What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 216 added, 200 removed, 1260 unchanged (25% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2024 December 31,

4 unchanged sentences

Total cash and cash equivalents 283,707 426,722

Available-for-sale investment securities, at fair value (amortized cost of $ 1,266,060 at June 30, 2024 and $ 1,184,288 at December 31, 2023) (a)

Available-for-sale investment securities, at fair value (amortized cost of $ 1,189,792 at September 30, 2024 and $ 1,184,288 at December 31, 2023) (a)

1,080,667 1,048,322

Held-to-maturity investment securities, at amortized cost (fair value of $ 622,593 at June 30, 2024 and $ 612,022 at December 31, 2023) (a)

Held-to-maturity investment securities, at amortized cost (fair value of $ 636,529 at September 30, 2024 and $ 612,022 at December 31, 2023) (a)

693,637 683,657

19 unchanged sentences

Stockholders’ equity

Preferred shares, no par value, 50,000 shares authorized, no shares issued at June 30, 2024 or at December 31, 2023

Common shares, no par value, 50,000,000 shares authorized, 36,760,516 shares issued at June 30, 2024 and 36,736,041 shares issued at December 31, 2023, including at each date shares held in treasury

Preferred shares, no par value, 50,000 shares authorized, no shares issued at September 30, 2024 or at December 31, 2023

Common shares, no par value, 50,000,000 shares authorized, 36,772,459 shares issued at September 30, 2024 and 36,736,041 shares issued at December 31, 2023, including at each date shares held in treasury

865,326 865,227

1 unchanged sentence

Accumulated other comprehensive loss, net of deferred income taxes ( 82,496 ) ( 101,590 )

Treasury stock, at cost, 1,347,476 shares at June 30, 2024 and 1,511,348 shares at December 31, 2023

Treasury stock, at cost, 1,323,075 shares at September 30, 2024 and 1,511,348 shares at December 31, 2023

( 33,254 ) ( 37,340 )

1 unchanged sentence

Total liabilities and stockholders’ equity $ 9,140,471 $ 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 June 30, 2024, and $ 0 and $ 238 , respectively, at December 31, 2023.

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $ 0 and $ 236 , respectively, at September 30, 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."

4 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

53 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2024 2023 2024 2023

2 unchanged sentences

Available-for-sale investment securities:

Gross unrealized holding (loss) gain arising during the period ( 1,422 ) ( 12,034 ) ( 11,309 ) 8,328

Related tax benefit (expense) 236 3,154 2,576 ( 1,493 )

Gross unrealized holding gain (loss) arising during the period 37,723 ( 34,330 ) 26,414 ( 26,002 )

Related tax (expense) benefit ( 8,779 ) 7,671 ( 6,203 ) 6,178

Reclassification adjustment for net loss included in net income 74 7 428 2,108

Related tax expense ( 82 ) ( 43 ) ( 82 ) ( 495 )

Net effect on other comprehensive (loss) income ( 915 ) ( 8,757 ) ( 8,461 ) 8,441

Related tax (expense) benefit ( 18 ) 3 ( 100 ) ( 492 )

Net effect on other comprehensive income (loss) 29,000 ( 26,649 ) 20,539 ( 18,208 )

Defined benefit plan:

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

Net (loss) gain arising during the period — ( 244 ) — ( 244 )

Related tax benefit — 57 — 57

Net effect on other comprehensive (loss) income — 5 — 7

Amortization of unrecognized loss and service cost on benefit plans — — — 9

Related tax benefit (expense) — — — ( 2 )

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

Related tax benefit (expense) — ( 566 ) — ( 566 )

Net effect on other comprehensive income — 1,671 — 1,678

Cash flow hedges:

2 unchanged sentences

Net effect on other comprehensive (loss) income ( 1,303 ) 102 ( 1,445 ) ( 130 )

Total other comprehensive (loss) income, net of tax ( 1,253 ) ( 7,941 ) ( 8,603 ) 8,216

Total other comprehensive income (loss), net of tax 27,697 ( 24,876 ) 19,094 ( 16,660 )

Total comprehensive income $ 59,381 $ 7,006 $ 109,369 $ 62,878

6 unchanged sentences

(Dollars in thousands)

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

Balance, June 30, 2024 $ 863,975 $ 357,886 $ ( 110,193 ) $ ( 33,835 ) $ 1,077,833

Net income — 31,684 — — 31,684

2 unchanged sentences

Reissuance of treasury stock for common share awards ( 235 ) — — 235 —

Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 342 342

Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 170 ) ( 170 )

3 unchanged sentences

Stock-based compensation 1,194 — — — 1,194

Balance, June 30, 2024 $ 863,975 $ 357,886 $ ( 110,193 ) $ ( 33,835 ) $ 1,077,833

Balance, September 30, 2024 $ 865,326 $ 375,396 $ ( 82,496 ) $ ( 33,254 ) $ 1,124,972

Accumulated Other Comprehensive Loss Total Stockholders' Equity

13 unchanged sentences

Stock-based compensation 5,530 — — — 5,530

Balance, June 30, 2024 $ 863,975 $ 357,886 $ ( 110,193 ) $ ( 33,835 ) $ 1,077,833

Balance, September 30, 2024 $ 865,326 $ 375,396 $ ( 82,496 ) $ ( 33,254 ) $ 1,124,972

Accumulated Other Comprehensive Loss Total Stockholders' Equity

1 unchanged sentence

(Dollars in thousands)

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

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

Net income — 31,882 — — 31,882

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

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 —

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 — — — ( 391 ) ( 391 )

3 unchanged sentences

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

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

177,929 — — — 177,929

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

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

Accumulated Other Comprehensive Loss Total Stockholders' Equity

3 unchanged sentences

Net income — 79,538 — — 79,538

Other comprehensive income, net of tax — — 8,216 — 8,216

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

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

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

8 unchanged sentences

177,929 — — — 177,929

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

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

See Notes to the Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Six Months Ended

Nine Months Ended

September 30,

(Dollars in thousands) 2024 2023

29 unchanged sentences

Proceeds from issuance of common shares 1,130 998

Net cash provided by (used in) financing activities 13,408 ( 17,551 )

Net decrease in cash and cash equivalents ( 190,851 ) ( 5,540 )

Net cash (used in) provided by financing activities ( 119,628 ) 111,118

Net (decrease) increase in cash and cash equivalents ( 143,015 ) 145,087

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

16 unchanged sentences

Accordingly, these financial statements do not contain all of the information and footnotes required by US GAAP for annual financial statements and should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 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’ 2023 Form 10-K, as updated by the information contained in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 (this "Form 10-Q").

Management has evaluated all significant events and transactions that occurred after June 30, 2024 for potential recognition or disclosure in these Unaudited Condensed Consolidated Financial Statements.

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

21 unchanged sentences

Recurring Fair Value Measurements at Reporting Date

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

28 unchanged sentences

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

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy at June 30, 2024 and December 31, 2023.

Non-Recurring Fair Value Measurements at Reporting Date

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

2 unchanged sentences

Other real estate owned — — — 7,118

(a) Loans held for sale are presented gross of a valuation allowance of $ 149 and $ 163 at June 30, 2024 and at December 31, 2023, respectively.

(a) Loans held for sale are presented gross of a valuation allowance of $ 74 and $ 163 at September 30, 2024 and at December 31, 2023, respectively.

Collateral Dependent Loans:

13 unchanged sentences

Fair Value Measurements of Other Financial Instruments

(Dollars in thousands) Fair Value Hierarchy Level June 30, 2024 December 31, 2023

(Dollars in thousands) Fair Value Hierarchy Level September 30, 2024 December 31, 2023

Carrying Amount Fair Value Carrying Amount Fair Value

21 unchanged sentences

Long-term borrowings 2 236,824 252,873 216,241 222,743

(a) Obligations of states and political subdivisions are presented gross of an allowance for credit losses of $ 238 at both June 30, 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 June 30, 2024

(a) Obligations of states and political subdivisions are presented gross of an allowance for credit losses of $ 236 and $ 238 at September 30, 2024 and December 31, 2023, respectively.

(b) Investments in the nonqualified deferred compensation plan consist of mutual funds.

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at September 30, 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 $ 66.2 million and $ 62.0 million at June 30, 2024 and at December 31, 2023, respectively.

(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $ 66.6 million and $ 62.0 million at September 30, 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.

12 unchanged sentences

Other investment securities at fair value are valued using quoted prices in an active market (Level 1) or quoted prices in less active markets (Level 2).

FHLB and FRB stock are both recorded at cost.

Loans and Leases, Net of Deferred Fees and Costs:

21 unchanged sentences

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

June 30, 2024

September 30, 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 or prepayments of available-for-sale securities for the periods ended June 30 were as follows:

Three Months Ended Six Months Ended

June 30, June 30,

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

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2024 2023 2024 2023

11 unchanged sentences

Unrealized Loss

June 30, 2024

September 30, 2024

Obligations of:

26 unchanged sentences

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

At June 30, 2024, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses.

At June 30, 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 June 30, 2024 and December 31, 2023 were attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit-related losses.

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 June 30, 2024 was attributable to the subordinated nature of the trust preferred securities.

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at June 30, 2024.

At September 30, 2024, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses.

At September 30, 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 September 30, 2024 and December 31, 2023 were attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit-related losses.

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, 2024 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, 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

June 30, 2024

September 30, 2024

Obligations of:

11 unchanged sentences

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 six months ended June 30, 2024 or 2023.

There were no sales of held-to-maturity investment securities during the periods ended September 30, 2024 or December 31, 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 June 30, 2024, and December 31, 2023.

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

6 unchanged sentences

Value Unrealized Loss

June 30, 2024

September 30, 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 investment securities by contractual maturity at June 30, 2024.

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 June 30, 2024.

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

17 unchanged sentences

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

(Dollars in thousands) June 30, 2024 December 31, 2023

(Dollars in thousands) September 30, 2024 December 31, 2023

FHLB stock $ 20,245 $ 29,949

4 unchanged sentences

Total other investment securities $ 55,691 $ 63,421

During the six months ended June 30, 2024, Peoples redeemed $ 19.3 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 six months ended June 30, 2024, as a result of the FHLB's capital requirements on FHLB advances.

For the three months ended June 30, 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 gain of $ 21,000 and an unrealized loss of $ 138,000 , respectively.

For the six months ended June 30, 2024 and 2023, Peoples recognized an unrealized gain of $ 68,000 and an unrealized loss of $ 117,000 , respectively, for the change in fair value of equity investment securities in "Other non-interest income".

At June 30, 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 June 30, 2024.

During the nine months ended September 30, 2024, Peoples redeemed $ 26.9 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, 2024, as a result of the FHLB's capital requirements on FHLB advances.

For the three months ended September 30, 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 gain of $ 12,000 and an unrealized loss of $ 58,000 , respectively.

For the nine months ended September 30, 2024 and 2023, Peoples recognized an unrealized gain of $ 81,000 and an unrealized loss of $ 175,000 , respectively, for the change in fair value of equity investment securities in "Other non-interest income".

At September 30, 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 September 30, 2024.

Pledged Securities

3 unchanged sentences

Carrying Amount

(Dollars in thousands) June 30, 2024 December 31, 2023

(Dollars in thousands) September 30, 2024 December 31, 2023

Securing public and trust department deposits, and repurchase agreements:

6 unchanged sentences

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 $ 11.2 million at June 30, 2024 and $ 8.8 million at December 31, 2023.

Interest receivable on investment securities was $ 10.2 million at September 30, 2024 and $ 9.5 million at December 31, 2023.

Note 4 Loans and Leases

2 unchanged sentences

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

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2024 December 31, 2023

11 unchanged sentences

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

Total interest receivable on loans was $ 24.4 million at June 30, 2024 and $ 24.5 million at December 31, 2023.

Total interest receivable on loans was $ 22.9 million at September 30, 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:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(Dollars in thousands) Nonaccrual (a)

1 unchanged sentence

Accruing Loans 90+ Days Past Due

Construction $ — $ — $ — $ —

Commercial real estate, other 4,416 3,838 2,816 78

7 unchanged sentences

Total loans, at amortized cost $ 34,807 $ 27,578 $ 25,477 $ 6,716

(a) There were $ 1.4 million of nonaccrual loans for which there was no allowance for credit losses at June 30, 2024 and $ 1.2 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2023.

During the first six 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 $ 2.0 million that went on nonaccrual status during the first half of 2024.

Further, eight leases and four commercial real estate loans went on nonaccrual status during the second quarter of 2024 which increased the amount reported by $ 3.4 million and $ 1.8 million, respectively.

The increase in accruing loans 90+ days past due at June 30, 2024 when compared to at December 31, 2023, was primarily due to an increase in accruing premium finance loans 90+ days past due of approximately $ 1.2 million and an increase in accruing residential real estate loans 90+ days past due of approximately $ 0.3 million which was partially offset by a decrease in accruing leases and commercial and industrial loans 90+ days past due.

The amount of interest income recognized on accruing loans 90+ days past due during the six months ended June 30, 2024 was $ 0.9 million.

(a) There were $ 3.8 million of nonaccrual loans for which there was no allowance for credit losses at September 30, 2024 and $ 1.2 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2023.

During the first nine months of 2024, nonaccrual loans increased compared to at December 31, 2023, which was primarily due to twelve large leases totaling $ 3.6 million and four commercial real estate loans of approximately $ 1.1 million that went on nonaccrual status during 2024.

The increase in accruing loans 90+ days past due at September 30, 2024, when compared to at December 31, 2023, was primarily due to an increase in leases that were 90+ days past due and accruing of $ 8.8 million, which was administrative in nature, an increase in premium finance loans loans of approximately $ 6.4 million, and an increase in commercial real estate loans of approximately $ 3.8 million.

The increase in past due premium finance loans carry low credit risk, due to the ability to cancel premiums and recover the majority of the receivable from the insurer.

The amount of interest income recognized on accruing loans 90+ days past due during the nine months ended September 30, 2024 was $ 1.3 million.

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

1 unchanged sentence

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

June 30, 2024

September 30, 2024

Construction $ — $ — $ — $ — $ 320,094 $ 320,094

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 98.8 % of Peoples' loan portfolio was considered “current” at June 30, 2024, compared to 98.6 % at December 31, 2023.

Delinquency trends decreased slightly, as 98.5 % of Peoples' loan portfolio was considered “current” at September 30, 2024, compared to 98.6 % at December 31, 2023.

Pledged Loans

2 unchanged sentences

Loans pledged are summarized as follows:

(Dollars in thousands) June 30, 2024 December 31, 2023

(Dollars in thousands) September 30, 2024 December 31, 2023

Loans pledged to FHLB $ 1,223,345 $ 1,206,134

30 unchanged sentences

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

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at June 30, 2024:

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, 2024:

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

28 unchanged sentences

Substandard 479 4,516 2,580 1,569 384 380 — — 9,908

Doubtful 686 1,824 722 596 — — — — 3,828

Loss — — — 192 — — — — 192

Total 161,202 149,510 80,099 32,927 6,462 2,809 — — 433,009

20 unchanged sentences

Pass 37,653 28,873 24,753 11,161 5,007 4,507 — — 111,954

Substandard — 60 70 49 7 81 — — 267

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 — 55 50 21 6 99 — — 231

Loss 10 3 — — — — — — 13

71 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.

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 multi-family complexes, warehouse buildings, industrial buildings, land under development, and other commercial real estate in process of construction.

7 unchanged sentences

Some consumer loans are unsecured and have no underlying collateral.

• Leases are secured by commercial equipment and other essential business assets.

• Leases are most often secured by commercial equipment and other essential business assets.

• Premium finance loans are secured by the unearned portion of the insurance premium being financed.

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

(Dollars in thousands) June 30, 2024 December 31, 2023

Amortized Cost Amortized Cost

(Dollars in thousands) September 30, 2024 December 31, 2023

Commercial real estate, other $ 1,923 $ —

Premium finance 4,034 —

Leases 3,805 —

Commercial and industrial 1,186 —

Residential real estate — 501

Total collateral dependent loans $ 10,948 $ 501

The increase in collateral dependent loans at June 30, 2024, compared to December 31, 2023, was primarily due to the addition of ten leases associated with three customer relationships during the three months ended June 30, 2024.

The increase in collateral dependent loans at September 30, 2024, compared to December 31, 2023, was primarily due to the addition of fourteen leases associated with five customer relationships and seven premium finance loans during the three months ended September 30, 2024.

Modifications for Borrowers Experiencing Financial Difficulty

7 unchanged sentences

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

The following tables display the amortized cost of loans that were restructured during the three and six months ended June 30, 2024 and June 30, 2023, presented by loan classification.

The following tables display the amortized cost of loans that were restructured during the three and nine months ended September 30, 2024 and September 30, 2023, presented by loan classification.

Payment Delay (Only)

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

During the Three Months Ended June 30, 2024

During the Three Months Ended September 30, 2024

Commercial real estate $ — $ 561 $ 561 0.03 %

Commercial and industrial — 9,057 9,057 0.72 %

Leasing 14 637 651 0.15 %

Home equity lines of credit — 64 64 0.03 %

Residential real estate — 17 17 — %

Consumer, indirect 14 1 15 — %

Total $ 28 $ 10,273 $ 10,301 0.16 %

During the Three Months Ended June 30, 2023

During the Three Months Ended September 30, 2023

Commercial real estate — 901 901 0.04 %

Commercial and industrial — 2,352 2,352 0.21 %

Residential real estate — 25 25 — %

Home equity lines of credit — 52 52 0.03 %

Total $ — $ 3,330 $ 3,330 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.

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

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

1 unchanged sentence

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

During the Six Months Ended June 30, 2024

During the Nine Months Ended September 30, 2024

Commercial real estate $ — $ — $ 1,122 $ — $ 1,122 0.05 %

5 unchanged sentences

Total $ — $ 228 $ 21,069 $ — $ 21,297 0.34 %

During the Six Months Ended June 30, 2023

During the Nine Months Ended September 30, 2023

Construction $ — $ 1,598 $ — $ — $ 1,598 0.43 %

2 unchanged sentences

Residential real estate — — 243 — 243 0.03 %

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

Total $ 189 $ 1,598 $ 6,665 $ 293 $ 8,745 0.14 %

2 unchanged sentences

The following tables summarizes the financial impacts of loan modifications and payment deferrals made to loans during both the three and six months ended June 30, 2024 and June 30, 2023, presented by loan classification.

The following tables summarize the financial impacts of loan modifications and payment deferrals made to loans during both the three and nine months ended September 30, 2024 and September 30, 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 June 30, 2024

During the Three Months Ended September 30, 2024

Commercial real estate 6 $ —

Commercial and industrial 7 —

Home equity lines of credit 120 —

Residential real estate 1 —

Consumer, indirect 13 —

During the Three Months Ended June 30, 2023

During the Three Months Ended September 30, 2023

Commercial real estate 4 —

Commercial and industrial 4 —

Residential real estate 240 —

Home equity lines of credit 217 —

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

2 unchanged sentences

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

During the Six Months Ended June 30, 2024

During the Nine Months Ended September 30, 2024

Commercial real estate 6 $ —

3 unchanged sentences

Consumer, indirect 3 —

During the Six Months Ended June 30, 2023

During the Nine Months Ended September 30, 2023

Commercial real estate 6 —

1 unchanged sentence

Residential real estate 213 8,072

Home equity lines of credit 189 —

Consumer, indirect 2 —

4 unchanged sentences

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

For the Three Months Ended June 30, 2024

For the Three Months Ended September 30, 2024

Total loans that subsequently defaulted $ 26

For the Nine Months Ended September 30, 2024

Commercial real estate 193

2 unchanged sentences

Total loans that subsequently defaulted $ 320

For the Six Months Ended June 30, 2024

Commercial real estate $ 193

For the Three Months Ended September 30, 2023 (b)

Commercial and industrial 245

Residential real estate $ 76

Total loans that subsequently defaulted $ 245

For the Three and Six Month Ended June 30, 2023 (b)

For the Nine Months Ended September 30, 2023 (b)

Commercial and industrial 245

Consumer, indirect 11

3 unchanged sentences

(b) Accounting standard was implemented as of January 1, 2023, thus information above reflects loan modifications made on or after that date.

The following table displays an aging analysis of loans that were modified during the 12 months prior to June 30, 2024, presented by classification and class of financing receivable.

As of June 30, 2024

The following table displays an aging analysis of loans that were modified during the 12 months prior to September 30, 2024, presented by classification and class of financing receivable.

As of September 30, 2024

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

Construction $ — $ 70 $ — $ 70 $ — $ 70

Commercial real estate — — 193 193 2,311 2,504

7 unchanged sentences

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

The following table displays an aging analysis of loans that were modified on or after January 1, 2023, the date Peoples adopted ASU 2022-02, through June 30, 2023, presented by classification and class of financing receivable.

As of June 30, 2023

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

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

3 unchanged sentences

Residential real estate — — — — 242 242

Home equity lines of credit — — — — 203 203

Total loans modified (a)

5 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 and six months ended June 30, 2024 and June 30, 2023 are summarized below:

(Dollars in thousands) Beginning Balance, March 31, 2024

Initial Allowance for Acquired PCD Assets (Recovery of) Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2024

Changes in the allowance for credit losses for the three and nine months ended September 30, 2024 and September 30, 2023 are summarized below:

(Dollars in thousands) Beginning Balance, June 30, 2024

Initial Allowance for Acquired PCD Assets (Recovery of) Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, September 30, 2024

Construction $ 673 $ — $ 181 $ — $ — $ 854

10 unchanged sentences

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

(Dollars in thousands) Beginning Balance, March 31, 2023 Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2023

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

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

11 unchanged sentences

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

Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2024

Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, September 30, 2024

Construction $ 699 $ — $ 155 $ — $ — $ 854

11 unchanged sentences

(Dollars in thousands) Beginning Balance,

December 31, 2022 Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, June 30, 2023

December 31, 2022 Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, September 30, 2023

Construction $ 1,250 $ — $ — $ ( 9 ) $ — $ 1,241

10 unchanged sentences

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

During the second quarter of 2024, Peoples recorded a total provision for credit losses of $ 5.7 million, which was a result of (i) higher net-charge offs, (ii) an increase of reserves on individually analyzed loans and leases, and (iii) loan growth.

Net charge-offs for the second quarter of 2024 were $ 4.2 million, primarily driven by an increase in charge-offs on leases originated by our North Star Leasing business, partially offset by decreases in net charge-offs on commercial and industrial loans and other commercial real estate loans.The increase in the allowance for credit losses at June 30, 2024 when compared to at March 31, 2024 and at December 31, 2023 was primarily due to an increase on reserves for individually analyzed loans and leases.

During the second quarter of 2023, Peoples recorded a provision for credit losses of $ 8.1 million, largely attributable to a provision of $ 9.4 million for the non-purchased credit deteriorated loans acquired in the Limestone Merger, partially offset by the release of reserves of $ 1.7 million on individually analyzed loans and leases and a recovery of $ 1.0 million due to improvements in macro-economic conditions.

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

Peoples had recorded an allowance for unfunded commitments of $ 1.8 million and $ 1.8 million as of June 30, 2024 and December 31, 2023, respectively.

During the third quarter of 2024, Peoples recorded a total provision for credit losses of $ 6.5 million, which was a result of higher net charge-offs.

Net charge-offs for the third quarter of 2024 were $ 6.1 million, primarily driven by an increase in charge-offs on leases originated by our North Star Leasing division, partially offset by recoveries of other commercial real estate loans.The increase in the allowance for credit losses at September 30, 2024 when compared to at June 30, 2024 and at December 31, 2023 was primarily due to an increase on reserves for individually analyzed loans and leases.

During the third quarter of 2023, Peoples recorded a provision for credit losses of $ 3.9 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 mode, partially offset by the release of reserves on individually analyzed loans.

The allowance for credit losses at September 30, 2023 also included an allowance for loans that were not considered purchased credit deteriorated acquired in the Limestone merger.

The provision for credit losses during the first nine months of 2024 was $ 18.3 million, compared to a provision for credit losses of $ 13.7 million for the first nine months of 2023.

The provision for credit losses during the first nine months of 2024 was mainly a result of (i) higher net charge-offs, (ii) an increase in reserves on individually analyzed loans and leases, (iii) economic forecast deterioration and (iv) loan growth.

The provision for credit losses during the first nine months of 2023 was driven by (i) the addition of the provision for the non-purchased credit deteriorated loans acquired in the Limestone Merger, (ii) loan growth and (iii) economic forecast deterioration, partially offset by a reduction in the reserves for individually analyzed loans and leases and the use of updated loss drivers.

Peoples had recorded an allowance for unfunded commitments of $ 2.0 million and $ 1.8 million as of September 30, 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.

2 unchanged sentences

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

For the Six Months Ended For the Year Ended

(Dollars in thousands) June 30, 2024 December 31, 2023

For the Nine Months Ended For the Year Ended

(Dollars in thousands) September 30, 2024 December 31, 2023

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

1 unchanged sentence

Goodwill, end of period $ 362,414 $ 362,169

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

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

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

As of June 30, 2024, Peoples recorded $ 68.8 million of Goodwill related to the Limestone Merger.

Peoples recorded $ 68.8 million of Goodwill related to the Limestone Merger.

Other Intangible Assets

Other intangible assets were comprised of the following at June 30, 2024 , and at December 31, 2023 :

Other intangible assets were comprised of the following at September 30, 2024 , and at December 31, 2023 :

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

June 30, 2024

September 30, 2024

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

13 unchanged sentences

Total other intangibles $ 50,003

As of June 30, 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 June 30, 2024:

The following table details estimated aggregate future amortization of other intangible assets at September 30, 2024:

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

Remaining six months of 2024 $ 2,938 $ 2,512 $ 121 $ 5,571

Remaining three months of 2024 $ 1,466 $ 1,254 $ 64 $ 2,784

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

7 unchanged sentences

Peoples’ deposit balances were comprised of the following:

(Dollars in thousands) June 30, 2024 December 31, 2023

(Dollars in thousands) September 30, 2024 December 31, 2023

Retail certificates of deposits ("CDs"):

10 unchanged sentences

Total deposits $ 7,483,157 $ 7,152,297

Uninsured deposits were $ 2.0 billion at June 30, 2024 and at December 31, 2023 .

Uninsured deposits were $ 2.0 billion at September 30, 2024 and at December 31, 2023 .

Uninsured deposit 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 over $ 748.3 million of the uninsured deposit balances at June 30, 2024 .

Peoples pledges investment securities against certain governmental deposit accounts, which covered over $ 714.1 million and $ 788.7 million of the uninsured deposit balances at September 30, 2024 and December 31,2023, respectively .

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

(Dollars in thousands) June 30, 2024 December 31, 2023

(Dollars in thousands) September 30, 2024 December 31, 2023

3 months or less $ 167,259 $ 58,708

5 unchanged sentences

(Dollars in thousands) Retail Brokered Total

Remaining six months ending December 31, 2024 $ 1,286,633 $ 406,493 $ 1,693,126

Remaining three months ending December 31, 2024 $ 682,696 $ 484,406 $ 1,167,102

Year ending December 31, 2025 1,144,366 10,298 1,154,664

4 unchanged sentences

Total CDs $ 1,884,139 $ 495,904 $ 2,380,043

At June 30, 2024, Peoples had 9 effective interest rate swaps, with an aggregate notional value of $ 85.0 million, all of which were funded by brokered CDs.

At September 30, 2024, Peoples had nine effective interest rate swaps, with an aggregate notional value of $ 85.0 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.

1 unchanged sentence

Note 7 Stockholders’ Equity

The following table details the progression in Peoples’ common shares and treasury stock during the six months ended June 30, 2024:

The following table details the progression in Peoples’ common shares and treasury stock during the nine months ended September 30, 2024:

Common Shares Treasury

11 unchanged sentences

Common shares issued under employee stock purchase plan

Shares at June 30, 2024 36,760,516 1,347,476

Shares at September 30, 2024 36,772,459 1,323,075

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.

As of June 30, 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 six months of 2024.

As of September 30, 2024, Peoples had repurchased an aggregate of 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 nine months of 2024, none of which were purchases in the third quarter 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 June 30, 2024, Peoples had no preferred shares issued or outstanding.

On July 22, 2024, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.40 per common share, payable on August 19, 2024, to shareholders of record on August 5, 2024.

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

At September 30, 2024, Peoples had no preferred shares issued or outstanding.

On October 21, 2024, Peoples' Board of Directors declared a quarterly cash dividend of $ 0.40 per common share, payable on November 18, 2024, to shareholders of record on November 4, 2024.

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

First quarter $ 0.39 $ 0.38

1 unchanged sentence

Third quarter 0.40 0.39

Fourth quarter 0.40 0.39

Total dividends declared $ 1.59 $ 1.55

Accumulated Other Comprehensive (Loss) Income

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income during the six months ended June 30, 2024:

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income during the nine months ended September 30, 2024:

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

4 unchanged sentences

20,211 ( 1,445 ) 18,766

Balance, June 30, 2024 $ ( 112,683 ) $ 2,490 $ ( 110,193 )

Balance, September 30, 2024 $ ( 83,683 ) $ 1,187 $ ( 82,496 )

Note 8 Employee Benefit Plans

1 unchanged sentence

The plan provided retirement benefits based on an employee’s years of service and compensation.

For employees hired before January 1, 2003, the amount of post-retirement benefit was based on the employee’s average monthly compensation over the highest five consecutive years out of the employee’s last ten years with Peoples while an eligible employee.

For employees hired on or after January 1, 2003, the amount of post-retirement benefit was based on 2 % of the employee’s annual compensation during the years 2003 through 2009, plus accrued interest.

6 unchanged sentences

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 totaled $ 3.1 million during the six months ended June 30, 2024 and $ 2.7 million for the six months ended June 30, 202 3.

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

Matching contributions made by Peoples totaled $ 4.5 million during the nine months ended September 30, 2024 and $ 4.1 million for the nine months ended September 30, 2023 .

Note 9 Earnings Per Common Share

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

21 unchanged sentences

Peoples also manages interest rate risk through the use of derivative financial instruments.

Specifically, Peoples enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or

payment of future known or expected cash amounts, the values of which are determined by interest rates.

Specifically, Peoples enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or expected cash amounts, the values of which are determined by interest rates.

Peoples’ derivative financial instruments are used to manage differences in the amount, timing and duration of Peoples' known or expected cash receipts and its known or expected cash payments principally related to certain variable rate borrowings.

5 unchanged sentences

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

At June 30, 2024, Peoples had entered into 9 interest rate swap contracts with an aggregate notional value of $ 85.0 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.

At September 30, 2024, Peoples had entered into 9 interest rate swap contracts with an aggregate notional value of $ 85.0 million.

Peoples will pay a fixed rate of interest for up to four 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 both June 30, 2024 and at December 31, 2023, the interest rate swaps were designated as cash flow hedges of $ 85.0 million and $ 105.0 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 September 30, 2024 and at December 31, 2023, the interest rate swaps were designated as cash flow hedges of $ 85.0 million and $ 105.0 million, respectively, in brokered CDs, which are expected to be extended every 90 days through the maturity dates of the interest rate swaps.

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

1 unchanged sentence

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.

For the six months ended June 30, 2024, and 2023, Peoples recorded reclassifications of losses to earnings of $ 1.7 million and $ 130,000 , respectively.

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

For the nine months ended September 30, 2024, and 2023, Peoples recorded reclassifications of losses to earnings of $ 2.4 million and $ 2.3 million, respectively.

During the next 12 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) June 30,

(Dollars in thousands) September 30,

2024 December 31,

5 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2024 2023 2024 2023

1 unchanged sentence

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,

5 unchanged sentences

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

By entering into the interest rate swap with the customer, Peoples Bank

effectively provides the customer with a fixed rate loan while creating a variable rate asset for Peoples Bank.

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

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

1 unchanged sentence

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 and six months ended June 30, 2024 and at or for the year ended December 31, 2023.

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

7 unchanged sentences

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

At June 30, 2024 and at December 31, 2023, Peoples Bank had no cash pledged, while counterparties had $ 15.4 million of cash pledged at June 30, 2024 and $ 12.8 million of cash pledged at December 31, 2023.

Peoples Bank had no pledged investment securities at June 30, 2024 or at December 31, 2023, while the counterparties had pledged investment securities in the amounts of $ 2.0 million at June 30, 2024 and $ 2.2 million at December 31, 2023.

At September 30, 2024 and at December 31, 2023, Peoples Bank had no cash pledged, while counterparties had $ 6.6 million of cash pledged at September 30, 2024 and $ 12.8 million of cash pledged at December 31, 2023.

Peoples Bank had no pledged investment securities at September 30, 2024 or at December 31, 2023, while the counterparties had pledged investment securities in the amounts of $ 2.0 million at September 30, 2024 and $ 2.2 million at December 31, 2023.

Note 11 Stock-Based Compensation

10 unchanged sentences

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

In the first six 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;

In the first nine 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 six months ended June 30, 2024:

The following table summarizes the changes to Peoples’ restricted common shares for the nine months ended September 30, 2024:

Time-Based Vesting Performance-Based Vesting

4 unchanged sentences

Forfeited ( 9,779 ) 29.65 ( 23,444 ) 29.51

Outstanding at June 30, 2024

Outstanding at September 30, 2024

134,372 $ 28.46 591,688 $ 29.67

For the six months ended June 30, 2024, the intrinsic value for restricted common shares released was $ 2.4 million compared to $ 2.5 million for the six months ended June 30, 2023.

For the nine months ended September 30, 2024, the intrinsic value for restricted common shares released was $ 2.6 million compared to $ 3.0 million for the nine months ended September 30, 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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2024 2023 2024 2023

8 unchanged sentences

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

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 8.2 million at June 30, 2024, which will be recognized over a weighted-average period of 2.2 years.

Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $ 7.2 million at September 30, 2024, which will be recognized over a weighted-average period of 2.0 years.

Note 12 Revenue

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in thousands) 2024 2023 2024 2023

26 unchanged sentences

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

The following table details the changes in Peoples' contract assets and contract liabilities for the six-month period ended June 30, 2024:

The following table details the changes in Peoples' contract assets and contract liabilities for the nine-month period ended September 30, 2024:

Contract Assets Contract Liabilities

5 unchanged sentences

Recognition of income previously deferred — ( 241 )

Balance, June 30, 2024 $ 789 $ 5,800

Balance, September 30, 2024 $ 845 $ 5,535

Note 13 Acquisitions

4 unchanged sentences

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

Peoples recorded no acquisition-related expenses related to the Limestone Merger for the three months ended June 30, 2024 and $( 0.1 ) million for the six months ended June 30, 2024.

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

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

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

Peoples recorded $( 0.7 ) million in other non-interest expenses related to the Limestone Merger for both the three and nine months ended September 30, 2024.

For the third quarter of 2023, Peoples had $ 4.4 million of acquisition-related non-interest expense which 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, Peoples had $ 15.7 million of acquisition-related non-interest expense which 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 following table provides the purchase price calculation as of the date of the Limestone Merger, and the assets acquired and liabilities assumed at their estimated fair values.

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Net loans 1,075,878

(Dollars in thousands) Fair Value

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

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

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

The employees retained from the Limestone Merger and the geographic locations

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

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

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

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

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

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

Peoples 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.

Peoples originates sales-type leases through its North Star Leasing division, as these leases are typically structured as dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment, or as equipment finance agreements.

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.

Peoples also originates leases through its Vantage subsidiary, which are classified as either sales-type, direct financing leases, or operating 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, direct financing leases, or operating leases based primarily on whether they include 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.

Equipment leases relate to information technology, restaurant, manufacturing, healthcare, and other equipment.

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

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The table below details Peoples' lease income:

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

(Dollars in thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Interest and fees on leases (a) $ 11,922 $ 11,508 $ 35,970 $ 31,426

Lease income 1,116 1,719 2,352 2,796

Lease income (loss) 1,827 ( 66 ) 4,179 2,730

Other non-interest income (b) 1,242 — 3,079 —

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

(Dollars in thousands) June 30, 2024 December 31, 2023

(Dollars in thousands) September 30, 2024 December 31, 2023

Lease payments receivable, at amortized cost $ 484,926 $ 463,742

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(Dollars in thousands) Balance

Remaining six months ending December 31, 2024 $ 75,253

Remaining three months ending December 31, 2024 $ 49,872

Year ending December 31, 2025 117,662

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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 June 30, 2024, Peoples did not have any leases that met the criteria for finance leases.

At September 30, 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.

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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 Six Months Ended

(Dollars in thousands) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

(Dollars in thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Operating lease expense $ 723 $ 474 $ 2,191 $ 2,262

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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) June 30, 2024 December 31, 2023

(Dollars in thousands) September 30, 2024 December 31, 2023

Other assets $ 10,629 $ 11,689

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Additions for ROU assets obtained during the year $ 1,130 $ 4,428

During both the three months ended June 30, 2024 and 2023, Peoples paid cash of $ 0.7 million for operating leases.

During the six months ended June 30, 2024 and 2023, Peoples paid cash of $ 1.4 million and $ 1.4 million, respectively, for operating leases.

During both the three months ended September 30, 2024 and 2023, Peoples paid cash of $ 0.7 million and $ 0.8 million, respectively, for operating leases.

During the nine months ended September 30, 2024 and 2023, Peoples paid cash of $ 2.2 million and $ 2.2 million, respectively, for operating leases.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands) Balance

Remaining six months ending December 31, 2024 $ 1,449

Remaining three months ending December 31, 2024 $ 726

Year ending December 31, 2025 2,315

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

What changed 10-Q

Item 1. Financial Statements