares at June 30, 2023 36,711,075 1,415,639

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

At March 31, 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 .

At June 30, 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 six 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 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:

At June 30, 2023, Peoples had no preferred shares issued or outstanding.

On July 24, 2023, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.39 per common share, payable on August 21, 2023, to shareholders of record on August 7, 2023.

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

First quarter $ 0.38 $ 0.36

Second quarter 0.39 0.38

Third quarter 0.39 0.38

Total dividends declared $ 1.16 $ 1.12

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:

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

4 unchanged sentences

6,835 7 ( 232 ) 6,610

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

Balance, June 30, 2023 $ ( 121,455 ) $ ( 1,626 ) $ 4,161 $ ( 118,920 )

Note 8 Employee Benefit Plans

17 unchanged sentences

Pension Benefits

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2023 2022 2023 2022

2 unchanged sentences

Amortization of net loss 8 20 10 40

Settlement of benefit obligation — —

Net periodic loss $ ( 62 ) $ ( 82 ) $ ( 138 ) $ ( 164 )

2 unchanged sentences

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

Peoples did 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.

Peoples did no t record a settlement gain or loss during the six months ended June 30, 2023 or the six months ended June 30, 2022 under the noncontributory defined benefit pension plan.

Note 9 Earnings Per Common Share

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

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

1 unchanged sentence

Dividends paid on unvested common shares 144 102 246 150

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

Undistributed income allocated to unvested common shares 13 19 45 40

Net earnings allocated to common shareholders $ 20,939 $ 24,767 $ 47,365 $ 48,275

25 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 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, 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.

At June 30, 2023, Peoples had entered into twelve interest rate swap contracts with an aggregate notional value of $ 115.0 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 through June 30, 2023, after which point three-month LIBOR shall cease publication, and Peoples will pay a fixed rate equal to term SOFR.

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 interest rate swaps.

At June 30, 2023 and at December 31, 2022, the interest rate swaps were designated as cash flow hedges of $ 115.0 million and $ 125.0 million, respectively, in brokered CDs, which are expected to be extended every 90 days through the maturity dates of the interest rate 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 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.

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 (or the SOFR term rate beyond June 30, 2023) of the swaps to ensure effectiveness of the cash flow hedge.

During the three months ended June 30, 2023, and 2022, Peoples recorded reclassifications of gains to earnings of $ 0.1 million and reclassifications of losses to earnings of $ 0.4 million, respectively.

For the six months ended June 30, 2023 and 2022, Peoples recorded reclassifications of losses to earnings of 130,000 and $ 1.0 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) March 31,

(Dollars in thousands) June 30,

2023 December 31,

4 unchanged sentences

Pre-tax changes in fair value included in AOCI $ 5,443 $ 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

The following table presents changes in fair value recorded in AOCI and in the Consolidated Statements of Operations related to the cash flow hedges:

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2023 2022 2023 2022

9 unchanged sentences

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

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

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

These interest rate swaps do not qualify as designated hedges;

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

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

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

These interest rate swaps did not have a material impact on Peoples' results of operations or financial condition at or for the three months and the six months ended June 30, 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:

8 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 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.

At June 30, 2023 and at December 31, 2022, Peoples had no cash pledged, while counterparties had $ 19.4 million of cash pledged at June 30, 2023 and $ 20.9 million of cash pledged at December 31, 2022.

Peoples had no pledged investment securities at June 30, 2023 or at December 31, 2022, while the counterparties had pledged investment securities in the amounts of $ 2.3 million at June 30, 2023 and $ 2.5 million at December 31, 2022.

Note 11 Stock-Based Compensation

Under the Peoples Bancorp Inc.

Third Amended and Restated 2006 Equity Plan (the "2006 Equity Plan"), Peoples may grant, among other awards, nonqualified stock options, incentive stock options, restricted common share awards, stock appreciation rights, performance units and unrestricted common share awards to employees and non-employee directors.

Fourth Amended and Restated 2006 Equity Plan (the "2006 Equity Plan"), Peoples may grant, among other awards, nonqualified stock options, incentive stock options, restricted common share awards, stock appreciation rights, performance units and unrestricted common share awards to employees and non-employee directors.

The total number of common shares available under the 2006 Equity Plan is 1,493,297 .

7 unchanged sentences

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

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;

In the first six 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 three months ended March 31, 2023:

The following table summarizes the changes to Peoples’ restricted common shares for the six months ended June 30, 2023:

Time-Based Vesting Performance-Based Vesting

4 unchanged sentences

Forfeited ( 4,064 ) 31.98 ( 6,461 ) 31.16

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.

Outstanding at June 30, 2023 167,827 $ 26.62 407,328 $ 31.21

For the six months ended June 30, 2023, intrinsic value for restricted common shares released was $ 2.5 million compared to $ 3.5 million for the six months ended June 30, 2022.

Stock-Based Compensation

4 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2023 2022 2023 2022

8 unchanged sentences

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 $ 7.0 million at March 31, 2023, which will be recognized over a weighted-average period of 2.2 years.

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 6.8 million at June 30, 2023, which will be recognized over a weighted-average period of 2.7 years.

Note 12 Revenue

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2023 2022 2023 2022

2 unchanged sentences

Fees related to third-party administration services (a) 74 92 156 163

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(Dollars in thousands) 2023 2022 2023 2022

24 unchanged sentences

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

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

The following table details the changes in Peoples' contract assets and contract liabilities for the six-month period ended June 30, 2023:

Contract Assets Contract Liabilities

2 unchanged sentences

Additional income receivable 82 —

Additional deferred income — 490

Recognition of income previously deferred — ( 72 )

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

Balance, June 30, 2023 $ 1,376 $ 6,052

Note 13 Acquisitions

Limestone Bancorp, Inc.

As of the close of business on April 30, 2023, Peoples completed the Limestone Merger and immediately after the Limestone Merger, Limestone Bank, Inc., which operated 20 branches in Kentucky, merged into Peoples Bank.

As consideration, Limestone shareholders were paid 0.90 common shares of Peoples for each full share of Limestone that was owned at the merger date, resulting in the issuance of 6,827,668 common shares by Peoples, or aggregate consideration of $ 177.9 million.

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

Peoples recorded acquisition-related expenses related to the Limestone Merger, which included $ 10.8 million and $ 11.2 million in non-interest expense for the second quarter and the six months ended June 30, 2023, respectively.

For the second quarter of 2023, the $ 10.8 million of non-interest expense consisted of $ 5.2 million in salaries and employee benefit costs, $ 4.8 million in professional fees, $ 0.5 million in insurance expense, and $ 0.3 million in various other non-interest expense line items.

For the six months ended June 30, 2023, the $ 11.2 million of non-interest expense consisted of $ 5.2 million in salaries and employee benefit costs, $ 5.1 million in professional fees, $ 0.5 million in insurance expense, $ 0.4 million in various other non-interest expense line items.

Peoples recorded the fair value based on initial valuations available at the close of business on April 30, 2023.

Due to the timing of the transaction closing date and this Form 10-Q, these estimated fair values were considered preliminary as of June 30, 2023, and are subject to adjustment for up to one year after April 30, 2023.

Valuations subject to change include, but are not limited to, loans, bank premises, core deposit intangibles (included in other intangible assets), certain deposits, other long-term borrowings, deferred tax assets and liabilities, and certain other assets and other liabilities.

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

(Dollars in thousands) Fair Value

Total purchase price $ 177,931

Cash and balances due from banks 5,260

Interest-bearing deposits in other banks 87,115

Total cash and cash equivalents 92,375

Available-for-sale investment securities, at fair value 166,944

Other investment securities 5,716

Total investment securities 172,660

Loans 1,079,253

Allowance for credit losses (on PCD loans) ( 1,008 )

Net loans 1,078,245

Bank premises and equipment, net of accumulated depreciation 17,690

Bank owned life insurance 31,343

Other intangible assets 27,722

Other assets 35,372

Total assets 1,455,407

Non-interest-bearing 262,727

Interest-bearing 971,457

Total deposits 1,234,184

Short-term borrowings 60,000

Long-term borrowings 33,744

Accrued expenses and other liabilities 12,967

Total liabilities 1,340,895

Net assets 114,512

Goodwill $ 63,419

The goodwill recorded in connection with the Limestone Merger is related to expected synergies to be gained from the combination of Limestone with Peoples' operations.

The employees retained from the Limestone Merger and the geographic locations of Limestone should allow Peoples to continue to grow the loan and deposit portfolios while also increasing Peoples' ability to penetrate the new markets, which should benefit Peoples in future periods.

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

Peoples recorded a core deposit asset in other intangible assets related to the Limestone Merger.

Loans acquired by Peoples in a business combination that have evidence of more than insignificant credit deterioration, which includes loans as to which 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

Commercial real estate, other 14,151 ( 280 ) ( 748 ) 13,123

Commercial and industrial 14,871 ( 376 ) ( 616 ) 13,879

Residential real estate 6,699 ( 254 ) ( 958 ) 5,487

Home equity lines of credit 472 ( 13 ) 5 464

Consumer 1,001 ( 85 ) 78 994

Fair value $ 37,194 $ ( 1,008 ) $ ( 2,239 ) $ 33,947

Peoples' operating results for the three months and the six months ended June 30, 2023 include the operating results of the acquired assets and assumed liabilities of Limestone subsequent to the Limestone Merger.

Due to the timing of the acquisition close and the conversion of Limestone systems, as well as other streamlining and integration of the operating activities into those of Peoples, historical reporting for the former Limestone operations is impracticable and the disclosures of revenue from the assets acquired and income before income taxes is impracticable for the period subsequent to the acquisition.

The following table presents unaudited pro forma information as if the Limestone Merger had occurred on January 1, 2022.

The pro forma adjustments include any changes in interest income due to the accretion of discounts, or amortization of premiums, associated with the fair value adjustments to acquired loans, interest-bearing deposits, long-term borrowings and customer deposit intangibles that would have resulted had the assets and liabilities been acquired as of January 1, 2022.

The pro forma information excludes Peoples' acquisition-related expenses as described above as well as a provision of credit losses of $ 9.4 million recorded to establish an allowance for credit losses for non-purchased credit deteriorated loans relating to the acquired loans.

The pro forma reflects the adoption of CECL by Limestone as of January 1, 2023.

The pro forma information does not necessarily reflect the results of operations that would have occurred had Peoples acquired Limestone on January 1, 2022.

Additionally, cost savings and other business synergies related to the acquisition are not reflected in the pro forma amounts.

Unaudited Pro Forma For

Three Months Ended Six Months Ended

(Dollars in thousands) June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Net interest income $ 89,455 $ 76,536 $ 177,851 $ 145,500

Non-interest income 19,432 21,642 40,552 43,930

Net income 34,376 30,498 67,069 59,348

Vantage Financial, LLC

1 unchanged sentence

Peoples Bank acquired assets comprising Vantage's lease business, including $ 154.9 million in leases and certain third-party debt in the amount of $ 106.9 million.

Under the terms of the agreement, Peoples Bank paid cash consideration of $ 54.0 million, and also repaid $ 28.9 million in recourse debt on behalf of Vantage, for total consideration of $ 82.9 million.

Under the terms of the acquisition agreement, Peoples Bank paid cash consideration of $ 54.0 million, and also repaid $ 28.9 million in recourse debt on behalf of Vantage, for total consideration of $ 82.9 million.

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

Peoples recorded acquisition-related expenses 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.

Peoples recorded acquisition-related expenses during the six months ended June 30, 2023 of $ 46,000 in professional fees related to the Vantage acquisition.

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

The following table provides the final 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 purchased credit deteriorated leases) ( 801 )

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

Net leases 154,925

12 unchanged sentences

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:

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

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

7 unchanged sentences

Lessor Arrangements

Leases originated by Peoples, that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff, are reported at the net investment of the lease, net of initial direct costs, charge-offs and an allowance for credit losses.

Leases originated by Peoples, that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff, are reported at the net investment in the lease, net of initial direct costs, charge-offs and an allowance for credit losses.

Peoples considers leases past due if any required principal or interest payments have not been received as of the date such payments were required to be made under the terms of the lease agreement.

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.

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.

Upon detection of the reduced ability of a lessee to meet cash flow obligations, a lease is 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.

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 these 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.

1 unchanged sentence

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

The leases acquired from Vantage were determined to be either sales-type or direct financing leases based primarily on whether they included a dollar buy-out or a fair market value buy-out, respectively.

The leases acquired through Vantage were determined to be either sales-type or direct financing leases based primarily on whether they included a dollar buy-out or a fair market value buy-out, respectively.

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

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

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

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.

Lease income noted in the table below includes gain on the early termination of leases, syndicated leases, and other fees.

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

The table below details Peoples' lease income:

Three Months Ended

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

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Interest and fees on leases (a) $ 10,275 $ 10,541 $ 19,918 $ 16,643

Other non-interest income 1,077 775

Lease income 1,719 431 2,796 1,206

Total lease income $ 11,994 $ 10,972 $ 22,714 $ 17,849

(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) March 31, 2023 December 31, 2022

(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 fees and costs" on the Unaudited Consolidated Balance Sheets:

(Dollars in thousands) June 30, 2023 December 31, 2022

Lease payments receivable, at amortized cost $ 411,627 $ 367,681

7 unchanged sentences

(Dollars in thousands) Balance

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

Remaining six months ending December 31, 2023 $ 50,716

Year ending December 31, 2024 92,833

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 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.

At June 30, 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.

1 unchanged sentence

Operating lease ROU assets exclude lease incentives.

Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term and do not have a ROU asset or lease liability.

Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term and do not have an ROU asset or lease liability.

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

Three Months Ended

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

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Operating lease expense $ 766 $ 660 1,461 1,263

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) March 31, 2023 December 31, 2022

(Dollars in thousands) June 30, 2023 December 31, 2022

Other assets $ 14,689 $ 6,825

4 unchanged sentences

Weighted-average discount rate 3.19 % 2.70 %

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.

During the three months ended June 30, 2023 and 2022, Peoples paid cash of $ 0.7 million and $ 0.7 million, respectively, for operating leases.

During the six months ended June 30, 2023 and 2022, Peoples paid cash of $ 1.4 million and $ 1.2 million, respectively, for operating leases.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands) Balance

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

Remaining six months ending December 31, 2023 $ 1,714

Year ending December 31, 2024 2,480

7 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements