What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 260 added, 446 removed, 1114 unchanged (39% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2024 December 31,

4 unchanged sentences

Total cash and cash equivalents 429,720 426,722

Available-for-sale investment securities, at fair value (amortized cost of $ 1,211,794 at September 30, 2023 and $ 1,300,719 at December 31, 2022) (a)

Available-for-sale investment securities, at fair value (amortized cost of $ 1,262,319 at March 31, 2024 and $ 1,184,288 at December 31, 2023) (a)

1,116,466 1,048,322

Held-to-maturity investment securities, at amortized cost (fair value of $ 569,888 at September 30, 2023 and $ 478,509 at December 31, 2022) (a)

Held-to-maturity investment securities, at amortized cost (fair value of $ 602,112 at March 31, 2024 and $ 612,022 at December 31, 2023) (a)

679,506 683,657

19 unchanged sentences

Stockholders’ equity

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

Common shares, no par value, 50,000,000 shares authorized, 36,723,893 shares issued at September 30, 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 March 31, 2024 or at December 31, 2023

Common shares, no par value, 50,000,000 shares authorized, 36,747,787 shares issued at March 31, 2024 and 36,736,041 shares issued at December 31, 2023, including at each date shares held in treasury

861,925 865,227

1 unchanged sentence

Accumulated other comprehensive loss, net of deferred income taxes ( 108,940 ) ( 101,590 )

Treasury stock, at cost, 1,412,650 shares at September 30, 2023 and 1,643,461 shares at December 31, 2022

Treasury stock, at cost, 1,355,337 shares at March 31, 2024 and 1,511,348 shares at December 31, 2023

( 34,059 ) ( 37,340 )

1 unchanged sentence

Total liabilities and stockholders’ equity $ 9,270,774 $ 9,157,382

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $ 0 and $ 238 , respectively, at September 30, 2023, and $ 0 and $ 241 , respectively, at 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 $ 238 , respectively, at March 31, 2024, and $ 0 and $ 238 , respectively, at December 31, 2023.

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

1 unchanged sentence

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands, except per share data) 2024 2023

11 unchanged sentences

Net interest income 86,640 72,878

Provision for (recovery of) credit losses 4,053 1,776 13,889 ( 5,811 )

Net interest income after provision for (recovery of) credit losses 89,221 65,275 237,116 188,640

Provision for credit losses 6,102 1,853

Net interest income after provision for credit losses 80,538 71,025

Non-interest income:

Electronic banking income 6,466 5,261 18,375 15,933

Insurance income 6,498 5,425

Electronic banking income 6,046 5,443

Trust and investment income 4,599 4,084

Deposit account service charges 4,223 3,523

Lease (loss) income ( 66 ) 1,725 2,730 2,931

Bank owned life insurance income 1,500 707

Lease income 1,236 1,077

Mortgage banking income 321 314

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

Net loss on asset disposals and other transactions ( 341 ) ( 246 )

Net (loss) gain on investment securities ( 7 ) 21 ( 2,108 ) 107

Other non-interest income 1,698 668

3 unchanged sentences

Net occupancy and equipment expense 6,283 4,955

Professional fees 3,456 2,832 13,775 8,784

Data processing and software expense 5,769 4,562

Professional fees 2,967 2,881

Amortization of other intangible assets 2,788 1,871

Electronic banking expense 1,781 1,491

Marketing expense 1,267 1,136 3,554 2,991

Federal Deposit Insurance Corporation ("FDIC") insurance expense

1,260 709 3,525 2,921

Other loan expenses 1,076 739

Marketing expense 1,056 930

Franchise tax expense 881 1,034

Communication expense 799 613

Other loan expenses 856 511 2,133 1,788

Other non-interest expense 4,986 4,574

10 unchanged sentences

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Three Months Ended

(Dollars in thousands) 2024 2023

Net income $ 29,584 $ 26,560

Other comprehensive loss:

Other comprehensive (loss) income:

Available-for-sale investment securities:

Gross unrealized holding loss arising during the period ( 34,330 ) ( 57,911 ) ( 26,002 ) ( 172,195 )

Related tax benefit 7,671 13,484 6,178 40,170

Reclassification adjustment for net loss (gain) included in net income 7 ( 21 ) 2,108 ( 107 )

Gross unrealized holding (loss) gain arising during the period ( 9,887 ) 20,362

Related tax benefit (expense) 2,340 ( 4,647 )

Net effect on other comprehensive loss ( 26,649 ) ( 44,443 ) ( 18,208 ) ( 132,107 )

Reclassification adjustment for net loss included in net income 1 1,935

Related tax expense — ( 452 )

Net effect on other comprehensive (loss) income ( 7,546 ) 17,198

Defined benefit plan:

Net (loss) gain arising during the period ( 244 ) 203 ( 244 ) 264

Related tax benefit (expense) 57 ( 48 ) 57 ( 62 )

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

Related tax benefit — ( 5 ) ( 2 ) ( 14 )

Reclassification from accumulated other comprehensive income ("AOCI") 2,424 139 2,424 139

Related tax benefit ( 566 ) ( 32 ) ( 566 ) ( 32 )

Net effect on other comprehensive loss 1,671 280 1,678 356

Net effect on other comprehensive (loss) income — 2

Cash flow hedges:

1 unchanged sentence

Related tax (expense) benefit ( 60 ) 313

Net effect on other comprehensive loss 102 2,599 ( 130 ) 8,447

Total other comprehensive loss, net of tax ( 24,876 ) ( 41,564 ) ( 16,660 ) ( 123,304 )

Total comprehensive income (loss) $ 7,006 $ ( 15,586 ) $ 62,878 $ ( 48,861 )

Net effect on other comprehensive (loss) income 196 ( 1,043 )

Total other comprehensive (loss) income, net of tax ( 7,350 ) 16,157

Total comprehensive income $ 22,234 $ 42,717

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC.

4 unchanged sentences

(Dollars in thousands)

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

Net income — 31,882 — — 31,882

Other comprehensive loss, excluding pension termination settlement, net of tax — — ( 26,734 ) — ( 26,734 )

Pension termination settlement, net of tax 1,858 1,858

Cash dividends declared — ( 13,793 ) — ( 13,793 )

Reissuance of treasury stock for common share awards ( 314 ) — — 314 —

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 391 ) ( 391 )

Common shares issued under dividend reinvestment plan 284 — — — 284

Common shares issued under compensation plan for Boards of Directors 6 — — 133 139

Common shares issued under employee stock purchase plan — — — ( 7 ) ( 7 )

Stock-based compensation 1,074 — — — 1,074

Balance, September 30, 2023 $ 864,010 $ 307,534 $ ( 143,796 ) $ ( 34,529 ) $ 993,219

Accumulated Other Comprehensive Loss Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(Dollars in thousands)

Balance, December 31, 2023 $ 865,227 $ 327,237 $ ( 101,590 ) $ ( 37,340 ) $ 1,053,534

Net income — 29,584 — — 29,584

Other comprehensive loss excluding pension termination settlement, net of tax — — ( 18,518 ) — ( 18,518 )

Pension termination settlement, net of tax 1,858 1,858

Cash dividends declared — ( 37,940 ) — — ( 37,940 )

Reissuance of treasury stock for common share awards ( 5,724 ) — — 5,724 —

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 — — — ( 1,445 ) ( 1,445 )

Common shares issued under dividend reinvestment plan 1,036 — — — 1,036

Common shares issued under compensation plan for Boards of Directors 25 — — 385 410

Common shares issued under employee stock purchase plan 61 — — 614 675

Stock-based compensation 4,233 — — — 4,233

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

177,929 — — — 177,929

Balance, September 30, 2023 $ 864,010 $ 307,534 $ ( 143,796 ) $ ( 34,529 ) $ 993,219

Accumulated Other Comprehensive Loss Total Stockholders' Equity

Common Shares Retained Earnings Treasury Stock

(Dollars in thousands)

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

Net income — 25,978 — — 25,978

Other comprehensive loss, net of tax — — ( 7,350 ) — ( 7,350 )

2 unchanged sentences

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 869 ) ( 869 )

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

Common shares repurchased under share repurchase program — — — ( 3,000 ) ( 3,000 )

Common shares issued under dividend reinvestment plan 455 — — — 455

2 unchanged sentences

Stock-based compensation 3,024 — — — 3,024

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

Balance, March 31, 2024 $ 861,925 $ 343,076 $ ( 108,940 ) $ ( 34,059 ) $ 1,062,002

Accumulated Other Comprehensive Loss Total Stockholders' Equity

3 unchanged sentences

Net income — 26,560 — — 26,560

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

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

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

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

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

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

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

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

2 unchanged sentences

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

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

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

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended

September 30,

Three Months Ended

(Dollars in thousands) 2024 2023

11 unchanged sentences

Proceeds from sales 8,028 3,746

Net (increase) decrease in loans held for investment ( 285,202 ) 36,158

Net increase in loans held for investment ( 43,339 ) ( 52,386 )

Net expenditures for premises and equipment ( 3,870 ) ( 2,757 )

Proceeds from sales of other real estate owned — 107

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

Business acquisitions, net of cash received — ( 200 )

Proceeds from bank owned life insurance contracts 486 —

Business acquisitions, net of cash received (paid) 92,952 ( 85,791 )

Investment in limited partnership and tax credit funds ( 2,566 ) ( 267 )

3 unchanged sentences

Net increase in interest-bearing deposits 273,573 105,991

Net increase (decrease) in short-term borrowings 25,299 ( 37,916 )

Net decrease in short-term borrowings ( 87,625 ) ( 9,468 )

Proceeds from long-term borrowings 26,770 2,899

5 unchanged sentences

Proceeds from issuance of common shares 451 397

Net cash provided by (used in) financing activities 111,118 ( 171,471 )

Net increase (decrease) in cash and cash equivalents 145,087 ( 270,543 )

Net cash provided by financing activities 89,074 45,118

Net increase in cash and cash equivalents 2,998 3,132

Cash and cash equivalents at beginning of period 426,722 154,022

7 unchanged sentences

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC.

7 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, 2023 ("Peoples' 2023 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 September 30, 2023 (this "Form 10-Q").

Management has evaluated all significant events and transactions that occurred after September 30, 2023 for potential recognition or disclosure in these Unaudited Condensed Consolidated Financial Statements.

The accounting and reporting policies followed in the presentation of the accompanying Unaudited Condensed Consolidated Financial Statements are consistent with those described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2023 Form 10-K, as updated by the information contained in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 (this "Form 10-Q").

Management has evaluated all significant events and transactions that occurred after March 31, 2024 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.

6 unchanged sentences

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by Peoples as of the required effective dates.

The following paragraphs related to new pronouncements should be read in conjunction with "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2022 Form 10-K.

Refer to "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2023 Form 10-K.

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

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

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

This guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

This guidance was further updated by ASU 2021-01.

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, which reduced 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 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.

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, have been amended to reference SOFR-indexed rates 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 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.

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

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

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

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

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

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

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

Note 2 Fair Value of Assets and Liabilities

8 unchanged sentences

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

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

1 unchanged sentence

Recurring Fair Value Measurements at Reporting Date

September 30, 2023 December 31, 2022

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

March 31, 2024 December 31, 2023

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

Available-for-sale investment securities:

19 unchanged sentences

Available-for-Sale Investment Securities:

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

As of September 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 was used to estimate the fair value (Level 3).

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, secured overnight funding rate ("SOFR") (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 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.

4 unchanged sentences

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

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

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy at September 30, 2023 and December 31, 2022.

Non-Recurring Fair Value Measurements at Reporting Date

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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

2 unchanged sentences

Other real estate owned — 63 — 7,118

(a) Loans held for sale are presented gross of a valuation allowance of $ 237 and $ 105 at September 30, 2023 and at December 31, 2022, respectively.

(a) Loans held for sale are presented gross of a valuation allowance of $ 138 and $ 163 at March 31, 2024 and at December 31, 2023, respectively.

Collateral Dependent Loans:

10 unchanged sentences

Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available (Level 3).

Servicing Rights :

Servicing rights are included in "Other intangible assets" on the Unaudited Consolidated Balance Sheets.

The fair value of servicing rights is determined by using a discounted cash flow model, which estimates the present value of the future net cash flows of the servicing portfolio based on various factors, such as servicing costs, expected prepayment speeds and discount rates (Level 3).

The carrying value of servicing rights is not re-measured to fair value on a recurring basis.

Peoples assesses the carrying value of servicing rights quarterly for impairment.

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Financial Instruments Not Required to be Measured or Reported at Fair Value

1 unchanged sentence

Fair Value Measurements of Other Financial Instruments

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

(Dollars in thousands) Fair Value Hierarchy Level March 31, 2024 December 31, 2023

Carrying Amount Fair Value Carrying Amount Fair Value

6 unchanged sentences

Commercial mortgage-backed securities 2 100,427 83,771 102,365 85,289

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

Total held-to-maturity securities 679,744 602,112 683,895 612,022

3 unchanged sentences

Federal Reserve Bank ("FRB") stock N/A 27,114 27,114 26,896 26,896

Banker's Bank of Kentucky ("BBKY") stock N/A 445 445 355 355

Total other investment securities at cost 55,540 55,540 56,845 56,845

8 unchanged sentences

Long-term borrowings 2 236,283 242,685 216,241 222,743

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $ 238 and $ 241 at September 30, 2023 and December 31, 2022, respectively.

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $ 238 at both March 31, 2024 and December 31, 2023.

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

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at September 30, 2023

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at March 31, 2024

and at December 31, 2023, 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 $ 62.9 million and $ 53.2 million at September 30, 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 $ 64.8 million and $ 62.0 million at March 31, 2024 and at December 31, 2023, respectively.

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

6 unchanged sentences

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

When observable market data is absent, the independent pricing service estimates prices based on

underlying cash flow characteristics and discount rates and compares them to similar securities (Level 3).

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

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

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

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

Other Investment Securities:

20 unchanged sentences

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

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Note 3 Investment Securities

2 unchanged sentences

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

September 30, 2023

March 31, 2024

Obligations of:

15 unchanged sentences

Total available-for-sale securities $ 1,184,288 $ 3,240 $ ( 139,206 ) $ 1,048,322

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

Three Months Ended Nine Months Ended

September 30, September 30,

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

Three Months Ended

(Dollars in thousands) 2024 2023

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.

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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:

6 unchanged sentences

Unrealized Loss

September 30, 2023

March 31, 2024

Obligations of:

26 unchanged sentences

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

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

At September 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 September 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.

At March 31, 2024, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses.

At March 31, 2024, 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, 2024 and December 31, 2023 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 $ 9.4 million at September 30, 2023 and $ 7.8 million at December 31, 2022.

At September 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 five positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004.

Of the five positions, no positions had a fair value of less than 90 % of their book values.

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

Obligations of the U.S.

treasury and government agencies, obligations of U.S.

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

Treasury Department or other U.S., state or local government agencies or 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 two bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at September 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 September 30, 2023.

Interest receivable on investment securities was $ 9.8 million at March 31, 2024 and $ 8.8 million at December 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 March 31, 2024 was attributable to the subordinated nature of the trust preferred securities.

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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, 2024.

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

22 unchanged sentences

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

September 30, 2023

March 31, 2024

Obligations of:

3 unchanged sentences

Commercial mortgage-backed securities 100,427 — — ( 16,656 ) 83,771

Total held-to-maturity securities $ 675,647 $ ( 238 ) $ 169 $ ( 105,690 ) $ 569,888

Total held-to-maturity investment securities $ 679,744 $ ( 238 ) $ 1,054 $ ( 78,448 ) $ 602,112

December 31, 2023

4 unchanged sentences

Commercial mortgage-backed securities 102,365 — — ( 17,076 ) 85,289

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

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

Total held-to-maturity investment securities $ 683,895 $ ( 238 ) $ 2,266 $ ( 73,901 ) $ 612,022

There were no sales of held-to-maturity investment securities during either of the three months ended March 31, 2024 or 2023.

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

3 unchanged sentences

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

Peoples reported $ 0.2 million of allowance for credit losses for held-to-maturity securities at both September 30, 2023, and December 31, 2022.

Peoples reported $ 0.2 million of allowance for credit losses for held-to-maturity securities at both March 31, 2024, and December 31, 2023.

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:

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Less than 12 Months 12 Months or More Total

5 unchanged sentences

Value Unrealized Loss

September 30, 2023

March 31, 2024

Obligations of:

15 unchanged sentences

Total $ 122,785 $ 3,306 34 $ 386,135 $ 70,595 150 $ 508,920 $ 73,901

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

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity investment securities by contractual maturity at March 31, 2024.

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.

6 unchanged sentences

Commercial mortgage-backed securities 1,490 9,371 38,821 50,745 100,427

Total held-to-maturity securities $ 11,191 $ 33,990 $ 118,441 $ 512,025 $ 675,647

Total held-to-maturity investment securities $ 11,990 $ 26,887 $ 121,537 $ 519,330 $ 679,744

Obligations of:

3 unchanged sentences

Commercial mortgage-backed securities 1,478 8,719 32,914 40,660 83,771

Total held-to-maturity securities $ 11,058 $ 31,376 $ 107,125 $ 420,329 $ 569,888

Total held-to-maturity investment securities $ 11,897 $ 25,553 $ 112,859 $ 451,803 $ 602,112

Total weighted-average yield 3.85 % 2.51 % 4.00 % 3.51 % 3.57 %

1 unchanged sentence

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

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

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

(Dollars in thousands) March 31, 2024 December 31, 2023

FHLB stock $ 28,426 $ 29,949

4 unchanged sentences

Total other investment securities $ 62,939 $ 63,421

During the nine months ended September 30, 2023, Peoples redeemed $ 15.6 million of FHLB stock in order to be in compliance with the requirements of the FHLB.

Peoples purchased $ 17.2 million of additional FHLB stock during the nine months ended September 30, 2023, as a result of the FHLB's capital requirements on FHLB advances during the first nine months.

For the three months ended September 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 $ 58,000 and an unrealized gain of $ 6,000 , respectively.

For the nine months ended September 30, 2023 and 2022, Peoples recognized an unrealized loss of $ 175,000 and an unrealized loss of $ 12,000 , respectively, for the change in fair value of equity investment securities in "Other non-interest income".

At September 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 at September 30, 2023.

During the three months ended March 31, 2024, Peoples redeemed $ 8.0 million of FHLB stock in order to be in compliance with the requirements of the FHLB.

Peoples purchased $ 6.5 million of additional FHLB stock during the three months ended March 31, 2024, as a result of the FHLB's capital requirements on FHLB advances.

For the three months ended March 31, 2024 and 2023, 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 gains of $ 47,000 and $ 21,000 , respectively.

At March 31, 2024, 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 at March 31, 2024.

Pledged Securities

3 unchanged sentences

Carrying Amount

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

(Dollars in thousands) March 31, 2024 December 31, 2023

Securing public and trust department deposits, and repurchase agreements:

7 unchanged sentences

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

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

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

(Dollars in thousands) September 30,

(Dollars in thousands) March 31,

2024 December 31, 2023

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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 $ 22.2 million at September 30, 2023 and $ 15.4 million at December 31, 2022.

Total interest receivable on loans was $ 24.3 million at March 31, 2024 and $ 24.5 million at December 31, 2023.

Nonaccrual and Past Due Loans

2 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(Dollars in thousands) Nonaccrual (a)

11 unchanged sentences

Total loans, at amortized cost $ 31,361 $ 7,662 $ 25,477 $ 6,716

(a) There were $ 0.5 million of nonaccrual loans for which there was no allowance for credit losses at September 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 nine months of 2023, nonaccrual loans declined compared to at December 31, 2022, which was primarily due to three large relationships totaling $ 8.0 million of commercial real estate loans which were paid off in the third quarter.

This was partially offset by an increase in nonaccrual leases during the first nine months of 2023.

The increase in accruing loans 90+ days past due at September 30, 2023 when compared to at December 31, 2022, was primarily due to increases of approximately $ 3.0 million and $ 1.1 million in leases and premium finance loans, respectively.

The amount of interest income recognized on accruing loans 90+ days past due during the nine months ended September 30, 2023 was $ 0.9 million.

(a) There were $ 3.8 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2024 and $ 1.2 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2023.

During the first three months of 2024, nonaccrual loans increased compared to at December 31, 2023, which was primarily due to one large commercial and industrial loan of approximately $ 1.9 million that went on nonaccrual status during the first quarter of 2024.

Further, two leases went on nonaccrual status during the quarter which increased the amount reported by $ 1.4 million.

The increase in accruing loans 90+ days past due at March 31, 2024 when compared to at December 31, 2023, was primarily due to an increase in premium finance loans of approximately $ 0.9 million which was partially offset by a decrease in commercial and industrial loans.

The amount of interest income recognized on accruing loans 90+ days past due during the three months ended March 31, 2024 was $ 0.5 million.

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

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Loans Past Due Current

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

September 30, 2023

March 31, 2024

Construction $ — $ 15 $ — $ 15 $ 314,672 $ 314,687

21 unchanged sentences

Total loans, at amortized cost $ 42,095 $ 17,154 $ 24,430 $ 83,679 $ 6,075,517 $ 6,159,196

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

Delinquency trends improved slightly, as 98.7 % of Peoples' loan portfolio was considered “current” at March 31, 2024, compared to 98.6 % at December 31, 2023.

Pledged Loans

2 unchanged sentences

Loans pledged are summarized as follows:

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

(Dollars in thousands) March 31, 2024 December 31, 2023

Loans pledged to FHLB $ 1,173,512 $ 1,206,134

10 unchanged sentences

Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations.

Loans in this risk grade would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the loan if required, for any weakness that may exist.

Loans in this risk category would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the loan if required, for any weakness that may exist.

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“Special Mention” (grade 5):

17 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 September 30, 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 March 31, 2024:

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

18 unchanged sentences

Total 60,989 228,060 184,588 196,124 92,861 198,361 253,632 7,415 1,214,615

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

12 unchanged sentences

Pass 13,458 73,850 89,518 137,348 57,315 400,297 — — 771,786

Special mention — — — — — 111 — — 111

Substandard — 119 188 453 178 9,082 — — 10,020

16 unchanged sentences

Pass 16,228 35,984 32,493 15,127 7,061 6,405 — — 113,298

Substandard — 52 93 48 16 75 — — 284

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

(Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Total

Substandard — 30 84 45 24 114 — — 297

Loss — — — — — 6 — — 6

12 unchanged sentences

Total 81,473 146,592 85,913 27,169 9,995 12,877 — — 364,019

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

Commercial real estate, other

4 unchanged sentences

Total 200,851 343,158 377,480 246,607 271,145 719,674 38,042 230 2,196,957

Current period gross charge-offs — — — 39 — 575 614

Commercial and industrial

4 unchanged sentences

Total 226,512 198,560 218,575 102,274 61,758 145,468 231,839 9,431 1,184,986

Current period gross charge-offs — 36 202 25 173 415 851

Premium finance

1 unchanged sentence

Total 201,659 1,517 1 — — — — — 203,177

Current period gross charge-offs 25 97 — — — — 122

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Term Loans at Amortized Cost by Origination Year

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

Pass 216,559 114,327 51,307 14,061 4,883 1,501 — — 402,638

2 unchanged sentences

Total 218,859 118,862 54,727 14,590 5,205 1,817 — — 414,060

Current period gross charge-offs 963 1,328 1,173 233 165 135 3,997

Residential real estate

Term Loans at Amortized Cost by Origination Year

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

Pass 75,957 91,506 140,157 58,144 45,507 369,552 — — 780,823

2 unchanged sentences

Total 76,000 91,749 140,742 58,326 46,036 378,242 — — 791,095

Current period gross charge-offs — — — — — 170 170

Home equity lines of credit

3 unchanged sentences

Total 39,725 42,565 33,467 19,872 14,420 58,599 27 1,346 208,675

Current period gross charge-offs — — — — — 110 110

Consumer, indirect

3 unchanged sentences

Total 248,169 226,193 97,489 59,602 18,836 16,183 — — 666,472

Current period gross charge-offs 609 2,091 865 255 63 147 4,030

Consumer, direct

3 unchanged sentences

Total 58,500 37,129 17,481 8,310 3,215 4,134 — — 128,769

Current period gross charge-offs 36 154 77 100 14 35 416

Deposit account overdrafts 986 — — — — — — — 986

Current period gross charge-offs 1,161 1,161

Total loans, at amortized cost $ 1,352,734 $ 1,206,325 $ 1,025,875 $ 536,750 $ 430,610 $ 1,336,994 $ 269,908 $ 11,007 $ 6,159,196

Current period gross charge-offs $ 2,794 $ 3,706 $ 2,326 $ 652 $ 415 $ 1,587 $ 11,480

Collateral Dependent Loans

3 unchanged sentences

• Construction loans are typically secured by owner occupied commercial real estate or non-owner occupied investment real estate.

Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction.

Non-owner occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development, and other commercial and industrial real estate in process of construction.

Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities,

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and other commercial and industrial properties that are in process of construction.

Non-owner occupied commercial construction loans are generally secured by multi-family complexes, warehouse buildings, industrial buildings, land under development, and other commercial real estate in process of construction.

• Commercial real estate loans can be secured by either owner occupied commercial real estate or non-owner occupied investment commercial real estate.

Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies.

Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate.

Non-owner occupied commercial real estate loans are generally secured by multifamily complexes, retail facilities, office buildings and complexes, warehouses, industrial buildings, land under development, as well as other commercial real estate.

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

6 unchanged sentences

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

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

(Dollars in thousands) March 31, 2024 December 31, 2023

Commercial real estate, other $ 689 $ —

Commercial and industrial — 1,456

Residential real estate 501 501

Total collateral dependent loans $ 1,928 $ 501

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

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

The increase in collateral dependent loans at March 31, 2024, compared to December 31, 2023, was primarily due to the addition of a commercial real estate loan and a lease as collateral dependent loans during the three months ended March 31, 2024.

Modifications for Borrowers Experiencing Financial Difficulty

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

6 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 tables display the amortized cost of loans that were restructured during the three months and the nine months ended September 30, 2023, presented by loan classification.

During the Three Months Ended September 30, 2023

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

The following tables display the amortized cost of loans that were restructured during the three months ended March 31, 2024 and March 31, 2023, presented by loan classification.

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Payment Delay (Only)

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

During the Three Months Ended March 31, 2024

Commercial real estate — — $ 565 $ — $ 565 0.03 %

Commercial and industrial — — 10,203 — 10,203 0.84 %

Leasing — 25 — — 25 0.01 %

Residential real estate — — 76 — 76 0.01 %

Home equity lines of credit 52 52 0.03 %

Total $ — $ 25 $ 10,844 $ — $ 10,869 0.18 %

During the Nine Months Ended September 30, 2023

Payment Delay (Only) Forbearance Plan and Term Extension Percentage of Total by Loan Category (a)

(Dollars in thousands) Forbearance Plan Payment Deferral Term Extension Total

During the Three Months Ended March 31, 2023

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

2 unchanged sentences

Residential real estate — — 221 — 221 0.03 %

Home equity lines of credit — — 203 — 203 0.10 %

Consumer, indirect — — 28 — 28 — %

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

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

The following tables summarize the financial impacts of loan modifications and payment deferrals made to loans during the three months and the nine months ended September 30, 2023, presented by loan classification.

During the Three Months Ended September 30, 2023

(b) The table presented above excludes loans that were paid off or otherwise no longer included in the loan portfolio of period end.

The following table summarizes the financial impacts of loan modifications and payment deferrals made to loans during both the three months ended March 31, 2024 and March 31, 2023, presented by loan classification.

Weighted-Average Term Extension

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

During the Three Months Ended March 31, 2024

Commercial real estate 6 $ —

1 unchanged sentence

Residential real estate 2 —

Home equity lines of credit 217 —

During the Nine Months Ended September 30, 2023

Weighted-Average Term Extension

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

Commercial real estate 6 $ —

During the Three Months Ended March 31, 2023

Commercial and industrial 12 —

Residential real estate 210 8,969

Home equity lines of credit 189 —

Consumer, indirect 2 —

1 unchanged sentence

Amounts are in whole dollars.

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 September 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 were 90 days or more past due following a modification through September 30, 2023.

For the Nine Months Ended September 30, 2023

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

The following table displays the amortized cost of loans that received a completed modification or payment deferral within the previous 12 months and that had a payment default in the period presented.

For purposes of this disclosure, Peoples defines loans that had a payment default as loans that were 90 days or more past due following a modification.

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For the Three Months Ended March 31, 2024

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

Commercial and industrial $ 648 $ 648

Consumer, indirect $ 11 $ 11

Total loans that subsequently defaulted $ 256 $ 256

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

(a) 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 September 30, 2023, presented by classification and class of financing receivable.

As of September 30, 2023

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 three months ended March 31, 2023.

The following table displays an aging analysis of loans that were modified during the twelve months prior to March 31, 2024, presented by classification and class of financing receivable.

As of March 31, 2024

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

2 unchanged sentences

Commercial and industrial — 667 648 1,315 12,752 14,067

Leasing — — — — 25 25

Residential real estate 76 — — 76 24 100

3 unchanged sentences

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

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

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

See “Note 1 Summary of Significant Accounting Policies” in Peoples' 2022 Form 10-K for more information on our TDR policy, and “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 nine months ended September 30, 2022:

Three Months Ended

Recorded Investment (a)

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

September 30, 2022

Commercial and industrial 1 20 20 19

Residential real estate 7 323 361 354

Home equity lines of credit 2 119 119 119

Consumer, indirect 6 79 79 79

Consumer, direct 3 20 20 20

Consumer 9 99 99 99

Total 19 $ 561 $ 599 $ 591

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

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

Nine Months Ended

Recorded Investment (a)

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

September 30, 2022

Commercial real estate, other 3 282 282 276

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

As of March 31, 2023

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

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

Commercial real estate 0 0 0 0 200 200

Commercial and industrial 0 0 0 0 344 344

Residential real estate 0 0 0 0 221 221

Home equity lines of credit 5 251 251 247

Consumer, indirect 28 0 0 28 0 28

Consumer, direct 6 63 63 63

Consumer 25 300 300 300

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

(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.

Total loans modified (a)

$ 28 $ — $ — $ 28 $ 2,365 $ 2,393

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

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 and the nine months ended September 30, 2023 and September 30, 2022 are summarized below:

(Dollars in thousands) Beginning Balance, June 30, 2023

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

Construction $ 1,496 — ( 255 ) — — 1,241

Commercial real estate, other 19,731 138 1,569 ( 278 ) 97 21,257

Commercial and industrial 11,028 3 ( 630 ) ( 199 ) 3 10,205

Premium finance 431 — 66 ( 33 ) 12 476

Leases 10,377 — 2,052 ( 905 ) 168 11,692

Residential real estate 6,112 6 156 ( 50 ) 27 6,251

Home equity lines of credit 1,676 5 ( 9 ) ( 32 ) — 1,640

Consumer, indirect 7,610 — 683 ( 926 ) 149 7,516

Consumer, direct 2,642 1 ( 43 ) ( 92 ) 11 2,519

Deposit account overdrafts 108 — 289 ( 319 ) 49 127

Total $ 61,211 $ 153 $ 3,878 $ ( 2,834 ) $ 516 $ 62,924

(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,

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

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

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

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

Premium finance 311 — 279 ( 38 ) 1 553

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

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

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

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

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

Deposit account overdrafts 53 — 218 ( 274 ) 44 41

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

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

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

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Changes in the allowance for credit losses for the three months ended March 31, 2024 and March 31, 2023 are summarized below:

(Dollars in thousands) Beginning Balance, December 31, 2023

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

Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, March 31, 2024

Construction $ 699 $ — $ 2 $ — $ — $ 701

9 unchanged sentences

Total $ 62,011 $ — $ 6,131 $ ( 3,874 ) $ 554 $ 64,822

(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.

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

(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, September 30, 2022

December 31, 2022 Initial Allowance for Acquired PCD Assets (a) Provision for (Recovery of) Credit Losses (b) Charge-offs Recoveries Ending Balance, March 31, 2023

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

11 unchanged sentences

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

During the third quarter of 2023, Peoples recorded a total provision for credit losses of $ 4.1 million, which was driven by (i) loan growth, (ii) an increase in net charge-offs, (iii) updates to our prepayment, curtailment and funding rates, and (iv) a deterioration in macro-economic conditions used within the CECL model, partially offset by the release of reserves on individually analyzed loans.

The increase in the allowance for credit losses at September 30, 2023 when compared to prior periods was driven by the establishment of an allowance for credit losses for loans acquired in the Limestone Merger that were not considered purchased credit deteriorated ("PCD").

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

Leases designated as PCD acquired from

Vantage increased the allowance for credit losses by $ 377,000 .

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

Peoples had recorded an allowance for unfunded commitments of $ 2.2 million and $ 2.0 million as of September 30, 2023 and December 31, 2022, respectively.

During the first quarter of 2024, Peoples recorded a total provision for credit losses of $ 6.1 million, which was driven by (i) a deterioration in macro-economic conditions used within the current expected credit loss ("CECL") model, (ii) an increase of reserves on individually analyzed loans, (iii) and loan growth.

The increase in the allowance for credit losses at March 31, 2024 when compared to prior periods was driven by the establishment of an allowance for credit losses for loans acquired in the Limestone Merger.

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During the first quarter of 2023, Peoples recorded a provision for credit losses of $ 1.7 million, largely attributable to a deterioration of macro-economic conditions, 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.

Peoples had recorded an allowance for unfunded commitments of $ 1.7 million and $ 1.8 million as of March 31, 2024 and December 31, 2023, respectively.

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.

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

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

(Dollars in thousands) March 31, 2024 December 31, 2023

Goodwill, beginning of year $ 362,169 $ 292,397

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

Peoples has recorded preliminary goodwill from the Limestone Merger totaling $ 62.1 million as of September 30, 2023.

On January 3, 2023, Peoples acquired a trust and investment business, for which Peoples has recorded $ 0.6 million in goodwill as of September 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 wholly-owned subsidiary of Peoples Bank.

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.

As of March 31, 2024, Peoples recorded $ 68.8 million of Goodwill related to the Limestone Merger.

Other Intangible Assets

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

Other intangible assets were comprised of the following at March 31, 2024 , and at December 31, 2023 :

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

September 30, 2023

March 31, 2024

Gross intangibles $ 54,186 $ 37,920 $ 2,491 $ 94,597

3 unchanged sentences

Servicing rights 1,285

Non-compete agreements 310

Total other intangibles $ 47,116

5 unchanged sentences

Servicing rights 1,385

Non-compete agreements 371

Total other intangibles $ 50,003

As of September 30, 2023 , Peoples has recorded $ 27.7 million of core deposit intangibles related to the Limestone Merger.

Refer to "Note 13 Acquisitions" for additional information.

Peoples recorded other intangible assets in 2022 related to the Vantage acquisition consisting of $ 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.

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.

("Elite") in 2022.

As of March 31, 2024, Peoples recorded $ 27.7 million of core deposit intangibles related to the Limestone Merger.

Refer to "Note 13 Acquisitions" for additional information.

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

(Dollars in thousands) Core Deposits Customer Relationships Total

Remaining three months of 2023 $ 1,692 $ 1,554 $ 3,246

The following table details estimated aggregate future amortization of other intangible assets at March 31, 2024:

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(Dollars in thousands) Core Deposits Customer Relationships Non-Compete Agreements Total

Remaining nine months of 2024 $ 4,406 $ 3,770 $ 182 $ 8,358

2025 4,609 4,038 112 $ 8,759

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Peoples’ deposit balances were comprised of the following:

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

(Dollars in thousands) March 31, 2024 December 31, 2023

Retail certificates of deposits ("CDs"):

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Total deposits $ 7,326,556 $ 7,152,297

Uninsured deposits were $ 1.9 billion and $ 1.6 billion at September 30, 2023 and at December 31, 2022, respectively.

Uninsured deposits were $ 2.1 billion and $ 2.0 billion at March 31, 2024 and at December 31, 2023 , respectively.

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

Peoples pledges investment securities against certain governmental deposit accounts, which covered o ver $ 812.7 million o f the uninsured deposit balances at September 30, 2023.

Peoples pledges investment securities against certain governmental deposit accounts, which covered o ver $ 865.6 million o f the uninsured deposit balances at March 31, 2024 .

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

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

(Dollars in thousands) March 31, 2024 December 31, 2023

3 months or less $ 99,470 $ 58,708

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(Dollars in thousands) Retail Brokered Total

Remaining three months ending December 31, 2023 $ 200,562 $ 608,914 $ 809,476

Remaining nine months ending December 31, 2024 $ 1,407,331 $ 483,444 $ 1,890,775

Year ending December 31, 2025 221,303 — 221,303

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Total CDs $ 1,680,414 $ 483,444 $ 2,163,858

At September 30, 2023, Peoples had eleven effective interest rate swaps, with an aggregate notional value of $ 105.0 million, of which $ 105.0 million were funded by brokered CDs.

At March 31, 2024, Peoples had 11 effective interest rate swaps, with an aggregate notional value of $ 105.0 million, all of which 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.

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Note 7 Stockholders’ Equity

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

The following table details the progression in Peoples’ common shares and treasury stock during the three months ended March 31, 2024:

Common Shares Treasury

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Grant of restricted common shares — ( 291,480 )

Grant of unrestricted common shares — ( 1,900 )

Changes related to deferred compensation plan for Boards of Directors:

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Disbursed out of treasury stock — ( 911 )

Common shares repurchased under share repurchase program — 100,905

Common shares issued under dividend reinvestment plan 11,746 —

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Common shares issued under employee stock purchase plan

Issuance of common shares related to the Limestone Merger

Shares at September 30, 2023 36,723,893 1,412,650

Shares at March 31, 2024 36,747,787 1,355,337

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

At September 30, 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 nine months of 2023 .

As of March 31, 2024, Peoples had repurchased 471,307 common shares totaling $ 13.4 million under the share repurchase program.

There were 100,905 common shares totaling $ 3.0 million repurchased during the first three months of 2024.

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 designated by Peoples' Board of Directors.

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

On October 23, 2023, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.39 per common share, payable on November 20, 2023, to shareholders of record on November 6, 2023.

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

At March 31, 2024, Peoples had no preferred shares issued or outstanding.

On January 22, 2024, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.39 per common share, payable on February 20, 2024, to shareholders of record on February 5, 2024.

On April 22, 2024, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.40 per common share, payable on May 20, 2024, to shareholders of record on May 6, 2024.

The following table details the cash dividends declared per common share during the first two quarters of 2024 and the comparable periods of 2023:

First quarter $ 0.39 $ 0.38

Second quarter 0.40 0.39

Third quarter 0.39 0.38

Fourth quarter 0.39 0.38

Total dividends declared $ 0.79 $ 0.77

Accumulated Other Comprehensive (Loss) Income

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

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income during the three months ended March 31, 2024:

(Dollars in thousands) Unrealized (Loss) Gain on Securities Unrealized Gain on Cash Flow Hedges Accumulated Other Comprehensive (Loss) Income

Balance, December 31, 2023 $ ( 104,222 ) $ 2,632 $ ( 101,590 )

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

Realized loss due to settlement and curtailment, net of tax — 1,858 — 1,858

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

( 7,547 ) 196 ( 7,351 )

Balance, September 30, 2023 $ ( 148,104 ) $ 45 $ 4,263 $ ( 143,796 )

Balance, March 31, 2024 $ ( 111,768 ) $ 2,828 $ ( 108,940 )

Note 8 Employee Benefit Plans

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Peoples does not anticipate further expenses related to the termination.

Peoples also provides post-retirement health and life insurance benefits to certain former employees and directors.

Only those individuals who retired before January 27, 2012 were eligible for life insurance benefits.

Since January 1, 2011, all retirees who desire to participate in the Peoples Bank medical plan may do so by electing COBRA, which provides up to 18 months of coverage;

retirees over the age of 65 also have the option to pay to participate in a group Medicare supplemental plan.

Peoples only pays 100 % of the cost of health benefits for those individuals who retired before January 1, 1993.

For all others, the retiree is responsible for most, if not all, of the cost of the health benefits.

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

Retirement Savings Plan

Peoples also maintains a retirement savings plan, or 401(k) plan, which covers substantially all employees.

The plan provides participants with the opportunity to save for retirement on a tax-deferred basis.

As of January 1, 2021, Peoples matches 100 % of participants’ contributions up to 6 % of the participants’ compensation.

Matching contributions made by Peoples during the first quarter of 2024 totaled $ 1.5 million.

Matching contributions totaled $ 5.4 million in 2023 and $ 4.4 million in 2022.

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Note 9 Earnings Per Common Share

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

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands, except per common share data) 2024 2023

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

At September 30, 2023, Peoples had entered into eleven interest rate swap contracts with an aggregate notional value of $ 105.0 million.

At March 31, 2024, Peoples had entered into 11 interest rate swap contracts with an aggregate notional value of $ 105.0 million.

Peoples will pay a fixed rate of interest for up to ten years while receiving a floating rate component of interest equal to 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 September 30, 2023 and at December 31, 2022, the interest rate swaps were designated as cash flow hedges of $ 105.0 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.

At both March 31, 2024 and at December 31, 2023, the interest rate swaps were designated as cash flow hedges of $ 105.0 million, in brokered CDs, which are expected to be extended every 90 days through the maturity dates of the interest rate swaps.

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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.

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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 term SOFR rate (or the three-month LIBOR floating portion prior to June 30, 2023) of the swaps to ensure effectiveness of the cash flow hedge.

During the three months ended September 30, 2023, and 2022, Peoples recorded reclassifications of losses to earnings of $ 0.9 million and $ 0.2 million, respectively.

For the nine months ended September 30, 2023 and 2022, Peoples recorded reclassifications of losses to earnings of $ 2.3 million and $ 1.3 million, respectively.

During the three months ended March 31, 2024, and 2023, Peoples recorded reclassifications of losses to earnings of $ 0.9 million and $ 0.1 million, respectively.

During the next twelve months, Peoples estimates that $ 1.4 million of AOCI will be reclassified as an addition to interest expense.

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

(Dollars in thousands) September 30,

(Dollars in thousands) March 31,

2024 December 31,

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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 Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands) 2024 2023

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

September 30,

2024 December 31,

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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 nine months ended September 30, 2023 and as of or for the year ended December 31, 2022.

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, 2024 and at or for the year ended December 31, 2023.

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

September 30,

2024 December 31,

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Interest rate swaps related to commercial loans $ 399,071 $ 21,688 $ 416,106 $ 19,122

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Pledged Collateral

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

At September 30, 2023 and at December 31, 2022, Peoples had no cash pledged, while counterparties had $ 22.2 million of cash pledged at September 30, 2023 and $ 20.9 million of cash pledged at December 31, 2022.

Peoples had no pledged investment securities at September 30, 2023 or at December 31, 2022, while the counterparties had pledged investment securities in the amounts of $ 2.2 million at September 30, 2023 and $ 2.5 million at December 31, 2022.

At March 31, 2024 and at December 31, 2023, Peoples had no cash pledged, while counterparties had $ 15.5 million of cash pledged at March 31, 2024 and $ 12.8 million of cash pledged at December 31, 2023.

Peoples had no pledged investment securities at March 31, 2024 or at December 31, 2023, while the counterparties had pledged investment securities in the amounts of $ 2.1 million at March 31, 2024 and $ 2.2 million at December 31, 2023.

Note 11 Stock-Based Compensation

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

In the first nine 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 three months of 2024, Peoples granted an aggregate of 283,712 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date;

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

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

The following table summarizes the changes to Peoples’ restricted common shares for the three months ended March 31, 2024:

Time-Based Vesting Performance-Based Vesting

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Forfeited ( 5,938 ) 31.99 ( 11,034 ) 29.48

Outstanding at September 30, 2023 160,028 $ 27.36 404,610 $ 31.21

For the nine months ended September 30, 2023, the intrinsic value for restricted common shares released was $ 3.0 million compared to $ 3.7 million for the nine months ended September 30, 2022.

Outstanding at March 31, 2024 138,933 $ 28.56 604,098 $ 29.66

For the three months ended March 31, 2024, the intrinsic value for restricted common shares released was $ 2.2 million compared to $ 2.3 million for the three months ended March 31, 2023.

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 Nine Months Ended

September 30, September 30,

Table of Co n tents

Three Months Ended

(Dollars in thousands) 2024 2023

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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 $ 6.0 million at September 30, 2023, which will be recognized over a weighted-average period of 2.1 years.

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 9.4 million at March 31, 2024, which will be recognized over a weighted-average period of 2.3 years.

Note 12 Revenue

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

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars in thousands) 2024 2023

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

Table of Co n tents

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

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

The following table details the changes in Peoples' contract assets and contract liabilities for the three-month period ended March 31, 2024:

Contract Assets Contract Liabilities

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Additional deferred income — 26

Receipt of income previously receivable ( 50 ) —

Recognition of income previously deferred — ( 529 )

Balance, September 30, 2023 $ 1,504 $ 5,577

Balance, March 31, 2024 $ 740 $ 5,273

Note 13 Acquisitions

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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 $ 4.4 million and $ 15.7 million in non-interest expense for the three months and the nine months ended September 30, 2023, respectively.

For the third quarter of 2023, the $ 4.4 million of acquisition-related non-interest expense consisted of $ 2.1 million in other non-interest expense, $ 1.3 million in data processing and software expense, $ 0.6 million in salaries and employee benefit costs, and $ 0.4 million in professional fees.

For the nine months ended September 30, 2023, the $ 15.7 million of acquisition-related non-interest expense consisted of $ 5.7 million in salaries and employee benefit costs, $ 5.5 million in professional fees, $ 3.0 million in other non-interest expense, $ 1.3 million in data processing and software expense, and $ 0.2 million in various other non-interest expense line items.

The other non-interest expenses were primarily due to $ 1.8 million of early contract termination fees on Limestone contracts driven by the system conversions, which took place in the third quarter of 2023.

Peoples recorded acquisition-related expenses primarily related to the Limestone Merger, which included $( 0.1 ) million in non-interest expense for the three months ended March 31, 2024.

Peoples recorded acquisition-related expenses related to the Limestone Merger, which included $ 16.9 million in non-interest expense for the year ended December 31, 2023.

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.

The estimated fair values below were considered preliminary as of September 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, including the designation of PCD loans, deferred tax assets and liabilities, long-term borrowings, and certain other assets and other liabilities.

The estimated fair values below are subject to adjustment for up to one year after April 30, 2023, which include, but are not limited to, loans, including the designation of PCD loans, deferred tax assets and liabilities, long-term borrowings, and certain other assets and other liabilities.

(Dollars in thousands) Fair Value

10 unchanged sentences

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

Table of Co n tents

(Dollars in thousands) Fair Value

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

The estimated fair values presented in the above table reflect additional information that was obtained during the three months ended September 30, 2023, which resulted in changes to certain fair value estimates made as of the date of the Limestone Merger.

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

The below table reflects the changes in the estimated fair value as they impact goodwill at September 30, 2023:

(Dollars in thousands) Fair Value

Cash and balances due from banks 1,162

Total cash and cash equivalents 1,162

Allowance for credit losses (on PCD loans) ( 153 )

Net loans 574

Other assets ( 447 )

Total assets 1,289

Net assets 1,289

Goodwill $ ( 1,289 )

There were no changes in the estimated fair value that impacted goodwill for the three months ended March 31, 2024.

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" (or "PCD") loans.

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Fair value $ 55,504 $ ( 2,051 ) $ ( 3,451 ) $ 50,002

Peoples' operating results for the three months and the nine months ended September 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 closing 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 separate disclosures of revenue from the assets acquired and income before income taxes is impracticable for the periods 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 information reflects the adoption of the current expected credit loss ("CECL") accounting standard 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 Nine Months Ended

(Dollars in thousands) September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Net interest income $ 88,541 $ 83,235 $ 266,367 $ 228,719

Non-interest income 23,204 22,594 63,756 66,524

Net income 31,906 33,319 98,810 92,639

Vantage Financial, LLC

On March 7, 2022, Peoples Bank purchased 100 % of the equity of Vantage, a nationwide provider of equipment financing headquartered in Excelsior, Minnesota.

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

Under the terms of the 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 nine months ended September 30, 2023 of $ 46,000 related to the Vantage acquisition, which consisted of professional fees.

Peoples recorded acquisition-related expenses during the first nine 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

Total purchase price $ 82,893

Net assets at fair value

Cash and due from banks $ 1,444

Leases 155,726

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

Net leases 154,925

Bank premises and equipment 116

Other intangible assets 13,207

Other assets 1,506

Total assets $ 171,198

Borrowings $ 106,919

Accrued expenses and other liabilities 8,550

Total liabilities $ 115,469

Net assets $ 55,729

Goodwill $ 27,164

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

The employees retained from the Vantage acquisition, along with Peoples' resources, should allow Peoples to continue to grow the lease portfolio and should benefit Peoples in future periods.

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

Peoples recorded other intangible assets, which included a customer relationship intangible, a trade-name intangible and non-compete agreements, related to this transaction.

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

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

Leases $ 3,412 $ ( 801 ) $ 1,120 $ 3,731

Fair value $ 3,412 $ ( 801 ) $ 1,120 $ 3,731

Note 14 Leases

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

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Lessor Arrangements

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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 these leases are structured as dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the

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

Peoples originates sales-type leases through its NSL division, as these leases are structured as dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment.

These leases do not typically contain residual value guarantees;

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

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.

Peoples also originates leases through its Vantage subsidiary, which are classified as 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 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.

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

Lease (loss) income noted in the table below includes (i) gains on the early termination of leases, (ii) fees received for referrals, (iii) gains and losses recognized on the sales of residual assets and (iv) syndication income.

1 unchanged sentence

The table below details Peoples' lease income:

Three Months Ended Nine Months Ended

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

Three Months Ended

(Dollars in thousands) March 31, 2024 March 31, 2023

Interest and fees on leases (a) $ 12,067 $ 9,643

Lease (loss) income ( 66 ) 1,725 2,730 2,931

Lease income 1,236 1,077

Other non-interest income 785 —

Total lease income $ 14,088 $ 10,720

2 unchanged sentences

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) September 30, 2023 December 31, 2022

(Dollars in thousands) March 31, 2024 December 31, 2023

Lease payments receivable, at amortized cost $ 473,987 $ 463,742

7 unchanged sentences

(Dollars in thousands) Balance

Remaining three months ending December 31, 2023 $ 28,442

Remaining nine months ending December 31, 2024 $ 103,408

Year ending December 31, 2025 109,429

4 unchanged sentences

Lease payments receivable, at amortized cost $ 473,987

Table of Co n tents

Lessee Arrangements

3 unchanged sentences

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

At September 30, 2023, Peoples did not have any leases that met the criteria for finance leases.

At March 31, 2024, 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.

1 unchanged sentence

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

lease ROU assets exclude lease incentives.

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 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 Nine Months Ended

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

Three Months Ended

(Dollars in thousands) March 31, 2024 March 31, 2023

Operating lease expense 735 695

4 unchanged sentences

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

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

(Dollars in thousands) March 31, 2024 December 31, 2023

Other assets $ 11,682 $ 11,689

4 unchanged sentences

Weighted-average discount rate 3.92 % 3.34 %

During the three months ended September 30, 2023 and 2022, Peoples paid cash of $ 0.8 million and $ 0.7 million, respectively, for operating leases.

During the nine months ended September 30, 2023 and 2022, Peoples paid cash of $ 2.2 million and $ 1.9 million, respectively, for operating leases.

Additions for ROU assets obtained during the year $ 509 $ 4,428

During both the three months ended March 31, 2024 and 2023, Peoples paid cash of $ 0.7 million for operating leases.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands) Balance

Remaining three months ending December 31, 2023 $ 909

Remaining nine months ending December 31, 2024 $ 2,280

Year ending December 31, 2025 2,210

6 unchanged sentences

Total lease liabilities $ 12,062

Table of Co n tents

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