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Item 1. Business

2024-02-28 compared with 2023-02-27 · 122 added, 135 removed, 487 unchanged (35% of the section changed)

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Peoples operates principally through its wholly-owned subsidiary, Peoples Bank, an Ohio state-chartered bank that was first chartered in 1902.

Peoples' other wholly-owned subsidiaries include Peoples Investment Company ("PIC") and Peoples Risk Management, Inc., a captive insurance subsidiary.

Peoples also holds all of the common securities of NB&T Statutory Trust III and FNB Capital Trust One.

Peoples Bank's operating subsidiaries include Peoples Insurance Agency, LLC ("Peoples Insurance") and Vantage Financial, LLC ("Vantage"), nationwide provider of equipment financing.

Peoples’ other wholly-owned subsidiary is Peoples Investment Company (“PIC”).

Peoples also holds all of the common securities of NB&T Statutory Trust III, FNB Capital Trust One, Ascencia Statutory Trust I, and Porter Statutory Trusts II-IV.

Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (“Peoples Insurance”) and Vantage Financial, LLC (“Vantage”), a nationwide provider of equipment financing.

Business Overview

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◦ various demand deposit accounts, savings accounts, money market accounts, certificates of deposit and governmental deposits;

◦ commercial loans, residential real estate loans, home equity lines of credit, consumer loans and Overdraft Privilege;

◦ commercial loans, residential real estate loans, home equity lines of credit, consumer loans and overdraft services;

◦ insurance premium financing;

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◦ mobile banking features including check deposit, alert notifications, Apple Pay® and Samsung Pay®;

◦ interactive teller machines (“ITMs”);

◦ safe deposit rental facilities;

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◦ employee benefit, retirement, and health care plan administration services.

◦ underwriting, origination and servicing of equipment leases and equipment financing agreements.

Peoples' financial products and services are primarily offered through its financial service offices and ATMs in Ohio, West Virginia, Kentucky, Virginia, Washington, D.C.

Peoples’ financial products and services are primarily offered through its financial service offices, ATMs, and ITMs in Ohio, West Virginia, Kentucky, Virginia, Washington, D.C.

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

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Peoples has a history of expanding its business, including its customer base and primary market area, through a combination of organic growth and targeted acquisitions.

The internal growth may include opening de novo banking and loan production offices located in or near Peoples' existing market area.

Acquisitions have consisted of traditional banking offices and loan production offices, both individually and as part of entire financial institutions, insurance agencies, financial advisory books of business, insurance

premium financing and equipment leasing services.

The organic growth may include opening de novo banking and loan production offices (“LPOs”) located in or near Peoples’ existing market area.

Acquisitions have consisted of traditional banking offices and LPOs, both individually and as part of entire financial institutions, insurance agencies, financial advisory books of business, insurance premium

financing and equipment leasing services.

The primary objectives of Peoples’ expansion efforts include:

(1) providing opportunities to integrate non-traditional products and services, such as insurance, and investment administration and management, insurance premium financing and commercial equipment leasing options, along with the traditional banking products offered to Peoples' clients;

(1) providing opportunities to integrate non-traditional products and services, such as insurance, investment administration and management, insurance premium financing and commercial equipment leasing options, along with the traditional banking products offered to Peoples’ clients;

(2) increasing market share in existing markets;

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Recent Corporate Developments

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

On October 25, 2022, Peoples announced the signing of a definitive Agreement and Plan of Merger providing for Peoples’ acquisition, in an all-stock merger, of Limestone Bancorp Inc.

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

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

The Limestone Merger is expected to close in the second quarter of 2023, subject to the satisfaction of closing conditions, including regulatory approvals.

As of December 31, 2022, Peoples had recognized $0.6 million in acquisition-related expenses associated with this pending transaction.

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

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

Total consideration for this transaction was $4.4 million.

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

On March 7, 2022, Peoples Bank purchased 100% of the equity of Vantage pursuant to an Equity Purchase Agreement, dated February 16, 2022 (the "Vantage acquisition").

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.

Peoples Bank paid cash consideration of $54.0 million and also repaid approximately $28.9 million in recourse debt on behalf of Vantage.

Peoples recorded goodwill in the amount of $27.2 million and other intangible assets of $13.2 million, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction.

Under the terms of the Agreement and Plan of Merger, Limestone merged with and into Peoples, and Limestone Bank merged with and into Peoples’ wholly-owned subsidiary, Peoples Bank (collectively, the “Limestone Merger”).

The Limestone Merger closed as of the close of business on April 30, 2023.

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 recorded goodwill in the amount of $68.8 million and core deposit other intangible assets in the amount of $27.7 million related to this transaction.

On January 28, 2021, Peoples’ Board of Directors approved a share repurchase program authorizing Peoples to purchase up to an aggregate of $30.0 million of Peoples’ outstanding common shares, replacing the February 27, 2020 share repurchase program which had authorized Peoples to purchase up to an aggregate of $40.0 million of Peoples’ outstanding common shares.

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

Peoples repurchased an aggregate of 107,219 of its common shares totaling $3.0 million during 2023 and an aggregate of 263,183 of its common shares totaling $7.4 million during 2022, but did not repurchase any common shares during 2021, under the share repurchase program authorized on January 28, 2021.

Primary Market Area and Customers

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and Maryland.

Peoples currently operates 65 offices in Ohio, 29 offices in West Virginia, 26 offices in Kentucky, two offices in Virginia, three offices in Washington D.C., one office in Maryland, an insurance premium finance lending office in Missouri, an equipment leasing office in Vermont and a technology equipment leasing office in Minnesota.

Peoples' market area consists of rural, small urban and metropolitan markets in which Peoples serves a diverse group of industries and employers.

Peoples currently operates 70 offices in Ohio, 28 offices in West Virginia, 46 offices in Kentucky, two offices in Virginia, three offices in Washington D.C., one office in Maryland, an insurance premium finance lending office in Missouri, and an equipment leasing office in Vermont.

Peoples’ market area consists of rural, small urban and metropolitan markets in which Peoples serves a diverse group of industries and consumers.

Principal industries served in Peoples’ primary market area include manufacturing, distribution, commercial real estate, health care, education, municipal, agricultural, automotive, wholesale and retail trade, franchise, and service-related industries.

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Lending Activities

Peoples Bank originates various types of loans, including commercial loans (comprised of commercial and industrial loans, commercial real estate loans, and construction loans), premium finance loans, residential real estate loans, home equity lines of credit, consumer loans (comprised of both indirect and direct loans) and Overdraft Privilege.

Peoples Bank's lending activities are focused principally on lending opportunities within its primary market areas, except for its premium finance lending and equipment leasing businesses.

Peoples Bank’s lending activities are focused principally on lending opportunities within its primary market area, except for its premium finance lending and equipment leasing businesses, which originate loans and leases nationwide.

However, Peoples Bank may occasionally originate loans outside its primary market area.

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however, certain longer-term fixed-rate mortgage loan originations, primarily one-to-four family residential mortgages, and portions of select commercial real estate loans and commercial and industrial loans are sold into the secondary market or to other financial institutions.

Peoples Bank's loans consist of credit extensions to borrowers spread over a broad range of industrial classifications.

Peoples Bank’s loans consist of credit extensions to consumers and other borrowers spread over a broad range of industrial classifications.

At December 31, 2023, Peoples Bank had no concentration of loans to borrowers engaged in the same or similar industries that exceeded 10% of total loans (also referred to as “loans, net of deferred fees and costs”), nor did Peoples Bank have any loans outstanding to non-United States (“U.S.”) entities.

Commercial Lending

Commercial loans include commercial and industrial loans, commercial real estate loans, and construction loans.

Commercial loans represented the largest portion of Peoples Bank's total loan portfolio, comprising approximately 54.4% and 59.3% of total loans at December 31, 2022 and December 31, 2021, respectively.

Commercial loans include commercial and industrial loans, commercial real estate loans, construction loans, and commercial credit card loans.

Commercial loans represented the largest portion of Peoples Bank’s total loan portfolio, comprising approximately 60.8% and 54.4% of total loans at December 31, 2023, and at December 31, 2022, respectively.

Commercial lending inherently carries a significant risk of loss since commercial loan relationships generally involve larger loan balances than other loan classes.

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At December 31, 2023, the commercial loan portfolio consisted of 59.6% in variable interest rate loans and 40.4% in fixed interest rate loans.

In determining whether to grant a commercial loan, Peoples Bank primarily reviews a schedule of cash flows to evaluate whether the borrower's anticipated future cash flows will be adequate to service both interest and principal due.

In determining whether to grant a commercial loan,

Peoples Bank primarily reviews a schedule of cash flows to evaluate whether the borrower’s anticipated future cash flows will be adequate to service both interest and principal due.

Peoples Bank also originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples Bank on terms that match the terms of the loan.

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Peoples Bank evaluates all commercial loan relationships whose aggregate credit exposure is greater than $1.0 million on an annual basis for possible credit deterioration.

This loan review process provides Peoples Bank with opportunities to identify potential problem loans and take proactive actions to assure repayment of the loan or minimize Peoples Bank's risk of loss, such as reviewing the relationship more frequently based upon the loan quality rating and aggregate outstanding exposure.

This internal loan review process provides Peoples Bank with opportunities to identify potential problem loans and take proactive actions to assure repayment of the loan or minimize Peoples Bank’s risk of loss, such as reviewing the relationship more frequently based upon the loan quality rating and aggregate outstanding exposure.

Upon detection of the reduced ability of a borrower to meet cash flow obligations, the loan is reviewed for possible downgrade in the loan quality rating or placement on nonaccrual status.

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Triggers for review include a borrower's request to renew a maturing loan or line of credit, actual knowledge of adverse events affecting the borrower’s business, receipt of financial statements indicating deteriorating credit quality, or other similar events.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act of 2020, as amended (the "CARES Act"), was signed into law on March 27, 2020, to provide national emergency economic relief measures.

The CARES Act amended the loan program of the Small Business Administration (the "SBA"), in which Peoples Bank participates, to create a guaranteed, unsecured loan program, the Paycheck Protection Program (the "PPP"), to fund operational costs of eligible businesses, organizations and self-employed persons during COVID-19.

These economic relief measures were extended through the enactment in December 2020 of the omnibus federal spending and economic stimulus legislation title the Consolidated Appropriations Act, 2021 (the "CAA").

The PPP loan program ended on May 31, 2021, meaning no new PPP loans have been originated since this date.

As of December 31, 2022, Peoples had $2.4 million aggregate principal amount, net of deferred fees, in PPP loans outstanding, which were included in commercial and industrial loan balances, compared to $87.1 million at December 31, 2021 (including $23.4 million acquired in the merger with Premier Financial Bancorp, Inc.

(“Premier” and the "Premier Merger")).

Commercial and Industrial Loans

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The primary source of repayment of this type of loan is generally cash flows generated from operations of the business, which can be susceptible to adverse changes in economic conditions of the general economy as a whole or within a specific industry.

Also included in commercial and industrial loan balances are the PPP loans.

At December 31, 2023, commercial and industrial loans comprised 19.2% of Peoples Bank’s total loan portfolio, compared to 19.0% at December 31, 2022.

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To mitigate the risk of construction lending, Peoples Bank requires periodic site inspections, typically completed by an independent third party, to ensure appropriate completion of the project prior to any disbursements.

Construction loans are structured to provide sufficient time to complete construction, giving consideration to weather or other variables that influence completion time.

Construction loans are

structured to provide sufficient time to complete construction, giving consideration to weather or other variables that influence completion time.

Peoples Bank typically requires the term of its construction loans to be less than three years.

Insurance Premium Finance Loans

Peoples Bank's portfolio of insurance premium finance loans comprised 3.4% of total loans at December 31, 2022, and 3.0% at December 31, 2021, with the portfolio having been acquired during 2020.

The insurance premium finance loans are originated through independent insurance agency partners nationwide and provide funding for the purchase by borrowers of property and casualty insurance policies from the insurance agency partners.

The loans are secured by the refundable, unearned premiums with respect to the underlying insurance policies.

These loans require a 10%-20% down payment followed by no less than nine consecutive, equal monthly payments of principal plus interest.

Based in Lee Summit, Missouri, the Peoples Premium Finance originates insurance premium finance loans through independent insurance agency partners nationwide and provide funding for the purchase by borrowers of property and casualty insurance policies from the insurance agency partners.

Peoples Bank’s portfolio of insurance premium finance loans comprised 3.3% of total loans at December 31, 2023, and 3.4% at December 31, 2022, with the original portfolio having been acquired during 2020.The loans are secured by the refundable, unearned premiums with respect to the underlying insurance policies.

These loans require a 10% to 20% down payment followed by no less than nine consecutive, equal monthly payments of principal plus interest.

This type of lending is relatively low risk, as the loan amount is generally less than the refundable, unearned premiums of the underlying insurance policy.

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Based in Burlington, Vermont, the North Star Leasing division underwrites, originates and services equipment leases and equipment financing agreements primarily to small businesses throughout the U.S.

These leases transfer substantially all of the benefits and risks of equipment ownership to the lessee.

The present value of future lease payments and the estimated residual value are recorded as leases on Peoples' Consolidated Balance Sheet.

Revenue is recognized as a constant percentage return on the lease's carrying value.

Lease origination costs are deferred and amortized as an adjustment of the related lease's yield.

Based in Excelsior, Minnesota, Vantage underwrites, originates and services primarily technology equipment leases to medium and large businesses throughout the U.S.

These leases transfer substantially all of the benefits and risks of equipment ownership to the lessee.

Both North Star Leasing’s and Vantage’s leases transfer substantially all of the benefits and much of the risks of equipment ownership to the lessee.

The present value of future lease payments and the estimated residual value are recorded as leases on Peoples’ Consolidated Balance Sheet.

Revenue is recognized as a constant percentage return on the lease's carrying value.

For the majority of the leases, revenue is recognized as a constant percentage return on the lease’s carrying value.

Lease origination costs are deferred and amortized as an adjustment of the related lease’s yield.

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however, Peoples Bank may retain certain fixed rate real estate loans.

Peoples bank also offers fixed rate home equity installment loans with five-year to 20-year terms.

Peoples Bank typically requires residential real estate loan amounts to be no more than 80% of the purchase price or the appraised value of the real estate securing the loan, whichever is lower, unless private mortgage insurance is obtained by the borrower for the percentage exceeding 80%.

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Numerous risk factors attributable to real estate lending are considered during underwriting for the purposes of establishing an interest rate commensurate with the inherent risks of the loan.

Residential real estate loans are typically secured by first mortgages with evidence of title in favor of Peoples Bank in the form of an attorney's opinion of the title or a title insurance policy.

Residential real estate loans are typically secured by first mortgages with evidence of title in favor of Peoples Bank in the form of an attorney’s opinion of title or a title insurance policy.

Peoples Bank requires insurance, with Peoples Bank named as the mortgagee and loss payee.

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At December 31, 2023, outstanding home equity lines of credit comprised 3.4% of Peoples Bank’s total loans, compared to 3.8% at December 31, 2022.

Peoples Bank currently offers home equity lines of credit with a prime-based variable rate for the entire 10-year term of the loan and fixed rate installment loans with five-year to 20-year terms.

At December 31, 2022, Peoples Bank's home equity loan portfolio consisted of 99.0% in variable interest rate loans and 1.0% in fixed interest rate loans.

Peoples Bank also offers a home equity line of credit product whose terms include a fixed rate for the first five years, which converts to a variable interest rate for the remaining five years.

Peoples Bank currently offers home equity lines of credit with a prime-based variable rate for the entire 10-year term, with interest-only payments and a balloon payment at maturity.

At December 31, 2023, Peoples

Bank’s home equity loan portfolio consisted of 99.3% in variable interest rate loans and 0.7% in fixed interest rate loans.

At December 31, 2023, 24.1% of the total home equity loan portfolio was represented by convertible rate home equity lines of credit, with total outstanding principal balances and available credit amounts of $50.4 million and $63.2 million, respectively, and a weighted-average remaining maturity of 7.5 years.

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Consumer Lending

Peoples Bank's consumer lending activities include consumer indirect loans and consumer direct loans, which primarily involve loans secured by automobiles, motorcycles, recreational vehicles and other personal property, as well as unsecured loans and personal lines of credit.

Peoples Bank’s consumer lending activities include consumer indirect loans, consumer credit card loans, and consumer direct loans, which primarily involve loans secured by automobiles, motorcycles, recreational vehicles and other personal property, as well as unsecured loans and personal lines of credit.

Consumer loans generally involve more risk as to collectability than real estate mortgage loans because of the type and nature of the collateral or, in certain instances, the absence of collateral.

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These dealerships undergo an approval process whereby Peoples Bank reviews the dealership licensing and industry experience, evaluates customer experience with the dealership, and completes an inspection of the inventory, showroom, and general facilities.

On an ongoing basis, the

dealerships are monitored based on production volume, application approval rates, portfolio default rates, and adherence to loan pricing guidelines.

On an ongoing basis, the dealerships are monitored based on production volume, application approval rates, portfolio default rates, and adherence to loan pricing guidelines.

Consumer Direct Loans

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Consumer direct loans differ from consumer indirect loans as they include expanded products, such as unsecured loans, or loans secured by stock or deposits.

Consumer direct loans comprised 2.3% of Peoples Bank's total loan portfolio at each of December 31, 2022 and December 31, 2021.

Overdraft Privilege

Peoples Bank grants Overdraft Privilege to qualified customers.

Overdraft Privilege is a service that provides overdraft protection to deposit customers, both individual and business, by establishing an Overdraft Privilege amount.

After a 60-day waiting period to verify account activity, each new checking account usually receives an Overdraft Privilege amount of $400, $700 or $1,000 based on the type of account and other parameters, such as previous charge-off history or credit loss.

Customers also have the ability to opt out of Overdraft Privilege offered by Peoples.

Once established, customers are permitted to overdraw their checking account at Peoples Bank's discretion, up to their Overdraft Privilege limit, with each item being charged Peoples Bank's regular overdraft fee, with a maximum of five charges per day when the customer's account is overdrawn more than $5.

Consumer direct loans comprised 2.1% of Peoples Bank’s total loan portfolio at December 31, 2023, compared to 2.3% at December 31, 2022.

Overdraft Services

Peoples Bank grants overdraft services to qualified customers, which provides overdraft protection to deposit customers, both individual and business, by establishing an overdraft amount.

After a 60-day waiting period to verify account activity, each new checking account usually receives an overdraft amount of $400, $700 or $1,000 based on the type of account and other parameters, such as previous charge-off history or credit loss.

Customers also have the ability to opt out of the overdraft services offered by Peoples.

Once established, customers are permitted to overdraw their checking account at Peoples Bank's discretion, up to their overdraft limit, with each item being charged Peoples Bank’s regular overdraft fee, with a maximum of five charges per day when the customer’s account is overdrawn more than $5.

Customers repay the overdraft with their next deposit.

Overdraft Privilege is designed to allow Peoples Bank to fill the void between traditional overdraft protection, such as a line of credit, and "check cashing stores." Under federal banking regulations, Peoples Bank is required to obtain the consent of its customers in order to apply Overdraft Privilege to ATM and one-time debit card transactions.

While Overdraft Privilege generates fee income, these fees may be offset by additions to the provision for credit losses necessary to ensure the maintenance of an appropriate allowance for credit losses against overdrafts deemed uncollectable.

Peoples’ overdraft services are designed to allow Peoples Bank to fill the void between traditional overdraft protection, such as a line of credit, and non-bank “check cashing services.” Under federal banking regulations, Peoples Bank is required to obtain the consent of its customers in order to apply Peoples’ overdraft services to ATM and one-time debit card transactions.

While the overdraft services generate fee income, these fees may be offset by additions to the provision for credit losses necessary to ensure the maintenance of an appropriate allowance for credit losses against overdrafts deemed uncollectable.

This allowance, along with net charge-offs, was included in determining Peoples Bank’s allowance for credit losses.

At December 31, 2022, the unfunded commitment related to Overdraft Privilege was $70.9 million.

At December 31, 2023, the unfunded commitment related to overdraft services was $82.3 million.

Investment Activities

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Investment activity by Peoples Bank is subject to certain regulatory guidelines and limitations on the types of securities eligible for purchase.

As a result, the investment securities owned by Peoples Bank at December 31, 2022 included agencies and corporations of the U.S.

government, including mortgage-backed securities, bank eligible obligations of any state or political subdivision in the U.S.

and bank eligible corporate obligations, including private-label mortgage-backed securities.

As a result, the investment securities owned by Peoples Bank at December 31, 2023 included obligations of agencies and corporations of the U.S.

government, including mortgage-backed securities, obligations of U.S.

government sponsored agencies, bank eligible obligations of states and political subdivisions in the U.S., and bank eligible corporate obligations, including private-label mortgage-backed securities.

Peoples Bank also invests in tax credit funds.

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and (4) earn the maximum overall return commensurate with Peoples Bank’s risk appetite and liquidity needs.

Investment strategies to achieve these objectives are reviewed and approved by the ALCO.

Investment strategies to achieve these objectives are reviewed by the ALCO.

In its evaluation of investment strategies, the ALCO considers various factors, including the interest rate environment, balance sheet mix, actual and anticipated loan demand, funding opportunities and Peoples Bank’s overall interest rate sensitivity.

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Peoples also hedges 90-day brokered deposits with interest rate swaps as part of its funding strategy.

The swaps pay a fixed rate of interest while receiving three-month LIBOR, which offsets the rate on the brokered deposits.

The swaps pay a fixed rate of interest while receiving variable interest based on the three-month Secured Overnight Financing Rate (“SOFR”), which offsets the rate on the brokered deposits.

Peoples’ funding sources are managed through Peoples’ asset-liability management process and monitored by the ALCO, which is discussed further in the “Interest Rate Sensitivity and Liquidity” section of “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K.

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Retail and business deposits are attractive sources of funding because of their stability and cost, relative to wholesale funding alternatives, in addition to providing opportunities for Peoples to build long-term client relationships through the cross-selling of its other products and services.

Peoples Bank also offers its customers the ability to receive multi-million dollar federal deposit insurance coverage for certificates of deposit ("CDs") through the Certificate of Deposit Account Registry Service ("CDARS") program and money market deposit accounts through the Insured Cash Sweep Services ("ICS") network.

Peoples Bank also offers its customers the ability to receive multi-million dollar federal deposit insurance coverage for certificates of deposit (“CDs”) through the Certificate of Deposit Account Registry Service (“CDARS”) program and money market deposit accounts through the Insured Cash Sweep (“ICS”) services network.

Under these programs, funds from large customer deposits are placed into accounts issued by other members of the CDARS program or ICS network in increments below the federal deposit insurance limits to ensure both principal and interest remain eligible for insurance.

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Peoples also has the ability to obtain funds, if determined to be appropriate, through federal funds purchased and advances from the Federal Reserve Discount Window.

Peoples also utilizes the Bank Term Funding Program (“BTFP”) which was created by the Federal Reserve Bank to support American businesses and households by making additional funding available to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

The BTFP offers loans of up to one year in length.

In addition, Peoples has the ability to obtain funds from unrelated financial institutions in the form of term loans or revolving lines of credit.

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Peoples experiences intense competition within its primary market area due to the presence of several national, regional and local financial institutions and other service providers, including finance companies, financial technology companies (“fintechs”), insurance agencies and mutual fund providers.

Competition within the financial services and insurance industries continues to increase as a result of mergers between, and expansion of, financial services and insurance providers within and outside of Peoples' primary market areas.

In addition, the deregulation of the financial services industry (see the discussion of the Gramm-Leach-Bliley Act of 1999 in the section of this item captioned “Supervision and Regulation – Bank Holding Company Regulation”) has allowed securities firms and insurance companies that have elected to become financial holding companies to acquire commercial banks and other financial institutions, which can create additional competitive pressure.

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However, some competitors may have greater resources, including additional technology offerings and higher lending limits than Peoples, which may adversely affect Peoples’ ability to compete.

Peoples' business

strategy includes the use of a "needs-based" sales and service approach to serve customers and is intended to promote customers' continued use of multiple financial products and services.

Peoples’ business strategy includes the use of a “needs-based” sales and service approach to serve customers and is intended to promote customers’ continued use of multiple financial products and services.

Peoples continues to emphasize the integration of traditional commercial banking products with non-traditional financial products, such as insurance and investment products.

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Management believes Peoples has developed a level of expertise in serving the financial service needs of all communities.

Peoples' primary market area has expanded into larger metropolitan areas, such as central, southwestern and northeastern Ohio along with eastern Virginia, southern Maryland, Minnesota and Washington, D.C.

Peoples’ primary market area has expanded into larger metropolitan areas, such as central, southwestern and northeastern Ohio along with Kentucky, eastern Virginia, southern Maryland, Minnesota, West Virginia, and Washington, D.C.

Peoples also competes nationally when providing insurance premium financing and commercial equipment leases and equipment financing arrangements.

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Peoples offers paid time off, medical, dental and vision insurance, along with wellness programs, a 401(k) program, an employee stock purchase program, programs to assist with education-related costs, reward and recognition programs, as well as other various programs and benefits.

Peoples has also implemented a $15 minimum wage throughout the organization and all associates are at or above this threshold as of January 2023.

Peoples Bank has been recognized by Newsweek as one of America’s Best Banks 2023 and Peoples Bank has been recognized as a Best Bank to Work For by American Banker in each of 2021 and 2022.

Peoples has also implemented a $15 minimum wage throughout the organization and all associates were at or above this threshold as of January 2023.

Peoples Bank has been recognized by Newsweek as one of America’s Best Banks in 2023, and Peoples Bank has been recognized as a “Best Bank to Work For” by American Banker in each of 2021, 2022 and 2023.

Peoples strives to be an inclusive and diverse workplace, free of harassment, and encourages employees to voice their opinions.

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Patent and Trademark Office (the “USPTO”).

Peoples has submitted an application to register "Vantage Financial" as a trademark, but has yet to receive final approval.

Peoples has submitted applications to the USPTO to register “Vantage Financial” and “vidTeller” as trademarks, but has yet to receive final approval.

Additionally, Peoples is the owner of “tradeIT”, a registered service mark of Vantage.

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Applicable laws and regulations restrict permissible activities and investments, and require actions to protect loan, deposit, brokerage, fiduciary and other customers, as well as the DIF.

Such laws and regulations may also restrict Peoples' ability to repurchase its common shares or to receive dividends from Peoples Bank, and may impose capital adequacy

and liquidity requirements.

Such laws and regulations may also restrict Peoples’ ability to repurchase its common shares or to receive dividends from Peoples Bank, and may impose capital adequacy and liquidity requirements.

The following is a summary of the regulatory agencies, statutes and related regulations that have, or could have, a material impact on Peoples’ business.

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Subsidiary Bank

Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions ("ODFI") and the Federal Reserve Bank of Cleveland ("FRB").

Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the “ODFI”) and the Federal Reserve Bank of Cleveland (the “FRB”).

Peoples Bank must also follow the regulations promulgated by the Consumer Financial Protection Bureau (the “CFPB”), which regulates consumer financial products and services and certain financial services providers.

Various requirements and restrictions under the laws of the U.S, and the states of Ohio, Kentucky, West Virginia, Virginia, Washington, D.C., Maryland, Minnesota, Vermont and Missouri affect the operations of Peoples Bank, including requirements to maintain reserves against deposits, restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon, restrictions relating to investments and other activities, limitations on credit exposure to correspondent banks, limitations on activities based on capital and surplus, limitations on transactions between Peoples Bank and Peoples, limitations on the payment of dividends, and limitations on branching.

Consumer laws and regulations that are designed to prevent unfair, deceptive and abusive acts and practices and that ensure that consumers have access to fair, transparent and competitive markets for consumer financial products and services also affect the services provided by Peoples Bank.

Various requirements and restrictions under the laws of the U.S, and the states of Ohio, Kentucky, West Virginia, Virginia, Washington, D.C., Maryland, Vermont and Missouri affect the operations of Peoples Bank, including requirements to maintain reserves against deposits, restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon, restrictions relating to investments and other activities, limitations on credit exposure to correspondent banks, limitations on activities based on capital and surplus, limitations on transactions between Peoples Bank and Peoples, limitations on the payment of dividends, and limitations on branching.

Consumer laws and regulations that are designed to prevent unfair, deceptive

and abusive acts and practices and that ensure that consumers have access to fair, transparent and competitive markets for consumer financial products and services also affect the services provided by Peoples Bank.

Non-Banking Subsidiaries

Peoples’ non-banking subsidiaries are also subject to regulation by the Federal Reserve Board and other applicable federal and state agencies.

Peoples Insurance, as a licensed insurance agency, is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states where it conducts business.

Peoples Risk Management, Inc., a Nevada-chartered captive insurance company, is subject to the laws and regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance.

Peoples Insurance, as a licensed insurance agency, is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of the other states where it conducts business.

Other Regulatory Agencies

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Peoples’ common shares are listed with Nasdaq under the symbol “PEBO” and Peoples is subject to the rules for Nasdaq listed companies.

Federal Home Loan Bank

Federal Home Loan Bank (“FHLB”)

Peoples Bank is a member of the FHLB, which provides credit to its members in the form of advances.

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As insurer, the FDIC is authorized to conduct examinations of and to require routine reporting by insured institutions, including Peoples Bank, to prohibit any insured institution from engaging in any activity the FDIC determines by regulation or order to pose a threat to the DIF, and to take enforcement actions against insured institutions.

The FDIC may terminate insurance of deposits of any insured institution if the FDIC finds that the insured institution has engaged in unsafe or unsound practices, is

in an unsafe or unsound condition, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or any other regulatory agency.

The FDIC may terminate insurance of deposits of any insured institution if the FDIC finds that the insured institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or any other regulatory agency.

Insured depository institutions are required to remit quarterly deposit insurance premiums to the FDIC, which are used to fund the DIF.

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The FDIC assesses a quarterly deposit insurance premium on each insured depository institution based on perceived risk characteristics of the insured institution to the DIF, with institutions deemed less risky paying lower rates.

Currently, assessments for institutions of less that $10.0 billion of total assets are based on financials measures and supervisory ratings derived from statistical models estimating the probability of failure within three years.

Currently, assessments for institutions of less than $10 billion of total assets are based on financial measures and supervisory ratings derived from statistical models estimating the probability of failure within three years.

The FDIC may increase or decrease the range of assessments uniformly, except that no adjustments can deviate more than two basis points from the base assessment without notice and comment rule making.

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In March 2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35% by September 30, 2020, the deadline imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (the “Dodd-Frank Act”).

The Dodd-Frank Act required the FDIC to offset the effect on insured institutions with assets of less than $10.0 million of the increase in statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.

Although the FDIC's rules reduced assessment ratio on all banks, they imposed a surcharge on banks with assets of $10.0 million or more to be paid until the DRR reached 1.35%.

The Dodd-Frank Act required the FDIC to offset the effect on insured institutions with assets of less than $10 billion of the increase in statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.

Although the FDIC’s rules reduced assessment ratio on all banks, they imposed a surcharge on banks with assets of $10 billion or more to be paid until the DRR reached 1.35%.

At September 30, 2018, the DRR met the statutory minimum of 1.35%.

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In addition, preliminary assessment credits were determined by the FDIC for banks with assets of less than $10 billion, which had previously contributed to the increase of the DRR to 1.35%.

On June 30, 2019, the DRR reached 1.40%, and the FDIC applied credits for banks with assets of less than $10.0 billion.

On June 30, 2019, the DRR reached 1.40%, and the FDIC applied credits for banks with assets of less than $10

On June 30, 2020, the DRR fell below the statutory minimum to 1.30%.

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In the semiannual update for the Restoration Plan in June 2022, the FDIC projected that the reserve ratio was at risk of not reaching the statutory minimum of 1.35% by September 30, 2028, the statutory deadline to restore the reserve ratio.

Based on this update, the FDIC Board approved an Amended Restoration Plan, and concurrently proposed an increase in initial base deposit insurance assessment rate schedules uniformly by 2 basis points (from three basis points to five basis points), applicable to all insured depository institutions.

Based on this update, the FDIC Board approved an Amended Restoration Plan, and concurrently proposed an increase in initial base deposit insurance assessment rate schedules uniformly by two basis points (from three basis points to five basis points), applicable to all insured depository institutions.

In October 2022, the FDIC Board finalized the increase with an effective date of January 1, 2023, applicable to the first quarterly assessment period of 2023 (i.e., January 1 through March 31, 2023).

The revised assessment rate schedules are intended to increase the likelihood that the reserve ratio of the DIF reaches the statutory minimum level of 1.35% percent by September 30, 2028.

As of December 31, 2022, the DRR remains below the statutory minimum of 1.35%.

In the FDIC’s most recent semiannual update for the Amended Restoration Plan in November 2023, the FDIC noted that increased loss provisions associated with the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023 that reduced the DIF balance, coupled with strong growth in insured deposits, resulted in the reserve ratio declining 15 basis points from 1.25% as of December 31, 2022 to 1.10% as of June 30, 2023.

Despite the decline in the reserve ratio, the FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028.

As a result, the FDIC staff recommended no changes to the Amended Restoration Plan and all scheduled assessment rates were maintained.

On November 16, 2023, the FDIC adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank.

The assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported for the quarter ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits.

The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024.

Because Peoples Bank’s uninsured deposits were less than $5 billion for the quarter ended December 31, 2022, Peoples Bank will not be subject to this special assessment.

Bank Holding Company Regulation

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The BHC Act and other federal and state statutes regulate acquisitions of commercial banks.

The BHC Act requires the prior approval of the Federal Reserve Board for the direct or indirect acquisition of more than 5% of the voting shares of a commercial

bank or its parent holding company.

The BHC Act requires the prior approval of the Federal Reserve Board for the direct or indirect acquisition of more than 5% of the voting shares of a commercial bank or its parent holding company.

Under the federal Bank Merger Act, as amended, the prior approval of the Federal Reserve Board is required for a state-chartered, Federal Reserve Bank member bank to merge with another bank or purchase the assets or assume the deposits of another bank.

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The Federal Reserve Board may require a financial holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to shareholders if the Federal Reserve Board believes the payment of such dividends would be an unsafe or unsound practice.

Federal Reserve System

The Federal Reserve Board requires all depository institutions to maintain reserves at specified levels against their transaction accounts, primarily checking accounts.

In response to the COVID-19 pandemic, the Federal Reserve reduced reserve requirement ratios to 0% effective on March 26, 2020, to support lending to households and businesses.

The reserve requirement ratio remained at 0% as of December 31, 2023.

Transactions with Affiliates, Directors, Executive Officers and Shareholders

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In addition, the amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

The Coronavirus Aid, Relief, and Economic Security Act of 2020 and Initiatives Related to COVID-19

The Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) and Initiatives Related to COVID-19

In response to the novel COVID-19 pandemic (“COVID-19”), the CARES Act was signed into law on March 27, 2020, to provide national emergency economic relief measures.

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Department of Treasury, the Federal Reserve Board and other federal banking agencies, including those with direct supervisory jurisdiction over Peoples and Peoples Bank.

Furthermore, as COVID-19 is ongoing and continues to evolve, federal regulatory authorities continue to issue additional guidance with respect to the implementation, lifecycle, and eligibility requirements for the various CARES Act programs as well as industry-specific recovery procedures for COVID-19.

In addition, it is possible that the U.S.

Congress will enact supplementary COVID-19 response legislation, including amendments to the CARES Act or new bills comparable in scope to the CARES Act.

Section 1102 of the CARES Act amended the loan program of the SBA, in which Peoples Bank participates, to create a guaranteed, unsecured loan program, the PPP, to fund operational costs of eligible businesses, organizations and self-employed persons during COVID-19.

Section 1102 of the CARES Act amended the loan program of the SBA, in which Peoples Bank participates, to create a guaranteed, unsecured loan program, the Paycheck Protection Program (“PPP”), to fund operational costs of eligible businesses, organizations and self-employed persons during COVID-19.

These loans are eligible to be forgiven if certain conditions are satisfied and are fully guaranteed by the SBA.

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In addition, neither the government nor lenders have been permitted to charge the recipients of PPP loans any fees.

On December 27, 2020, the President signed into law the CAA, which that included the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "HHSB Act").

On December 27, 2020, the President signed into law the Consolidated Appropriates Act, 2021, which included the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “HHSB Act”).

Among other things, the HHSB Act renewed the PPP, allocating $284.5 billion for both new first-time PPP loans under the existing PPP and the expansion of existing PPP loans for certain qualified, existing PPP borrowers.

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The Federal Deposit Insurance Corporation Improvement Act of 1991, as amended (“FDICIA”), identifies five capital categories for insured depository institutions and requires the applicable regulatory agencies to implement systems for “prompt corrective action” for insured depository institutions that do not meet minimum capital requirements within such categories.

The regulatory agencies, including the Federal Reserve Board, the FDIC, the ODFI, and the Office of Comptroller of the Currency (the "OCC"), have adopted substantially similar regulatory capital guidelines and regulations consistent with the requirements of FDICIA, and have established a system of prompt corrective action to resolve certain problems of undercapitalized institutions.

The regulatory agencies, including the Federal Reserve Board, the FDIC, the ODFI, and the Office of the Comptroller of the Currency (the “OCC”), have adopted substantially similar regulatory capital guidelines and regulations consistent with the requirements of FDICIA, and have established a system of prompt corrective action to resolve certain problems of undercapitalized institutions.

This system is based on five capital level categories for insured depository institutions:

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and (d) a minimum tier 1 leverage ratio of 4.0%.

Common equity for the common equity tier 1 capital ratio generally consists of common stock (plus related surplus), retained earnings, accumulated other comprehensive income ("AOCI") (unless an institution elects to exclude such income from regulatory capital), and limited amounts of minority interests in the form of common stock, subject to applicable regulatory adjustments and deductions.

Common equity for the common equity tier 1 capital ratio generally consists of common stock (plus related surplus), retained earnings, accumulated other comprehensive income/loss (“AOCI” for income, “AOCL” for loss) (unless an institution elects to exclude such income from regulatory capital), and limited amounts of minority interests in the form of common stock, subject to applicable regulatory adjustments and deductions.

Tier 1 capital generally consists of common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred stock and related surplus, cumulative preferred stock and related surplus, trust preferred securities that have been grandfathered (but which are not otherwise permitted), and limited amounts of minority interests in the form of additional tier 1 capital instruments, less certain deductions.

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In addition, regulations adopted by the federal bank regulatory agencies authorize the agencies to require that an institution that has been given notice that it is not satisfying any of such safety and soundness standards to submit a compliance plan.

If, after being so notified, the institution fails to submit an acceptable compliance plan or fails in any material respect to implement an accepted compliance plan, the agency must issue an order directing corrective actions and may issue an order directing other actions of the types to which an undercapitalized institution is subject under the "prompt corrective action" provisions of FDIA.

If the institution fails to comply with such an order, the agency may seek to enforce such order in judicial proceedings and to impose civil money penalties.

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Depository institutions are periodically examined for compliance with the CRA and are assigned ratings that must be publicly disclosed.

The most recent performance evaluation by the Federal Reserve Board (which was Peoples Bank's primary federal banking regulator at the time of the examination) of Peoples Bank was conducted in 2021 and resulted in an overall rating of "Outstanding."

Peoples Bank received an overall rating of “Outstanding” pursuant to its most recent CRA rating assigned by the Federal Reserve Board.

On October 24, 2023, the federal banking agencies, including the Federal Reserve Board, issued a final rule designed to strengthen and modernize the regulations implementing the CRA.

The changes are designed to encourage banks to expand access to credit, investment and banking services in low- and moderate-income communities, adapt to changes in the banking industry, including mobile and internet banking, provide greater clarity and consistency in the application of the CRA regulations, and tailor CRA evaluations and data collection to bank size and type.

The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

Peoples cannot predict the impact the changes to the CRA will have on its operations at this time.

Dividend Restrictions

Current banking regulations impose restrictions on Peoples Bank’s ability to pay dividends to Peoples.

These restrictions include a limit on the amount of dividends that may be paid in a given year without prior approval of the Federal Reserve Board

and a prohibition on paying dividends that would cause Peoples Bank's total capital to be less than the required minimum levels under the capital requirements imposed by the Federal Reserve Board and the amount of the capital conservation buffer.

Ohio law also limits the amount of dividends that may be paid in any given year without prior approval of the Ohio Superintendent of Financial Institutions.

These restrictions include a limit on the amount of dividends that may be paid in a given year without prior approval of the Federal Reserve Board and a prohibition on paying dividends that would cause Peoples Bank’s total capital to be less than the required minimum levels under the capital requirements imposed by the Federal Reserve Board and the amount of the capital conservation buffer.

Ohio law also limits the amount of dividends that may be paid in any given year without prior approval of the Ohio Superintendent of

Financial Institutions.

Peoples Bank may not declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of Peoples Bank’s net income during the current calendar year and the retained net income of the prior two calendar years, unless the dividend has been approved by the ODFI and the Federal Reserve Board.

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Specifically, Peoples Bank is prohibited from paying dividends in an amount greater than permitted by law without requiring prior Federal Reserve Board or other regulatory approval.

In addition, if Peoples were to elect to defer payments of interest on the junior subordinated debt securities held by the NB&T Statutory Trust III or FNB Capital Trust One, or an event of default were to occur under the indenture governing those junior subordinated debt securities, Peoples will be prohibited from declaring or paying any dividends on Peoples' common shares.

In addition, if Peoples were to elect to defer payments of interest on the junior subordinated debt securities held by NB&T Statutory Trust III, FNB Capital Trust One, Ascencia Statutory Trust I or Porter Statutory Trusts II-IV or an event of default were to occur under the indenture governing those junior subordinated debt securities, Peoples will be prohibited from declaring or paying any dividends on Peoples’ common shares.

Even where the declaration or payment of a dividend would not otherwise be restricted under applicable laws, Peoples or Peoples Bank may decide to limit the payment of dividends in order to retain earnings for corporate use.

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and (iv) establish related definitions, reporting, and recordkeeping requirements.

In August 2021, the court overseeing the litigation challenging the Final Small Dollar Rule found in the CFPB's favor, and ordered the compliance date to be 286 days after the final judgment.

In October 2022, the Fifth Circuit Court of Appeals reversed the lower court's decision and vacated the Final Small Dollar Rule.

In November 2022, the CFPB filed a petition for a writ of certiorari with the U.S.

Supreme Court seeking an expedited review of the appellate court decision.

However, due to continuing appellate litigation regarding the constitutionality of the CPFB’s funding structure, which stems, in part, from legal challenges to the Final Small Dollar Rule, the effective date for nationwide compliance with the Final Small Dollar Rule remains uncertain at this time.

The federal bank regulatory agencies also issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

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OFAC publishes lists of specially designated targets and countries.

Peoples is responsible for, among other

things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.

Failure to comply with these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Peoples is responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.

Failure to comply with these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to

approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.

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Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and take other actions.

Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk

to the organization's safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.

Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.

Public company compensation committee members must meet heightened independence requirements and consider the independence of compensation consultants, legal counsel and other advisors to the compensation committee.

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SEC regulations require public companies such as Peoples to provide various disclosures about executive compensation in annual reports and proxy statements, and to present to their shareholders a non-binding vote on the approval of executive compensation.

Public companies will be required, once stock exchanges adopt additional listing requirements under the Dodd-Frank Act and rules adopted by the SEC in October 2022, to adopt and implement "clawback" policies for incentive compensation payments and to disclose the details of the procedures which allow recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating an accounting restatement due to material noncompliance with financial reporting requirements.

Following the adoption of additional listing requirements in 2023 to comply with the Dodd-Frank Act and rules adopted by the SEC in October 2022, public companies are now required to adopt and implement “clawback” policies for incentive compensation payments and to disclose the details of the procedures which allow recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating an accounting restatement due to material noncompliance with financial reporting requirements.

This clawback policy is intended to apply to compensation paid within the three completed fiscal years immediately preceding the date the issuer is required to prepare a restatement and would cover all executives (including former executives) who received incentive awards.

Peoples has implemented a clawback policy and it is posted under the "Corporate Overview – Governance Documents" tab of the "Investor Relations" page of Peoples' Internet website.

Peoples has implemented a clawback policy and it is posted under the “Corporate Overview – Governance Documents” tab of the “Investor Relations” page of Peoples’ Internet website at www.peoplesbancorp.com.

Cybersecurity

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If Peoples Bank fails to observe the regulatory guidance, it could be subject to various regulatory sanctions, including financial penalties.

In February 2018, the SEC published interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks and incidents.

These SEC guidelines, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.

In November 2021, the federal bank regulatory agencies issued a final rule, that became effective in May 2022, requiring banking organizations that experience a computer-security incident to notify certain entities.

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Separate reporting to CISA will also be required within 24 hours if a ransom payment is made as a result of a ransomware attack.

On July 26, 2023, the SEC adopted final rules that require public companies to promptly disclose material cybersecurity incidents in a Current Report on Form 8-K and detailed information regarding their cybersecurity risk management, strategy, and governance on an annual basis in its Annual Reports on Form 10-K.

Companies are required to report on Form 8-K any cybersecurity incident they determine to be material within four business days of making that determination.

See “ITEM 1C CYBERSECURITY” of this Form 10-K.

These SEC rules, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.

In the ordinary course of business, Peoples relies on electronic communications and information systems to conduct its operations and to store sensitive data.

Peoples employs an in-depth, layered, defensive approach that leverages people, processes, and encryption and multi-factor authentication technology to manage and maintain cybersecurity controls.

Peoples employs a

variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.

Peoples employs an in-depth, layered, defensive approach that leverages people, processes,

and encryption and multi-factor authentication technology to manage and maintain cybersecurity controls.

Peoples employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.

Notwithstanding the strength of Peoples’ defensive measures, the threat from cybersecurity attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures.

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Various and significant legislation affecting financial institutions and the financial industry is from time to time introduced by the U.S.

The CARES Act and the CAA were enacted during 2020.

These Acts provided significant funding for PPP loans for businesses and fiscal stimulus funding for individuals, as well as updates related to reporting for troubled debt restructurings and other various changes.

The PPP loan program expired on May 31, 2021 and no originations have been permitted after this date.

Additionally, in September 2021, guidance issued for the reporting of troubled debt restructurings expired and no COVID-19-related deferments remained as of September 30, 2021.

There were sweeping reforms in the Dodd-Frank Act adopted in 2010, and the rollback of the Dodd-Frank Act that began in 2018.

For example, as a result of the COVID-19 pandemic, the U.S.

Congress enacted the CARES Act and other legislation during 2020 that provided significant funding for PPP loans for businesses and fiscal stimulus funding for individuals, as well as updates related to reporting for troubled debt restructurings and other various changes.

Additionally, there were sweeping reforms in the Dodd-Frank Act adopted in 2010, and the rollback of the Dodd-Frank Act that began in 2018.

Many of the regulations mentioned above were adopted or amended pursuant to the guidance issued.

Such legislation may continue to change banking statutes and regulations, and the operating environment of Peoples and its subsidiaries in substantial and unpredictable ways, and such legislation could significantly increase or decrease costs of doing business, limit or expand permissible activities, and/or affect the competitive balance among financial institutions.

The enactment of the Dodd-Frank Act, the subsequent rollback and the

continuing implementation of final rules and regulations thereunder, makes the nature and extent of future legislative and regulatory changes affecting financial institutions unpredictable.

The enactment of the Dodd-Frank Act,

the subsequent rollback and the continuing implementation of final rules and regulations thereunder, makes the nature and extent of future legislative and regulatory changes affecting financial institutions unpredictable.

Website Access to Peoples’ SEC Filings

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

What changed 10-K

Item 1. Business