PEOPLES BANCORP INC 10-K

pebo-20241231 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number: 000-16772 PEOPLES BANCORP INC. (Exact name of registrant as specified in its charter) Ohio 31-0987416 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 138 Putnam Street, P.O. Box 738, Marietta, Ohio 45750-0738 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (740) 373-3155 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common shares, without par value PEBO The Nasdaq Stock Market Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer x Accelerated filer ☐ Non-accelerated filer o Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report . ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: As of June 30, 2024 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the registrant’s common shares (the only common equity of the registrant) held by non-affiliates was $ 1,002,781,000 based upon the closing price as reported on the Nasdaq Global Select Market®. For this purpose, executive officers and directors of the registrant are considered affiliates. Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date: 35,670,204 common shares, without par value, at February 26, 2025. Document Incorporated by Reference: Portions of Registrant’s definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held on April 24, 2025 (the “2025 Annual Meeting of Shareholders”), are incorporated by reference into Part III of this Annual Report on Form 10-K. TABLE OF CONTENTS PART I ITEM 1 Business 4 ITEM 1A Risk Factors 21 ITEM 1B Unresolved Staff Comments 33 ITEM 1C Cybersecurity 33 ITEM 2 Properties 34 ITEM 3 Legal Proceedings 35 ITEM 4 Mine Safety Disclosures (not applicable) 35 PART II ITEM 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 36 ITEM 6 [RESERVED ] 38 ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 ITEM 7A Quantitative and Qualitative Disclosures About Market Risk 76 ITEM 8 Financial Statements and Supplementary Data 76 ITEM 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 76 ITEM 9A Controls and Procedures 76 ITEM 9B Other Information 77 ITEM 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections (not applicable) 77 PART III ITEM 10 Directors, Executive Officers and Corporate Governance 126 ITEM 11 Executive Compensation 126 ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 127 ITEM 13 Certain Relationships and Related Transactions, and Director Independence 128 ITEM 14 Principal Accountant Fees and Services 128 PART IV ITEM 15 Exhibits and Financial Statement Schedules 129 ITEM 16 Form 10-K Summary (not applicable) 129 SIGNATURES 136 3 As used in this Annual Report on Form 10-K (this “Form 10-K”), “Peoples” refers to Peoples Bancorp Inc. and its consolidated subsidiaries collectively, except where the context indicates the reference relates solely to the registrant, Peoples Bancorp Inc. Unless otherwise indicated, all note references contained in this Form 10-K refer to the Notes to the Consolidated Financial Statements included immediately following “ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS” of this Form 10-K. PART I ITEM 1 BUSINESS The disclosures set forth in this Item are qualified by “ITEM 1A RISK FACTORS” and the section captioned “Forward-Looking Statements” in “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K and other cautionary statements set forth elsewhere in this Form 10-K. Corporate Overview Peoples Bancorp Inc. is a financial holding company, which was organized in 1980. Peoples operates principally through its wholly-owned subsidiary, Peoples Bank, an Ohio state-chartered bank that was first chartered in 1902. Peoples’ other wholly-owned subsidiary is Peoples Investment Company (“PIC”). Peoples also holds all of the common securities of NB&T Statutory Trust III, FNB Capital Trust One, Ascencia Statutory Trust I, and Porter Statutory Trusts II-IV. Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (“Peoples Insurance”) and Vantage Financial, LLC (“Vantage”), a nationwide provider of equipment financing. Business Overview Peoples makes available a complete line of commercial and consumer banking, trust and investment, insurance, premium financing solutions, equipment leases and equipment financing agreements through its financial subsidiaries – Peoples Bank, Peoples Insurance and Vantage. These products and services include the following: ◦ various demand deposit accounts, savings accounts, money market accounts, certificates of deposit and governmental deposits; ◦ commercial loans, residential real estate loans, home equity lines of credit, consumer loans and overdraft services; ◦ insurance premium financing; ◦ commercial equipment leasing; ◦ technology equipment leasing; ◦ debit and automated teller machine (“ATM”) cards; ◦ credit cards for individuals and businesses; ◦ merchant credit card transaction processing services; ◦ person-to-person and business-to-business payment processing via Zelle®, FedNow®, and Real-Time Payments®; ◦ mobile banking features including check deposit, alert notifications, Apple Pay® and Samsung Pay®; ◦ interactive teller machines (“ITMs”); ◦ safe deposit rental facilities; ◦ money orders and cashier’s checks; ◦ a full range of life, health, and property and casualty insurance products; ◦ third-party insurance administration services; ◦ brokerage services; ◦ custom-tailored fiduciary and trust services; ◦ asset management and administration services; and ◦ employee benefit, retirement, and healthcare plan administration services. Peoples’ financial products and services are primarily offered through its financial service offices, ATMs, and ITMs in Ohio, West Virginia, Kentucky, Virginia, Washington, D.C. and Maryland, as well as through online resources that are web-based and mobile-based. Peoples’ premium financing and commercial and technology equipment leasing services are offered nationwide. Brokerage services are offered exclusively through an unaffiliated registered broker-dealer located at Peoples Bank’s offices. Indirect consumer lending activities are provided through approved dealerships. Peoples Bank’s credit card and merchant processing services are provided through joint marketing arrangements with third parties. Peoples’ business activities are currently limited to one reporting unit and reportable operating segment, which is community banking. For a discussion of Peoples’ financial performance for the fiscal year ended December 31, 2024, see Peoples’ Consolidated Financial Statements and Notes to the Consolidated Financial Statements. Peoples has a history of expanding its business, including its customer base and primary market area, through a combination of organic growth and targeted acquisitions. The organic growth may include opening de novo banking and loan production offices (“LPOs”) located in or near Peoples’ existing market area. Acquisitions have consisted of traditional banking offices and LPOs, both individually and as part of entire financial institutions, insurance agencies, financial advisory books of business, insurance premium 4 financing and equipment leasing services. The primary objectives of Peoples’ expansion efforts include: (1) providing opportunities to integrate non-traditional products and services, such as insurance, investment administration and management, insurance premium financing and commercial equipment leasing options, along with the traditional banking products offered to Peoples’ clients; (2) increasing market share in existing markets; (3) expanding Peoples’ core financial service businesses of banking, insurance, investment and investment management, insurance premium financing and commercial equipment leasing services; and (4) improving operating efficiency by directing resources toward offices and markets with the greatest earnings opportunities. Recent Corporate Developments On October 25, 2022, Peoples announced the signing of a definitive Agreement and Plan of Merger providing for Peoples’ acquisition, in an all-stock merger, of Limestone Bancorp Inc. (“Limestone”), a bank holding company headquartered in Louisville, Kentucky, and the parent company of Limestone Bank. Under the terms of the Agreement and Plan of Merger, Limestone merged with and into Peoples, and Limestone Bank merged with and into Peoples’ wholly-owned subsidiary, Peoples Bank (collectively, the “Limestone Merger”). The Limestone Merger closed as of the close of business on April 30, 2023. As consideration, Limestone shareholders received 0.90 common shares of Peoples for each full share of Limestone that was owned at the merger date, resulting in the issuance of 6,827,668 common shares by Peoples, or aggregate consideration of $177.9 million. Peoples recorded goodwill in the amount of $68.8 million and core deposit other intangible assets in the amount of $27.7 million related to this transaction. On January 28, 2021, Peoples’ Board of Directors approved a share repurchase program authorizing Peoples to purchase up to an aggregate of $30.0 million of Peoples’ outstanding common shares, replacing the February 27, 2020 share repurchase program which had authorized Peoples to purchase up to an aggregate of $40.0 million of Peoples’ outstanding common shares. Peoples repurchased an aggregate of 100,905 of its common shares totaling $3.0 million during 2024, an aggregate of 107,219 of its common shares totaling $3.0 million during 2023, and an aggregate of 263,183 of its common shares totaling $7.4 million during 2022, under the share repurchase program authorized on January 28, 2021. Primary Market Area and Customers Peoples considers its primary market area to be those counties with a physical branch presence and their contiguous counties. This includes Ohio, West Virginia, Kentucky, Virginia, Washington, D.C. and Maryland. Peoples currently operates 67 offices in Ohio, 29 offices in West Virginia, 43 offices in Kentucky, three offices in Virginia, two offices in Washington D.C., one office in Maryland, an insurance premium finance lending office in Missouri, an equipment leasing office in Vermont, and an equipment leasing office in Minnesota. Peoples’ market area consists of rural, small urban and metropolitan markets in which Peoples serves a diverse group of industries and consumers. Principal industries served in Peoples’ primary market area include manufacturing, distribution, commercial real estate, healthcare, education, municipal, agricultural, automotive, wholesale and retail trade, franchise, and service-related industries. This broad-based economic area provides diversity, which helps prevent Peoples’ revenue and earnings from being largely dependent upon any single industry segment. Lending Activities Peoples Bank originates various types of loans, including commercial loans (comprised of commercial and industrial loans, commercial real estate loans, and construction loans), premium finance loans, residential real estate loans, home equity lines of credit, consumer loans (comprised of both indirect and direct loans) and overdraft services. Peoples Bank’s lending activities are focused principally on lending opportunities within its primary market area, except for its premium finance lending and equipment leasing businesses, which originate loans and leases nationwide. However, Peoples Bank may occasionally originate loans outside its primary market area. In general, Peoples Bank retains the majority of the loans and leases it originates; however, certain longer-term fixed-rate mortgage loan originations, primarily one-to-four family residential mortgages, and portions of select commercial real estate loans and commercial and industrial loans are sold into the secondary market or to other financial institutions. Peoples Bank’s loans consist of credit extensions to consumers and other borrowers spread over a broad range of industrial classifications. At December 31, 2024, Peoples Bank had no concentration of loans to borrowers engaged in the same or similar industries that exceeded 10% of total loans (also referred to as “loans, net of deferred fees and costs”), nor did Peoples Bank have any loans outstanding to non-United States (“U.S.”) entities. Commercial Lending Commercial loans include commercial and industrial loans, commercial real estate loans, construction loans, and commercial credit card loans. Commercial loans represented the largest portion of Peoples Bank’s total loan portfolio, comprising approximately 60.3% and 60.8% of total loans at December 31, 2024, and at December 31, 2023, respectively. Commercial lending inherently carries a significant risk of loss since commercial loan relationships generally involve larger loan balances than other loan classes. Commercial loan terms include amortization schedules and interest rates commensurate with the purpose of each loan, the identified source of repayment, and the risk involved. The majority of Peoples Bank’s commercial loans carry variable interest rates equal to an underlying index rate plus a margin. However, Peoples Bank also originates commercial loans with fixed interest rates for periods generally ranging from three to ten years. At December 31, 2024, the commercial loan portfolio consisted of 5 61.1% in variable interest rate loans and 38.9% in fixed interest rate loans. In determining whether to grant a commercial loan, Peoples Bank primarily reviews a schedule of cash flows to evaluate whether the borrower’s anticipated future cash flows will be adequate to service both interest and principal due. Peoples Bank also originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples Bank on terms that match the terms of the loan. By entering into the interest rate swap with the customer, the customer synthetically fixes the rate on the variable rate loan. Peoples Bank offsets its exposure in each such swap by entering into an offsetting interest rate swap with an unaffiliated financial institution. These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative instrument. Peoples Bank evaluates all commercial loan relationships whose aggregate credit exposure is greater than $1.0 million on an annual basis for possible credit deterioration. This internal loan review process provides Peoples Bank with opportunities to identify potential problem loans and take proactive actions to assure repayment of the loan or minimize Peoples Bank’s risk of loss, such as reviewing the relationship more frequently based upon the loan quality rating and aggregate outstanding exposure. Upon detection of the reduced ability of a borrower to meet cash flow obligations, the loan is reviewed for possible downgrade in the loan quality rating or placement on nonaccrual status. Peoples Bank also completes evaluation procedures for a selection of larger loan relationships on a quarterly basis. Loan relationships whose aggregate credit exposure to Peoples Bank is equal to or less than $1.0 million are reviewed on an event-driven basis. Triggers for review include a borrower's request to renew a maturing loan or line of credit, actual knowledge of adverse events affecting the borrower’s business, receipt of financial statements indicating deteriorating credit quality, or other similar events. Commercial and Industrial Loans Commercial and industrial loans are loans to operating companies for purposes of financing working capital needs, fixed asset purchases, acquisitions of other businesses, and other business activities. Typically, these loans are secured with business assets and, in some cases, owner-occupied real estate and are personally guaranteed by the owners of the operating companies. The primary source of repayment of this type of loan is generally cash flows generated from operations of the business, which can be susceptible to adverse changes in economic conditions of the general economy as a whole or within a specific industry. At December 31, 2024, commercial and industrial loans comprised 21.2% of Peoples Bank’s total loan portfolio, compared to 19.2% at December 31, 2023. Commercial Real Estate Loans Peoples Bank’s portfolio of commercial real estate loans comprised 33.9% of total loans at December 31, 2024, and 35.7% at December 31, 2023. Peoples Bank originates commercial real estate loans for both owner-occupied commercial real estate and non-owner-occupied investment commercial real estate. Generally, the real estate securing these loans is stabilized and typically the loans are personally guaranteed by the owners of the borrowing entities. Normally, owner-occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties occupied by operating companies. The source of repayment for this type of loan is typically cash flow from the operating company occupying the real estate. Investment commercial real estate generally includes multifamily complexes, office buildings and complexes, retail facilities, land under development, and industrial properties, as well as other commercial or industrial real estate. Typically, the primary source of repayment of this type of loan is rental income generated from leasing activities. Construction Loans Peoples Bank originates construction loans to provide temporary financing during the construction phase for commercial and residential properties. Peoples Bank’s construction lending is focused primarily on commercial and residential projects of select real estate developers. These projects include the construction of apartment, office, retail, industrial complexes, and other commercial and residential projects. The underwriting criteria for construction loans are generally the same as for non-construction loans. Construction loans comprised 5.2% of Peoples Bank’s total loan portfolio at December 31, 2024 and 5.9% at December 31, 2023. Construction financing is generally considered to involve higher credit risk than other types of loans since Peoples Bank is dependent largely upon the accuracy of the initial estimate of the property’s value at the completion of construction and the estimated cost (including interest) of construction. If the estimated construction cost proves to be inaccurate, Peoples Bank may be required to advance funds beyond the amount originally committed to enable completion of the project. If the estimate of a property’s value upon completion proves inaccurate, Peoples Bank may be confronted, at or prior to the maturity of the loan, with a property having a value insufficient to ensure full repayment, should the borrower default. In the event a default on a construction loan occurs and foreclosure follows, Peoples Bank must take control of the project and attempt to either arrange for completion of construction or sell the collateral of the unfinished project. In certain cases, such as real estate development projects, repayment of construction loans occurs as a result of subsequent sale of the developed real estate. Additional risk exists in these cases as the developer may lack funds to repay the loan if the property is not sold upon completion. To mitigate the risk of construction lending, Peoples Bank requires periodic site inspections, typically completed by an independent third party, to ensure appropriate completion of the project prior to any disbursements. Construction loans are 6 structured to provide sufficient time to complete construction, giving consideration to weather or other variables that influence completion time. Peoples Bank typically requires the term of its construction loans to be less than three years. Insurance Premium Finance Loans Based in Lee Summit, Missouri, Peoples Premium Finance originates insurance premium finance loans through independent insurance agency partners nationwide that provide funding for the purchase by borrowers of property and casualty insurance policies from the insurance agency partners. Peoples Bank’s portfolio of insurance premium finance loans comprised 4.2% of total loans at December 31, 2024, and 3.3% of total loans at December 31, 2023, with the original portfolio having been acquired during 2020. The loans are secured by the refundable, unearned premiums with respect to the underlying insurance policies. These loans require a 10% to 20% down payment followed by no less than nine consecutive, equal monthly payments of principal plus interest. This type of lending is relatively low risk, as the loan amount is generally less than the refundable, unearned premiums of the underlying insurance policy. If the loan becomes delinquent, the underlying insurance policy is cancelled, and the unearned premiums are refunded directly to Peoples Bank. Commercial Equipment Leases and Equipment Financing Agreements Peoples Bank originates leases and equipment financing agreements through its North Star Leasing division and through its wholly-owned subsidiary, Vantage. Peoples Bank’s portfolio of leases comprised 6.4% of total loans at December 31, 2024, and 6.7% of total loans at December 31, 2023. Based in Burlington, Vermont, the North Star Leasing division underwrites, originates and services equipment leases and equipment financing agreements primarily to small businesses throughout the U.S. Based in Excelsior, Minnesota, Vantage underwrites, originates and services primarily technology equipment leases to medium and large businesses throughout the U.S. Both North Star Leasing’s and Vantage’s leases transfer substantially all of the benefits and much of the risks of equipment ownership to the lessee. The present value of future lease payments and the estimated residual value are recorded where leases are classified as sales-type or direct finance leases. For those leases classified as operating, the original cost of the equipment, which is subsequently depreciated over the life of the asset, is recorded on Peoples’ Consolidated Balance Sheet. For leases classified as sales-type or direct finance, revenue is recognized as a constant percentage return on the lease’s carrying value. For leases classified as operating, lease income is recognized ratably over the life of the lease. Lease origination costs are deferred and amortized as an adjustment of the related lease’s yield. Residential Real Estate Loans Peoples Bank’s portfolio of residential real estate loans comprised 13.2% of total loans at December 31, 2024, and 12.9% of total loans at December 31, 2023. The residential real estate loans originated by Peoples Bank may either be retained in its loan portfolio, or sold into the secondary market with servicing either retained by Peoples Bank or sold with the loan. Peoples Bank also had $2.3 million of residential real estate loans held for sale and was servicing $346.2 million of loans, consisting primarily of one-to-four family residential mortgages, which had previously been sold into the secondary market, in each case, at December 31, 2024. Peoples Bank also originates and retains jumbo residential mortgage loans for primary and secondary residences, which are nonconforming loans that have higher loan amounts than those acceptable for sale to the government-sponsored enterprises to which Peoples Bank typically sells residential mortgage loans. Peoples Bank originates both fixed rate and variable rate residential real estate loans. From time to time, Peoples Bank sells its longer-term fixed rate real estate loans into the secondary market; however, Peoples Bank may retain certain fixed rate real estate loans. Peoples bank also offers fixed rate home equity installment loans with five-year to 20-year terms. Peoples Bank typically requires residential real estate loan amounts to be no more than 80% of the purchase price or the appraised value of the real estate securing the loan, whichever is lower, unless private mortgage insurance is obtained by the borrower for the percentage exceeding 80%. In limited circumstances, Peoples Bank may lend up to 100% of the appraised value of the real estate, although such lending currently is limited to loans that qualify under established federally-backed rural housing programs or through a designated low-to-moderate income loan program. Numerous risk factors attributable to real estate lending are considered during underwriting for the purposes of establishing an interest rate commensurate with the inherent risks of the loan. Residential real estate loans are typically secured by first mortgages with evidence of title in favor of Peoples Bank in the form of an attorney’s opinion of title or a title insurance policy. Peoples Bank requires insurance, with Peoples Bank named as the mortgagee and loss payee. Peoples Bank requires evidence of insurance at the time of the loan closing. Additionally, Peoples Bank has a blanket insurance policy to cover loans secured by real estate with outstanding balances of less than $1.0 million that do not include an insurance escrow account. For loans secured by real estate with outstanding balances over $1.0 million or those that include an insurance escrow account, Peoples Bank force-places an insurance policy to cover the residential real estate loan when the borrower fails to maintain adequate insurance. Licensed appraisals are required for all residential real estate loans, and are completed by an independent third party. A compliance officer assigned to the line of business is responsible for working with the management team to identify, implement and test regulatory compliance controls. 7 Home Equity Lines of Credit Peoples Bank originates home equity lines of credit that provide consumers with greater flexibility in financing personal expenditures. At December 31, 2024, outstanding home equity lines of credit comprised 3.7% of Peoples Bank’s total loans, compared to 3.4% at December 31, 2023. Peoples Bank currently offers home equity lines of credit with a prime-based variable rate for the entire 10-year term, with interest-only payments and a balloon payment at maturity. At December 31, 2024, Peoples Bank’s home equity loan portfolio consisted of 99.2% in variable interest rate loans and 0.8% in fixed interest rate loans. At December 31, 2024, 18.7% of the total home equity loan portfolio was represented by convertible rate home equity lines of credit, with total outstanding principal balances and available credit amounts of $44.0 million and $57.9 million, respectively, and a weighted-average remaining maturity of 6.7 years. The average original loan amount under these convertible rate home equity lines of credit was $51,000 at December 31, 2024. Home equity lines of credit are generally made as second mortgages by Peoples Bank. The maximum amount of a home equity line of credit is generally limited to 80% of the appraised value of the property less the balance of the first mortgage. Peoples Bank may lend up to 90% of the appraised value of the property (less the balance of the first mortgage) at higher interest rates that are commensurate with the additional risk being assumed in these situations. The home equity lines of credit are written with 10-year terms and are subject to a new underwriting review upon request for renewal. Consumer Lending Peoples Bank’s consumer lending activities include consumer indirect loans, consumer credit card loans, and consumer direct loans, which primarily involve loans secured by automobiles, motorcycles, recreational vehicles and other personal property, as well as unsecured loans and personal lines of credit. Consumer loans generally involve more risk as to collectability than real estate mortgage loans because of the type and nature of the collateral or, in certain instances, the absence of collateral. As a result, consumer lending collections are dependent upon the borrower’s continued financial stability, and are at more risk from adverse changes in personal circumstances. In addition, application of various state and federal laws, including bankruptcy and insolvency laws, could limit the amount that may be recovered under these loans. Credit approval for consumer loans typically requires demonstration of sufficiency of income to repay principal and interest due, stability of employment, an established credit record and sufficient collateral for secured loans. It is the policy of Peoples Bank to review its consumer loan portfolio monthly and to charge-off loans that do not meet its ongoing standards, while strictly adhering to all laws and regulations governing consumer lending. A compliance officer assigned to the line of business is responsible for working with the management team to identify, implement and test regulatory compliance controls. Consumer Indirect Loans Peoples Bank originates consumer indirect loans through select dealerships, which generally include loans secured by automobiles, motorcycles and recreational vehicles. At December 31, 2024, consumer indirect loans comprised 10.5% of Peoples Bank’s total loan portfolio, compared to 10.8% at December 31, 2023. Consumer indirect loans are originated at the point of sale, or dealership, and are subject to the same pricing structure and underwriting process as consumer loans originated through the retail branch channel. Consumer indirect lending offers Peoples Bank the opportunity to access additional customers outside of its primary office locations. Peoples Bank offers consumer indirect lending for new and pre-owned vehicles through approved franchise or independent dealerships. These dealerships undergo an approval process whereby Peoples Bank reviews the dealership licensing and industry experience, evaluates customer experience with the dealership, and completes an inspection of the inventory, showroom, and general facilities. On an ongoing basis, the dealerships are monitored based on production volume, application approval rates, portfolio default rates, adherence to loan pricing guidelines, compliance with fair lending laws and consumer protection regulations, including unfair and deceptive acts and practices (“UDAP”) under Section 5 of the FTC Act or unfair, deceptive or abusive acts and practices (“UDAAP”) pursuant to the Dodd-Frank Act. Consumer Direct Loans Peoples Bank originates consumer direct loans primarily through its office locations. Consumer direct loans generally include loans secured by automobiles, motorcycles, recreational vehicles and other personal property; unsecured loans; and personal lines of credit. Consumer direct loans differ from consumer indirect loans as they include expanded products, such as unsecured loans, or loans secured by stock or deposits. Consumer direct loans comprised 1.7% of Peoples Bank’s total loan portfolio at December 31, 2024, compared to 2.1% at December 31, 2023. Overdraft Services Peoples Bank grants overdraft services to qualified customers, which provides overdraft protection to deposit customers, both individual and business, by establishing an overdraft amount. After a 60-day waiting period to verify account activity, each new checking account usually receives an overdraft amount of $400, $700 or $1,000 based on the type of account and other parameters, such as previous charge-off history or credit loss. Customers also have the ability to opt out of the overdraft services offered by Peoples. Once established, customers are permitted to overdraw their checking account at Peoples Bank's discretion, up to their overdraft limit, with each item being charged Peoples Bank’s regular overdraft fee, with a maximum of five charges per day when the customer’s account is overdrawn more than $5. Customers repay the overdraft with their next deposit. Peoples’ 8 overdraft services are designed to allow Peoples Bank to fill the void between traditional overdraft protection, such as a line of credit, and non-bank “check cashing services.” Under federal banking regulations, Peoples Bank is required to obtain the consent of its customers in order to apply Peoples’ overdraft services to ATM and one-time debit card transactions. While the overdraft services generate fee income, these fees may be partially offset by additions to the provision for credit losses necessary to ensure the maintenance of an appropriate allowance for credit losses against overdrafts deemed uncollectable. This allowance, along with net charge-offs, was included in determining Peoples Bank’s allowance for credit losses. At December 31, 2024, the unfunded commitment related to overdraft services was $79.6 million. Investment Activities At December 31, 2024, investment securities comprised 20.7% of Peoples’ total assets, compared to 19.6% at December 31, 2023. The majority of Peoples’ investment activities are conducted through Peoples Bank, although Peoples and its non-banking subsidiary, PIC, also may engage in investment activities from time to time. Investment activity by Peoples Bank is subject to certain regulatory guidelines and limitations on the types of securities eligible for purchase. As a result, the investment securities owned by Peoples Bank at December 31, 2024, included obligations of agencies and corporations of the U.S. government, including mortgage-backed securities, obligations of U.S. government sponsored agencies, bank eligible obligations of states and political subdivisions in the U.S., and bank eligible corporate obligations, including private-label mortgage-backed securities. Peoples Bank also invests in tax credit funds. The investments owned by PIC consist of tax credit funds, municipal obligations, privately issued mortgage-backed securities, and subordinated debt issued by a non-related banking entity. Peoples Bank’s investment activities are governed internally by a policy approved by the Board of Directors of Peoples Bank, which is administered by Peoples Bank’s Asset-Liability Management Committee (“ALCO”). The primary purpose of Peoples Bank’s investment portfolio is to: (1) employ excess funds not needed to support loan demand; (2) provide a source of liquid assets to accommodate unanticipated deposit and loan fluctuations, and overall liquidity needs; (3) provide eligible securities to secure public and trust funds; and (4) earn the maximum overall return commensurate with Peoples Bank’s risk appetite and liquidity needs. Investment strategies to achieve these objectives are reviewed by the ALCO. In its evaluation of investment strategies, the ALCO considers various factors, including the interest rate environment, balance sheet mix, actual and anticipated loan demand, funding opportunities and Peoples Bank’s overall interest rate sensitivity. The ALCO also has much broader responsibilities, which are discussed in the “Interest Rate Sensitivity and Liquidity” section of “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K. Funding Sources Peoples’ primary sources of funds for lending and investing activities are interest-bearing and non-interest-bearing deposits. Cash flows from both the loan and investment portfolios, which include scheduled payments, as well as prepayments, calls and maturities, also provide a relatively stable source of funds. Peoples also utilizes a variety of short-term borrowings and long-term borrowings to fund asset growth and satisfy liquidity needs. Peoples also hedges 90-day brokered deposits and Federal Home Loan Bank of Cincinnati (“the FHLB”) advances with interest rate swaps as part of its funding strategy. The swaps pay a fixed rate of interest while receiving variable interest based on the three-month Secured Overnight Financing Rate (“SOFR”), which offsets the rate on the brokered deposits or FHLB advances. Peoples’ funding sources are managed through Peoples’ asset-liability management process and monitored by the ALCO, which is discussed further in the “Interest Rate Sensitivity and Liquidity” section of “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K. The following is a brief description of the various sources of funds utilized by Peoples: Deposits Peoples Bank obtains deposits principally from individuals and businesses within its primary market area by offering a broad selection of deposit products to clients. Deposit products for individuals have account terms that vary with respect to the minimum balance required, the time the funds must remain on deposit, and service charge schedules. Interest rates paid on specific deposit types are determined based on (1) the interest rates offered by competitors, (2) the anticipated amount and timing of funding needs, (3) the availability and cost of alternative sources of funding, and (4) the anticipated future economic conditions and interest rates. Business deposits, which include deposits from traditional commercial businesses as well as governmental entities, are obtained through an offering of multiple deposit account types as well as cash management solutions. Depending on the need of the entity, these deposits could be either interest-bearing or non-interest-bearing. The ability of Peoples Bank to offer competitive cash management solutions to its customers, enables it to obtain valuable operating account funds as well as non-operating account funds. Retail and business deposits are attractive sources of funding because of their stability and cost, relative to wholesale funding alternatives, in addition to providing opportunities for Peoples to build long-term client relationships through the cross-selling of its other products and services. Peoples Bank also offers its customers the ability to receive multi-million dollar federal deposit insurance coverage for certificates of deposit (“CDs”) through the Certificate of Deposit Account Registry Service (“CDARS”) program and money market deposit accounts through the Insured Cash Sweep (“ICS”) services network. Under these programs, funds from large customer deposits are placed into accounts issued by other members of the CDARS program or ICS network in increments below 9 the federal deposit insurance limits to ensure both principal and interest remain eligible for insurance. Peoples Bank also purchases certain “one-way buy” CDARS deposits, and overnight ICS network deposits which are utilized as a wholesale funding source. CDARS one-way buys are classified as brokered deposits in “Note 8 Deposits”. ICS overnight deposits are classified as other short-term borrowings in “Note 9 Short-Term Borrowings.” Peoples Bank occasionally obtains deposits from clients outside its primary market area, generally in the form of CDs, and has the ability, if determined to be appropriate, to obtain deposits from deposit brokers. These deposits are used to supplement Peoples Bank’s deposits to fund loans originated to customers located outside Peoples Bank’s primary market area, as well as provide diversity in funding sources as they do not require Peoples Bank to secure the funds with collateral, unlike most other borrowed funds. Additional information regarding the amounts and composition of Peoples Bank’s deposits can be found in the “Deposits” section of “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K and in “Note 8 Deposits.” Borrowed Funds Peoples obtains funds through a variety of short-term borrowings and long-term borrowings, which typically include advances from the Federal Home Loan Bank (“FHLB”) and repurchase agreements. Peoples also has the ability to obtain funds, if determined to be appropriate, through federal funds purchased and advances from the Federal Reserve Discount Window. Peoples utilized the Bank Term Funding Program (“BTFP”) through November of 2024, which was created by the Federal Reserve Bank to support American businesses and households by making additional funding available to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. The BTFP offers loans of up to one year in length. In addition, Peoples has the ability to obtain funds from unrelated financial institutions in the form of term loans or revolving lines of credit. Short-term borrowings are used generally to manage Peoples’ daily liquidity needs since they typically may be repaid, in whole or part, at any time without a penalty. In recent years, Peoples has utilized interest rate swaps to obtain short-term borrowings at long-term fixed rates, effectively replacing maturing long-term borrowings. Long-term borrowings provide cost-effective options for funding asset growth and satisfying capital needs, due to the variety of pricing and maturity options available. Additional information regarding the amounts and composition of Peoples’ borrowed funds can be found in the “Borrowed Funds” section of “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K and in “Note 9 Short-Term Borrowings” and “Note 10 Long-Term Borrowings.” Competition Peoples experiences intense competition within its primary market area due to the presence of several national, regional and local financial institutions and other service providers, including finance companies, financial technology companies (“fintechs”), insurance agencies and mutual fund providers. Competition within the financial services and insurance industries continues to increase as a result of mergers between, and expansion of, financial services and insurance providers within and outside of Peoples’ primary market area. In addition, the deregulation of the financial services industry (see the discussion of the Gramm-Leach-Bliley Act of 1999 in the section of this item captioned “Supervision and Regulation – Bank Holding Company Regulation”) has allowed securities firms and insurance companies that have elected to become financial holding companies to acquire commercial banks and other financial institutions, which can create additional competitive pressure. In addition, fintechs are also providing nontraditional, but increasingly strong, competition for our borrowers, depositors, and other customers. Peoples primarily competes based on client service, convenience and responsiveness to customer needs, product characteristics, interest rates on loans, insurance premium financing, leases and deposits, and the availability and pricing of fiduciary, employee benefit plan, brokerage and insurance services. However, some competitors may have greater resources, including additional technology offerings and higher lending limits than Peoples, which may adversely affect Peoples’ ability to compete. Peoples’ business strategy includes the use of a “needs-based” sales and service approach to serve customers and is intended to promote customers’ continued use of multiple financial products and services. Peoples continues to emphasize the integration of traditional commercial banking products with non-traditional financial products, such as insurance and investment products. In addition, Peoples continuously works to improve its online and mobile capabilities to ensure customers are able to use its products and services utilizing many channels. Historically, Peoples has focused on providing its full range of products and services in smaller metropolitan markets and certain major metropolitan areas. Management believes Peoples has developed a level of expertise in serving the financial service needs of all communities. Peoples’ primary market area has expanded into larger metropolitan and other areas, such as central, southwestern and northeastern Ohio along with Kentucky, eastern Virginia, southern Maryland, Minnesota, Vermont, West Virginia, and Washington, D.C. Peoples also competes nationally when providing insurance premium financing and commercial equipment leases and equipment financing arrangements. These larger areas typically contain entrenched service providers with existing customer bases much larger than Peoples’ current position. As a result, Peoples may be forced to compete more aggressively in order to grow its market share in these areas, which could reduce current and future profit potential derived from such markets. 10 Human Capital Resources At December 31, 2024, Peoples had 1,479 full-time equivalent employees, compared to 1,478 at December 31, 2023. Peoples makes it a priority to provide a first class workplace for its employees, focusing on providing quality benefits, recognizing and rewarding performance, cultivating diversity, promoting a culture of learning and coaching in every direction. Peoples offers paid time off, medical, dental and vision insurance, along with wellness programs, a 401(k) program, an employee stock purchase program, programs to assist with education-related costs, reward and recognition programs, as well as various other programs and benefits. Peoples has also implemented a $15 minimum wage throughout the organization and all associates were at or above this threshold as of January 2023. Peoples Bank has been recognized by Newsweek as one of America’s Best Workplaces in 2024 and one of America’s Best Regional Banks in 2024, and Peoples Bank has been recognized as a “Best Bank to Work For” by American Banker in each of 2021, 2022, 2023, and 2024. Peoples strives to be an inclusive and diverse workplace, free of harassment, and encourages employees to voice their opinions. Peoples works to attract and retain top quality talent, and in doing so, promotes a learning environment where positive constructive feedback can be given at any level of the organization. Employees are encouraged to communicate their thoughts, whether it is with a co-worker, management or the Human Resources Department. Peoples also provides an anonymous ethics hotline for employees to report any issues that they may feel uncomfortable reporting to management. Peoples maintains many reward programs for employees and management to recognize contributions by individuals and teams within the organization. Peoples provides internal training throughout the organization, as well as opportunities to attend external and online training events. Managers complete quarterly performance reviews with employees, and semi-annual employee satisfaction pulse surveys are completed. Peoples tracks and monitors employee turnover and conducts exit interviews to better understand why employees choose to leave the organization. Peoples maintains a high level of commitment to its communities, which is shown both through employees volunteering and with donations made to many organizations within the Peoples footprint. Intellectual Property and Proprietary Rights Peoples has registered the service marks “Peoples Bank (with logo),” “Peoples Bancorp,” “Peoples Bank,” Peoples in motion logo consisting of three arched ribbons, “Working Together. Building Success.”, “Peoples Insurance (with logo)”, “Peoples Investment Services”, “Peoples Premium Finance”, “North Star Leasing” and “peoplesbancorp.com” with the U.S. Patent and Trademark Office (the “USPTO”). Additionally, Peoples is the owner of “tradeIT”, a registered service mark of Vantage. These service marks currently have expiration dates ranging from 2025 to 2031. Peoples may renew the registrations of service marks with the USPTO generally for additional five-year to 10-year periods indefinitely, provided it continues to use the service marks and files appropriate maintenance and renewal documentation with the USPTO at the times required by the federal trademark laws and regulations. Peoples intends to continue to use its registered service marks and to timely renew the registration of each of them. Peoples has proprietary interests in the Internet domain names “pebo.com”, “peoplespf.com”, “northstarleasing.com”, “vantagefncl.com” and “peoplesbancorp.com.” Internet domain names in the U.S. and in foreign countries are regulated, but the laws and regulations governing the Internet are continually evolving. Supervision and Regulation Peoples and its subsidiaries are subject to extensive supervision and regulation by federal and state agencies. The regulation of financial holding companies and their subsidiaries is intended primarily for the protection of consumers, depositors, borrowers, the Deposit Insurance Fund (the “DIF”) of the Federal Deposit Insurance Corporation (the “FDIC”) and the banking system as a whole, and not for the protection of shareholders. Applicable laws and regulations restrict permissible activities and investments, and require actions to protect loan, deposit, brokerage, fiduciary and other customers, as well as the DIF. Such laws and regulations may also restrict Peoples’ ability to repurchase its common shares or to receive dividends from Peoples Bank, and may impose capital adequacy and liquidity requirements. The following is a summary of the regulatory agencies, statutes and related regulations that have, or could have, a material impact on Peoples’ business. This discussion is qualified in its entirety by reference to such regulations and statutes. Financial Holding Company Peoples is a legal entity separate and distinct from its subsidiaries and affiliated companies. As a financial holding company, Peoples is subject to regulation under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and to inspection, examination and supervision by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). The Federal Reserve Board has extensive enforcement authority over financial holding companies. In general, the Federal Reserve Board may initiate enforcement actions for violations of laws and regulations and unsafe or unsound practices. The Federal Reserve Board may assess civil money penalties, issue cease and desist or removal orders, and require that a financial holding company divest subsidiaries, including subsidiary banks. Peoples is routinely required to file reports and other information with the Federal Reserve Board regarding Peoples’ business operations and those of its subsidiaries. 11 Subsidiary Bank Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the “ODFI”) and the Federal Reserve Bank of Cleveland (the “FRB”). Peoples Bank must also follow the regulations promulgated by the Consumer Financial Protection Bureau (the “CFPB”), which regulates consumer financial products and services and certain financial services providers. Various requirements and restrictions under the laws of the U.S., and the states of Ohio, Kentucky, West Virginia, Virginia, Washington, D.C., Maryland, Minnesota,Vermont and Missouri affect the operations of Peoples Bank, including requirements to maintain reserves against deposits, restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon, restrictions relating to investments and other activities, limitations on credit exposure to correspondent banks, limitations on activities based on capital and surplus, limitations on transactions between Peoples Bank and Peoples, limitations on the payment of dividends, and limitations on branching. Consumer laws and regulations that are designed to prevent unfair, deceptive and abusive acts and practices and that ensure that consumers have access to fair, transparent and competitive markets for consumer financial products and services also affect the services provided by Peoples Bank. Non-Banking Subsidiaries Peoples’ non-banking subsidiaries are also subject to regulation by the Federal Reserve Board and other applicable federal and state agencies. Peoples Insurance, as a licensed insurance agency, is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of the other states where it conducts business. Other Regulatory Agencies Securities and Exchange Commission (“SEC”) and the Nasdaq Global Select Market® (“Nasdaq”) Peoples is also under the jurisdiction of the SEC and certain state securities commissions for matters relating to the offering and sale of its securities. Peoples is subject to the registration, disclosure, reporting and regulatory requirements of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the regulations promulgated under each of the Securities Act and the Exchange Act, as administered by the SEC. Peoples’ common shares are listed with Nasdaq under the symbol “PEBO” and Peoples is subject to the rules for Nasdaq listed companies. Federal Home Loan Bank (“FHLB”) Peoples Bank is a member of the FHLB, which provides credit to its members in the form of advances. As a member of the FHLB, Peoples Bank must maintain an investment in the capital stock of the FHLB in a specified amount. Upon the origination or renewal of a loan or an advance, the FHLB is required by law to obtain and maintain a security interest in certain types of collateral. The FHLB is required to establish standards of community investment or service that its members must maintain for continued access to long-term advances from the FHLB. The standards take into account a member’s performance under the Community Reinvestment Act of 1977, as amended (the “CRA”), and the member’s record of lending to first-time homebuyers. Federal Deposit Insurance Corporation (“FDIC”) The FDIC is an independent federal agency which insures the deposits, up to prescribed statutory limits, of federally-insured banks and savings associations, and safeguards the safety and soundness of the financial institution industry. Peoples Bank’s deposits are insured up to applicable limits by the DIF of the FDIC and Peoples Bank is subject to deposit insurance assessments to maintain the DIF. The general insurance limit is $250,000 per separately insured depositor. This insurance is backed by the full faith and credit of the U.S. government. As insurer, the FDIC is authorized to conduct examinations of and to require routine reporting by insured institutions, including Peoples Bank, to prohibit any insured institution from engaging in any activity the FDIC determines by regulation or order to pose a threat to the DIF, and to take enforcement actions against insured institutions. The FDIC may terminate insurance of deposits of any insured institution if the FDIC finds that the insured institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or any other regulatory agency. Insured depository institutions are required to remit quarterly deposit insurance premiums to the FDIC, which are used to fund the DIF. Insurance premiums for each insured depository institution are determined based upon the institution’s capital level and supervisory rating provided to the FDIC by the institution’s primary federal regulator and other information the FDIC determines to be relevant to the risk posed to the DIF by the insured depository institution. The assessment rate determined by considering such information is then applied to the amount of the insured depository institution’s average assets minus average tangible equity to determine the insured depository institution’s insurance premium. An increase in the assessment rate could have a material adverse effect on the earnings of the affected insured depository institution, depending on the amount of the increase. The FDIC assesses a quarterly deposit insurance premium on each insured depository institution based on perceived risk characteristics of the insured institution to the DIF, with institutions deemed less risky paying lower rates. Currently, assessments for institutions of less than $10 billion of total assets are based on financial measures and supervisory ratings derived from statistical models estimating the probability of failure within three years. The FDIC may increase or decrease the range of 12 assessments uniformly, except that no adjustments can deviate more than two basis points from the base assessment without notice and comment rule making. The FDIC may also impose special assessments in emergency situations. The FDIC has established 2.0% as the designated reserve ratio (“DRR”), which is the amount in the DIF as a percentage of all DIF insured deposits. In March 2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35% by September 30, 2020, the deadline imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (the “Dodd-Frank Act”). The Dodd-Frank Act required the FDIC to offset the effect on insured institutions with assets of less than $10 billion of the increase in statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%. Although the FDIC’s rules reduced assessment ratio on all banks, they imposed a surcharge on banks with assets of $10 billion or more to be paid until the DRR reached 1.35%. At September 30, 2018, the DRR met the statutory minimum of 1.35%. As a result, the previous surcharge imposed on banks with assets of $10 billion or more was lifted. In addition, preliminary assessment credits were determined by the FDIC for banks with assets of less than $10 billion, which had previously contributed to the increase of the DRR to 1.35%. On June 30, 2019, the DRR reached 1.40%, and the FDIC applied credits for banks with assets of less than $10 billion. On June 30, 2020, the DRR fell below the statutory minimum to 1.30%. This resulted in the FDIC adopting a restoration plan designed to restore the DRR to 1.35% within eight years, by September 30, 2028. As part of this restoration plan, all scheduled assessment rates for all insured institutions were maintained. In the semiannual update for the Restoration Plan in June 2022, the FDIC projected that the reserve ratio was at risk of not reaching the statutory minimum of 1.35% by September 30, 2028, the statutory deadline to restore the reserve ratio. Based on this update, the FDIC Board approved an Amended Restoration Plan, and concurrently proposed an increase in initial base deposit insurance assessment rate schedules uniformly by two basis points (from three basis points to five basis points), applicable to all insured depository institutions. In October 2022, the FDIC Board finalized the increase with an effective date of January 1, 2023, applicable to the first quarterly assessment period of 2023 (i.e., January 1 through March 31, 2023). The revised assessment rate schedules are intended to increase the likelihood that the reserve ratio of the DIF reaches the statutory minimum level of 1.35% percent by September 30, 2028. Since the previous semiannual update, the DIF reserve ratio increased by 6 basis points—from 1.15 percent as of December 31, 2023, to 1.21 percent as of June 30, 2024, due to growth in the DIF balance and slower-than-average insured deposit growth. The FDIC staff projects that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028. On November 16, 2023, the FDIC adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank. The assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported for the quarter ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits. The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024. Because Peoples Bank’s uninsured deposits were less than $5 billion for the quarter ended December 31, 2022, Peoples Bank will not be subject to this special assessment. Bank Holding Company Regulation In general, the BHC Act limits the business of bank holding companies to banking, managing or controlling banks, and other activities that the Federal Reserve Board determines to be so closely related to banking as to be a proper incident thereto. As a result of the Gramm-Leach-Bliley Act of 1999 – also known as the Financial Services Modernization Act of 1999 – which amended the BHC Act, bank holding companies that are financial holding companies may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either (1) financial in nature or incidental to such financial activity (as determined by the Federal Reserve Board in consultation with the Secretary of the Treasury), or (2) complementary to a financial activity, and that does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally. Activities that are financial in nature include securities underwriting and dealing, insurance underwriting and making merchant banking investments. In 2002, Peoples elected, and received approval from the Federal Reserve Board, to become a financial holding company. In order for a financial holding company to commence any new activity permitted by the BHC Act, or to acquire a company engaged in any new activity permitted by the BHC Act, the financial holding company must be “well managed” and “well capitalized,” and each insured depository institution subsidiary of the financial holding company must be well capitalized under the prompt corrective action provisions, be well managed and have received a rating of at least “satisfactory” in its most recent examination under the CRA. The CRA is more fully discussed in the section captioned “Community Reinvestment Act” included later in this Item. In addition, financial holding companies, such as Peoples, are permitted to acquire companies engaged in activities that are financial in nature and in activities that are incidental and complementary to financial activities without prior Federal Reserve Board approval. The BHC Act and other federal and state statutes regulate acquisitions of commercial banks. The BHC Act requires the prior approval of the Federal Reserve Board for the direct or indirect acquisition of more than 5% of the voting shares of a commercial bank or its parent holding company. Under the federal Bank Merger Act, as amended, the prior approval of the Federal Reserve Board is required for a state-chartered, Federal Reserve Bank member bank to merge with another bank or purchase the assets or assume the deposits of another bank. In reviewing an application seeking approval of a merger or acquisition transaction, the bank 13 regulatory authorities consider, among other factors, the competitive effect and public benefits of the transaction, the capital position of the combined organization, the applicant’s performance record under the CRA and fair housing laws, and the effectiveness of the subject organizations in combating money laundering activities. A financial holding company is required by law and Federal Reserve Board policy to act as a source of financial strength to each subsidiary bank and to commit resources to support each subsidiary bank. The Federal Reserve Board may require a financial holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to shareholders if the Federal Reserve Board believes the payment of such dividends would be an unsafe or unsound practice. Federal Reserve System The Federal Reserve Board requires all depository institutions to maintain reserves at specified levels against their transaction accounts, primarily checking accounts. In response to the COVID-19 pandemic (“COVID-19”), the Federal Reserve reduced reserve requirement ratios to 0% effective on March 26, 2020, to support lending to households and businesses. The reserve requirement ratio remained at 0% as of December 31, 2024. Transactions with Affiliates, Directors, Executive Officers and Shareholders Sections 23A and 23B of the Federal Reserve Act and Federal Reserve Board Regulation W generally: • limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10.0% of the bank’s capital stock and surplus; • limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with all affiliates to an amount equal to 20.0% of the bank’s capital stock and surplus; and • require that all such transactions be on terms substantially the same, or at least as favorable to the bank or subsidiary, as those provided to a non-affiliate. Under Regulation W, an affiliate of a bank is generally any company that controls the bank, any company under common control with the bank, and any financial subsidiary of the bank. The term “covered transaction” includes the making of loans to the affiliate, the purchase of assets from the affiliate, the issuance of a guarantee on behalf of the affiliate, the purchase of securities issued by the affiliate and other similar types of transactions. A bank’s authority to extend credit to executive officers, directors and greater than 10.0% shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated under the Federal Reserve Act by the Federal Reserve Board. Among other things, these loans must be made on terms (including interest rates charged and collateral required) substantially similar to those offered to unaffiliated individuals, or be made as part of a benefit or compensation program and on terms widely available to employees, and must not involve a greater than normal risk of repayment. In addition, the amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts. The Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) and Initiatives Related to COVID-19 In response to the novel COVID-19 pandemic, the CARES Act was signed into law on March 27, 2020, to provide national emergency economic relief measures. Section 1102 of the CARES Act amended the loan program of the SBA, in which Peoples Bank participated, to create a guaranteed, unsecured loan program, the Paycheck Protection Program (“PPP”), to fund operational costs of eligible businesses, organizations and self-employed persons during COVID-19. These loans were eligible to be forgiven if certain conditions are satisfied and are fully guaranteed by the SBA. In June 2020, the Paycheck Protection Program Flexibility Act was enacted, which, among other things, gave borrowers additional time and flexibility to use PPP loan proceeds. After previously being extended by Congress, the application deadline for PPP loans expired on May 31, 2021. No collateral or personal guarantees were required for PPP loans. In addition, neither the government nor lenders were permitted to charge the recipients of PPP loans any fees. On December 27, 2020, the President signed into law the Consolidated Appropriates Act, 2021, which included the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “HHSB Act”). Among other things, the HHSB Act renewed the PPP, allocating $284.5 billion for both new first-time PPP loans under the existing PPP and the expansion of existing PPP loans for certain qualified, existing PPP borrowers. The PPP program ended May 31, 2021 and no new loans can be originated under that program. Capital Adequacy and Prompt Corrective Action The Federal Deposit Insurance Corporation Improvement Act of 1991, as amended (“FDICIA”), identifies five capital categories for insured depository institutions and requires the applicable regulatory agencies to implement systems for “prompt corrective action” for insured depository institutions that do not meet minimum capital requirements within such categories. The regulatory agencies, including the Federal Reserve Board, the FDIC, the ODFI, and the Office of the Comptroller of the Currency (the “OCC”), have adopted substantially similar regulatory capital guidelines and regulations consistent with the requirements of FDICIA, and have established a system of prompt corrective action to resolve certain problems of undercapitalized institutions. This system is based on five capital level categories for insured depository institutions: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” 14 The regulatory agencies may (or in some cases must) take certain supervisory actions depending upon a bank’s capital level. For example, the banking agencies must appoint a receiver or conservator for a bank within 90 days after the bank becomes “critically undercapitalized” unless the bank’s primary regulator determines, with the concurrence of the FDIC, that other action would better achieve regulatory purposes. Banking operations otherwise may be significantly affected depending on a bank’s capital category. For example, a bank that is not “well capitalized” generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, and the holding company of any undercapitalized bank must guarantee, in part, specific aspects of the bank’s capital plan for the plan to be acceptable. The Federal Reserve Board has adopted risk-based capital guidelines for financial holding companies and other bank holding companies, as well as state member banks. The guidelines provide a systematic analytical framework which makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account in evaluating capital adequacy, and minimizes disincentives to holding liquid, low-risk assets. Capital levels, as measured by these standards, are also used to categorize financial institutions for purposes of certain prompt corrective action regulatory provisions. The Basel III Capital Rules include: (a) a minimum common equity tier 1 capital ratio of 4.5%; (b) a minimum tier 1 risk-based capital ratio of 6.0%; (c) a minimum total risk-based capital ratio of 8.0%; and (d) a minimum tier 1 leverage ratio of 4.0%. Common equity for the common equity tier 1 capital ratio generally consists of common stock (plus related surplus), retained earnings, accumulated other comprehensive income/loss (“AOCI” for income, “AOCL” for loss) (unless an institution elects to exclude such income from regulatory capital), and limited amounts of minority interests in the form of common stock, subject to applicable regulatory adjustments and deductions. Tier 1 capital generally consists of common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred stock and related surplus, cumulative preferred stock and related surplus, trust preferred securities that have been grandfathered (but which are not otherwise permitted), and limited amounts of minority interests in the form of additional tier 1 capital instruments, less certain deductions. Tier 2 capital, which can be included in the total capital ratio, generally consists of other preferred stock and subordinated debt meeting certain conditions plus limited amounts of the allowance for credit losses, subject to specified eligibility criteria, less applicable deductions. The deductions from common equity tier 1 capital include goodwill and other intangibles, certain deferred tax assets, mortgage-servicing assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments and investments in the capital of unconsolidated financial institutions (above certain levels). Under the guidelines, capital is compared to the relative risk included in the balance sheet. To derive the risk included in the balance sheet, one of several risk weights is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. The Basel III Capital Rules also place restrictions on the payment of capital distributions, including dividends and share repurchases, and certain discretionary bonus payments to executive officers if the banking organization does not hold a capital conservation buffer of greater than 2.5% composed of common equity tier 1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% at the beginning of the quarter. In October 2021, effective in November 2021, the FDIC issued a final rule to incorporate the Community Bank Leverage Ratio rule into the Real Estate Lending Standards. This rule calculates the ratio of loans in excess of the supervisory loan-to-value limits (“LTV Limits”) using Tier 1 capital plus the appropriate allowance for credit losses in the denominator. This rule was adopted to allow a consistent approach for calculating the ratio of loans in excess of the supervisory LTV Limits at all FDIC supervised institutions, and to avoid any regulatory burden that could arise if an FDIC supervised institution subsequently decides to switch between different capital frameworks. In December 2018, the federal banking agencies issued a final rule to address regulatory capital treatment of credit loss allowances under the current expected credit loss (“CECL”) model (accounting standard). The rule revises the federal banking agencies’ regulatory capital rules to identify which credit loss allowances under the CECL model are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in over three years the day-one adverse effects on regulatory capital that may result from the adoption of the CECL model. During 2020, regulatory agencies issued guidance allowing additional phase-in periods for the impact of the CECL model for regulatory capital purposes. This additional phase-in period includes a 25% deferment of the impact on regulatory capital of the estimated increase in the allowance for credit losses related to the CECL model, which is applied during the first two years of application. For the first two years of the phase-in period, 100% of the transition adjustment due to the implementation of the CECL model is excluded for regulatory capital purposes, along with 25% of the increase in the allowance for credit losses compared to the January 1, 2020 allowance for credit 15 losses. In year three of the phase-in, 75% of the transition adjustment, and the cumulative 25% increase in the allowance for credit losses compared to January 1, 2020, are excluded from regulatory capital, while 50% and 25% of these amounts are excluded in years four and five, respectively, under this phase-in period. Additional information on the impact of Peoples’ adoption of the CECL methodology can be found under the “FINANCIAL CONDITION - Allowance for Credit Losses” section of “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K. In order to be “well capitalized,” a bank must have a common equity tier 1 capital ratio of at least 6.5%, a tier 1 risk-based capital ratio of at least 8.0%, a total risk-based capital of at least 10.0%, and a tier 1 leverage ratio of at least 5.0%, and the bank must not be subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measures. Peoples’ management believes that Peoples Bank meets the ratio requirements to be deemed “well capitalized” according to the guidelines described above. Additional information regarding Peoples’ regulatory matters can be found in “Note 17 Regulatory Matters.” Safety and Soundness Regulations In accordance with the Federal Deposit Insurance Act (the “FDIA”), the federal bank regulatory agencies adopted safety and soundness guidelines establishing general standards relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, asset quality, earnings, compensation, fees and benefits. In general, the guidelines require, among other things, appropriate systems and practices to identify, monitor, and manage the risks and exposures specified in the guidelines. The guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal shareholder. In addition, regulations adopted by the federal bank regulatory agencies authorize the agencies to require that an institution that has been given notice that it is not satisfying any of such safety and soundness standards to submit a compliance plan. If, after being so notified, the institution fails to submit an acceptable compliance plan or fails in any material respect to implement an accepted compliance plan, the agency must issue an order directing corrective actions and may issue an order directing other actions of the types to which an undercapitalized institution is subject under the “prompt corrective action” provisions of the FDIA. If the institution fails to comply with such an order, the agency may seek to enforce such order in judicial proceedings and to impose civil money penalties. Community Reinvestment Act The CRA requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice. Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit or other financial assistance to low-income and moderate-income individuals and communities. Depository institutions are periodically examined for compliance with the CRA and are assigned ratings that must be publicly disclosed. Peoples Bank received an overall rating of “Satisfactory” pursuant to its most recent CRA rating assigned by the Federal Reserve Board. On October 24, 2023, the federal banking agencies, including the Federal Reserve Board, issued a final rule designed to strengthen and modernize the regulations implementing the CRA. The changes are designed to encourage banks to expand access to credit, investment and banking services in low- and moderate-income communities, adapt to changes in the banking industry, including mobile and internet banking, provide greater clarity and consistency in the application of the CRA regulations, and tailor CRA evaluations and data collection to bank size and type. The applicability date for the majority of the changes to the CRA regulations is January 1, 2026. Peoples cannot predict the impact the changes to the CRA will have on its operations at this time. Dividend Restrictions Current banking regulations impose restrictions on Peoples Bank’s ability to pay dividends to Peoples. These restrictions include a limit on the amount of dividends that may be paid in a given year without prior approval of the Federal Reserve Board and a prohibition on paying dividends that would cause Peoples Bank’s total capital to be less than the required minimum levels under the capital requirements imposed by the Federal Reserve Board and the amount of the capital conservation buffer. Ohio law also limits the amount of dividends that may be paid in any given year without prior approval of the Ohio Superintendent of Financial Institutions. Peoples Bank may not declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of Peoples Bank’s net income during the current calendar year and the retained net income of the prior two calendar years, unless the dividend has been approved by the ODFI and the Federal Reserve Board. Peoples Bank’s regulators may prohibit the payment of dividends at any time if the regulators determine the dividends represent unsafe and/or unsound banking practices, or reduce Peoples Bank’s total capital below adequate levels. For further discussion regarding regulatory restrictions on dividends, refer to “Note 17 Regulatory Matters.” Peoples’ ability to pay dividends to its shareholders may also be restricted. Current Federal Reserve Board policy requires a financial holding company to act as a source of financial strength to each of its banking subsidiaries. Under this policy, the Federal Reserve Board may require Peoples to commit resources or contribute additional capital to Peoples Bank, which could restrict the amount of cash available for dividends. 16 The Federal Reserve Board has also issued a policy statement with regard to the payment of cash dividends by financial holding companies and other bank holding companies. The policy statement provides that, as a matter of prudent banking, a financial holding company or bank holding company should not maintain a rate of cash dividends unless its net income available to common shareholders over the past year has been sufficient to fully fund the dividends, and the prospective rate of earnings retention appears to be consistent with the financial holding company’s or bank holding company’s capital needs, asset quality and overall financial condition. Accordingly, a financial holding company or bank holding company should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken the financial holding company’s or bank holding company’s financial health, such as by borrowing. Peoples also has entered into certain agreements that place restrictions on dividends. Specifically, Peoples Bank is prohibited from paying dividends in an amount greater than permitted by law without requiring prior Federal Reserve Board or other regulatory approval. In addition, if Peoples were to elect to defer payments of interest on the subordinated debt securities held by NB&T Statutory Trust III, FNB Capital Trust One, Ascencia Statutory Trust I or Porter Statutory Trusts II-IV or an event of default were to occur under the indenture governing those subordinated debt securities, Peoples will be prohibited from declaring or paying any dividends on Peoples’ common shares. Even where the declaration or payment of a dividend would not otherwise be restricted under applicable laws, Peoples or Peoples Bank may decide to limit the payment of dividends in order to retain earnings for corporate use. Customer Privacy and Other Consumer Protections Peoples Bank is subject to regulations limiting the ability of financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated party. Peoples Bank is also subject to numerous federal and state laws aimed at protecting consumers, including the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Fair Housing Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Bank Secrecy Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Fair Credit Reporting Act and the authority granted to banking regulators under the Federal Trade Commission Act with respect to unfair, deceptive, or abusive acts or practices. The CFPB issued its final small dollar loan rule related to payday, vehicle title and certain high cost installment loans (the “Final Small Dollar Rule”) on July 22, 2020. The Final Small Dollar Rule rescinds the Mandatory Underwriting Provisions of the 2017 Payday Rule after re-evaluating the legal and evidentiary bases for these provisions and finding them to be insufficient. The Final Small Dollar Rule does not rescind or alter the Payments Provisions of the 2017 Payday Rule. Specifically, in the Final Small Dollar Rule, the CFPB revoked provisions that: (i) provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer term balloon-payment loan, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay those loans according to their terms; (ii) prescribe mandatory underwriting requirements for making the ability-to-repay determination; (iii) exempt certain loans from the mandatory underwriting requirements; and (iv) establish related definitions, reporting, and recordkeeping requirements. The effective date for compliance with the Final Small Dollar Rule is March 30, 2025. The federal bank regulatory agencies also issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes. Office of Foreign Assets Control Regulation The U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others. OFAC publishes lists of specially designated targets and countries. Peoples is responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence. Failure to comply with these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required. Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. Anti-Money Laundering Act The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the Bank Secrecy Act of 1970 (the “BSA”), was enacted in January 2021. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws. Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for BSA compliance; and expands enforcement-related and investigation-related authority, including increasing available sanctions for certain BSA violations and instituting BSA whistleblower initiatives and protections. 17 USA Patriot Act The Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended (the “USA Patriot Act”), and related regulations, among other things, require financial institutions to establish programs specifying procedures for obtaining identifying information from customers seeking to establish new accounts and establishing enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity. Peoples Bank has established policies and procedures that Peoples believes comply with the requirements of the USA Patriot Act. Monetary Policy The Federal Reserve Board regulates money, credit conditions and interest rates in order to influence general economic conditions primarily through open market operations in U.S. government securities, changes in the discount rate on bank borrowings, and changes in the reserve requirements against deposits of depository institutions. These policies and regulations significantly affect the overall growth and distribution of loans, investments and deposits, as well as interest rates charged on loans and paid on deposits. The monetary policies of the Federal Reserve Board have had a significant effect on the operating results of financial institutions in the past and are expected to continue to have significant effects in the future. In light of the changing conditions in the U.S. economy, including with respect to inflation and the failure of the federal government to raise the federal debt ceiling, the money markets and the activities of monetary and fiscal authorities, Peoples can make no definitive predictions as to future changes in interest rates, credit availability or deposit levels. Executive and Incentive Compensation The Dodd-Frank Act requires that the federal banking agencies, including the Federal Reserve Board, issue a rule related to incentive-based compensation. No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Form 10-K, been adopted, but a proposed rule was published in 2016, and again in 2024, that expanded upon a prior proposed rule published in 2011. The proposed rule is intended to: (i) prohibit incentive-based payment arrangements that the banking agencies determine could encourage certain financial institutions to take inappropriate risks by providing excessive compensation or that could lead to material financial loss; (ii) require the board of directors of those financial institutions to take certain oversight actions related to incentive-based compensation; and (iii) require those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator. Although a final rule has not been issued, Peoples and Peoples Bank have undertaken efforts to ensure that their incentive compensation plans do not encourage inappropriate risks, consistent with the principles identified above. In June 2010, the Federal Reserve Board, the OCC and the FDIC issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually, or as a part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. These three principles are incorporated into the proposed joint compensation regulations under the Dodd-Frank Act, described above. The Federal Reserve Board reviews, as part of its regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as Peoples Bank, that are not “large, complex banking organizations.” These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies. Public company compensation committee members must meet heightened independence requirements and consider the independence of compensation consultants, legal counsel and other advisors to the compensation committee. A compensation committee must have the authority to hire advisors, and the public company must fund the reasonable compensation of such advisors. SEC regulations require public companies such as Peoples to provide various disclosures about executive compensation in annual reports and proxy statements, and to present to their shareholders a non-binding vote on the approval of executive compensation. Following the adoption of additional listing requirements in 2023 to comply with the Dodd-Frank Act and rules adopted by the SEC in October 2022, public companies are now required to adopt and implement “clawback” policies for incentive compensation payments and to disclose the details of the procedures which allow recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating an accounting restatement due to material noncompliance with 18 financial reporting requirements. This clawback policy is intended to apply to compensation paid within the three completed fiscal years immediately preceding the date the issuer is required to prepare a restatement and would cover all executives (including former executives) who received incentive awards. Peoples has implemented a clawback policy and it is posted under the “Governance – Governance Documents” tab of the “Investor Relations” page of Peoples’ Internet website at www.peoplesbancorp.com. Cybersecurity In March 2015, federal regulators issued two related statements regarding cybersecurity. One statement indicates that financial institutions should design multiple layers of security controls to establish several lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing Internet-based services of the financial institution. The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the financial institution’s operations after a cybersecurity attack involving destructive malware. A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cybersecurity attack. If Peoples Bank fails to observe the regulatory guidance, it could be subject to various regulatory sanctions, including financial penalties. In November 2021, the federal bank regulatory agencies issued a final rule, that became effective in May 2022, requiring banking organizations that experience a computer-security incident to notify certain entities. A computer-security incident occurs when actual or potential harm to the confidentiality, integrity or availability of information or the information system occurs, or there is a violation or imminent threat of a violation to banking security policies and procedures. The affected bank must notify its respective federal regulator of the computer-security incident as soon as possible and no later than 36 hours after the bank determines a computer-security incident that rises to the level of a notification incident has occurred. These notifications are intended to promote early awareness of threats to banking organizations and will help banks react to those threats before they manifest into larger incidents. This rule also requires bank service providers to notify their bank organization customers of a computer-security incident that has occurred, or is reasonably likely to cause, a material service disruption or degradation for four or more hours. State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification and data privacy requirements. Peoples expects this trend of state-level activity in those areas to continue, and continues to monitor developments in the states in which Peoples’ customers are located. Furthermore, once final rules are adopted, the Cyber Incident Reporting for Critical Infrastructure Act, enacted in March 2022, will require certain covered entities to report a covered incident to the U.S. Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (“CISA”) within 72 hours after a covered entity reasonably believes an incident has occurred. Separate reporting to CISA will also be required within 24 hours if a ransom payment is made as a result of a ransomware attack. On July 26, 2023, the SEC adopted final rules that require public companies to promptly disclose material cybersecurity incidents in a Current Report on Form 8-K and detailed information regarding their cybersecurity risk management, strategy, and governance on an annual basis in its Annual Reports on Form 10-K. Companies are required to report on Form 8-K any cybersecurity incident they determine to be material within four business days of making that determination. See “ITEM 1C CYBERSECURITY” of this Form 10-K. These SEC rules, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations. In the ordinary course of business, Peoples relies on electronic communications and information systems to conduct its operations and to store sensitive data. Peoples employs an in-depth, layered, defensive approach that leverages people, processes, and encryption and multi-factor authentication technology to manage and maintain cybersecurity controls. Peoples employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats. Notwithstanding the strength of Peoples’ defensive measures, the threat from cybersecurity attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures. While to date, Peoples has not detected a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, Peoples’ systems and those of its customers and third-party service providers are under constant threat and it is possible that Peoples could experience a significant event in the future. Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based products and services by Peoples and Peoples’ customers. See “ITEM 1A RISK FACTORS” for a further discussion of risks related to cybersecurity. 19 Volcker Rule In December 2013, five federal agencies adopted a final regulation implementing the Volcker Rule provision of the Dodd-Frank Act (the “Volcker Rule”). The Volcker Rule placed limits on the trading activity of insured depository institutions and entities affiliated with depository institutions, subject to certain exceptions. Such trading activity included the purchase or sale as principal of a security, derivative, commodity future, option or similar instrument in order to benefit from short-term price movements or to realize short-term profits. The Volcker Rule exempted trading in specified U.S. government, agency, state and/or municipal obligations. The Volcker Rule also excepted (i) trading conducted in certain capacities; (ii) trading to satisfy a debt previously contracted; (iii) trading under certain repurchase and securities lending agreements; and (iv) trading in connection with risk-mitigating hedging activities. In addition, the Volcker Rule prohibited a banking entity from having an ownership interest in, or substantial relationships with, a hedge fund or private equity fund, also known as “covered funds”, subject to a number of exceptions. In July 2019, the federal bank regulatory agencies that adopted the Volcker Rule adopted a final rule to exempt certain community banks, including Peoples Bank, from the Volcker Rule, consistent with the Economic Growth, Regulatory Relief, and Consumer Protection Act. Under the final rule, community banks with $10 billion or less in total consolidated assets and total trading assets and liabilities of 5.0% or less of total consolidated assets were excluded from the restrictions of the Volcker Rule. On June 25, 2020, the federal bank regulatory agencies also finalized a rule modifying the Volcker Rule’s prohibition on banking entities investing in or sponsoring covered funds. Such rule permits certain banking entities to offer financial services and engage in other activities that do not raise concerns that the Volcker Rule was originally intended to address. To the extent that Peoples Bank engages in any of the trading activities or has any ownership interest in or relationship with any of the types of funds regulated by the Volcker Rule, Peoples Bank believes that its activities and relationships comply with such rule, as amended. Effect of Environmental Regulation Compliance with federal, state and local provisions regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had a material effect upon the capital expenditures, earnings or competitive position of Peoples and Peoples’ subsidiaries. Peoples believes the nature of the operations of Peoples’ subsidiaries has little, if any, environmental impact. As a result, Peoples anticipates no material capital expenditures for environmental control facilities for Peoples’ current fiscal year or for the foreseeable future. Peoples believes its primary exposure to environmental risk is through the lending activities of Peoples Bank. Peoples limits its exposure to environmental risk by lending to a diverse range of consumer and commercial customers. In cases where management believes environmental risk potentially exists, Peoples Bank mitigates its environmental risk exposure by requiring environmental site assessments at the time of loan origination to confirm collateral quality as to commercial real estate parcels posing higher than normal potential for environmental impact, as determined by reference to present and past uses of the subject property and adjacent sites. In addition, environmental assessments are typically required prior to any foreclosure activity involving non-residential real estate collateral. Future Legislation and Administrative Rulemaking Various and significant legislation affecting financial institutions and the financial industry is from time to time introduced by the U.S. Congress. For example, as a result of the COVID-19 pandemic, the U.S. Congress enacted the CARES Act and other legislation during 2020 that provided significant funding for PPP loans for businesses and fiscal stimulus funding for individuals, as well as updates related to reporting for troubled debt restructurings and other various changes. Additionally, there were sweeping reforms in the Dodd-Frank Act adopted in 2010, and the rollback of the Dodd-Frank Act that began in 2018. Many of the regulations mentioned above were adopted or amended pursuant to the guidance issued. Such legislation and administrative rulemaking may continue to change banking statutes and regulations, and the operating environment of Peoples and its subsidiaries in substantial and unpredictable ways, and such legislation could significantly increase or decrease costs of doing business, limit or expand permissible activities, and/or affect the competitive balance among financial institutions. The enactment of the Dodd-Frank Act, the subsequent rollback and the continuing implementation of final rules and regulations thereunder, makes the nature and extent of future legislative and regulatory changes affecting financial institutions unpredictable. Website Access to Peoples’ SEC Filings Peoples maintains an Internet website at www.peoplesbancorp.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate Peoples’ Internet website into this Form 10-K). Peoples makes available free of charge on or through its website, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as well as Peoples’ definitive proxy statement filed pursuant to Section 14 of the Exchange Act, as soon as reasonably practicable after Peoples electronically files each such report, amendment or proxy statement with, or furnishes it to, the SEC. 20 ITEM 1A RISK FACTORS The following are certain risks that management believes are specific to Peoples’ business. This should not be viewed as an all-inclusive list of risks or presenting the risk factors listed in any particular order. Additional risks that are not presently known or that Peoples presently deems to be immaterial could also have a material adverse impact on Peoples’ business, financial condition or results of operations. Economic, Political, Environmental and Market Risks • Changes in economic and political conditions could adversely affect Peoples’ earnings and capital through declines in deposits, quality of investment securities, loan demand, the ability of Peoples’ borrowers to repay loans and the value of the collateral securing Peoples’ loans. Peoples’ success depends, in part, on local and national economic and political conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, slowing gross domestic product, tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars, and other factors beyond Peoples’ control may adversely affect Peoples Bank’s deposit levels and composition, the quality of investment securities available for purchase, the demand for loans, the ability of Peoples Bank’s borrowers to repay their loans, and the value of the collateral securing the loans Peoples Bank makes. Disruptions in U.S. and global financial markets and changes in oil production in the Middle East also affect the economy and stock prices in the U.S., which can affect Peoples’ earnings and capital, as well as the ability of Peoples Bank’s customers to repay loans. The local economies of the majority of Peoples’ market areas historically have been less robust than the economy of the nation as a whole and typically are not subject to the same extent of fluctuations as the national economy. In general, a favorable business environment and economic conditions are characterized by, among other factors, economic growth, efficient capital markets, low inflation, low unemployment, high business and investor confidence, and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity, or investor or business confidence; limitations on the availability or increases in the cost of credit and capital; increases in inflation or interest rates; high unemployment; volatility in pricing and availability of natural resources; natural disasters; or a combination of these or other factors. The continued impact on economic conditions caused by rising inflation and changes in market interest rates could have an adverse effect on Peoples’ asset quality, deposit levels and loan demand, and, therefore, Peoples’ financial condition and results of operations. Because a significant amount of Peoples Bank’s loans are secured by either commercial or residential real estate, decreases in real estate values could adversely affect the value of property used as collateral and Peoples Bank’s ability to sell the collateral upon foreclosure. • Changes in interest rates may adversely affect Peoples’ profitability. Peoples’ earnings and cash flows are dependent to a significant degree on net interest income, which is the amount by which interest income exceeds interest expense. Interest rates are highly sensitive to many factors that are beyond Peoples’ control, including general economic conditions and the policies of various governmental and regulatory agencies and, in particular, the Federal Reserve Board. Changes in monetary policy, including changes in interest rates, not only could influence the interest Peoples receives on loans and securities, and the amount of interest Peoples pays on deposits and borrowings, but such changes could also affect (1) Peoples’ ability to originate loans and obtain deposits, (2) the fair value of Peoples’ financial assets and liabilities, and (3) the average duration of Peoples’ mortgage-backed securities portfolio. If the interest rates paid on deposits and borrowings increase at a faster rate than the interest rates received on loans and other investments, Peoples’ net interest income and, therefore, earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and borrowings. Changes in interest rates may also negatively affect the ability of Peoples’ borrowers to repay their loans, particularly as interest rates rise and adjustable-rate loans become more expensive. Peoples' management uses various measures to monitor interest rate risk and believes it has implemented effective asset and liability management strategies to reduce the potential effects of changes in interest rates on Peoples’ results of operations. Peoples’ management also periodically adjusts the mix of assets and liabilities to manage interest rate risk. However, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on Peoples’ financial condition and results of operations. A prolonged period of extremely volatile and unstable market conditions has the potential to increase Peoples’ funding costs and negatively affect market risk mitigation strategies. Higher revenue volatility from changes in interest rates and spreads to benchmark indices could cause a loss of future net interest income and a decrease in the fair market values of Peoples’ assets. Fluctuations in interest rates will impact both the level of income and expense recorded on most of Peoples’ assets and liabilities 21 and the market value of all interest-earning assets and interest-bearing liabilities, which in turn could have a material adverse effect on Peoples’ net income, results of operations and financial condition. Peoples cannot predict the nature or timing of future changes in monetary policies or the precise effects that they may have on Peoples’ activities and financial results. See the sections captioned “Net Interest Income” and “Interest Rate Sensitivity and Liquidity” in “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K for further discussion related to Peoples’ interest rate risk. • Changes in market rates and economic conditions could cause the interest rate swaps Peoples Bank has entered into to become ineffective. The accounting treatment of the interest rate swaps entered into by Peoples as part of Peoples’ interest rate management strategy may change if the hedging relationship is not as effective as currently anticipated. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for fixed payments from Peoples. At December 31, 2024, Peoples had eight effective interest rate swaps, with an aggregate notional value of $75.0 million, which were designated as cash flow hedges of brokered deposits, and which are expected to be extended every 90 days through the maturity dates of the swaps. Although Peoples expects that the hedging relationships described above will be highly effective, such relationships could prove ineffective. At December 31, 2024, the termination value of derivative financial instruments in a net liability position was $17.0 million, which included accrued interest but excluded any adjustment for nonperformance risk. At December 31, 2024, Peoples had no collateral posted with its derivative counterparties and the derivative financial counterparties had $12.3 million of cash pledged and $1.9 million of investment securities pledge. If Peoples had breached any of the provisions of the derivative financial instruments at December 31, 2024, Peoples could have been required to settle its obligations under the derivative financial agreements at the termination value. • Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on Peoples’ results of operations and financial condition. The macroeconomic environment in the U.S. is susceptible to global events and volatility in financial markets. In addition, trade negotiations between the U.S. and other nations remain uncertain and could adversely impact economic and market conditions for Peoples and its clients and counterparties. Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on the Peoples’ results of operations and financial condition. For example, on February 24, 2022, Russian military forces invaded Ukraine, and sustained conflict and disruption in the region have occurred and remains likely to continue. In addition, the October 7, 2023 attack by Hamas in Israel has resulted in prolonged conflict and disruption in the Middle East. Although the length, impact and outcome of the ongoing war in Ukraine and the conflict in the Middle East are highly unpredictable, these conflicts have resulted, and could continue to result, in significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increases in cyberattacks and espionage. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and Peoples’ business for an unknown period of time. • Inflation may have an adverse impact on Peoples’ business and on its customers. Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. In addition, inflation generally increases the cost of goods and services Peoples uses in its business operations, such as electricity and other utilities, which increases non-interest expenses. Furthermore, Peoples’ customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans. Any of the above-mentioned factors could affect Peoples’ business, financial condition and operating results. Any such disruptions may also magnify the impact of other risks described in this Form 10-K. Business Operations Risks • Peoples is exposed to operational risk. Similar to any large organization, Peoples is exposed to many types of operational risk, including those discussed in more detail elsewhere in this Item, such as reputational risk, cybersecurity risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems. 22 Peoples may be subject to disruptions of its operating systems arising from events that are wholly or partially beyond its control, which may include, for example, computer viruses, cyber-attacks, spikes in transaction volume and/or customer activity, electrical or telecommunications outages, or natural disasters. Peoples could be adversely affected by operating systems disruptions if new or upgraded business management systems are defective, not installed properly or not properly integrated into existing operating systems. Although Peoples has programs in place related to business continuity, disaster recovery and information security to maintain the confidentiality, integrity and availability of its operating systems, business applications and customer information, such disruptions may give rise to interruptions in service to customers, loss of data privacy and loss or liability to Peoples. Any failure or interruption in Peoples’ operating or information systems, or any security or data breach, could cause reputational damage, jeopardize the confidentiality of customer information, result in a loss of customer business, subject Peoples to regulatory intervention or expose Peoples to civil litigation and financial loss or liability, any of which could have a material adverse effect on Peoples. Negative public opinion can result from Peoples’ actual or alleged conduct in any number of activities, including lending practices, corporate governance, acquisitions, social media and other marketing activities, and the implementation of environmental, social, and governance practices, and from actions taken by governmental regulators and community organizations in response to any of the foregoing. Negative public opinion could adversely affect Peoples’ ability to attract and keep customers, could expose Peoples to potential litigation or regulatory action, and could have a material adverse effect on the price of Peoples’ common shares or result in heightened volatility. Given the volume of transactions Peoples processes, certain errors may be repeated or compounded before they are discovered and successfully rectified. Peoples’ necessary dependence upon automated systems to record and process its transaction volume may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect, which may give rise to disruption of service to customers and to financial loss or liability. Peoples is further exposed to the risk that its external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees as Peoples is) or that Peoples’ (or its vendors’) consumer compliance business continuity, and data security systems will prove to be inadequate. Any future restrictions on the access of Peoples’ workforce to its facilities could limit Peoples’ ability to meet customer service expectations and have a material adverse effect on operations. Peoples relies on business processes and branch activity that largely depend on people and technology, including access to information technology systems as well as information, applications, payment systems and other services provided by third parties. • Failures or material breaches in security of Peoples’ systems and telecommunications networks, or those of a third-party service provider, may have a material adverse effect on Peoples’ results of operations and financial condition and the price of Peoples’ common shares. Peoples collects, processes and stores sensitive consumer data by utilizing computer systems and telecommunications networks operated by both Peoples and third-party service providers. Peoples’ dependence upon automated systems to record and process Peoples’ transactions poses the risk that technical system flaws, employee errors, tampering or manipulation of those systems, or attacks by third parties will result in losses and may be difficult to detect. Peoples has security and backup and recovery systems in place, as well as a business continuity plan, designed to ensure the computer systems will not become inoperable, to the extent possible. Peoples also routinely reviews documentation of such controls and backups related to third-party service providers. Peoples’ inability to use or access these information systems at critical points in time could unfavorably impact the timeliness and efficiency of Peoples’ business operations. Information security risks have increased due to the sophistication and activities of organized crime, hackers, terrorists and other external parties and the use of online, telephone, and mobile banking channels by clients. In recent years, several banks have experienced denial of service attacks in which individuals or organizations flood the bank’s website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions. Other businesses have been victims of ransomware attacks in which the business becomes unable to access the business’ own information and is presented with a demand to pay a ransom in order to once again have access to the business’ information. Peoples could be adversely affected if one of its employees or a third-party service provider causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates Peoples’ operations or systems. Peoples may not be able to prevent employee or third-party errors or misconduct, and the precautions Peoples takes to detect this type of activity might prove ineffective. Peoples is further exposed to the risk that the third-party service providers may be unable to fulfill their contractual obligations (or will be subject to the same risks as Peoples is). These disruptions may interfere with service to Peoples’ customers, cause additional regulatory scrutiny and result in a financial loss or liability. Any compromise to Peoples’ information security could impair Peoples’ reputation and deter Peoples’ clients from using Peoples’ banking services. Information security breaches can also disrupt the operation of information systems on which Peoples and its customers depend, adversely affecting business operations. Such events can result in costly remediation measures and litigation or governmental investigation and responding to security breaches can place unanticipated demands on the time and 23 attention of management. Peoples relies on security systems to provide the protection and authentication necessary to secure transmission of data against damage by theft, fire, power loss, telecommunications failure or similar catastrophic event, as well as from security breaches, ransomware, denial of service attacks, viruses, worms, and other disruptive problems caused by hackers. Computer break-ins, phishing and other disruptions of customer or vendor systems could also jeopardize the security of information stored in and transmitted through Peoples’ computer systems and network infrastructure. Peoples’ associates also confront the risk of being compromised by emails sent by perpetrators posing as company executives or vendors in order to dupe Peoples’ personnel into sending large sums of money to accounts controlled by the perpetrators. Peoples requires all employees to complete annual information security awareness training to increase their awareness of these risks and to engage them in Peoples’ mitigation efforts. If these precautions are not sufficient to protect Peoples’ systems from data breaches or compromises, Peoples’ reputation and business could be adversely affected. In addition, there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts. Although Peoples has policies and procedures in place to verify the authenticity of its customers, Peoples cannot ensure that such policies and procedures will prevent all fraudulent transfers. Peoples depends on the services of a variety of third-party vendors to meet data processing and communication needs, and Peoples has contracted with third parties to run their proprietary software on Peoples’ behalf. While Peoples performs reviews of security controls instituted by the vendor in accordance with industry standards and institutes Peoples’ own internal security controls, Peoples relies on continued maintenance of the controls by the outside party to safeguard customer data. Additionally, Peoples issues debit cards which are susceptible to compromise at the point of sale via the physical terminal through which transactions are processed and by other means of hacking. The security and integrity of these transactions are dependent upon the retailers’ vigilance and willingness to invest in technology and upgrades. Issuing debit cards to Peoples’ clients exposes Peoples to potential losses which, in the event of a data breach at one or more major retailers may adversely affect Peoples’ business, financial condition, and results of operations. Peoples is also at risk of the impact of natural disasters, terrorism and international hostilities on Peoples’ systems or from the effects of outages or other failures involving power or communications systems operated by others. Peoples has implemented security controls to prevent unauthorized access to its computer systems, and Peoples requires that its third-party service providers maintain similar controls. However, Peoples’ management cannot be certain that these measures will be successful. A security breach of the computer systems and loss of confidential information, such as customer account numbers and related information, could result in a loss of customers’ confidence and, thus, loss of business. Peoples could also lose revenue if competitors gain access to confidential information about Peoples’ business operations and use such confidential information to compete with Peoples. While Peoples maintains specific “cyber” insurance coverage, which would apply in the event of various breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be covered under Peoples’ cyber insurance coverage. Further, Peoples may be affected by data breaches at retailers and other third parties who participate in data interchanges with Peoples and its customers that involve the theft of customer credit and debit card data, which may include the theft of Peoples’ consumer and business debit card PIN numbers and commercial card information used to make purchases at such retailers and other third parties. Such data breaches could result in Peoples incurring significant expenses to reissue debit cards and cover losses, which could result in a material adverse effect on Peoples’ operations. All of the types of cybersecurity incidents discussed above could result in damage to Peoples’ reputation, loss of customer business, increased costs of incentives to customers or business partners in order to maintain their relationships, litigation, increased regulatory scrutiny and potential enforcement actions, repairs of system damage, increased investments in cybersecurity (such as obtaining additional technology, making organizational changes, deploying additional personnel, training personnel and engaging consultants), increased insurance premiums, and loss of investor confidence and a reduction in the price of Peoples’ common shares, all of which could result in financial loss and material adverse effects on Peoples’ results of operations and financial condition. • Noncompliance with the BSA and other anti-money laundering statutes and regulations could cause Peoples to incur a material financial loss. The BSA and the USA Patriot Act contain anti-money laundering and financial transparency provisions intended to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing activities. The BSA, as amended by the USA Patriot Act and the AMLA, requires depository institutions and their holding companies to undertake activities including maintaining an anti-money laundering program, verifying the identity of clients, monitoring for and reporting suspicious transactions, reporting on cash transactions exceeding specified thresholds, and responding to requests for information by regulatory authorities and law enforcement agencies. The Financial Crimes Enforcement Network (also known as FinCEN), a unit of the U.S. Department of the Treasury that administers the BSA, is authorized to impose significant civil money penalties for 24 violations of those requirements and has recently engaged in coordinated enforcement efforts with the federal bank regulatory agencies, as well as the U.S. Department of Justice, the U.S. Drug Enforcement Administration, and the U.S. Internal Revenue Service. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws, which includes a codified risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for BSA compliance; and expands enforcement-related and investigation-related authority, including increasing available sanctions for certain BSA violations and instituting BSA whistleblower incentives and protections. There is also increased scrutiny of compliance with the rules enforced by OFAC. If Peoples’ policies, procedures, and systems are deemed deficient, or if the policies, procedures, and systems of the financial institutions that Peoples has already acquired or may acquire in the future are deficient, Peoples may be subject to liability, including fines and regulatory actions such as restrictions on Peoples’ ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain planned business activities, including acquisition plans, which could negatively impact Peoples’ business, financial condition, and results of operations. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for Peoples. For a more complete discussion of the BSA, the USA Patriot Act and the AMLA as well as OFAC, see the section captioned “Supervision and Regulation” in “ITEM 1 BUSINESS” of this Form 10-K. • Peoples’ business could be adversely affected through events impacting third parties who perform significant operational services on behalf of Peoples. The third parties performing operational services for Peoples are subject to risks similar to those faced by Peoples relating to cybersecurity, breakdowns or failures of their own systems, or misconduct of their employees. Like many other community bank organizations, Peoples relies, in significant part, on a single vendor for the systems which allow Peoples to provide banking services to Peoples’ customers, with the systems being maintained on Peoples’ behalf by this single vendor. One or more of the third parties utilized by Peoples may experience a cybersecurity event or operational disruption and, if any such event or disruption does occur, it may not be adequately addressed, either operationally or financially, by such third party. Certain of these third parties may have limited indemnification obligations to Peoples in the event of a cybersecurity event or operational disruption, or may not have the financial capacity to satisfy their indemnification obligations. Financial or operational difficulties of a third-party provider could also impair Peoples’ operations if those difficulties interfere with such third party’s ability to serve Peoples. If a critical third-party provider is unable to meet the needs of Peoples in a timely manner, or if the services or products provided by such third party are terminated or otherwise delayed, and if Peoples is not able to develop alternative sources for these services and products quickly and in a cost-effective manner, Peoples’ business could be materially adversely affected. Additionally, regulatory guidance adopted by federal and state bank regulators addressing how banks select, engage and manage their third-party relationships, could affect the circumstances and conditions under which Peoples works with third parties and the cost of managing such relationships. • Peoples’ failure to be in compliance with any material provision or covenant of its debt instruments could have a material adverse effect on Peoples’ liquidity and operations. Peoples has a Loan Agreement (the “U.S. Bank Loan Agreement”) with U.S. Bank National Association that provides Peoples with a revolving line of credit. A Sixth Amendment to the U.S. Bank Loan Agreement, entered into on March 31, 2024, extended the maturity from April 1, 2024 to March 31, 2025. The U.S. Bank Loan Agreement imposes operating and financial covenants on Peoples. These restrictions may affect Peoples’ operations and may limit the ability to take advantage of potential business opportunities as they arise. Peoples’ ability to comply with the covenants contained in the U.S. Bank Loan Agreement may be affected by events beyond Peoples’ control, including deteriorating economic conditions, and these events could require Peoples to seek waivers or amendments of such covenants, or alternative sources of financing. Peoples’ ability to obtain such waivers, amendments or alternative financing, may be on terms unfavorable to Peoples. A breach of any of the covenants or restrictions contained in any of the existing or future financing agreements, including financial covenants, could result in an event of default under the agreements. Such a default could allow the lenders under the financing agreements, if the agreements so provide, to discontinue lending, to accelerate the related debt, and/or to declare all borrowings outstanding thereunder to be due and payable. In addition, the lenders could terminate any commitments they have to provide Peoples with further funds. If any of these events occur, Peoples may not have sufficient funds available to pay in full the total amount of obligations that become due as a result of any such acceleration, or Peoples may not be able to find additional or alternative financing to refinance any such accelerated obligations. Even if additional or alternative financing is obtained, it may be on terms that are unfavorable to Peoples. 25 • Peoples’ exposure to credit risk could adversely affect Peoples’ earnings and financial condition. There are certain risks inherent in making loans. These risks include interest rate changes over the time period in which loans are to be repaid, risks resulting from changes in the economy, risks that Peoples will have inaccurate or incomplete information about borrowers, risks that borrowers will become unable to repay loans, and, in the case of loans secured by collateral, risks resulting from uncertainties about the future value of the collateral. Commercial loans comprise a significant portion of Peoples’ loan portfolio. Commercial loans generally are viewed as having a higher degree of credit risk than residential real estate or consumer loans because commercial loans usually involve larger loan balances to a single borrower and are more susceptible to a risk of default during an economic downturn. Since Peoples’ loan portfolio contains a significant number of commercial loans, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans, and ultimately could have a material adverse effect on Peoples’ earnings and financial condition. Peoples may also have credit exposures concentrated in a particular industry, resulting in a risk of a material adverse effect on earnings or financial condition, if there is an event adversely affecting such industry. Peoples’ risks of timely loan repayment and the value of collateral supporting the loans are affected by the strength of the business of Peoples’ commercial borrowers and the financial circumstances of Peoples’ consumer borrowers. Economic conditions, including high inflation and elevated interest rates, and political climate could cause business shutdowns and slowdowns, limitations on commercial activity and financial transactions, labor shortages, supply chain interruptions, increased unemployment and commercial property vacancy rates, reduced profitability and ability for property owners to make mortgage, auto and other consumer loan payments, overall economic and financial market instability, which may affect individuals, households and business differently, and decreased consumer confidence generally, all of which may cause Peoples’ customers to be unable to make scheduled loan payments. Additional information regarding Peoples’ credit exposure concentration at December 31, 2024 can be found in the section captioned “Loan Concentration” in “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K. • Peoples’ allowance for credit losses may be insufficient to absorb the expected, lifetime losses in its loan portfolio. Peoples maintains an allowance for credit losses that is believed to be a reasonable estimate of the expected losses based on management’s quarterly analysis of its loan portfolio. The determination of the allowance for credit losses requires management to make various assumptions and judgments about the collectability of Peoples’ loans, including the creditworthiness of its borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. Additional information regarding Peoples’ allowance for credit losses methodology and the sensitivity of the estimates can be found in the discussion of “Critical Accounting Policies” included in “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K. Peoples’ estimate of future credit losses is susceptible to changes in economic, operating and other conditions, including changes in regulations and interest rates, which may be beyond Peoples’ control, and the losses may exceed current estimates. Peoples cannot be assured of the amount or timing of losses, nor whether the allowance for credit losses will be adequate in the future. If Peoples’ assumptions prove to be incorrect, Peoples’ allowance for credit losses may not be sufficient to cover the expected losses from its loan portfolio, resulting in the need for additions to the allowance for credit losses which could have a material adverse impact on Peoples’ financial condition and results of operations. In addition, bank regulators periodically review Peoples’ allowance for credit losses as part of their examination process and may require management to increase the allowance or recognize further loan charge-offs based on judgments different than those of management. Under the CECL model, Peoples is required to use historical information, current conditions and reasonable and supportable forecasts to estimate the expected credit losses. If the methodologies and assumptions used by Peoples in the CECL model prove to be incorrect, or inadequate, the allowance for credit losses may not be sufficient, resulting in the need for additional allowance for credit losses to be established, which could have a material adverse impact on Peoples’ financial condition and results of operations. Additionally, the time horizon over which Peoples is required to estimate future credit losses expanded under CECL, which could result in increased volatility in future provisions for credit losses. Peoples may also experience a higher or more volatile provision for credit losses due to higher levels of nonperforming loans and net charge-offs if commercial and consumer customers are unable to make scheduled loan payments. • Peoples’ accounting estimates and risk management processes rely on analytical and forecasting models. The processes Peoples uses to estimate its expected credit losses and to measure the fair value of financial instruments, as well as the processes used to estimate the effects of changing interest rates and other market measures on Peoples’ financial condition and results of operations, depend upon the use of analytical and, in some cases, forecasting models. These models reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen circumstances. Even if these assumptions are accurate, the model may prove to be inadequate or inaccurate because of other flaws in their design or their 26 implementation. If the model Peoples uses for interest rate risk and asset-liability management is inadequate, Peoples may incur increased or unexpected losses upon changes in market interest rates or other market measures. If the model used by Peoples for determining its expected credit losses is inadequate, the allowance for credit losses may not be sufficient to support future charge-offs. If the model used by Peoples to measure the fair value of financial instruments is inadequate, the fair value of such financial instruments may fluctuate unexpectedly or may not accurately reflect what Peoples could realize upon sale or settlement of such financial instruments. Any such failure in Peoples’ analytical or forecasting models could have a material adverse effect on Peoples’ business, financial condition and results of operations. • Peoples and Peoples Bank may elect or be compelled to seek additional capital in the future, but such capital may not be available when needed. Peoples and Peoples Bank are required by federal and state regulatory authorities to maintain adequate levels of capital to support their operations. Federal bank regulators have adopted extensive changes to their capital requirements, including raising required amounts and eliminating the inclusion of certain instruments from the calculation of capital. If Peoples Bank experiences significant losses, additional capital may be needed. In addition, Peoples and Peoples Bank may elect to raise additional capital to support the businesses or to finance acquisitions, if any, or for other unanticipated reasons. The ability to raise additional capital, if needed, will depend on financial performance, conditions in the capital markets, economic conditions and a number of other factors, many of which are outside of Peoples’ control. Therefore, there can be no assurance that additional capital will be available or that additional capital will be available on acceptable terms. The inability to raise additional capital may have a material adverse effect on Peoples’ financial condition, results of operations or potential acquisitions. • Peoples and Peoples Bank operate in a highly regulated industry, and the laws and regulations that govern Peoples’ operations, corporate governance, executive compensation, financial accounting and financial reporting, including changes in, or failure to comply with, such laws and regulations may adversely affect Peoples. The banking industry is highly regulated. Peoples is subject to supervision, regulation and examination by various federal and state regulators, including the Federal Reserve Board, the SEC, the CFPB, the FDIC, Financial Industry Regulatory Authority, Inc. (also known as FINRA), and various state regulatory agencies. The statutory and regulatory framework that governs Peoples is generally designed to protect depositors and customers, the DIF, the U.S. banking and financial system, and financial markets as a whole and not to protect Peoples’ shareholders. These laws and regulations, among other matters, prescribe minimum capital requirements, restrict the ability of Peoples Bank to guarantee Peoples’ debt, and impose limitations on Peoples Bank’s business activities (including foreclosure and collection practices), limit the dividends or distributions that Peoples Bank can pay, and impose certain specific accounting requirements that may be more restrictive and may result in greater or earlier charges to earnings or reductions in capital than would otherwise be required under U.S. generally accepted accounting principles (“US GAAP”). Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs. Both the scope of the laws and regulations, and the intensity of the supervision to which Peoples is subject, have increased in recent years in response to the perceived state of the financial services industry, as well as other factors such as technological and market changes. Such regulation and supervision may increase Peoples’ costs and limit its ability to pursue business opportunities. Further, Peoples’ failure to comply with these laws and regulations, even if the failure was inadvertent or reflects a difference in interpretation, could subject Peoples to restrictions on business activities, fines, and other penalties, any of which could adversely affect the results of operations, the capital base, and the price of Peoples’ common shares. Further, any new laws, rules, or regulations could make compliance more difficult or expensive or otherwise adversely affect Peoples’ business and financial condition. • Peoples may not be able to adapt to technological change. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers while reducing costs. Peoples’ future success depends, in part, upon its ability to address customer needs by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in its operations. This could include the development, implementation, and adaptation of digital or cryptocurrency, blockchain, and other “fintech” technology. Peoples may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to Peoples’ customers. Failure to successfully keep pace with technological changes affecting the financial services industry could negatively affect Peoples’ growth, revenue and net income. • Peoples may not be able to attract and retain key employees. Peoples’ success depends, in large part, on its ability to attract, retain, motivate and develop key employees. Competition for key employees is ongoing and Peoples may not be able to attract, retain or hire the key employees who are wanted or needed, which may also negatively impact Peoples’ ability to execute identified business strategies. Many of Peoples’ offices are located in rural areas, resulting in the possible need for Peoples to offer higher compensation equal to or greater than what is offered in metropolitan areas to attract or retain key employees, which may adversely affect salaries and employee benefit costs. 27 Various restrictions on the compensation which may be paid to certain executive officers were imposed under the Dodd-Frank Act and other legislation and regulations. In addition, Peoples’ incentive compensation structure is subject to review by regulators, who may identify deficiencies in the structure or issue additional guidance on Peoples’ compensation practices, causing Peoples to make changes that may affect its ability to offer competitive compensation to these individuals or that place Peoples at a disadvantage to non-financial service competitors. Peoples’ ability to attract and retain talented employees may be affected by these restrictions, or any new executive compensation limits or regulations. • Peoples’ ability to pay dividends is limited, and Peoples may not be in the position to pay dividends in the future. Although Peoples has paid dividends on its common shares in the past, Peoples may, at the discretion of Peoples’ Board of Directors, reduce or eliminate dividends in the future, for any reason, including a determination to use funds for other purposes, or due to regulatory constraints. Peoples is a separate and distinct legal entity from Peoples’ subsidiaries. Peoples receives nearly all of its liquidity from dividends from Peoples Bank, which are limited by federal and state banking laws and regulations. These dividends also serve as the primary source of funds to pay dividends on Peoples’ common shares. The inability of Peoples Bank to pay sufficient dividends to Peoples could have a material, adverse effect on its business. Further discussion of Peoples’ ability to pay dividends can be found under the caption “Supervision and Regulation – Dividend Restrictions” in “ITEM 1 BUSINESS” of this Form 10-K and “Note 17 Regulatory Matters.” • Peoples depends upon the accuracy and completeness of information about customers and counterparties. In deciding whether to extend credit or enter into other transactions with customers and counterparties, Peoples may rely on information provided by customers and counterparties, including financial statements and other financial information. Peoples may also rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. For example, in deciding whether to extend credit to a business, Peoples Bank may assume that the customer’s audited financial statements conform with US GAAP and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer. Peoples Bank may also rely on the audit report covering those financial statements. Peoples’ financial condition, results of operations and cash flows could be negatively impacted to the extent that Peoples Bank relies on financial statements that do not comply with US GAAP or on financial statements and other financial information that are materially misleading. • Peoples Bank may be required to repurchase loans it has sold or to indemnify loan purchasers under the terms of the sale agreements, which could adversely affect Peoples’ liquidity, results of operations and financial condition. When Peoples Bank sells a mortgage loan, it may agree to repurchase or substitute a mortgage loan if Peoples Bank is later found to have breached any representation or warranty Peoples Bank made about the loan or if the borrower is later found to have committed fraud in connection with the origination of the loan. While Peoples Bank has underwriting policies and procedures designed to avoid breaches of representations and warranties and borrower fraud, there can be no assurance that a breach or fraud will not occur. Required repurchases, substitutions or indemnifications could have an adverse effect on Peoples’ liquidity, results of operations and financial condition. • Peoples and its subsidiaries are subject to examinations and challenges by tax authorities. In the normal course of business, Peoples and its subsidiaries are routinely subject to examinations and challenges from federal and state tax authorities regarding positions taken regarding their respective tax returns. State tax authorities have become increasingly aggressive in challenging tax positions taken by financial institutions, especially those positions relating to tax compliance and calculation of taxes subject to apportionment. Any challenge or examination by a tax authority may result in adjustments to the timing or amount of taxable net worth or taxable income, or deductions or the allocation of income among tax jurisdictions. Management believes it has taken appropriate positions with respect to all tax returns and does not anticipate that any examination would have a material impact on Peoples’ Consolidated Financial Statements. However, the outcome of any such examination and the ultimate resolution of any resulting assessments are inherently difficult to predict. Thus, no assurance can be given that Peoples’ tax liability for any tax year open to examination will be as reflected in Peoples’ current and historical Consolidated Financial Statements. • Peoples could experience an unexpected inability to obtain needed liquidity which could adversely affect its business, profitability, and viability as a going concern. Liquidity measures the ability to meet current and future cash flow needs as they become due. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits, and to take advantage of interest rate market opportunities and is essential to a financial institution’s business. The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets, and its access to alternative sources of funds. The bank failures in 2023 exemplify the potential serious results of the unexpected inability of insured depository institutions to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institution’s ability to satisfy its obligations to depositors. 28 Peoples seeks to ensure its funding needs are met by maintaining a level of liquidity through asset and liability management. If Peoples becomes unable to obtain funds when needed, it could have a material adverse effect on Peoples’ business, financial condition, and results of operations. Legislative, Regulatory and Tax Change Risks • Legislative or regulatory changes or actions could adversely impact Peoples or the businesses in which it is engaged. The financial services industry is heavily regulated under both federal and state law. Peoples is subject to regulation and supervision by the Federal Reserve Board, and Peoples Bank is subject to regulation and supervision by the ODFI, the Federal Reserve Board, and the FDIC, and the regulations of the CFPB. These regulations are primarily intended to protect depositors and the DIF, not Peoples’ shareholders. Peoples’ non-bank subsidiaries are also subject to the supervision of the Federal Reserve Board, in addition to other regulatory and self-regulatory agencies, including the SEC, and state securities and insurance regulators. Regulations affecting banks and financial services businesses are undergoing continuous change, and Peoples’ management cannot predict the effect of those changes. The impact of any changes to laws and regulations or other actions by regulatory agencies could adversely affect Peoples’ business. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets held by an institution, the appropriateness of an institution’s allowance for credit losses and the ability to complete acquisitions. Additionally, actions by regulatory agencies or significant litigation against Peoples could cause Peoples to devote significant time and resources to defending its business and may lead to penalties that materially affect Peoples and its shareholders. Even the reduction of regulatory restrictions could have an adverse effect on Peoples and its shareholders if such lessening of restrictions increases competition within the financial services industry or Peoples’ market area. Further information about government regulation of Peoples’ business can be found under the caption “Supervision and Regulation” in “ITEM 1 BUSINESS” of this Form 10-K. • Changes in accounting standards, policies, estimates or procedures may impact Peoples’ reported financial condition or results of operations. The entities responsible for setting accounting standards, including the Financial Accounting Standards Board (“FASB”), the SEC and other regulatory bodies, periodically change the financial accounting and reporting standards that govern the preparation of Peoples’ Consolidated Financial Statements. The pace of change continues to accelerate and changes in accounting standards can be difficult to predict and can materially impact how Peoples records and reports its financial condition and results of operations. In some cases, Peoples could be required to apply a new or revised guidance retroactively, resulting in the restatement of prior period financial statements. The preparation of consolidated financial statements in conformity with US GAAP requires management to make significant estimates that affect the financial statements. Due to the inherent nature of these estimates, actual results may vary materially from management’s estimates. Additional information regarding Peoples’ critical accounting policies and the sensitivity of estimates can be found in the section captioned “Critical Accounting Policies” in “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and “Note 1 Summary of Significant Accounting Policies” of this Form 10-K. • Regulatory capital standards may have an adverse effect on its profitability, lending, and ability to pay dividends. Peoples is subject to capital adequacy guidelines and other regulatory requirements specifying minimum amounts and types of capital that Peoples must maintain. From time to time, regulators implement changes to these regulatory capital adequacy guidelines. If Peoples fail to meet these minimum capital guidelines and/or other regulatory requirements, its financial condition would be materially and adversely affected. The Basel III capital framework requires Peoples to maintain significantly more capital as a result of higher required capital levels and more demanding regulatory capital risk weightings and calculations. Satisfying capital requirements may require Peoples to limit its banking operations, retain net income or reduce dividends to improve regulatory capital levels, which could negatively affect its business, financial condition and results of operations. • Increases in FDIC insurance premiums may have a material adverse effect on Peoples’ earnings. Peoples Bank has limited ability to control the amount of premiums it is required to pay for FDIC insurance. The DIF is funded by fees assessed on insured depository institutions, such as Peoples Bank. If the costs of future bank failures increase, deposit insurance premiums may also increase. Increases in FDIC insurance premiums may have a material adverse effect on Peoples’ results of operations and ability to continue to pay dividends on its common shares at the current rate or at all. On November 16, 2023, the FDIC Board adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank. The assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported for the quarter ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits. The FDIC will 29 collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024. Because Peoples Bank’s uninsured deposits were less than $5 billion for the quarter ended December 31, 2022, Peoples Bank was not subject to this special assessment. However, there can be no assurance that assessments may not be changed in the future and/or that additional special assessments may not be imposed in the future by the FDIC, either in response to additional bank failures or otherwise, that could increase the amount of premiums required to be paid to the FDIC by Peoples Bank. Federal deposit insurance is described in more detail in the section captioned “Supervision and Regulation” in “ITEM 1 BUSINESS” of this Form 10-K. Strategic Risks • Peoples’ ability to complete acquisitions and integrate completed acquisitions may be unsuccessful or more difficult, time-consuming or costly than expected, which could have an adverse effect on Peoples’ business, earnings and financial condition. Peoples actively evaluates opportunities to acquire other businesses. However, Peoples may not have the opportunity to make suitable acquisitions on favorable terms in the future, which could negatively impact the growth of its business. Peoples expects that other banking and financial companies, many of which have significantly greater resources, will compete to acquire compatible businesses. This competition could increase prices for acquisitions that Peoples would likely pursue, and its competitors may have greater resources to pay such acquisition prices. In addition, acquisitions of regulated businesses, such as banks, are subject to various regulatory approvals. If Peoples fails to receive the appropriate regulatory approvals, it will not be able to consummate an acquisition that it believes is in its best interest. Peoples may not be able to integrate new acquisitions without encountering difficulties, including the loss of key employees and customers, the disruption of ongoing businesses or possible inconsistencies in standards, controls, procedures and policies. Peoples may not be able to fully achieve the strategic objectives and operating efficiencies anticipated in the acquisitions it completes. Future acquisitions may also result in other unforeseen difficulties, including in the integration of the combined companies. Further, benefits such as enhanced earnings anticipated from the acquisitions may not develop and future results of the combined companies may be materially below those estimated. In addition, Peoples may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of Peoples’ shareholders. Recent changes in the stock price of financial institutions could impact the valuation of potential target companies and, therefore, Peoples’ ability to compete for acquisitions. • Changes in retail distribution strategies and consumer behavior may adversely impact Peoples’ investments in its financial service office premises and equipment and other assets, and may lead to increased expenditures to change its retail distribution channel. Peoples has significant investments in financial service office premises and equipment for its financial service office network, including 20 financial service offices, consisting of LPOs and limited service locations, as well as its retail work force and other financial service office banking assets. Advances in technology such as e-commerce, telephone, internet and mobile banking, and in-branch self-service technologies including ATMs, ITMs, and other equipment, as well as changing customer preferences for these other methods of accessing Peoples’ products and services, could affect the value of Peoples’ financial service office network or other retail distribution assets and may cause Peoples to change its retail distribution strategy, close and/or sell certain financial service offices and restructure or reduce its remaining financial service offices and work force. Further advances in technology and/or changes in customer preferences including those related to social media, digital or cryptocurrency, blockchain and other “fintech” technologies could result in additional changes in Peoples’ retail distribution strategy and/or financial service office network. These actions could lead to losses on these assets or could adversely impact the carrying value of other long-lived assets and may lead to increased expenditures to renovate and reconfigure remaining financial service offices or to otherwise reform Peoples’ retail distribution channel. • Anti-takeover provisions may delay or prevent an acquisition or change in control by a third party. Provisions in the Ohio General Corporation Law, Peoples’ Amended Articles of Incorporation and Peoples’ Code of Regulations, including a supermajority vote requirement for significant corporate changes, could discourage potential takeover attempts and make attempts by shareholders to remove Peoples’ Board of Directors and management more difficult. These provisions may also have the effect of delaying or preventing a transaction or change in control that might be in the best interests of Peoples’ shareholders. General Risks • Adverse changes in the financial markets may adversely impact Peoples’ results of operations. While Peoples generally invests in securities issued by U.S. government agencies and sponsored entities and domestic state and local governments with limited credit risk, certain investment securities held by Peoples possess higher credit risk since they represent beneficial interests in structured investments collateralized by residential mortgages, debt obligations and other similar 30 asset-backed assets. Even securities issued by governmental agencies and sponsored entities may entail risk depending on political and economic changes. Regardless of the level of credit risk, all investment securities are subject to changes in market value due to changing interest rates, implied credit spreads and credit ratings. • Peoples is subject to environmental liability risk associated with lending activities. A significant portion of Peoples’ loan portfolio is secured by real property. During the ordinary course of business, Peoples forecloses on and takes title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, Peoples may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws and evolving regulation may require Peoples to incur substantial expenses and may materially reduce the affected property’s value or limit Peoples’ ability to use or sell the affected property. In addition, future laws and regulations or more stringent interpretations or enforcement policies with respect to existing laws or regulations may increase Peoples’ exposure to environmental liability. Environmental reviews of real property before initiating foreclosure actions may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on Peoples’ business, financial condition and results of operations. • The value of Peoples’ goodwill and other intangible assets may decline in the future. A significant decline in expected future cash flows, a significant adverse change in the business climate, slower growth rates or a significant and sustained decline in the price of Peoples’ common shares may necessitate taking charges in the future related to the impairment of goodwill and other intangible assets. If Peoples were to conclude that a future write-down of goodwill and other intangible assets is necessary, the appropriate charge will be recorded, which could have a material adverse effect on Peoples’ business, financial condition and results of operations. • Peoples is at risk of increased losses from fraud. Criminals are committing fraud at an increasing rate and are using more sophisticated techniques. In some cases, these individuals are part of larger criminal rings, which allow them to be more effective. Such fraudulent activity has taken many forms, ranging from wire fraud, debit card fraud, check fraud, mechanical devices attached to ATMs, ITMs, social engineering and phishing attacks to obtain personal information, or impersonation of clients through the use of falsified or stolen credentials. Additionally, an individual or business entity may properly identify itself, yet seek to establish a business relationship for the purpose of perpetrating fraud. An emerging type of fraud even involves the creation of synthetic identification in which fraudsters “create” individuals for the purpose of perpetrating fraud. In addition to fraud committed directly against Peoples, Peoples may suffer losses as a result of fraudulent activity committed against third parties. Increased deployment of technologies, such as chip card technology, defray and reduce certain aspects of fraud; however, criminals are turning to other sources to steal personally identifiable information, such as unaffiliated healthcare providers and government entities, in order to impersonate consumers and thereby commit fraud. • Peoples may not be able to remain competitive. Peoples experiences significant competition in originating loans, obtaining deposits, and maintaining and growing insurance and trust customers, principally from other commercial banks, savings associations, credit unions, trust and brokerage companies, insurance agencies, fintechs and online service providers. Several of Peoples’ competitors have greater resources, larger branch systems and wider arrays of banking and non-banking services. This competition could reduce Peoples’ net income by decreasing the number and size of loans that Peoples originates and the interest rates it can charge on these loans. Moreover, technology and other changes are allowing businesses and individuals to utilize alternative methods to complete financial transactions that historically have involved banks. For example, consumers can now maintain funds that have historically been held as bank deposits in brokerage accounts, mutual funds, or high yield savings accounts with online banks. Consumers can also complete transactions such as paying bills and/or transferring funds directly without the assistance of banks. Digital or cryptocurrencies, blockchain, and other “fintech” technologies are designed to enhance transactional security and have the potential to disrupt the financial industry, change the way banks do business, and reduce the need for banks as financial deposit-keepers and intermediaries. The process of eliminating the use of banks to complete financial transactions could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and lower cost deposits as a source of funding could have a material adverse effect on Peoples’ financial condition and results of operations. If Peoples is unable to compete effectively, Peoples will lose market share, which could reduce income generated from deposits, loans and other products. For a more complete discussion of Peoples’ competitive environment, see the section captioned “Competition” in “ITEM 1 BUSINESS” of this Form 10-K. • Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to Peoples’ environmental, social and governance practices may impose additional costs on Peoples or expose Peoples to new or additional risks. Financial institutions are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure. Investor advocacy groups, investment funds, and 31 influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. Increased ESG-related compliance costs for Peoples as well as among its suppliers, vendors and various other parties within its supply chain could result in increases to its overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact its reputation, ability to do business with certain partners, access to capital, and the price of its common shares. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. • Climate change, severe weather, natural disasters, acts of war or terrorism, the emergence of a pandemic and other adverse external events could significantly impact Peoples’ business. Natural disasters, including severe weather events of increasing strength and frequency due to climate change, acts of war or terrorism, pandemics or concern about a possible pandemic, and other adverse external events could have a significant impact on Peoples’ ability to conduct business or upon third parties who perform operational services for Peoples or its customers. Such events could affect the stability of Peoples’ deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, disrupt the infrastructure that supports Peoples’ business and the communities Peoples is located in, negatively impact financial markets and interest rates, result in lost revenue or cause Peoples to incur additional expenses. • Peoples or one of its subsidiaries may be a defendant from time to time in a variety of litigation and other actions, which could have a material adverse effect on Peoples’ financial condition, results of operations and cash flows. Peoples and its subsidiaries may be involved from time to time in a variety of litigation arising out of each entity’s respective business. The risk of litigation increases in times of increased troubled loan collection activity. Peoples’ insurance may not cover all claims that may be asserted against Peoples and its subsidiaries, and any claims asserted against them, regardless of merit or eventual outcome, may harm their respective reputations. Should the ultimate judgments or settlements in any litigation exceed the applicable insurance coverage, they could have a material adverse effect on Peoples’ financial condition, results of operations and cash flows. In addition, Peoples or one of its subsidiaries may not be able to obtain appropriate types or levels of insurance in the future or to obtain adequate replacement policies with acceptable terms. • The impact of larger or similar-sized financial institutions encountering problems may adversely affect Peoples’ business, earnings and financial condition. Many financial institutions and their related operations are closely intertwined, and the soundness of such financial institutions may, to some degree, be interdependent. As a result, concerns about, or a default or threatened default by, one financial institution could lead to significant market-wide liquidity and credit problems and/or losses or defaults by other financial institutions. This “systemic risk” may adversely affect Peoples’ business. Peoples is exposed to the risk that when a peer financial institution experiences financial difficulties, there could be an adverse impact on the regional banking industry and the business environment in which Peoples operates. For example, the bank failures of Silicon Valley Bank in California, Signature Bank in New York, First Republic Bank in California, and Heartland Tri-State Bank in Kansas during 2023 caused a degree of panic and uncertainty in the investor community and among bank customers generally. Peoples will continue to monitor potential bank failures and volatility within the banking industry generally, together with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in the banking industry. • Economic and other conditions may cause volatility in the price of Peoples’ common shares. The price of Peoples’ common shares can fluctuate widely in response to a variety of factors, including: actual or anticipated variations in the Peoples’ quarterly operating results; recommendations by securities analysts; significant acquisitions or business combinations; strategic partnerships, joint ventures or capital commitments; operating and stock price performance of other companies that investors deem comparable to Peoples; new technology used or services offered by Peoples’ competitors; news reports relating to trends, concerns and other issues in the banking and financial services industry; and changes in government regulations. General market fluctuations, industry factors and general economic and political conditions and external events, including terrorist attacks, increased inflation, economic slowdowns or recessions, interest rate changes, credit loss trends or currency fluctuations, could also cause the price of Peoples’ common shares to decrease, regardless of Peoples’ operating results. • Changes in tax laws could adversely affect Peoples’ performance. Peoples is subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, franchise, withholding and ad valorem taxes. Changes to tax laws could have a material adverse effect on Peoples’ results of operations, fair values of net deferred tax assets and obligations of states and political subdivisions held in Peoples’ investment securities portfolio. In addition, Peoples’ customers are subject to a wide variety of federal, state and local taxes. Changes in taxes paid by Peoples’ customers may adversely affect their ability to purchase homes or consumer products, which could adversely affect their demand for loans and deposit products. In addition, such negative effects on Peoples’ customers could result in defaults on the loans made by Peoples Bank and decrease the value of mortgage-backed securities in which Peoples has invested. 32 ITEM 1B UNRESOLVED STAFF COMMENTS None. ITEM 1C CYBERSECURITY Risk Management and Strategy Peoples has a comprehensive Enterprise Risk Management program (“ERM Program”), which includes policies and processes for assessing, identifying and managing material risks from cybersecurity threats to Peoples and its customers. Peoples’ information security policy and procedures are reviewed and assessed on an annual basis and as needed throughout the year by the Risk Committee of the Board. Peoples assesses itself against the Federal Financial Institutions Examination Council’s (“FFIEC”) Cybersecurity Assessment Tool (“CAT”) on a quarterly basis. Beginning in 2025, Peoples will assess itself using the Cyber Risk Institute Tool (“CRIT”) on at least an annual basis. Additional assessment of Peoples’ cybersecurity capabilities is performed by consultants and regulators annually. Identified risks resulting from these assessments are documented, rated and mitigated by Peoples Bank’s Chief Information Security Officer (“CISO”), with oversight by the Risk Committee. Peoples also has a third-party risk management program pursuant to which Peoples performs annual reviews of third-party vendors as to their cybersecurity and business continuity capabilities to ensure they meet the stated requirements and the risk appetite of Peoples as documented in Peoples’ information security policy. Vendors not meeting Peoples’ risk requirements are notified of necessary improvements and, if the vendors cannot mitigate the identified risks, Peoples looks to identify alternative vendors. Documentation of performance of the third-party risk assessments is retained and acknowledged by appropriate Risk and Information Security employees of Peoples. Roles and Responsibilities Peoples’ Board of Directors provides oversight of risks from cybersecurity threats primarily through the Risk Committee of the Board. The Risk Committee is comprised of all of the independent directors of the Board, along with Peoples’ Chief Executive Officer (“CEO”), and is responsible for oversight of Peoples’ risk management policies, programs and processes. The Risk Committee is organized and conducts its business pursuant to a written charter adopted by the Board. At least annually, the Risk Committee reviews and reassesses the adequacy of its charter and recommends any proposed changes to the full Board as necessary to reflect changes in regulatory requirements, authoritative guidance and evolving practices. On at least a quarterly basis, Peoples’ Chief Risk Officer provides a report to the Risk Committee regarding the overall risk condition of Peoples and whether it is within Peoples’ stated risk appetite. Peoples’ Chief Risk Officer (“CRO”) reports to the Risk Committee and the CEO and has primary responsibility for the design and implementation of the ERM Program. The ERM Program establishes Peoples’ risk appetite, monitors key risk and performance indicators, identifies key risks within the firm, designs and executes specific risk initiatives and monitors risk mitigation efforts and control processes. The CRO updates the Risk Committee quarterly on the overall risk condition of Peoples inclusive of any cybersecurity issues or threats. Peoples Bank also has an executive governance structure which includes the Capital and Risk Management Committee (“CRMC”). The CRMC, which is comprised of individuals representing each of the functional areas of Peoples and its subsidiaries, meets monthly and is responsible for the review of risk issues faced by Peoples, including material risks from cybersecurity threats. Summaries of the topics and discussions at CRMC meetings are provided to the Risk Committee along with an overview and recommendations regarding key risks and mitigating actions. The CISO has primary responsibility for assessing and responding to material risks from cybersecurity threats. The current CISO is an experienced Information Security and Information Technology professional with over 25 years of experience specializing in cyber defense, vulnerability management, security operations, recovery management and as a Windows system engineer. On a quarterly basis, the CISO updates the Risk Committee on the state of cybersecurity and potential risks to Peoples’ to be considered by the Risk Committee. Assessment and Response to Cybersecurity Threats Peoples employs an in-depth, layered, defensive approach that leverages people, processes, and encryption and multi-factor authentication technology to manage and mitigate cybersecurity threats. Peoples employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats. Peoples and the CISO leverage several technologies and a third-party Managed Security Service Provider to monitor and respond to cybersecurity threats. In the event that the CISO assesses a material risk from a potential cybersecurity threat, the CISO immediately notifies and works with Peoples’ Crisis Management Team, which includes Peoples’ General Counsel, to appropriately respond and mitigate the threat. If necessary, third-party resources will be engaged, with the support of Peoples’ cyber insurance provider, to mitigate the cybersecurity threat, perform forensic activities and distribute appropriate notifications to impacted parties and/or regulators. In the event a material cybersecurity incident occurs that requires notification to the Board of Directors, the General Counsel and CEO will coordinate notifications to the Board of Directors and provide updates to the Board of Directors as needed. 33 While Peoples has implemented security controls and processes to mitigate against cybersecurity threats, Peoples cannot be certain that these measures will be successful. The threat from cybersecurity attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures. While to date, Peoples has not detected a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, Peoples’ systems and those of its customers and third-party service providers are under constant threat and it is possible that Peoples could experience a significant event in the future. Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based products and services by Peoples and Peoples' customers. Any breach, compromise or disruption of its information security or systems as a result of a cybersecurity incident or threat could result in damage to Peoples’ reputation, loss of customer business, increased costs of incentives to customers or business partners in order to maintain their relationships, litigation, increased regulatory scrutiny and potential enforcement actions, repairs of system damage, increased investments in cybersecurity (such as obtaining additional technology, making organizational changes, deploying additional personnel, training personnel and engaging consultants), increased insurance premiums, and loss of investor confidence and a reduction in the price of Peoples’ common shares, all of which could result in financial loss and material adverse effects on Peoples’ results of operations and financial condition. ITEM 2 PROPERTIES Peoples’ sole banking subsidiary, Peoples Bank, generally owns its offices, related facilities and unimproved real property. At December 31, 2024, Peoples Bank operated 67 offices in Ohio, 43 offices in Kentucky, 29 offices in West Virginia, three offices in Virginia, two offices in Washington D.C., one office in Maryland, an insurance premium finance lending office in Missouri, an equipment leasing office in Vermont, and a leasing office in Minnesota. Of these 148 offices, 67 are leased and the rest are owned by Peoples Bank. Peoples Bank’s subsidiary, Peoples Insurance, rents office space in various Peoples Bank offices, and also leases office space from third parties in Inez and Pikeville, Kentucky. Peoples Bank’s subsidiary, Vantage, rents office space in Excelsior, Minnesota, Cherry Hill, New Jersey, Holmdel, New Jersey, Austin, Texas, Grafton, Wisconsin, and Guilford, Connecticut. Rent expense on the leased properties totaled $4.1 million in 2024 and $3.3 million in 2023, which excludes intercompany rent expense. The following properties have a lease term expiring on or before June 2025: Location Address Lease Expiration Date Cherry Hill 4 Haddonfield Road, Suite 217 Cherry Hill, NJ February 2025 (b) Guilford (Vantage) The Monroe Building, 87 Whitfield Street, Office 5 Guilford, CT March 2025 (e) Dupont Cir. -17th St. Wash. DC 1604 17th St NW Washington, DC March 2025 (a) Worthington 250 E Wilson Bridge Rd, Ste. 230 Worthington, OH March 2025 (a) Caldwell ATM 17010 St Rt 78 Caldwell, OH June 2025 (c) Akron Business Office Parking 354 S Main Street Akron, OH June 2025 (a) Akron Business Office 348 S Main St Akron, OH June 2025 (a) GWB Oil & Gas - Storage Bldg 2013-B State Route 821 Marietta, OH June 2025 (c) North Canton-LPO 125 S. Main Street North Canton, OH June 2025 (d) Waynesville Parking Easement 826 Franklin Rd Waynesville, OH June 2025 (c) (a) Current lease agreement has no remaining extensions available. (b) Current lease agreement will switch to a month to month lease at expiration. (c) Current lease agreement will auto-renew for 1 year periods until terminated by one of the parties. (d) Current lease agreement has one one-year extension remaining. (e) Current lease agreement has one two-year extension remaining. Peoples considers its offices and related facilities to be suitable and adequate for the present needs of Peoples and its subsidiaries. Peoples evaluates on a continuing basis the suitability and adequacy of its offices and related facilities, and has opened, relocated, remodeled or closed them as appropriate to maintain efficient and attractive premises. Additional information concerning the property and equipment owned or leased by Peoples and its subsidiaries is incorporated herein by reference from “Note 5 Bank Premises and Equipment.” 34 ITEM 3 LEGAL PROCEEDINGS Peoples or one of its subsidiaries from time to time is engaged in various litigation matters including the defense of claims of improper loan or deposit practices or lending violations. In addition, in the ordinary course of their respective businesses or operations, Peoples or one of its subsidiaries may be named as a plaintiff, a defendant, or a party to a legal proceeding or any of their respective properties may be subject to various pending and threatened legal proceedings and various actual and potential claims. In view of the inherent difficulty of predicting the outcome of such matters, Peoples cannot state what the eventual outcome of any such matters will be; however, based on management’s current knowledge and after consultation with legal counsel, Peoples’ management believes that damages, if any, and other amounts related to pending legal proceedings will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of Peoples. ITEM 4 MINE SAFETY DISCLOSURES Not applicable. 35 PART II ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Peoples’ common shares are traded on The Nasdaq Global Select Market® under the symbol PEBO. At December 31, 2024, Peoples had 4,219 shareholders of record. Peoples currently plans to continue to pay quarterly cash dividends comparable to those paid historically, subject to certain regulatory restrictions described in “Note 17 Regulatory Matters,” as well as in the section captioned “Supervision and Regulation – Dividend Restrictions” of “ITEM 1 BUSINESS” of this Form 10-K. Issuer Purchases of Equity Securities The following table details repurchases by Peoples and purchases by “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Exchange Act of Peoples’ common shares during the three months ended December 31, 2024: Period (a) Total Number of Common Shares Purchased (b) Average Price Paid per Common Share (c) Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1 – 31, 2024 1,448 (2)(3) $ 30.98 (2)(3) — $ 16,616,711 November 1 – 30, 2024 77 (3) $ 30.83 (3) — $ 16,616,711 December 1 – 31, 2024 1,213 (2)(3) $ 35.08 (2)(3) — $ 16,616,711 Total 2,738 $ 32.79 — $ 16,616,711 (1) On January 29, 2021, Peoples announced that 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 its outstanding common shares, replacing the February 27, 2020 share repurchase program which terminated on January 28, 2021. (2) Information includes 1,118 and 1,055 common shares purchased in open market transactions during October and December 2024, respectively, by Peoples Bank under the Rabbi Trust Agreement. The Rabbi Trust Agreement establishes a rabbi trust that holds assets to provide funds for the payment of the benefits under the Peoples Bancorp Inc. Third Amended and Restated Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries. (3) Information reported includes an aggregate of 330, 77, and 158 common shares withheld to satisfy income taxes associated with restricted common shares which were granted under the Peoples Bancorp Inc. Fourth Amended and Restated 2006 Equity Plan and vested during October, November, and December 2024, respectively. 36 Performance Graph The following Performance Graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be deemed to be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that Peoples specifically incorporates the Performance Graph by reference into such filing. The following line graph compares the five-year cumulative total shareholder return of Peoples’ common shares, based on an initial investment of $100 on December 31, 2019, and assuming reinvestment of dividends, against two indices. The first is the Russell 2000 Index, which is a leading benchmark for small cap domestic stocks and is comprised of the stocks ranked 1,001 to 2,000 in order of descending market capitalization in the Russell 3000 Index. The second is the KBW Nasdaq Bank Index, which is designed to track the performance of the leading banks and thrifts that are publicly-traded in the U.S. The KBW Nasdaq Bank Index includes 24 banking stocks representing the large U.S. national money centers, regional banks and thrift institutions. At December 31, 2019 2020 2021 2022 2023 2024 Peoples Bancorp Inc. $ 100.00 $ 82.73 $ 101.62 $ 94.87 $ 119.81 $ 118.64 Russell 2000 Index $ 100.00 $ 119.93 $ 137.67 $ 109.50 $ 127.98 $ 142.73 KBW Nasdaq Bank Index $ 100.00 $ 89.69 $ 124.08 $ 97.53 $ 96.66 $ 132.63 37 ITEM 6 [RESERVED] ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements Certain statements made in this Form 10-K, which are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “may,” “feel,” “expect,” “believe,” “plan,” “will,” “will likely,” “would,” “should,” “could,” “project,” “goal,” “target,” “potential,” “seek,” “intend,” “continue,” “remain,” and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. Factors that might cause such a difference include, but are not limited to: (1) the effects of interest rate policies, changes in the interest rate environment due to economic conditions and/or the fiscal and monetary policy measures undertaken by the U.S. government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity; (2) the effects of inflationary pressures on borrowers’ liquidity and ability to repay; (3) the success, impact, and timing of the implementation of Peoples’ business strategies and Peoples’ ability to manage strategic initiatives, including the interest rate policies of the Federal Reserve Board, the completion and successful integration of acquisitions, and the expansion of commercial and consumer lending activities; (4) competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, which can in turn impact Peoples’ credit spreads, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples’ ability to attract, develop and retain qualified professionals; (5) uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies, including the ODFI, the FDIC, the Federal Reserve Board, and the CFPB, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements; (6) the effects of easing restrictions on participants in the financial services industry; (7) current and future local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, supply-demand imbalances affecting local real estate prices, high unemployment rates in the local or regional economies in which Peoples operates and/or the U.S. economy generally, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, and changes in the relationship of the U.S. and U.S. global trading partners), and changes in the federal, state, and local government policy and the impact these conditions may have on Peoples, Peoples’ customers and Peoples’ counterparties, and Peoples’ assessment of the impact, which may be different than anticipated; (8) Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples’ current shareholders; (9) changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties’ performance and creditworthiness generally, which may be less favorable than expected in light of recent inflationary pressures and continued elevated interest rates, and may adversely impact the amount of interest income generated; (10) Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral; (11) future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses; (12) changes in accounting standards, policies, estimates or procedures may adversely affect Peoples’ reported financial condition or results of operations; (13) the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model; 38 (14) adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures, which may adversely affect the fair value of securities within Peoples’ investment portfolio, the interest rate sensitivity of Peoples’ consolidated balance sheet, and the income generated by Peoples’ trust and investment activities; (15) the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors; (16) Peoples’ ability to receive dividends from Peoples’ subsidiaries; (17) Peoples’ ability to maintain required capital levels and adequate sources of funding and liquidity; (18) the impact of larger or similar-sized financial institutions encountering problems, such as the failure in 2024 of Republic First Bank, and closures in 2023 of Silicon Valley Bank in California, Signature Bank in New York, First Republic Bank in California, and Heartland Tri-State Bank in Kansas, which may adversely affect the banking industry and/or Peoples’ business generation and retention, funding and liquidity, including Peoples’ continued ability to grow deposits or maintain adequate deposit levels, and may further result in potential increased regulatory requirements, increase reputational risk and potential impacts to macroeconomic conditions; (19) Peoples’ ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples’ third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss; (20) any misappropriation of the confidential information which Peoples possesses could have an adverse impact on Peoples’ business and could result in regulatory actions, litigation and other adverse effects; (21) Peoples’ ability to anticipate and respond to technological changes, and Peoples’ reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples’ primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands; (22) operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and Peoples’ subsidiaries are highly dependent; (23) changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated; (24) the adequacy of Peoples’ internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples’ business; (25) the impact on Peoples’ businesses, personnel, facilities or systems of losses related to acts of fraud, theft, misappropriation or violence; (26) the impact on Peoples’ businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters including severe weather events, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including Russia’s war in Ukraine and the ongoing conflicts in the Middle East); (27) the potential deterioration of the U.S. economy due to financial, political or other shocks; (28) the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; (29) the impact on Peoples’ businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples’ intellectual property; (30) risks and uncertainties associated with Peoples’ entry into new geographic markets and risks resulting from Peoples’ inexperience in these new geographic markets; (31) the risk that expected revenue synergies and cost savings from the Limestone Merger may not be fully realized or realized within the expected time frame; (32) changes in laws or regulations imposed by Peoples’ regulators impacting Peoples’ capital actions, including dividend payments and share repurchases; (33) the vulnerability of Peoples’ network and online banking portals, and the systems of parties with whom Peoples contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; 39 (34) regulatory and legal matters, including the failure to resolve outstanding matters on a timely basis and the potential of new regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences; (35) Peoples’ business may be adversely affected by increased political and regulatory scrutiny of corporate ESG practices; (36) the effect of a fall in stock market prices on the asset and wealth management business; and (37) other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples’ reports filed with the SEC, including those risk factors included in the disclosures under the heading “ITEM 1A RISK FACTORS” of this Form 10-K. All forward-looking statements speak only as of the filing date of this Form 10-K and are expressly qualified in their entirety by the cautionary statements. Although management believes the expectations in these forward-looking statements are based on reasonable assumptions within the bounds of management’s knowledge of Peoples’ business and operations, it is possible that actual results may differ materially from these projections. Additionally, Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the filing date of this Form 10-K or to reflect the occurrence of unanticipated events except as may be required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC’s website at www.sec.gov and/or through Peoples’ website – www.peoplesbancorp.com under the “Investor Relations” section. The following discussion and analysis of Peoples’ Consolidated Financial Statements is presented to provide insight into management’s assessment of the financial position and results of operations for the periods presented. This discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto, as well as the ratios and statistics, contained elsewhere in this Form 10-K. Summary of Significant Transactions and Events The following is a summary of transactions or events that have impacted or are expected by management to impact Peoples’ results of operations or financial condition: Mergers and Acquisitions ◦ During 2024, Peoples incurred $0.2 million of acquisition-related expenses, compared to $17.0 million for 2023 and $3.0 million for 2022. The acquisition-related expenses in 2024 and 2023 were related to the Limestone Merger. The acquisition-related expenses in 2022 were related to the Vantage acquisition (defined below), the merger with Premier Financial Bancorp, Inc (“Premier Merger”), and the Limestone Merger. ◦ On October 25, 2022, Peoples announced the Limestone Merger, a transaction valued at $177.9 million. The Limestone Merger closed as of the close of business on April 30, 2023. Peoples acquired Limestone’s loan portfolio totaling $1.1 billion, $1.2 billion of deposits, $172.7 million of total investment securities, an aggregate of $99.5 million of short-term and long-term borrowings, and $93.5 million of total cash and cash equivalents. Peoples also recorded goodwill in the amount of $68.8 million and other intangible assets of $27.7 million, which consisted of core deposit intangibles. ◦ On April 1, 2022, Peoples Insurance acquired substantially all of the assets and rights of an insurance agency with five locations in eastern Kentucky and certain rights to related customer accounts, which were previously developed and maintained by Elite Agency, Inc. (“Elite”), pursuant to an Asset Purchase Agreement between Peoples Insurance and Elite. Total consideration for this transaction was $4.4 million. Peoples recognized intangibles of $2.1 million, primarily comprised of a customer relationship intangible. ◦ On March 7, 2022, Peoples Bank purchased 100% of the equity of Vantage, a nationwide provider of equipment financing headquartered in Excelsior, Minnesota (the “Vantage acquisition”). Peoples Bank acquired assets comprising Vantage’s lease business, including $154.9 million in leases and certain third-party debt in the amount of $106.9 million. Peoples Bank paid cash consideration of $54.0 million and also repaid approximately $28.9 million in recourse debt on behalf of Vantage. Vantage offers mid-ticket equipment leases, primarily for business essential information technology equipment across a wide array of industries. Upon completion of the Vantage transaction, Vantage became a subsidiary of Peoples Bank. As a subsidiary, Vantage has continued to operate under the name Vantage Financial, which leverages Vantage’s strong brand recognition within the equipment finance industry. Peoples recorded goodwill in the amount of $27.2 million and other intangible assets of $13.2 million, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction. Other Significant Developments ◦ During 2024, Peoples recorded a provision for credit losses of $24.8 million, compared to a provision for credit losses of $15.2 million for 2023 and a recovery of credit losses of $3.5 million for 2022. The provision for credit losses during 2024 was driven by (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, (iii) economic forecast deterioration and (iv) loan growth. The provision for credit losses during 2023 was primarily driven by (i) the 40 addition of the provision for the loans acquired in the Limestone Merger, (ii) loan growth and (iii) an increase in charge-offs, partially offset by a release of reserves on individually analyzed loans and the use of updated loss drivers. ◦ During the third quarter of 2023, Peoples terminated its pension plan by settling the remaining benefit obligation of $7.7 million. The pension plan had been closed to new entrants since January 1, 2010. Peoples recorded a settlement charge of $2.4 million in the third quarter of 2023 in relation to the termination of the pension plan. Peoples incurred $185,000 in pension settlement charges in 2022, compared to $143,000 in 2021, due to the aggregate amount of lump-sum distributions to participants in Peoples’ defined benefit pension plan exceeding the threshold for recognizing settlement charges during the period. ◦ On January 28, 2021, Peoples’ Board of Directors approved a share repurchase program authorizing Peoples to purchase up to an aggregate of $30.0 million of Peoples’ outstanding common shares, replacing the February 27, 2020 share repurchase program which had authorized Peoples to purchase up to an aggregate of $40.0 million of Peoples’ outstanding common shares. During 2024, Peoples repurchased 100,905 common shares totaling $3.0 million under the share repurchase program. During 2023, Peoples repurchased 107,219 common shares totaling $3.0 million under the share repurchase program. During 2022, Peoples repurchased 263,183 common shares totaling $7.4 million under the share repurchase program. ◦ On April 3, 2019, Peoples entered into the U.S. Bank Loan Agreement. A Sixth Amendment to the U.S. Bank Loan Agreement, entered into on March 31, 2024, extended the maturity from April 1, 2024 to March 31, 2025. The U.S. Bank Loan Agreement provides Peoples with a revolving line of credit in the maximum aggregate principal amount of $30.0 million that may be used: (i) for working capital purposes; (ii) to finance dividends or other distributions (other than stock dividends and stock splits) on or in respect of Peoples’ capital stock and redemptions, repurchases or other acquisitions of any of Peoples’ capital stock permitted under the U.S. Bank Loan Agreement; and (iii) to finance acquisitions permitted under the U.S. Bank Loan Agreement. ◦ To combat the effects of ongoing inflationary pressures, the Federal Reserve Board increased the Federal Funds Target Rate range to 0.25% to 0.50% beginning on March 16, 2022, and continued to raise rates up to 5.50% on July 27, 2023. The Federal Reserve Board had kept rates unchanged since July 2023, before beginning to cut rates in September 2024. The impact of these transactions, where material, is discussed in the applicable sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations. 41 Critical Accounting Policies The accounting and reporting policies of Peoples conform to US GAAP and to general practices within the financial services industry. A summary of significant accounting policies is contained in “Note 1 Summary of Significant Accounting Policies.” While all of these policies are important to understanding the Consolidated Financial Statements, certain accounting policies require management to exercise judgment and make estimates or assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes. These estimates and assumptions are based on information available as of the date of the Consolidated Financial Statements; accordingly, as this information changes, the Consolidated Financial Statements could reflect different estimates or assumptions. Management has identified four accounting policies as those that, due to the judgments, estimates and assumptions inherent in the policies, are critical to an understanding of Peoples’ Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations. The four accounting policies identified were the allowance for credit losses, business combinations, goodwill and fair value measurements. These four accounting policies are described in further detail below. Allowance for Credit Losses The allowance for credit losses represents Peoples’ estimate of expected credit losses over the expected contractual life of the existing loan portfolio. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is measured on a pool basis, with loans collectively evaluated when similar risk characteristics exist. Peoples evaluated risk characteristics, including but not limited to: internal or third-party credit scores or credit ratings, risk ratings or classifications, financial asset type, collateral type, loan size, effective interest rate, term, geographical location, industry of the borrower, vintage, historical or credit loss patterns, and reasonable and supportable forecast periods. Peoples identified 20 segments for which it believes there are similar risk characteristics and utilized a discounted cash flow methodology in determining an allowance for credit losses for each segment. In estimating credit losses, Peoples uses a loss driver method, which analyzes one or more economic variables to the change in default rate using a regression analysis. Variables that had a strong correlation were selected as economic factors, or variables, for the model. If a single variable was not found to be strongly correlated, additional variables were included. Peoples utilizes U.S. unemployment and Ohio unemployment as economic factors in modeling. In general, Peoples completes a quarterly evaluation based on several qualitative factors to determine if there should be adjustments made to the allowance for credit losses. These factors include economic conditions, collateral, concentrations, troubled assets, Peoples’ loss trends, peer loss trends, delinquency trends, portfolio composition and loan growth, underwriting, and certain other risks. Loans that do not share similar risk characteristics are evaluated on an individual basis. The allowance for credit losses related to these specific loans was based on management’s estimate of potential losses as determined by (1) the present value of expected future cash flows, (2) the fair value of collateral if the loan is determined to be collateral dependent, or (3) the loan’s observable market price. Peoples also completes a quarterly evaluation for unfunded commitments for loans that are not unconditionally cancellable, which includes construction loans, floor plan lines of credit, home equity lines of credit, other credit lines and letters of credit. Peoples performed a study to determine the historical funding rates of unadvanced portions of loans, and applied these funding rates to the unfunded commitments at period end. The loss rates, including qualitative factors, in determining the allowance for credit losses were applied at the segment level to the unfunded commitment amounts to determine the allowance for credit loss liability for unfunded commitments. There can be no assurance that the allowance for credit losses will be adequate to cover all losses, but management believes the allowance for credit losses at December 31, 2024 was adequate to provide for expected losses from existing loans based on information available at that time. While management uses available information to estimate losses, the ultimate collectability of a substantial portion of the loan portfolio, and the need for future additions to the allowance, will be based on changes in economic conditions and other relevant factors. As such, adverse changes in economic conditions could reduce currently estimated cash flows for both commercial and consumer borrowers, which would likely cause Peoples to experience increases in problem assets, delinquencies and losses on loans in the future. To demonstrate the sensitivity to key economic parameters used in the measurement of the allowance for credit losses at December 31, 2024, management calculated the difference between the modeled allowance for credit losses at December 31, 2024, compared to one based on an adverse scenario. The adverse scenario reflected increases of 100 basis points in both U.S. and Ohio unemployment. Excluding consideration of general reserve adjustments, this sensitivity analysis would result in a hypothetical increase in the allowance for credit losses of approximately $6.9 million at December 31, 2024. 42 Business Combinations Peoples utilizes the acquisition method of accounting for business combinations. As of the acquisition date, Peoples records the acquired company’s net assets at fair value. The determination of fair value as of the acquisition date requires management to consider various factors that involve judgment and estimation, including the application of discount rates, prepayment rates, attrition rates, future estimates of interest rates, as well as many other assumptions. These assumptions can have a material impact on the estimated fair value, and as a result, the goodwill recorded in a business combination. ASC 805 allows for a measurement period of 12 months beyond the acquisition date to finalize the fair value measurement of the acquired company’s net assets as additional information existing as of the acquisition date becomes available. Measurement period adjustments are recorded through goodwill. Based on recent acquisitions, loans and leases acquired through business combinations have comprised the majority of purchase accounting adjustments in arriving at the fair values of acquired assets and liabilities, with the most significant adjustments relating to the creditworthiness of the acquired portfolios. The assumptions and inputs impacting the allowance for credit losses are discussed in the above paragraphs of this section of Management’s Discussion and Analysis. Those same judgments drive the measurement of the credit adjustments of acquired loan and lease portfolios when arriving at fair value. For further information regarding business combination accounting, please refer to “Note 20 Acquisitions.” Goodwill Peoples records goodwill as a result of acquisitions accounted for under the acquisition method of accounting. Under the acquisition method, Peoples is required to allocate the consideration paid for an acquired company to the assets acquired, including identified intangible assets, and liabilities assumed based on their estimated fair values at the date of acquisition. Goodwill represents the excess cost over the fair value of net assets acquired and is not amortized but is tested for impairment when indicators of impairment exist, and, in any case, at least annually. For further information regarding the fair values of assets and liabilities recently acquired in business combinations, please refer to “Note 20 Acquisitions.” The value of recorded goodwill is supported by revenue that is driven by the volume of business transacted and Peoples’ ability to provide quality, cost-effective services in a competitive market place. A decline in earnings as a result of a lack of growth or the inability to deliver cost-effective services over sustained periods can lead to impairment of goodwill that could adversely impact earnings in future periods. Goodwill impairment exists when the carrying value of the reporting unit (as defined by US GAAP) exceeds its fair value and an impairment loss is recognized in earnings in an amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit. The process of evaluating goodwill for impairment involves highly subjective and complex judgments, estimates and assumptions regarding the fair value of Peoples’ reporting unit and, in some cases, goodwill itself. As a result, changes to these judgments, estimates and assumptions in future periods could result in materially different results. Peoples currently maintains a single reporting unit for goodwill impairment testing. While quoted market prices exist for Peoples’ common shares since they are publicly traded, these market prices do not necessarily reflect the value associated with gaining control of an entity. Thus, management takes into account all appropriate fair value measurements in determining the estimated fair value of the reporting unit. Peoples performs its required annual impairment test as of October 1st each year. Peoples first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, including goodwill. In this evaluation, Peoples assesses relevant events and circumstances, which may include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, events specific to Peoples, significant changes in the reporting unit, or a sustained decrease in stock price. If Peoples determines that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amount, then performing the quantitative impairment test is unnecessary. None of the indicators noted above triggered the quantitative test, but management felt it was prudent to perform a quantitative test given the time since Peoples' prior quantitative test. At October 1, 2024, management completed a quantitative assessment of goodwill. This test resulted in management concluding that the fair value of the reporting unit exceeded its carrying value. Peoples is required to perform interim tests for goodwill impairment in subsequent quarters if events occur or circumstances change that indicate potential goodwill impairment exists, such as adverse changes to Peoples’ business or a significant decline in Peoples’ market capitalization. For further information regarding goodwill, refer to “Note 7 Goodwill and Other Intangible Assets.” Fair Value Measurements As a financial services company, the carrying value of certain financial assets and liabilities is impacted by the application of fair value measurements, either directly or indirectly. In certain cases, an asset or liability is measured and reported at fair value on a recurring basis, such as available-for-sale investment securities. In other cases, management must 43 rely on estimates or judgments to determine if an asset or liability not measured at fair value warrants an impairment write-down or whether a valuation reserve should be established. Given the inherent volatility, the use of fair value measurements may have a significant impact on the carrying value of assets or liabilities, or result in material changes to the Consolidated Financial Statements, from period to period. Detailed information regarding fair value measurements can be found in “Note 2 Fair Value of Financial Instruments.” New Accounting Guidance Pending Adoption ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures: The FASB issued ASU 2023-09 on December 14, 2023. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. ASU 2023-09 applies to all entities subject to income taxes. For public business entities, the new requirements were effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively with early adoption is permitted. Peoples does not expect the update will have a material impact on its consolidated financial statements. EXECUTIVE SUMMARY Net income for the year ended December 31, 2024 was $117.2 million, compared to $113.4 million for 2023 and $101.3 million for 2022, representing earnings per diluted common share of $3.31, $3.44 and $3.60, respectively. The increases in 2024 earnings when compared to 2023 and 2022 were driven by increases in net interest income, partially offset by increases in non-interest expenses. Non-core items, and the related tax effect of each, negatively impacted earnings per diluted common share by $0.07 for 2024 compared to $0.59 for 2023 and $0.11 for 2022. Net interest income increased 3% to $348.7 million for 2024, compared to $339.4 million for 2023, and $253.4 million for 2022. Net interest margin was 4.21% in 2024, compared to 4.55% in 2023 and 3.96% in 2022. The increases in net interest income when compared to 2023 were driven by increases in market interest rates and the full year impact of net interest income from the Limestone Merger. Net interest margin for 2024 decreased 34 basis points when compared to 2023, which was primarily driven by higher borrowings costs, which offset higher earning asset yields. Net interest margin increased during 2023 when compared to 2022 largely due to increases in market interest rates, additional net interest income stemming from the Limestone Merger, and improvements in investment yields. Accretion income, net of amortization expense, from acquisitions totaled $25.2 million for 2024, $25.2 million for 2023, and $11.6 million for 2022, adding 30 basis points, 34 basis points, and 19 basis points, respectively, to the net interest margin. The provision for credit losses for 2024 was $24.8 million, compared to a provision of credit losses of $15.2 million for 2023 and a recovery of credit losses of $3.5 million for 2022. Net charge-offs for 2024 were $23.2 million, compared to $8.5 million for 2023 and $7.3 million for 2022. Net charge-offs as a percent of average total loans were 0.37% for 2024, 0.15% for 2023 and 0.16% for 2022. The provision for credit losses during 2024 was mainly a result of (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, (iii) economic forecast deterioration and (iv) loan growth. The provision for credit losses during 2023 compared to the provision for credit losses during 2022 was primarily driven by the addition of the provision for loans acquired in the Limestone Merger. The increase in net-charge-offs as a percent of average total loans was driven by charge-offs on small-ticket leases primarily occurring in the second half of 2024. Total non-interest income, excluding gains and losses, for 2024 increased $9.1 million, or 10%, when compared to 2023. The increase was driven by (i) a $2.6 million increase in lease income, primarily attributable to operating lease income, (ii) a $2.4 million increase in trust and investment income driven by an increase in assets under administration and management, (iii) a $1.4 million increase in insurance income driven by higher contingency income and market increases for premiums, (iv) a $0.9 million increase in deposit account service charge income, and (vi) a $0.7 million increase in mortgage banking income. Total non-interest income for 2023 increased $8.6 million, or 11% when compared to 2022. The increase was driven by growth of $4.1 million in electronic banking income, $2.3 million in insurance income, and $2.1 million in deposit account services charges. Total non-interest expense for 2024 and 2023, was impacted by the Limestone Merger and acquisition-related non-interest expenses, which added $0.2 million and $17.0 million, respectively, across various line-items within non-interest expense. The table below summarizes the amount of acquisition-related expenses for each line item that is a component of non-interest expense. Acquisition-related expenses are considered a non-core non-interest expense by Peoples. This information is used by Peoples to provide information useful to investors in understanding Peoples’ operating performance and trends. 44 (Dollars in thousands) 2024 2023 2022 Non-interest expense: Salaries and employee benefit costs $ 150,041 $ 144,031 112,690 Data processing and software expense 25,221 21,607 14,241 Net occupancy and equipment expense 24,151 21,368 19,516 Professional fees 12,109 17,041 12,094 Amortization of other intangible assets 11,161 11,222 7,763 Electronic banking expense 7,548 7,150 9,231 Marketing expense 3,914 5,017 3,728 FDIC insurance premiums 4,929 4,785 3,702 Franchise tax expense 3,222 3,540 3,487 Other loan expenses 4,147 2,859 2,735 Communication expense 3,145 2,834 2,484 Operating lease expense 3,539 1,687 — Travel and entertainment expense 2,656 2,401 1,400 Other non-interest expense 18,033 20,945 14,076 Total non-interest expense 273,816 266,487 207,147 Acquisition-related non-interest expense: Salaries and employee benefit costs 16 5,827 29 Data processing and software expense (252) 1,850 410 Net occupancy and equipment expense 36 109 50 Professional fees 38 6,062 2,407 Electronic banking expense (100) 115 (92) Marketing expense 11 81 51 Other loan expenses — 2 (4) Communication expense — 1 2 Travel and entertainment expense 84 326 — Other non-interest expense 336 2,597 163 Total acquisition-related non-interest expense 169 16,970 3,016 Non-interest expense excluding acquisition-related expense: Salaries and employee benefit costs 150,025 138,204 112,661 Data processing and software expense 25,473 19,757 13,831 Net occupancy and equipment expense 24,115 21,259 19,466 Professional fees 12,071 10,979 9,687 Amortization of other intangible assets 11,161 11,222 7,763 Electronic banking expense 7,648 7,035 9,323 Marketing expense 3,903 4,936 3,677 FDIC insurance premiums 4,929 4,785 3,702 Franchise tax expense 3,222 3,540 3,487 Other loan expenses 4,147 2,857 2,739 Communication expense 3,145 2,833 2,482 Operating lease expense 3,539 1,687 — Travel and entertainment expense 2,572 2,075 1,400 Other non-interest expense 17,697 18,348 13,913 Total non-interest expense excluding acquisition-related expense $ 273,647 $ 249,517 $ 204,131 Total non-interest expense was $273.8 million for 2024, an increase of $7.3 million, or 3%, compared to 2023. Excluding acquisition-related expenses, non-interest expenses increased $24.1 million, or 10%, due to increases in all non-interest expense line items except for marketing expense, franchise tax expense and amortization of other intangible assets, which decreased $1.0 million, $0.3 million, and $0.1 million, respectively, when compared to 2023. The increases were primarily driven by recent growth, including 45 through acquisitions. Total non-interest expense was $266.5 million for 2023, an increase of $59.3 million compared to 2022. The growth was driven by increases of (i) $31.3 million in salaries and employee benefit costs, (ii) $7.4 million in data processing and software expenses, (iii) $4.9 million in professional fees, and (iv) $3.5 million in intangible asset amortization. These increases were primarily attributable to the Limestone Merger, as well as organic growth. Peoples’ efficiency ratio, which is calculated as total non-interest expense less amortization of other intangible assets divided by fully tax-equivalent (“FTE”) net interest income, plus total non-interest income, excluding all gains and losses, was 58.0% for 2024, compared to 58.7% for 2023 and 59.6% for 2022. The efficiency ratio improved when compared to prior periods due to increased revenue. The efficiency ratio, when adjusted for non-core items, was 57.9% for 2024, 54.4% for 2023 and 58.6% for 2022. The increase in the efficiency ratio, adjusted for non-core items, for 2024 compared to 2023 was driven by higher non-interest expense. The efficiency ratio and the efficiency ratio, adjusted for non-core items for 2023 improved when compared to 2022, due to higher net interest income driven by the Limestone Merger, increases in market interest rates, and higher non-interest income. Income tax expense totaled $32.3 million for 2024, compared to $31.8 million for 2023 and $27.3 million for 2022. The effective tax rate for 2024 was 21.6%, 21.9% for 2023 and 21.3% for 2022. The increased expense for 2024 compared to 2023 and 2022 was driven by higher pre-tax income. Peoples’ effective tax rate has increased primarily due to apportionment in additional states due to recent acquisitions, but was lower in 2024 due to a one-time benefit relating to a prior year amended return. Total assets increased 1% to $9.25 billion at December 31, 2024, compared to $9.16 billion at year-end 2023. The increase was primarily due to increases of $198.8 million in loans and leases and $123.1 million in investment securities, partially offset by a decrease of $209.1 million in cash and cash equivalents. The increase in loans and leases compared to December 31, 2023 was driven by growth of $162.7 million and $66.3 million in the commercial and industrial and premium finance segments, respectively, which was partially offset by a reduction of $40.9 million in commercial real estate. The decrease in cash and cash equivalents is primarily related to investing activity and the purchase of both available-for-sale and held-to-maturity securities, partially offset by cash provided by operating activities. The increase in investment securities from at December 31, 2023 was driven by purchases of longer duration, higher yielding held-to-maturity investment securities. Management underwent investment portfolio restructurings during 2023 to increase portfolio yield and reduce Peoples’ sensitivity to falling intermediate and long-term interest rates. The allowance for credit losses increased to $63.3 million, or 1.00% of total loans, net of deferred fees and costs, compared to $62.0 million and 1.01%, respectively, at December 31, 2023. The increase in the allowance balance at December 31, 2024 when compared to at December 31, 2023 was driven by an increase in reserves for individually analyzed loans and leases, as well as loan growth. The decrease in the ratio of the allowance for credit losses to total loans was due to loan growth. Total liabilities were $8.14 billion at December 31, 2024, an increase of $38.8 million since December 31, 2023, primarily due to an increase of $487.3 million in total deposits which was driven primarily by promotional offerings on retail CDs, partially offset by a decrease in $435.2 million in total borrowings due to the payoff of the BTFP and lower FHLB overnight borrowings. Total demand deposit accounts comprised 34% and 38% of total deposits at December 31, 2024, and at December 31, 2023, respectively. Total stockholders’ equity was $1.11 billion at December 31, 2024, an increase of $58.1 million, or 6%, from December 31, 2023 due to net income of $117.2 million for the full year of 2024, partially offset by an increase in other comprehensive loss of $8.8 million and dividends paid of $56.3 million. The increase in other comprehensive loss was the result of changes in the market value of available-for-sale investment securities, which were primarily driven by changes in market interest rates. Peoples continued to exceed the capital required by the Federal Reserve Board to be deemed “well capitalized.” Peoples’ tier 1 capital ratio was 12.39% at December 31, 2024, versus 12.37% at December 31, 2023, while the total capital ratio was 13.58% at December 31, 2024, versus 13.17% at December 31, 2023. The common equity tier 1 risk-based capital ratio was 11.95% at December 31, 2024 compared to 11.56% at December 31, 2023. Compared to at December 31, 2023, the tier 1 risk-based capital and the total risk-based capital ratios improved due to higher net income, partially offset by dividends paid. Peoples’ book value and tangible book value per share were $31.26 and $19.94, respectively, at December 31, 2024, compared to $29.83 and $18.16, respectively, at December 31, 2023. Additional information regarding capital requirements can be found in “Note 17 Regulatory Matters.” 46 RESULTS OF OPERATIONS Net Interest Income Peoples earns interest income on investments, loans and leases, and incurs interest expense on interest-bearing deposits and borrowed funds. Net interest income, the amount by which interest income exceeds interest expense, remains Peoples’ largest source of revenue and was 77% of total revenue during 2024. The amount of net interest income earned by Peoples is affected by various factors, including changes in market interest rates due primarily to the Federal Reserve Board’s monetary policy, the level and degree of pricing competition for both loans and deposits in Peoples’ markets, and the amount and composition of Peoples’ earning assets and interest-bearing liabilities. Peoples monitors net interest income performance and manages its balance sheet composition through regular ALCO meetings. The asset-liability management process employed by the ALCO is intended to mitigate the impact of future interest rate changes on Peoples’ net interest income and earnings. However, the frequency and/or magnitude of changes in market interest rates are difficult to predict, and may have a greater impact on net interest income than management is able to mitigate through the asset-liability management process. As part of the analysis of net interest income, management converts tax-exempt income earned on obligations of states and political subdivisions to the pre-tax equivalent of taxable income using a federal statutory corporate income tax rate of 21% for all periods presented. Management believes the resulting FTE net interest income allows for a more meaningful comparison of tax-exempt income and yields to their taxable equivalents. Net interest margin, which is calculated by dividing FTE net interest income by average interest-earning assets, serves as an important measurement of the net revenue stream generated by the volume, mix and pricing of earning assets and interest-bearing liabilities. The following table details the calculation of FTE net interest income for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Net interest income $ 348,701 $ 339,374 $ 253,442 Taxable equivalent adjustments 1,308 1,503 1,459 FTE net interest income $ 350,009 $ 340,877 $ 254,901 47 The following table details Peoples’ average balance sheets, with corresponding income/expense and yield/cost, for the years ended December 31: 2024 2023 2022 ( Dollars in thousands) Average Balance Income/ Expense Yield/Cost Average Balance Income/Expense Yield/Cost Average Balance Income/ Expense Yield/Cost Short-term investments (a) $ 125,112 $ 6,810 5.44 % $ 57,464 $ 2,763 4.81 % $ 178,781 $ 1,710 0.96 % Investment securities (b)(c): Taxable 1,696,965 59,113 3.48 % 1,621,852 49,463 3.05 % 1,481,368 29,086 1.96 % Nontaxable 180,913 5,016 2.77 % 190,479 5,475 2.87 % 199,279 5,287 2.65 % Total investment securities 1,877,878 64,129 3.42 % 1,812,331 54,938 3.03 % 1,680,647 34,373 2.05 % Loans (c)(d): Construction 330,989 25,791 7.66 % 347,317 27,833 7.90 % 223,197 10,732 4.74 % Commercial real estate, other 2,058,450 146,077 6.98 % 1,757,676 120,479 6.76 % 1,327,064 65,405 4.86 % Commercial and industrial 1,237,068 95,609 7.60 % 1,052,647 79,449 7.44 % 875,754 41,335 4.66 % Premium finance 259,374 22,134 8.39 % 168,077 12,155 7.13 % 150,135 6,789 4.46 % Leases 416,728 47,498 11.21 % 371,809 42,931 11.39 % 271,349 34,720 12.62 % Residential real estate (e) 921,725 47,017 5.10 % 913,069 43,647 4.78 % 881,136 37,851 4.30 % Home equity lines of credit 227,046 18,414 8.11 % 194,415 14,722 7.57 % 170,567 8,300 4.87 % Consumer, indirect 666,083 39,912 5.99 % 656,736 33,263 5.06 % 563,887 23,029 4.08 % Consumer, direct 120,607 8,694 7.21 % 128,707 8,726 6.78 % 111,148 6,769 6.09 % Total loans 6,238,070 451,146 7.14 % 5,590,453 383,205 6.79 % 4,574,237 234,930 5.09 % Allowance for credit losses (64,491) (57,391) (55,233) Net loans 6,173,579 451,146 7.22 % 5,533,062 383,205 6.86 % 4,519,004 234,930 5.15 % Total earning assets 8,176,569 522,085 6.32 % 7,402,857 440,906 5.90 % 6,378,432 271,013 4.21 % Goodwill and other intangible assets 406,619 384,172 322,639 Other assets 539,655 511,748 393,636 Total assets $ 9,122,843 $ 8,298,777 $ 7,094,707 Interest-bearing deposits: Savings accounts $ 882,748 $ 885 0.10 % $ 1,034,713 $ 1,394 0.13 % $ 1,069,097 $ 356 0.03 % Government deposit accounts 799,195 21,872 2.74 % 709,887 12,252 1.73 % 701,587 2,172 0.31 % Interest-bearing demand accounts 1,089,688 2,118 0.19 % 1,156,953 1,605 0.14 % 1,165,106 583 0.05 % Money market accounts 845,547 21,434 2.53 % 684,015 9,986 1.46 % 632,364 1,015 0.16 % Retail certificates of deposit 1,774,419 74,509 4.20 % 948,310 25,198 2.66 % 580,660 2,978 0.51 % Brokered deposits (f) 492,390 21,295 4.32 % 483,483 21,712 4.49 % 88,234 2,067 2.34 % Total interest-bearing deposits 5,883,987 142,113 2.42 % 5,017,361 72,147 1.44 % 4,237,048 9,171 0.22 % Borrowed funds: Short-term FHLB advances (f) 121,739 6,675 5.48 % 353,532 18,058 5.11 % 83,356 2,386 2.86 % Repurchase agreements and other 179,567 8,870 5.36 % 107,935 1,664 1.54 % 113,434 275 0.24 % Total short-term borrowings 301,306 15,545 5.16 % 461,467 19,722 4.27 % 196,790 2,661 1.35 % Long-term FHLB advances 130,674 5,213 3.99 % 54,457 1,779 3.27 % 53,102 984 1.85 % Long-term notes payable 49,456 3,446 6.97 % 45,038 2,560 5.43 % 56,865 2,562 4.51 % Other borrowings 54,342 5,759 10.42 % 44,121 3,821 8.97 % 13,718 734 5.27 % Total long-term borrowings 234,472 14,418 6.11 % 143,616 8,160 5.68 % 123,685 4,280 3.46 % Total borrowed funds 535,778 29,963 5.57 % 605,083 27,882 4.59 % 320,475 6,941 2.15 % Total interest-bearing liabilities 6,419,765 172,076 2.68 % 5,622,444 100,029 1.78 % 4,557,523 16,112 0.35 % Non-interest-bearing deposits 1,491,019 1,598,009 1,637,690 Other liabilities 128,267 137,527 101,510 Total liabilities 8,039,051 7,357,980 6,296,723 Stockholders’ equity 1,083,792 940,797 797,984 Total liabilities and stockholders’ equity $ 9,122,843 $ 8,298,777 $ 7,094,707 Interest rate spread (b) $ 350,009 3.64 % $ 340,877 4.12 % $ 254,901 3.86 % Net interest margin (b) 4.21 % 4.55 % 3.96 % (a) Balances are primarily composed of interest bearing demand deposits at the FRB and FHLB. (b) Average balances are based on carrying value. (c) Interest income and yields are presented on a fully tax-equivalent basis, using a federal statutory corporate income tax rate of 21% for all periods presented. 48 (d) Average balances include nonaccrual, impaired loans, and loans held for sale. Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status. Loan fees included in interest income were immaterial for all periods presented. (e) Loans held for sale are included in the average loan balances listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income. (f) Interest related to interest rate swap transactions is included, as appropriate to the transaction, in interest expense on short-term FHLB advances and interest expense on brokered deposits for the periods presented in which FHLB advances and brokered deposits were being utilized. Peoples’ average balances compared to prior periods have been impacted by recent acquisitions, which included: (i) the Limestone Merger as of the close of business on April 30, 2023, which added to average short-term investments, average total investment securities, and average loans, deposit and borrowed funds balances and (ii) the acquisition of Vantage on March 7, 2022, which added to average lease and borrowed funds balances. Peoples’ cash balances have decreased primarily due to a decrease in interest-bearing deposits in other banks, mostly with the FRB. The increases in market interest rates have increased asset yields and increased borrowing costs. The following table provides an analysis of the changes in FTE net interest income: (Dollars in thousands) Changes from 2023 to 2024 Changes from 2022 to 2023 Increase (decrease) in: Rate Volume Total (a) Rate Volume Total (a) INTEREST INCOME: Short-term investments $ 328 $ 3,718 $ 4,046 $ 2,900 $ (1,847) $ 1,053 Investment securities (b): Taxable 7,280 2,371 9,651 17,396 2,981 20,377 Nontaxable (190) (269) (459) 430 (242) 188 Total investment income 7,090 2,102 9,192 17,826 2,739 20,565 Loans (b) : Construction (800) (1,242) (2,042) 9,323 7,778 17,101 Commercial real estate, other 4,083 21,515 25,598 30,089 24,985 55,074 Commercial and industrial 1,744 14,416 16,160 28,493 9,621 38,114 Premium finance 2,450 7,529 9,979 4,474 892 5,366 Leases (646) 5,213 4,567 (3,577) 11,788 8,211 Residential real estate 2,953 417 3,370 4,387 1,409 5,796 Home equity lines of credit 1,098 2,594 3,692 5,132 1,290 6,422 Consumer, indirect 6,170 479 6,649 6,071 4,163 10,234 Consumer, direct 534 (567) (33) 818 1,139 1,957 Total loan income 17,586 50,354 67,940 85,210 63,065 148,275 Total interest income 25,004 56,174 81,178 105,936 63,957 169,893 INTEREST EXPENSE: Deposits: Savings accounts 584 (75) 509 1,049 (11) 1,038 Government deposit accounts (10,457) 836 (9,621) 10,054 26 10,080 Interest-bearing demand accounts (448) (65) (513) 1,026 (4) 1,022 Money market accounts (12,239) 791 (11,448) 8,881 90 8,971 Retail certificates of deposit (37,267) (12,044) (49,311) 19,297 2,923 22,220 Brokered deposit 122 82 204 3,338 16,307 19,645 Total deposit cost (59,705) (10,475) (70,180) 43,645 19,331 62,976 Borrowed funds: Short-term borrowings 1,209 3,181 4,390 4,455 12,606 17,061 Long-term borrowings (3,590) (2,666) (6,256) 2,806 1,074 3,880 Total borrowed funds cost (2,381) 515 (1,866) 7,261 13,680 20,941 Total interest expense (62,086) (9,960) (72,046) 50,906 33,011 83,917 Net interest income $ (37,082) $ 46,214 $ 9,132 $ 55,030 $ 30,946 $ 85,976 49 (a) The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the dollar amounts of the changes in each. (b) Interest income and yields are presented on a fully tax-equivalent basis, using a federal statutory corporate income tax rate of 21% for all periods presented. FTE net interest income increased $9.1 million, or 3%, for 2024 when compared to 2023, and net interest margin decreased 34 basis points to 4.21%. The increase in net interest income was driven by increases in market interest rates and an additional four months of income from the Limestone Merger. The decrease in net interest margin for 2024 compared to 2023 was primarily driven by higher borrowings costs, which offset higher earning asset yields. Accretion income, net of amortization expense, from acquisitions was $25.2 million for 2024 and 2023, which added 30 and 34 basis points to net interest margin for 2024 and 2023, respectively. During 2023, FTE net interest income increased $85.9 million, or 34%, when compared to 2022, and net interest margin increased 59 basis points to 4.55%. The increase in net interest income was driven by increase in market interest rates, additional net interest income from the Limestone Merger, and improved investment yields. Accretion income, net of amortization expense, from acquisitions was $25.2 million for 2023, which added 34 basis points to net interest margin for 2023 and was primarily driven by the Limestone Merger. Detailed information regarding changes in the Consolidated Balance Sheets can be found under appropriate captions of the “FINANCIAL CONDITION” section of this discussion. Additional information regarding Peoples’ interest rate risk and the potential impact of interest rate changes on Peoples’ results of operations and financial condition can be found later in this discussion under the caption “Interest Rate Sensitivity and Liquidity.” Provision for Credit Losses The following table details Peoples’ provision for credit losses recognized for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Provision for (Recovery of) other credit losses $ 23,524 $ 14,236 $ (4,560) Provision for checking account overdrafts 1,263 938 1,050 Provision for (Recovery of) credit losses $ 24,787 $ 15,174 $ (3,510) As a percent of average total loans 0.40 % 0.27 % (0.08) % The provision for credit losses represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management’s formal quarterly analysis of the loan portfolio and procedural methodology that estimates the amount of probable credit losses. The CECL methodology utilized by Peoples relies on economic forecasts, as well as other key assumptions including prepayments, probability of default and loss given default. For 2024, the increase in the provision for credit losses compared to 2023 was mainly a result of (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, (iii) economic forecast deterioration and (iv) loan growth. During 2023, the provision for credit losses was driven by (i) the addition of the provision for the loans acquired in the Limestone Merger, (ii) loan growth and (iii) an increase in charge-offs, partially offset by a release of reserves on individually analyzed loans and the use of updated loss drivers. During 2022, the recovery of credit losses was driven by improvements in economic forecasts, coupled with loan pay-offs. Additional information regarding changes in the allowance for credit losses and loan credit quality can be found later in this discussion under the caption “Allowance for Credit Losses.” Net Losses Included in Total Non-Interest Income Net losses include and losses on investment securities, asset disposals and other transactions, which are recognized in total non-interest income. The following table details the net losses for the years ended December 31 recognized by Peoples: (Dollars in thousands) 2024 2023 2022 Net loss on investment securities $ (416) $ (3,700) $ (61) Net loss on asset disposals and other transactions: Net loss on other assets $ (1,928) $ (1,143) $ (326) Net loss on OREO (1,230) (1,623) (139) Net loss on other transactions (152) (71) (151) Net loss on asset disposals and other transactions $ (3,310) $ (2,837) $ (616) 50 For 2024, Peoples’ net loss on investment securities was primarily due to the loss recorded on a contingent call of a security in the second quarter of 2024. During the first quarter of 2023, Peoples executed sales of $96.7 million of lower yielding available-for-sale investment securities for a pre-tax loss of $2.0 million. Proceeds from sales were used to pay down overnight borrowings. During the fourth quarter of 2023, Peoples executed the sales of an additional $36.5 million of lower yielding available-for-sale investment securities for a pre-tax loss of $1.7 million. Proceeds from the sales were used to purchase higher yielding agency investment securities. The loss on the sales of these available-for-sale investment securities had a nominal impact on tangible book value as such loss was previously reflected in capital through accumulated other comprehensive loss. The realized losses recognized in 2023 due to the first quarter transactions were earned back within the 2023 fiscal year, and the realized losses recognized due to the fourth quarter transactions were earned back by December 31, 2024. Peoples’ net loss on asset disposals and other transactions during 2024 was primarily driven by $1.8 million of net losses on repossessed assets and a $1.2 million write-down of an OREO property. During 2023, Peoples’ net loss on asset disposals was primarily driven by a $1.6 million write-down of an OREO property and net losses on repossessed assets. During 2022, net losses on asset disposals and other transactions were primarily driven by losses on repossessed assets. Total Non-Interest Income Excluding Net Gains and Losses Peoples generates total non-interest income excluding net gains and losses from four primary sources: electronic banking income (“e-banking”); trust and investment income; insurance income; and deposit account service charges. Peoples continues to focus on revenue growth from non-interest income sources in order to maintain a diversified revenue stream through greater reliance on total non-interest income excluding net gains and losses. Total non-interest income excluding net gains and losses accounted for 22.8% of Peoples’ total revenues (defined as net interest income plus total non-interest income excluding net gains and losses) in 2024, compared to 21.7% in 2023 and 23.9% in 2022. The increase in Peoples’ total non-interest income excluding net gains and losses, as a percent of total revenue during 2024 compared to 2023, was largely due to the growth in lease income, primarily attributable to operating lease income, and growth in trust and investment income, and insurance income. E-banking income comprised the largest portion of Peoples’ total non-interest income excluding net gains and losses, for 2024. The following table shows Peoples’ e-banking income for the years ended December 31: (Dollars in thousands) 2024 2023 2022 E-banking income $ 25,142 $ 25,210 $ 21,094 Peoples’ e-banking services include ATM and debit cards, direct deposit services, internet and mobile banking, and remote deposit capture, and serve as alternative delivery channels to traditional sales offices for providing services to clients. Revenue is derived largely from ATM and debit cards, as other services are mainly provided at no charge to the customers. The amount of e-banking income is largely dependent on the timing and volume of customer activity. For 2024, e-banking income was relatively flat when compared to 2023. For 2023 compared to 2022, e-banking income increased 20%, primarily due to additional customers from the Limestone Merger as well as organic growth. In 2024, Peoples’ customers used their debit cards to complete $2.0 billion of transactions, up from $1.9 billion in 2023 and $1.7 billion in 2022. Peoples’ fiduciary and brokerage revenues continue to be based primarily upon the value of assets under administration and management. The following table details Peoples’ trust and investment income for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Fiduciary $ 8,355 $ 7,537 $ 7,508 Brokerage 8,017 6,865 6,343 Employee benefit plan fees 3,141 2,758 2,540 Trust and investment income $ 19,513 $ 17,160 $ 16,391 For 2024, trust and investment income increased primarily due to increases in fiduciary and brokerage income, primarily reflecting an increase in assets under management and market performance. For 2023, trust and investment increased compared to 51 2022 due to increases in brokerage income, as Peoples added new accounts and the underlying market values of assets under administration and management grew, and employee benefit plan fees. The following table details Peoples’ assets under administration and management at December 31: (Dollars in thousands) 2024 2023 2022 Trust $ 2,061,267 $ 2,021,249 $ 1,764,639 Brokerage 1,614,189 1,473,814 1,211,868 Total $ 3,675,456 $ 3,495,063 $ 2,976,507 Annual average $ 3,617,882 $ 3,236,449 $ 2,965,985 The increase in total assets under administration and management at December 31, 2024, compared to December 31, 2023, was primarily due to market value increases in 2024. During 2023, Peoples’ assets under administration and management increased primarily driven by market performance, new account activity, and an acquisition of an independent financial advisor in January of 2023 which increased brokerage assets by $30 million. The following table details Peoples’ insurance income for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Property and casualty insurance commissions $ 14,423 $ 13,852 $ 11,986 Performance-based commissions 2,218 1,634 1,424 Life and health insurance commissions 2,760 2,530 2,317 Insurance income $ 19,401 $ 18,016 $ 15,727 Insurance income for 2024 increased compared to 2023, primarily driven by higher commissions and market increases for premiums. Peoples Insurance increased its clientele throughout 2024, which drove the increases in commissions. Insurance income for 2023 increased compared to 2022, primarily due to increases in (i) property and casualty insurance commissions, (ii) performance-based commissions and (iii) life and health insurance commissions. Deposit account service charges are based on the costs associated with services provided by Peoples. The following table details deposit account service charges for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Overdraft and non-sufficient funds fees $ 9,412 $ 9,016 $ 8,324 Account maintenance fees 6,939 6,425 5,323 Other fees and charges 1,233 1,241 936 Deposit account service charges $ 17,584 $ 16,682 $ 14,583 The amount of deposit account service charges, particularly fees for overdrafts and non-sufficient funds, is largely dependent on the timing and volume of customer activity. Management periodically evaluates these fees to ensure they are reasonable based on operational costs and similar to fees charged in Peoples’ markets by competitors. Deposit account service charges in 2024 increased compared to 2023 due to an increase in customer activity. Deposit account service charges in 2023 increased compared to 2022 due to increased customers added in conjunction with the Limestone Merger, as well as organic growth. The following table details the other items included within Peoples’ total non-interest income for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Lease income $ 10,408 $ 7,844 $ 4,267 Bank owned life insurance income 4,216 4,151 2,624 Mortgage banking income 1,788 1,078 1,397 Other non-interest income 5,040 3,809 3,430 Lease income is primarily comprised of (i) gains on the early termination of leases, net of any associated purchase accounting adjustments, (ii) month-to-month lease payments in excess of net investment in the lease, (iii) fees received for referrals, (iv) gains and losses recognized on the sales of residual assets, (v) syndication income, and (vi) operating leases. The increase in lease income for 2024 when compared to 2023 was driven primarily by an increase in operating lease income from Vantage. The 2023 increase in lease income when compared to 2022 was due month-to-month lease income from Vantage. Bank owned life insurance income (“BOLI”) for 2024 remained flat when compared to 2023. BOLI income for 2023 increased when compared to 2022 due to a $0.4 million death benefit related to the cash surrender value of the underlying policy in the fourth 52 quarter of 2023, and additional income from policies acquired in the Limestone Merger. Peoples purchased no additional BOLI policies during 2023 or 2024. Mortgage banking income is comprised mostly of net gains from the origination and sale of long-term, fixed-rate real estate loans in the secondary market, as well as servicing income for sold loans. As a result, the amount of income recognized by Peoples is largely dependent on customer demand and long-term interest rates for residential real estate loans offered in the secondary market. Mortgage banking income increased for 2024 when compared to 2023 primarily driven by higher production. Mortgage banking income declined for 2023 when compared to 2022 due to lower volumes of new loan originations as a result of the rising market interest rate environment. In 2024, Peoples sold approximately $24.1 million of loans to the secondary market with servicing retained and sold approximately $40.7 million in loans with servicing released, compared to approximately $2.7 million and $30.7 million, respectively, in 2023. Peoples sold $18.5 million of loans to the secondary market with servicing retained and $31.1 million of loans with servicing released during 2022. The volume of sales has a direct impact on the amount of mortgage banking income. For 2024, other non-interest income increased when compared to 2023 due primarily to increased swap fee income which is driven by customer demand. Other non-interest income increased during 2023, compared to 2022, primarily due to swap fee income and other operating income. Total Non-Interest Expense Salaries and employee benefit costs remain Peoples’ largest non-interest expense, accounting for over half of total non-interest expense. The following table details Peoples’ salaries and employee benefit costs for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Base salaries and wages $ 98,743 $ 95,604 $ 74,593 Sales-based and incentive compensation 22,445 23,085 18,732 Employee benefit costs 17,956 16,249 13,654 Employee stock-based compensation 6,973 5,476 3,819 Deferred personnel costs (4,978) (4,517) (4,975) Payroll taxes and other employment costs 8,902 8,134 6,867 Salaries and employee benefit costs $ 150,041 $ 144,031 $ 112,690 Full-time equivalent employees: Actual at end of the period 1,479 1,478 1,267 Average during the period 1,491 1,411 1,245 Base salaries and wages increased for 2024 compared to 2023, driven by an additional four months of salary expense associated with employees added from the Limestone Merger, coupled with annual merit increases. Base salaries and wages increased in 2023 compared to 2022, driven by the additional salaries associated with the Limestone Merger, including $5.8 million in acquisition-related salary and employee benefit expenses related to the Limestone Merger in 2023. Base salaries and wages were impacted by merit increases, as well as movement towards a $15 per hour minimum wage throughout Peoples’ organization. The $15 per hour minimum was phased in and fully implemented by January of 2023. The decrease in sales-based and incentive compensation for 2024 compared to 2023 was primarily due to the overall company performance measures used in calculating incentive awards. Sales-based and incentive compensation increased in 2023 compared to 2022, due primarily to the overall company performance measures used in calculating incentive awards and $1.3 million in Vantage-related sales-based and incentive compensation. Peoples’ sales-based and incentive compensation plans are designed to grow core earnings while managing risk, while not encouraging unnecessary and excessive risk-taking that could threaten the value of Peoples. The sales-based and incentive compensation plans are designed to reward employees for appropriate behaviors and include provisions addressing inappropriate practices with respect to Peoples and its customers, including clawbacks for executives. The increase in employee benefit costs for 2024 compared to 2023 was due to increased medical and 401(k) costs reflecting a full year of expenses in 2024 for the additional employees added in the Limestone Merger. Employee benefit costs in 2023 increased compared to 2022 due to higher medical and 401(k) costs from additional employees added in the Limestone Merger. Employee stock-based compensation is generally recognized over the vesting period, which generally ranges from immediate vesting to vesting at the end of three years, with an adjustment made at the vesting date to reverse expense for forfeited awards. The majority of Peoples’ stock-based compensation is attributable to annual equity-based incentive awards to employees, which are awarded in the first quarter and based upon Peoples achieving certain performance goals during the prior year. During the years presented in the table above, Peoples granted restricted common shares to officers and key employees with performance-based vesting periods and time-based vesting periods, generally with a three-year cliff vesting. Employee stock-based compensation for 2024 increased when compared to 2023 due to additional employees primarily as a result of the full year impact from the Limestone Merger. Employee stock-based compensation increased for 2023 compared to 2022 due to additional employees primarily as a result of the Limestone Merger, as well as a full year with Vantage employees. 53 Deferred personnel costs represent the portion of current period salaries and employee benefit costs considered to be direct loan origination costs. These costs are capitalized and recognized over the life of the loan as a yield adjustment in interest income. As a result, the amount of deferred personnel costs for each period corresponds directly with the volume of loan originations, coupled with the average deferred costs per loan that are updated annually at the beginning of each year. Deferred personnel costs in 2024 increased compared to 2023, primarily due to an increase in business loan origination volume. Lower deferred personnel costs in 2023 compared to 2022 were primarily due to an decrease in loan origination volume. Additional information regarding Peoples’ loan activity can be found later in this discussion under the caption “Loans” within “FINANCIAL CONDITION.” For 2024, payroll taxes and other employment costs increased compared to 2023, primarily due to the employees added from the Limestone Merger coupled with annual merit increases. Payroll taxes and other employee costs increased during 2023 compared to 2022, primarily due to the employees added from the Limestone Merger. Peoples’ net occupancy and equipment expense for the years ended December 31 was comprised of the following: (Dollars in thousands) 2024 2023 2022 Depreciation expense $ 8,587 $ 7,724 $ 7,015 Repairs and maintenance costs 6,923 6,037 5,323 Net rent expense 4,177 2,780 2,974 Property taxes, utilities and other costs 4,464 4,827 4,204 Net occupancy and equipment expense $ 24,151 $ 21,368 $ 19,516 For 2024, net occupancy and equipment expense increased when compared to 2023 due to the full year impact of the Limestone Merger and a prior period one-time benefit to rent expense in 2023. Net occupancy and equipment expense grew during 2023 when compared to 2022 due to the additional locations and equipment added in the Limestone Merger. The following table details the other items included within Peoples’ total non-interest expense for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Data processing and software expense $ 25,221 $ 21,607 $ 14,241 Professional fees 12,109 17,041 12,094 Amortization of other intangible assets 11,161 11,222 7,763 E-banking expense 7,548 7,150 9,231 FDIC insurance expense 4,929 4,785 3,702 Other loan expenses 4,147 2,859 2,735 Marketing expense 3,914 5,017 3,728 Franchise tax expense 3,222 3,540 3,487 Communication expense 3,145 2,834 2,484 Operating lease expense 3,539 1,687 — Travel and entertainment expense 2,656 2,401 1,400 Other non-interest expense $ 18,033 $ 20,945 $ 14,076 Data processing and software expense includes software support, maintenance and depreciation expense. Data processing and software expense for 2024 increased relative to 2023, driven by software upgrades and implementation of new systems, coupled with the increased size of Peoples’ organization as a result of the Limestone Merger. During 2023, data processing and software expense grew when compared to 2022 was driven by (i) software upgrades, (ii) implementation of new systems, (iii) growth from the Limestone Merger, and (iv) $1.9 million in acquisition-related expenses related to the Limestone Merger. Professional fees decreased for 2024 when compared to 2023, primarily driven by a $6.0 million decrease in acquisition-related expenses, due to expenses related to the Limestone Merger in 2023. Professional fees during 2023 increased when compared 2022, primarily driven by a $3.7 million increase in acquisition-related expenses, due to increased expenses related to the Limestone Merger in 2023. Amortization of other intangible assets remained relatively flat for 2024 when compared to 2023. During 2023, amortization of other intangible assets increased when compared to 2022 due to the increased intangible assets recognized as a result of the Limestone Merger. Peoples’ e-banking expense is comprised of costs associated with debit and ATM cards, as well as Internet and mobile banking costs. E-banking expense increased for 2024 when compared to 2023 due to increased processing fees. E-banking expense decreased for 2023 when compared to 2022 due to decreased costs for Peoples’ online banking platform. 54 Marketing expense, which includes advertising, donations, marketing campaigns, and other public relations costs, for 2024 decreased when compared to 2023, primarily driven by decreased advertising expense. Marketing expense increased for 2023 compared to 2022, which was driven by increased marketing related to the Limestone Merger, an increase in donations, and a full year of expenses from Vantage. FDIC insurance premiums for 2024 increased when compared to 2023 due to organic growth. FDIC insurance expense increased during 2023 compared to 2022 due to organic and acquisitive growth, in addition to an increase in rates assessed by the FDIC. The FDIC quarterly assessment rate is applied to average total assets less average tangible equity, and is based on the leverage ratio, net income before taxes, nonperforming loans as a percent of total assets, OREO, loan mix and asset growth. Additional information regarding Peoples’ FDIC insurance assessments may be found in “ITEM 1 BUSINESS” of this Form 10-K in the section captioned “Supervision and Regulation.” Peoples is subject to state franchise taxes, which are based largely on Peoples’ equity at year-end, in the states where Peoples has a physical presence. Franchise tax expense also includes the Ohio Financial Institution Tax (“FIT”), which is a business privilege tax that is imposed on financial institutions organized for profit and doing business in Ohio. Franchise tax expense decreased for 2024 when compared to 2023 primarily driven by the Ohio FIT, which decreased due to lower apportionment in the state. The Ohio FIT is based on the total equity capital in proportion to the taxpayer’s gross receipts in Ohio. Franchise tax expense was relatively flat in 2023 compared to 2022. Other loan expenses during 2024 increased when compared to 2023 primarily due to increases in collection and underwriting costs. Other loans expenses increased in 2023 compared to 2022, primarily due to Limestone-related expenses and increases in business loan expenses and credit bureau expenses. Communications expense increased during 2024 when compared to 2023 and increased during 2023 when compared to 2022, in each case due to upgraded networking to certain branches (including new branches acquired in acquisitions and mergers) and increased costs compared to the prior period among certain vendors that provide communication services. Other non-interest expense for 2024 decreased when compared to 2023 due to higher acquisition costs and pension expense in the prior year of $2.5 million and $2.1 million, respectively, both of which were partially offset by an increase in miscellaneous expenses of $1.9 million, which was primarily attributable to one-time corporate expenses. Other non-interest expense increased for 2023 when compared to 2022, primarily due to $2.8 million in additional acquisition-related expenses related to the Limestone Merger and a $2.4 million settlement charge in relation to the termination of the pension plan. Income Tax Expense A key driver for the amount of income tax expense or benefit recognized by Peoples each year is the amount of pre-tax income. In addition to the expense recognized, Peoples receives tax benefits from tax-exempt investments and loans, BOLI income, common share awards that settled or vested during the year, and investments in tax credit funds, which reduce Peoples’ effective tax rate. A reconciliation of Peoples’ recorded income tax expense/benefit and effective tax rate to the statutory tax rate can be found in “Note 13 Income Taxes.” For the full year of 2024, income tax expense totaled $32.3 million, compared to $31.8 million in 2023, and $27.3 million in 2022, and the effective tax rate for 2024 was 21.6%, compared to 21.9% for 2023, and 21.3% for 2022. Income tax was positively impacted by a $1.1 million one-time benefit recognized in 2024 related to a prior year amended return. Income tax expense increased during 2023 when compared to 2022, which was driven by higher pre-tax income. Peoples also recorded a tax benefit of $48,000 in 2024, $128,000 in 2023, and $5,000 in 2022 related to common share awards that settled or vested during the year, with the substantial majority recorded in the first quarter of each year. Pre-Provision Net Revenue (non-US GAAP) Pre-provision net revenue (“PPNR”) has become a key financial measure used by state and federal bank regulatory agencies when assessing the capital adequacy of financial institutions. PPNR is defined as net interest income plus total non-interest income, excluding all gains and losses, minus total non-interest expense. PPNR excludes income tax expense. As a result, PPNR represents the earnings capacity that can be either retained in order to build capital or used to absorb unexpected losses and preserve existing capital. PPNR represents a non-US GAAP financial measure since it excludes the provision for credit losses and all gains and losses included in earnings. 55 The following table provides a reconciliation of this non-US GAAP financial measure to the amounts of income before income taxes reported in Peoples’ Consolidated Financial Statements for the periods presented: (Dollars in thousands) 2024 2023 2022 Pre-Provision Net Revenue: Income before income taxes $ 149,464 $ 145,126 $ 128,641 Add: provision for credit losses 24,787 15,174 — Add: net loss on OREO 1,230 1,623 138 Add: net loss on investment securities 416 3,700 61 Add: net loss on other assets 1,928 1,143 326 Add: net loss on other transactions 152 71 151 Less: recovery of credit losses — — 3,510 Pre-provision net revenue $ 177,977 $ 166,837 $ 125,807 PPNR increased in 2024 when compared to 2023 mostly due to increased net interest income and increased non-interest income driven by higher rates and the additional four months of income from the Limestone Merger. During 2023, PPNR grew when compared to 2022 mostly due to (i) the impact of the Limestone Merger in improving net interest income, (ii) increases in market interest rates, and (iii) higher non-interest income. Core Non-Interest Expense (non-US GAAP) Core non-interest expense is a financial measure used to evaluate Peoples’ recurring expense stream. This measure is a non-US GAAP financial measure since it excludes the impact of all COVID-19-related expenses, pension settlement charges, and acquisition-related expenses. The following table provides a reconciliation of this non-US GAAP financial measure to the amounts of total non-interest expense reported in Peoples’ Consolidated Financial Statements for the years presented: (Dollars in thousands) 2024 2023 2022 Core non-interest expense: Total non-interest expense $ 273,816 $ 266,487 $ 207,147 Less: COVID-19-related expenses — — 134 Less: pension settlement charges — 2,424 185 Less: acquisition-related expenses 169 16,970 3,016 Add: COVID-19 Employee Retention Credit — 548 — Core non-interest expense $ 273,647 $ 247,641 $ 203,812 Efficiency Ratio (non-US GAAP) The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of FTE net interest income plus total non-interest income excluding net gains and losses. This financial measure is non-US GAAP since it excludes amortization of other intangible assets and all gains and/or losses included in earnings, and uses FTE net interest income. The following table provides a reconciliation of this non-US GAAP financial measure to the amounts of total non-interest income and total non-interest expense reported in Peoples’ Consolidated Financial Statements for the years presented: 56 (Dollars in thousands) 2024 2023 2022 Efficiency ratio: Total non-interest expense $ 273,816 $ 266,487 $ 207,147 Less: amortization of other intangible assets 11,161 11,222 7,763 Adjusted total non-interest expense 262,655 255,265 199,384 Total non-interest income 99,366 87,413 78,836 Less: net loss on investment securities (416) (3,700) (61) Less: net (loss) gain on asset disposals and other transactions (3,310) (2,837) (616) Total non-interest income excluding net gains and losses 103,092 93,950 79,513 Net interest income 348,701 339,374 253,442 Add: fully-tax-equivalent adjustment (a) 1,308 1,703 1,644 Net interest income on a fully-tax equivalent basis 350,009 341,077 255,086 Adjusted revenue $ 453,101 $ 435,027 $ 334,599 Efficiency ratio 57.97 % 58.68 % 59.59 % Efficiency ratio adjusted for non-core items: Core non-interest expense $ 273,647 $ 247,641 $ 203,812 Less: amortization of other intangible assets 11,161 11,222 7,763 Adjusted core non-interest expense 262,486 236,419 196,049 Core non-interest income excluding net gains and losses 103,092 93,950 79,513 Net interest income on a fully-tax-equivalent basis 350,009 341,077 255,086 Adjusted core revenue $ 453,101 $ 435,027 $ 334,599 Efficiency ratio adjusted for non-core items 57.93 % 54.35 % 58.59 % (a) Based on 21% statutory federal corporate income tax rate. The efficiency ratio for 2024 improved when compared to 2023 due to increased revenue. The increase in the efficiency ratio, adjusted for non-core items for 2024 when compared to 2023 was due to higher non-interest expense. The efficiency ratio and the efficiency ratio adjusted for non-core items for 2023 improved when compared to 2022, due to higher net interest income driven by the Limestone Merger, increases in market interest rates, and higher non-interest income. Managing expenses has been a major focus over recent years; however, during this time Peoples has continued to make meaningful investments in its infrastructure and systems. Peoples was primarily impacted in 2024 by the competition for deposits impacting funding costs; whereas, 2023 and 2022 net interest income was positively impacted by rising market interest rate environment. Return on Average Assets Adjusted for Non-Core Items (non-US GAAP) In addition to return on average assets, management uses return on average assets adjusted for non-core items to monitor performance. The return on average assets ratio adjusted for non-core items represents a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses, acquisition-related expenses, and pension settlement charges included in net income. 57 The following table provides a reconciliation of this non-US GAAP financial measure to the amounts of net income reported in Peoples’ Consolidated Financial Statements for the years presented: (Dollars in thousands) 2024 2023 2022 Net income adjusted for non-core items: Net income $ 117,205 $ 113,363 $ 101,292 Add: net loss on investment securities 416 3,700 61 Less: tax effect of net loss on investment securities (a) 87 777 13 Add: net loss on asset disposals and other transactions 3,310 2,837 616 Less: tax effect of net loss on asset disposals and other transactions (a) 695 596 129 Add: acquisition-related expenses 169 16,970 3,016 Less: tax effect of acquisition-related expenses (a) 35 3,564 633 Add: pension settlement charges — 2,424 185 Less: tax effect of pension settlement charges (a) — 509 39 Add: COVID-19-related expenses — — 134 Less: tax effect of COVID-19-related expenses (a) — — 28 Net income adjusted for non-core items (after tax) $ 120,283 $ 133,848 $ 104,462 Return on average assets: Net income $ 117,205 $ 113,363 $ 101,292 Total average assets 9,122,843 8,298,777 7,094,707 Return on average assets 1.28 % 1.37 % 1.43 % Return on average assets adjusted for non-core items: Net income adjusted for non-core items $ 120,283 $ 133,848 $ 104,462 Total average assets 9,122,843 8,298,777 7,094,707 Return on average assets adjusted for non-core items 1.32 % 1.61 % 1.47 % (a) Based on a 21% statutory federal corporate income tax rate. The decrease in the return on average assets for 2024 compared to 2023 was primarily driven by the assets acquired in the Limestone Merger. The decrease in return on average assets adjusted for non-core items for 2024 compared to 2023 was primarily driven by higher non-interest expense, and the assets acquired in the Limestone Merger. The decrease in the return on average assets for 2023 compared to 2022 was attributable to a greater impact from non-core items, primarily due to (i) an increase in net acquisition-related expenses as a result of the Limestone Merger, (ii) higher net losses on investment securities and asset disposals and other transactions, and (iii) pension settlement charges of $2.4 million in relation to the termination of the pension plan. 58 Return on Average Tangible Equity (non-US GAAP) The return on average tangible equity ratio is a key financial measure used to monitor performance. The return on tangible equity is calculated as net income (less after-tax impact of amortization of other intangible assets) divided by tangible equity. This measure is non-US GAAP since it excludes amortization of other intangible assets from earnings and the impact of goodwill and other intangible assets acquired through acquisitions on total stockholders’ equity. The following table provides a reconciliation of this non-US GAAP financial measure to the amounts of total average stockholders’ equity and the return on average stockholders’ equity ratios reported in Peoples’ Consolidated Financial Statements for the years presented: (Dollars in thousands) 2024 2023 2022 Net income excluding amortization of other intangible assets: Net income $ 117,205 $ 113,363 $ 101,292 Add: amortization of other intangible assets 11,161 11,222 7,763 Less: tax effect of amortization of other intangible assets (a) 2,344 2,357 1,630 Net income excluding amortization of other intangible assets 126,022 122,228 107,425 Average tangible equity: Total average stockholders’ equity $ 1,083,792 $ 940,797 $ 797,984 Less: average goodwill and other intangible assets 406,619 384,172 322,639 Average tangible equity $ 677,173 $ 556,625 $ 475,345 Return on average stockholders’ equity ratio: Net income $ 117,205 $ 113,363 $ 101,292 Average stockholders’ equity $ 1,083,792 $ 940,797 $ 797,984 Return on average stockholders’ equity 10.81 % 12.05 % 12.69 % Return on average tangible equity ratio: Net income excluding amortization of other intangible assets $ 126,022 $ 122,228 $ 107,425 Average tangible equity $ 677,173 $ 556,625 $ 475,345 Return on average tangible equity 18.61 % 21.96 % 22.60 % (a) Based on a 21% statutory federal corporate income tax rate. The return on total average stockholders’ equity and average tangible equity ratios decreased in 2024 when compared to 2023, due to higher average stockholders’ equity driven by the full year impact of the Limestone Merger. Return on total average stockholders’ equity and average tangible equity ratios were lower in 2023 relative to 2022 due to (i) the issuance of 6.8 million common shares as consideration in the Limestone Merger, (ii) an increase in acquisition-related expenses, and (iii) an increase in the provision for credit losses due to the initial provision for the non-purchase credit deteriorated (“PCD”) loans acquired from Limestone, partially offset by an increase in total net interest income driven by the recent increases in market interest rates and additional net interest income resulting from the Limestone Merger. At the same time, average tangible equity for 2023 was negatively impacted by the Limestone Merger, for which Peoples recorded additional goodwill and other intangible assets. FINANCIAL CONDITION Cash and Cash Equivalents Peoples considers cash and cash equivalents to consist of federal funds sold, cash and balances due from banks, interest-bearing balances in other institutions and other short-term investments that are readily liquid. The amount of cash and cash equivalents fluctuates on a daily basis due to customer activity and Peoples’ liquidity needs. At December 31, 2024, excess cash reserves at the FRB were $104.7 million, compared to $309.8 million at December 31, 2023. The amount of excess cash reserves maintained is dependent upon Peoples’ daily liquidity position, which is driven primarily by changes in deposits, loan balances and unpledged securities. In 2024, Peoples’ total cash and cash equivalents decreased $209.1 million, due to cash used in investing activities of $344.3 million and financing activities of $7.9 million, which were partially offset by cash provided by operating activities of $143.2 million. Peoples’ investing activities reflected a net increase of $199.2 million in loans held for investment and $584.8 million in purchases of available-for-sale investment securities and held-to-maturity investment securities, which were partially offset by $446.6 million in net proceeds from sales, principal payments, calls and prepayments on available-for-sale and held-to-maturity investment securities. Financing activities included a net increase of $437.7 million in deposits, a decrease of $457.0 million in short-term borrowings, a net increase of $20.6 million in long-term borrowings, as well as $55.8 million of cash dividends paid. 59 In 2023, Peoples’ total cash and cash equivalents increased $272.7 million, due to cash provided by financing activities of $262.0 million and cash provided by operating activities of $143.6 million, partially offset by cash used in investing activities of $132.9 million. Peoples’ investing activities reflected a net increase of $356.1 million in loans held for investment and $282.8 million in purchases of available-for-sale investment securities and held-to-maturity investment securities, which were more than offset by $434.1 million in net proceeds from sales, principal payments, calls and prepayments on available-for-sale and held-to-maturity investment securities. Financing activities included a net increase of $201.4 million in deposits, an increase of $41.0 million in short-term borrowings, a net increase of $74.9 million in long-term borrowings, as well as $51.8 million of cash dividends paid. Further information regarding the management of Peoples’ liquidity position can be found later in this discussion under “Interest Rate Sensitivity and Liquidity.” Investment Securities The following table provides information regarding Peoples’ investment portfolio at December 31: (Dollars in thousands) Weighted average yield 2024 2023 2022 Available-for-sale securities, at fair value: Obligations of: U.S. Treasury and government agencies 6.27 % $ 15,196 $ 30,296 $ 152,422 U.S. government sponsored agencies 3.45 % 209,083 118,607 88,115 States and political subdivisions 2.57 % 196,301 213,296 225,882 Residential mortgage-backed securities 2.48 % 601,802 628,924 604,653 Commercial mortgage-backed securities 2.09 % 55,065 51,234 50,049 Bank-issued trust preferred securities 4.42 % 6,108 5,965 10,278 Total fair value $ 1,083,555 $ 1,048,322 $ 1,131,399 Total amortized cost $ 1,229,382 $ 1,184,288 $ 1,300,719 Net unrealized loss $ (145,827) $ (135,966) $ (169,320) Held-to-maturity securities, at amortized cost: Obligations of: U.S. government sponsored agencies 4.83 % $ 233,302 $ 188,475 $ 132,366 States and political subdivisions (a) 2.24 % 142,691 144,258 145,022 Residential mortgage-backed securities 4.21 % 300,290 248,559 176,215 Commercial mortgage-backed securities 2.50 % 98,754 102,365 106,609 Total amortized cost $ 775,037 $ 683,657 $ 560,212 Other investment securities $ 60,132 $ 63,421 $ 51,609 Total investment securities: Amortized cost $ 2,064,551 $ 1,931,366 $ 1,912,540 Carrying value $ 1,918,724 $ 1,795,400 $ 1,743,220 (a) A mortized cost is presented net of the allowance for credit losses of $237 at December 31, 2024, $238 at December 31, 2023 and $241 at December 31, 2022. At December 31, 2024, Peoples’ investment securities represented approximately 20.7% of total assets, compared to 19.6% at December 31, 2023. For 2024, total investment securities increased compared to the prior year, largely due to purchases of higher yielding, longer duration securities designated as held-to-maturity. During 2023, total investment securities increased compared to the prior year, largely due to purchases of held-to-maturity securities, partially offset by available-for-sale securities sold, both of which were part of portfolio restructurings throughout 2023. During the first quarter of 2023, Peoples executed the sales of $96.7 million of its lower yielding available-for-sale investment securities for an after-tax loss of $1.6 million. Proceeds from the sales were used to pay down overnight borrowings. During the fourth quarter of 2023, Peoples executed the sales of an additional $36.5 million of its lower yielding available-for-sale investment securities for an after-tax loss of $1.3 million. Proceeds from the sales were used to purchase higher yielding agency investment securities. Peoples designates certain securities as “held-to-maturity” at the time of their purchase if management determines Peoples would have the intent and ability to hold the purchased securities until maturity. The unrealized gain or loss related to held-to-maturity investment securities does not directly impact total stockholders’ equity, in contrast to the impact from the available-for-sale investment securities portfolio. Additional information regarding Peoples’ investment portfolio can be found in “Note 3 Investment Securities.” 60 Loans The following table provides information regarding outstanding loan balances at or for the year ended December 31: (Dollars in thousands) 2024 2023 2022 Originated loans: Construction $ 271,975 $ 279,335 $ 212,869 Commercial real estate, other 1,310,127 1,209,204 919,531 Commercial real estate 1,582,102 1,488,539 1,132,400 Commercial and industrial 1,162,777 938,659 835,178 Premium finance 269,435 203,177 159,197 Leases 382,074 357,217 226,438 Residential real estate 448,884 418,570 384,262 Home equity lines of credit 182,831 148,155 132,093 Consumer, indirect 669,857 666,472 629,426 Consumer, direct 101,062 112,292 98,706 Consumer 770,919 778,764 728,132 Deposit account overdrafts 1,253 986 722 Total originated loans $ 4,800,275 $ 4,334,067 $ 3,598,422 Acquired loans: Construction $ 56,413 $ 84,684 $ 34,072 Commercial real estate, other 845,886 987,753 503,987 Commercial real estate 902,299 1,072,437 538,059 Commercial and industrial 184,868 246,327 57,456 Leases 24,524 56,843 118,693 Residential real estate 386,217 372,525 339,098 Home equity lines of credit 49,830 60,520 45,765 Consumer, direct 9,990 16,477 9,657 Total acquired loans (a) $ 1,557,728 $ 1,825,129 $ 1,108,728 Total loans $ 6,358,003 $ 6,159,196 $ 4,707,150 Average total loans 6,238,070 5,590,453 4,574,237 Average allowance for credit losses (64,491) (57,391) (55,233) Average loans, net of average allowance for credit losses $ 6,173,579 $ 5,533,062 $ 4,519,004 Percent of loans to total loans: Construction 5.2 % 5.9 % 5.2 % Commercial real estate, other 33.9 % 35.7 % 30.2 % Commercial real estate 39.1 % 41.6 % 35.4 % Commercial and industrial 21.2 % 19.2 % 19.0 % Premium finance 4.2 % 3.3 % 3.4 % Leases 6.4 % 6.7 % 7.3 % Residential real estate 13.2 % 12.9 % 15.4 % Home equity lines of credit 3.7 % 3.4 % 3.8 % Consumer, indirect 10.5 % 10.8 % 13.4 % Consumer, direct 1.7 % 2.1 % 2.3 % Consumer 12.2 % 12.9 % 15.7 % Deposit account overdrafts (b) NM NM NM 61 (Dollars in thousands) 2024 2023 2022 Total percentage 100.0 % 100.0 % 100.0 % Residential real estate loans being serviced for others $ 346,189 $ 356,784 $ 392,364 (a) Includes all loans acquired, and related loan discount recorded as part of acquisition accounting, in 2012 and thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals, and increase in lines of credit). (b) NM represents “not meaningful.” As of December 31, 2024, total loans increased $198.8 million, compared to at December 31, 2023, due to organic growth in our commercial and industrial and premium finance portfolios which increased by $162.7 million and $66.3 million, respectively, and were partially offset by a decrease in commercial real estate loans of $40.9 million. As of December 31, 2023, total loans increased $1.5 billion, compared to at December 31, 2022, primarily due to the Limestone Merger. Excluding the loans acquired in the Limestone Merger, the period-end loan and lease balance increased $472.2 million, or 10%, driven by increases of $203.6 million in other commercial real estate loans, $78.2 million in commercial and industrial loans, $68.9 million in leases, $44.0 million in premium finance loans, $37.9 million in construction loans, and $37.0 million in indirect consumer loans, respectively. The following table details the maturities of Peoples’ loan portfolio at December 31, 2024: (Dollars in thousands) Due in One Year or Less Due in One to Five Years Due in Five to Fifteen Years Due After Fifteen Years Total % of Total Construction: Fixed $ 501 $ 45,689 $ 2,479 $ — $ 48,669 14.8 % Variable 109,208 132,288 34,032 4,191 279,719 85.2 % Total 109,709 177,977 36,511 4,191 328,388 100.0 % Commercial real estate, other: Fixed 62,449 488,238 350,590 49,542 950,819 44.1 % Variable 230,639 372,925 449,830 151,800 1,205,194 55.9 % Total 293,088 861,163 800,420 201,342 2,156,013 100.0 % Commercial and industrial: Fixed 218,277 180,409 90,564 384 489,634 36.3 % Variable 244,763 196,933 404,569 11,746 858,011 63.7 % Total 463,040 377,342 495,133 12,130 1,347,645 100.0 % Premium finance: Fixed 269,435 — — — 269,435 100.0 % Leases: Fixed 64,242 330,184 12,172 — 406,598 100.0 % Residential real estate: Fixed 107,007 16,464 138,165 325,673 587,309 70.3 % Variable 6,490 7,620 66,075 167,607 247,792 29.7 % Total 113,497 24,084 204,240 493,280 835,101 100.0 % Home equity lines of credit: Fixed 49 95 1,629 297 2,070 0.9 % Variable 4,934 34,952 185,257 5,448 230,591 99.1 % Total 4,983 35,047 186,886 5,745 232,661 100.0 % Consumer, indirect: Fixed 4,695 381,380 283,782 — 669,857 100.0 % Consumer, direct: Fixed 8,020 60,529 32,740 121 101,410 91.3 % Variable 3,778 4,254 1,511 99 9,642 8.7 % Total 11,798 64,783 34,251 220 111,052 100.0 % 62 Loan Concentration Peoples categorizes its commercial loans according to standard industry classifications and monitors for concentrations in a single industry or multiple industries that could be impacted by changes in economic conditions in a similar manner. Peoples’ commercial lending activities continue to be spread over a diverse range of businesses from all sectors of the economy, with no single industry comprising over 10% of Peoples’ total loan portfolio. Loans secured by commercial real estate, including commercial construction loans, continue to comprise the largest portion of Peoples’ loan portfolio. 63 The following table provides information regarding the largest concentrations of commercial real estate loans within the loan portfolio at December 31, 2024: (Dollars in thousands) Outstanding Balance Available Loan Commitments Total Exposure % of Total Exposure Construction: Apartment complexes $ 188,036 $ 223,982 $ 412,018 60.8 % Land development 36,214 15,458 51,672 7.6 % Residential property 30,573 19,693 50,266 7.4 % Land only 7,881 26,626 34,507 5.1 % Lodging and lodging related 10,313 13,916 24,229 3.6 % Assisted living facilities and nursing homes 6,567 16,972 23,539 3.5 % Warehouse facilities 331 16,315 16,646 2.5 % Student housing 14,288 712 15,000 2.2 % Other (a) 34,185 15,198 49,383 7.3 % Construction $ 328,388 $ 348,872 $ 677,260 100.0 % Commercial real estate, other: Apartment complexes 365,215 2,352 367,567 16.5 % Retail facilities: Owner occupied 41,225 1,385 42,610 1.9 % Non-owner occupied 207,119 500 207,619 9.3 % Total retail 248,344 1,885 250,229 11.2 % Light industrial facilities: Owner occupied 138,279 7,290 145,569 6.5 % Non-owner occupied 112,458 3,317 115,775 5.2 % Total light industrial facilities 250,737 10,607 261,344 11.7 % Office buildings and complexes: Owner occupied 75,417 2,454 77,871 3.5 % Non-owner occupied 118,030 2,954 120,984 5.4 % Total office buildings and complexes 193,447 5,408 198,855 8.9 % Lodging and lodging related: Owner occupied 30,407 — 30,407 1.4 % Non-owner occupied 121,443 1 121,444 5.5 % Total lodging and lodging related 151,850 1 151,851 6.9 % Assisted living facilities and nursing homes 119,687 855 120,542 5.4 % Warehouse facilities: Owner occupied 38,643 521 39,164 1.7 % Non-owner occupied 35,312 216 35,528 1.6 % Total warehouse facilities 73,955 737 74,692 3.3 % Restaurant/bar facilities: Owner occupied 39,737 — 39,737 1.8 % Non-owner occupied 31,057 — 31,057 1.4 % Total restaurant/bar facilities 70,794 — 70,794 3.2 % Healthcare: Owner occupied 40,109 127 40,236 1.8 % Non-owner occupied 15,241 583 15,824 0.7 % Total healthcare facilities 55,350 710 56,060 2.5 % Mixed commercial use facilities: Owner occupied 43,598 1,837 45,435 2.0 % Non-owner occupied 27,323 1,541 28,864 1.3 % Total mixed commercial use facilities 70,921 3,378 74,299 3.3 % Other (a) 555,713 45,093 600,806 27.1 % Commercial real estate, other $ 2,156,013 $ 71,026 $ 2,227,039 100.0 % (a) All other total exposures by industry are less than 2% of the Total Exposure. 64 Peoples’ commercial lending activities continue to focus on lending opportunities inside its primary and secondary market areas within Ohio, Kentucky, West Virginia, Virginia, Washington, D.C. and Maryland. In all other states, the aggregate outstanding balances of commercial loans in each state were less than 4% of total loans at both December 31, 2024 and December 31, 2023. Additional information regarding Peoples’ loan portfolio can be found in “Note 4 Loans and Leases, and Allowance for Credit Losses.” Allowance for Credit Losses The amount of the allowance for credit losses at the end of each period represents management’s estimate of expected credit losses from existing loans based upon its formal quarterly analysis of the loan portfolio described in the “Critical Accounting Policies” section of this discussion. While this process involves making allocations to specific loans and pools of loans, the entire allowance is available for all losses incurred within the loan portfolio. The following details management’s allocation of the allowance for credit losses at December 31: (Dollars in thousands) 2024 2023 2022 Construction $ 878 $ 699 $ 1,250 Commercial real estate 16,256 20,915 17,710 Commercial and industrial 13,283 10,490 8,229 Premium finance 662 484 344 Leases 12,893 10,850 8,495 Residential real estate 6,491 5,937 6,357 Home equity lines of credit 1,792 1,588 1,693 Consumer, indirect 8,576 8,590 7,448 Consumer, direct 2,396 2,343 1,575 Deposit account overdrafts 121 115 61 Allowance for credit losses $ 63,348 $ 62,011 $ 53,162 As a percent of total loans 1.00 % 1.01 % 1.13 % The increase in the allowance balance at December 31, 2024 when compared to at December 31, 2023 was driven by an increase in reserves for individually analyzed loans and leases, as well as loan growth. The increase in the allowance balance at December 31, 2023 when compared to at December 31, 2022 was driven by (i) the additional allowance related to the loans acquired in the Limestone Merger, (ii) loan growth and (iii) an increase in charge-offs, partially offset by a release of reserves on individually analyzed loans and the use of updated loss drivers. Additional information regarding Peoples’ allowance for credit losses can be found in “Note 1 Summary of Significant Accounting Policies” and “Note 4 Loans and Leases, and Allowance for Credit Losses.” The following table summarizes the changes in the allowance for credit losses for the years ended December 31: (Dollars in thousands) 2024 2023 2022 Allowance for credit losses, January 1 $ 62,011 $ 53,162 $ 63,967 Gross charge-offs: Construction — 9 16 Commercial real estate, other 431 614 489 Commercial and industrial 668 851 943 Premium finance 209 122 124 Leases 15,106 3,997 2,585 Residential real estate 288 170 668 Home equity lines of credit 11 110 88 Consumer, indirect 6,179 4,030 2,233 Consumer, direct 678 416 363 Consumer 6,857 4,446 2,596 Deposit account overdrafts 1,542 1,161 1,246 Total gross charge-offs 25,112 11,480 8,755 Recoveries: Commercial real estate, other 127 965 297 Commercial and industrial 58 552 49 65 Premium finance 28 24 13 Leases 528 362 420 Residential real estate 254 192 84 Home equity lines of credit 7 1 45 Consumer, indirect 552 487 328 Consumer, direct 50 73 47 Consumer 602 560 375 Deposit account overdrafts 285 277 200 Total recoveries 1,889 2,933 1,483 Net charge-offs (recoveries): Construction — 9 16 Commercial real estate, other 304 (351) 192 Commercial and industrial 610 299 894 Premium finance 181 98 111 Leases 14,578 3,635 2,165 Residential real estate 34 (22) 584 Home equity lines of credit 4 109 43 Consumer, indirect 5,627 3,543 1,905 Consumer, direct 628 343 316 Consumer 6,255 3,886 2,221 Deposit account overdrafts 1,257 884 1,046 Total net charge-offs $ 23,223 $ 8,547 $ 7,272 Provision for (recovery of) credit losses, December 31 (a) 24,560 15,345 (2,904) Initial allowance for PCD assets $ — $ 2,051 $ (629) Allowance for credit losses, December 31 $ 63,348 $ 62,011 $ 53,162 Net charge-offs (recoveries) as a percent of average total loans: Construction — % — % — % Commercial real estate, other 0.01 % (0.01) % 0.01 % Commercial and industrial 0.01 % 0.01 % 0.02 % Premium finance — % — % — % Leases 0.23 % 0.06 % 0.05 % Residential real estate — % — % 0.01 % Home equity lines of credit — % — % — % Consumer, indirect 0.09 % 0.06 % 0.04 % Consumer, direct 0.01 % 0.01 % 0.01 % Consumer 0.10 % 0.07 % 0.05 % Deposit account overdrafts 0.02 % 0.02 % 0.02 % Total 0.37 % 0.15 % 0.16 % (a) Amount does not include the provision for unfunded commitment liability. Net charge-offs as a percent of average total loans for 2024 increased to 0.37% compared to 0.15% at 2023. The increase over all periods presented was due to an increase in charge-offs on small-ticket leases that occurred during the second half of 2024. During 2023, net charge-offs as a percent of average total loans decreased to 0.15%, compared to 0.16% for 2022. The decrease was due to (i) an increase in average loan balances, primarily driven by the loans acquired in the Limestone Merger, (ii) decreases in net charge-offs of residential real estate loan balances and commercial and industrial loan balances, and (iii) net recoveries in 2023 compared to net charge-offs in 2022 of other commercial real estate loan balances, mostly offset by increases in net charge-offs related to total consumer loan balances and lease balances. 66 The following table details Peoples’ nonperforming assets at December 31: (Dollars in thousands) 2024 2023 2022 Loans 90+ days past due and accruing: Commercial real estate, other 227 78 167 Commercial and industrial 78 316 130 Premium finance 4,947 1,355 504 Leases 803 3,826 3,041 Residential real estate 2,166 877 917 Home equity lines of credit 213 171 58 Consumer, indirect 159 68 — Consumer, direct 44 25 25 Consumer 203 93 25 Total loans 90+ days past due and accruing 8,637 6,716 4,842 Nonaccrual loans: Construction — — 12 Commercial real estate, other 7,136 2,816 12,121 Commercial and industrial 6,809 2,758 3,462 Leases 8,850 8,436 3,178 Residential real estate 7,329 7,921 9,496 Home equity lines of credit 1,498 1,022 820 Consumer, indirect 2,374 2,412 2,176 Consumer, direct 133 112 208 Consumer 2,507 2,524 2,384 Total nonaccrual loans 34,129 25,477 31,473 Total nonperforming loans (“NPLs”) 42,766 32,193 36,315 OREO: Commercial 5,891 7,118 8,730 Residential 279 56 165 Total OREO 6,170 7,174 8,895 Total nonperforming assets (“NPAs”) $ 48,936 $ 39,367 $ 45,210 Criticized loans (a) $ 241,302 $ 235,239 $ 191,355 Classified loans (b) 128,815 120,027 89,604 Asset Quality Ratios: Nonaccrual loans as a percent of total loans (c) 0.54 % 0.41 % 0.67 % NPLs as a percent of total loans (c)(d) 0.67 % 0.52 % 0.77 % NPAs as a percent of total assets (c)(d) 0.53 % 0.43 % 0.63 % NPAs as a percent of total loans and OREO (c)(d) 0.77 % 0.64 % 0.96 % Allowance for credit losses as a percent of nonaccrual loans (c) 185.61 % 245.79 % 168.91 % Allowance for credit losses as a percent of NPLs (c)(d) 148.13 % 194.38 % 146.39 % Criticized loans as a percent of total loans (a)(c) 3.80 % 3.82 % 4.07 % Classified loans as a percent of total loans (b)(c) 2.03 % 1.95 % 1.90 % (a) Includes loans categorized as special mention, substandard or doubtful. (b) Includes loans categorized as substandard or doubtful. (c) Data presented as of the end of the year indicated. (d) Nonperforming loans include loans 90+ days past due and accruing, troubled debt restructured loans and nonaccrual loans. Nonperforming assets include nonperforming loans and OREO. Peoples’ NPAs increased to 0.53% of total assets at December 31, 2024, compared to 0.43% of total assets at December 31, 2023. This was driven by an increase in nonaccrual balances for commercial real estate and commercial and industrial loans, partially offset by a decrease in commercial OREO. Loans 90+ days past due and accruing at December 31, 2024 increased compared to at December 31, 2023, driven by higher administrative delinquencies on premium finance loans. 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. During 2024, both criticized and classified loans increased when compared to 2023, primarily due to loan downgrades. Nonperforming assets decreased to 0.43% of total assets at December 31, 2023 compared to 0.63% of total assets at December 31, 2022. Loans 90+ days past due and accruing at December 31, 2023 increased compared to at December 31, 2022, primarily due to the 67 loans acquired in the Limestone Merger and an increase in leases and premium finance loans 90+ days past due and accruing. During 2023, both criticized and classified loans increased when compared to 2022, primarily due to criticized and classified loans acquired in the Limestone Merger. The majority of Peoples’ nonaccrual commercial real estate loans consists of owner occupied commercial properties. In general, management believes repayment of these loans is dependent on the sale of the underlying collateral. As such, the carrying values of these loans are ultimately supported by management’s estimate of the net proceeds Peoples would receive upon the sale of the collateral. These estimates are based in part on market values provided by independent, licensed or certified appraisers periodically, but no less frequently than annually. Given the volatility in commercial real estate values, management continues to monitor changes in real estate values from quarter-to-quarter and updates its estimates as needed based on observable changes in market prices and/or updated appraisals for similar properties. Peoples discontinues the accrual of interest on a loan when conditions cause management to believe collection of all or any portion of the loan’s contractual interest is doubtful. Such conditions may include the borrower being 90 days or more past due on any contractual payments or the availability of updated information regarding the borrower’s financial condition and repayment ability. All unpaid accrued interest deemed uncollectable is reversed, which would reduce Peoples’ net interest income. Interest received on nonaccrual loans is included in income only if principal recovery is reasonably assured. Interest income on loans classified as nonaccrual and renegotiated at each year-end that would have been recorded under the original terms of the loans was $1.9 million for 2024, $0.8 million for 2023 and $1.7 million for 2022. No portion of these amounts were recorded during 2024, 2023 or 2022. Overall, management believes the allowance for credit losses was appropriate at December 31, 2024, based on all significant information currently available. Still, there can be no assurance that the allowance for credit losses will be adequate to cover future losses in Peoples’ loan portfolio. Additional information regarding Peoples’ allowance for credit losses can be found in “Note 4 Loans and Leases, and Allowance for Credit Losses.” Deposits The following table details Peoples’ deposit balances at December 31: (Dollars in thousands) 2024 2023 2022 Non-interest-bearing deposits (a) $ 1,507,661 $ 1,567,649 $ 1,589,402 Interest-bearing deposits: Interest-bearing demand accounts (a) 1,085,158 1,144,357 1,160,182 Savings accounts 866,959 919,244 1,068,547 Retail CDs 1,921,415 1,443,417 530,236 Money market deposit accounts 878,254 775,488 617,029 Governmental deposit accounts 775,782 726,713 625,965 Brokered deposits 554,976 526,053 125,580 Total interest-bearing deposits 6,082,544 5,535,272 4,127,539 Total deposits $ 7,590,205 $ 7,102,921 $ 5,716,941 (a) The sum of amounts presented are considered total demand deposits. The increase in total deposits between December 31, 2024 and December 31, 2023 was primarily driven by special promotional rates over the past year on retail CDs. Total demand deposits comprised 34% and 38% of total deposits at December 31, 2024 and at December 31, 2023, respectively. The increase in total deposits between December 31, 2023 and December 31, 2022 was primarily due to deposits acquired in the Limestone Merger. Excluding Limestone deposit balances, total deposits at December 31, 2023 increased $565.9 million, or 10%, compared to at December 31, 2022, primarily due to increases of $785.6 million in retail CDs and $351.1 million in brokered deposits, partially offset by decreases of $226.8 million, $223.3 million, and $193.7 million, in non-interest bearing deposits, savings accounts, and interest-bearing demand deposit accounts, respectively. Total demand deposits comprised 38% and 48% of total deposits at December 31, 2023 and December 31, 2022, respectively. As part of its funding strategy, Peoples hedges 90-day brokered deposits with interest rate swaps. The swaps pay a fixed rate of interest while receiving three-month SOFR, which offsets the rate on the brokered deposits. As of December 31, 2024, Peoples had eight effective interest rate swaps, with an aggregate notional value of $75.0 million, which were designated as cash flow hedges of brokered deposits, and are expected to be extended every 90 days through the maturity dates of the swaps. Peoples continually evaluates the overall balance sheet position given the interest rate environment. Peoples’ governmental deposit accounts represent savings and interest-bearing transaction accounts from state and local governmental entities. These funds are subject to periodic fluctuations based on the timing of tax collections and subsequent expenditures or disbursements. Peoples normally experiences an increase in balances annually during the first and third quarters, 68 corresponding with tax collections, with declines normally in the second and fourth quarters of each year, corresponding with expenditures by the governmental entities. Peoples continues to emphasize growth of low-cost deposits, while continuing to migrate these customers to ICS network deposits that do not require Peoples to pledge assets as collateral. The maturities of retail CDs with total balances of $100,000 or more at December 31 were as follows: (Dollars in thousands) 2024 2023 2022 3 months or less $ 454,711 $ 135,806 $ 54,471 Over 3 to 6 months 334,579 239,057 39,031 Over 6 to 12 months 239,110 353,433 58,342 Over 12 months 30,431 86,489 110,972 Total $ 1,058,831 $ 814,785 $ 262,816 Additional information regarding Peoples’ deposits can be found in “Note 8 Deposits.” Borrowed Funds The following table details Peoples’ short-term and long-term borrowings at December 31: (Dollars in thousands) 2024 2023 2022 Short-term borrowings: FHLB overnight borrowings $ 175,000 $ 369,000 $ 400,000 Repurchase agreements 18,367 99,121 100,138 Bank Term Funding Program (“BTFP”) — 133,000 — Other short-term borrowings 107 49,376 — Total short-term borrowings 193,474 650,497 500,138 Long-term borrowings: FHLB advances 131,868 112,865 34,158 Vantage non-recourse debt 51,330 49,572 53,147 Other long-term borrowings 54,875 53,804 13,788 Total long-term borrowings 238,073 216,241 101,093 Total borrowed funds $ 431,547 $ 866,738 $ 601,231 Total borrowed funds, which include overnight borrowings, are mainly a function of loan growth and changes in total deposit balances. Other long-term borrowings include trust preferred securities held for investments and floating rate subordinated deferrable interest debentures. Peoples continually evaluates its overall balance sheet position given the interest rate environment and liquidity needs. Total borrowed funds decreased at December 31, 2024 compared to at December 31, 2023 due to lower FHLB overnight borrowings and the payoff of the BTFP borrowing as of December 31, 2024. Peoples’ borrowed funds increased at December 31, 2023 compared to at December 31, 2022 due to the addition of $133.0 million of BTFP borrowings at December 31, 2023, an increase in FHLB long-term advances, and an increase in other long-term borrowings assumed in the Limestone Merger. On April 3, 2019, Peoples entered into the U.S. Bank Loan Agreement with U.S. Bank National Association, the term of which has been extended to March 31, 2025 through an amendment in March 2024. The U.S. Bank Loan Agreement provides Peoples with a revolving line of credit in the maximum aggregate principal amount of $30.0 million. Additional information regarding Peoples’ borrowed funds can be found in “Note 9 Short-Term Borrowings” and “Note 10 Long-Term Borrowings.” Capital/Stockholders’ Equity Peoples’ total stockholders’ equity at December 31, 2024 increased $58.1 million, or 6%, when compared to at December 31, 2023, which was due to net income of $117.2 million for 2024, partially offset by an increase in other comprehensive loss of $8.8 million and dividends paid of $56.3 million. The increase in other comprehensive loss was the result of changes in the fair market value of available-for-sale investment securities, which were driven by changes in market interest rates. At December 31, 2024, capital levels for both Peoples and Peoples Bank remained substantially higher than the minimum amounts needed to be considered “well capitalized” under banking regulations. These higher capital levels reflect Peoples’ desire to maintain a strong capital position. During 2023, total stockholders’ equity increased 34% when compared to 2022 due to (i) 6.8 million common shares (valued at $177.9 million) issued in the Limestone Merger, (ii) net income of $113.4 million for 2023, and (iii) a decrease in other comprehensive loss of $25.5 million, partially offset by dividends paid of $52.1 million and share repurchases of $3.0 million. The 69 decrease in other comprehensive loss was the result of changes in the fair market value of available-for-sale investment securities, which were driven by changes in market interest rates. On January 1, 2020, Peoples recorded a one-time transition adjustment to reduce retained earnings by $3.7 million. This adjustment reflected the increase in the allowance for credit losses for loans (excluding the gross up of loan balances related to the establishment of an allowance for credit losses for PCD loans, the allowance for credit losses for held-to-maturity investment securities and the addition of an unfunded commitment liability, net of statutory federal corporate income taxes). Peoples elected to utilize the five-year phase-in period for the transition adjustment due to the implementation of ASU 2016-13. This phase-in period also includes a 25% deferment of the impact on regulatory capital of the estimated increase in the allowance for credit losses related to the CECL model, which was applied during the first two years of application. For the first two years of the phase-in period, 100% of the transition adjustment due to ASU 2016-13 was excluded for regulatory capital purposes, along with 25% of the increase in the allowance for credit losses compared to the January 1, 2020 allowance for credit losses. In year three of the phase-in (i.e., 2022), 75% of the transition adjustment, and the cumulative 25% increase in the allowance for credit losses compared to January 1, 2020, were excluded from regulatory capital, while 50% and 25% of these amounts were excluded in years four and five, respectively, under this phase-in period. Under the risk-based capital rules, in order to avoid limitations on dividends, equity repurchases and compensation, Peoples must exceed the three minimum required ratios by at least a capital conservation buffer of 2.50%. These three minimum required ratios are the common equity tier 1 capital ratio, tier 1 risk-based capital ratio and total risk-based capital ratio. Peoples had a capital conservation buffer of 5.58% at December 31, 2024, 5.17% at December 31, 2023 and 5.06% at December 31, 2022. As such, Peoples exceeded the minimum ratios, including the capital conservation buffer, at December 31, 2024. The following table details Peoples’ actual risk-based capital levels and corresponding ratios at December 31: (Dollars in thousands) 2024 2023 2022 Capital Amounts: Common equity tier 1 $ 833,128 $ 766,692 $ 604,644 Tier 1 863,974 820,496 618,432 Total (tier 1 and tier 2) 946,724 873,226 662,499 Net risk-weighted assets $ 6,971,490 $ 6,630,945 $ 5,071,240 Capital Ratios: Common equity tier 1 11.95 % 11.56 % 11.92 % Tier 1 12.39 % 12.37 % 12.19 % Total (tier 1 and tier 2) 13.58 % 13.17 % 13.06 % Tier 1 leverage ratio 9.73 % 9.48 % 8.96 % In addition to traditional capital measurements, management uses tangible capital measures to evaluate the adequacy of Peoples’ total stockholders’ equity. Such financial measures represent non-US GAAP financial information since they exclude the impact of goodwill and other intangible assets acquired through acquisitions on the Consolidated Balance Sheets. Peoples’ management believes this information is useful to investors since it facilitates the comparison of Peoples’ operating performance, financial condition and trends to peers, especially those without a level of intangible assets similar to that of Peoples. Further, intangible assets generally are difficult to convert into cash, especially during a financial crisis, and could decrease substantially in value should there be deterioration in the overall franchise value. As a result, tangible equity represents a conservative measure of the capacity for Peoples to incur losses but remain solvent. 70 The following table reconciles the calculation of the identified non-US GAAP financial measures to amounts reported in Peoples’ Consolidated Financial Statements at December 31: (Dollars in thousands) 2024 2023 2022 Tangible equity: Total stockholders’ equity $ 1,111,590 $ 1,053,534 $ 785,328 Less: goodwill and other intangible assets 402,422 412,172 326,329 Tangible equity $ 709,168 $ 641,362 $ 458,999 Tangible assets: Total assets $ 9,254,247 $ 9,157,382 $ 7,207,304 Less: goodwill and other intangible assets 402,422 412,172 326,329 Tangible assets $ 8,851,825 $ 8,745,210 $ 6,880,975 Tangible book value per common share: Tangible equity $ 709,168 $ 641,362 $ 458,999 Common shares outstanding 35,563,590 35,314,745 28,287,837 Tangible book value per common share $ 19.94 $ 18.16 $ 16.23 Tangible equity to tangible assets ratio: Tangible equity $ 709,168 $ 641,362 $ 458,999 Tangible assets $ 8,851,825 $ 8,745,210 $ 6,880,975 Tangible equity to tangible assets 8.01 % 7.33 % 6.67 % Tangible book value per common share increased to $19.94 at December 31, 2024 from $18.16 at December 31, 2023 and was primarily due to net income over the last twelve months. The increase in tangible book value per common share at December 31, 2023 from at December 31, 2022 was due to tangible equity increasing as a result of common shares issued throughout 2023, including shares issued due to the Limestone Merger, a decrease in other comprehensive losses recognized on available-for-sale investment securities, which was driven by changes in market interest rates, and net income for 2023. Future Outlook Peoples improved its performance for the third consecutive year during 2024, recording record annual net income despite the challenges that were presented to the banking industry due to the bank failures in 2023. In 2025, Peoples expects to generate positive operating leverage for the year, compared to 2024. For 2025, Peoples expects net interest margin to be between 4.00% and 4.20% for the full year, which is assuming another 50 basis point reduction by the Federal Reserve, spread over the first nine months of 2025. These projections will vary depending on the timing and magnitude of the anticipated rate cuts and the level of competition for deposits. Peoples projects growth in total non-interest income, excluding net gains and losses, to be in the mid-to-high single-digits in 2025 compared to 2024. Total non-interest expenses are expected to be between $69 million and $71 million for the second, third and fourth quarters of 2025, with the first quarter of 2025 being higher due to annual expenses typically recognized during the first quarter of each year. The efficiency ratio is projected to be between 55% and 60% for 2025. Peoples will continue to place importance on loan growth. Peoples anticipates that the annual loan growth for 2025 will be between 4% and 6%. Provision for credit losses is expected to be at a similar quarterly run rate compared to 2024, with a modest reduction in our net charge-off rate compared to 2024. The balance sheet mix of Peoples will be continually evaluated in an effort to mitigate exposure risk during 2025. Total deposit balances are expected to grow by approximately 1% in 2025. Peoples expects continued growth despite increased competition in its markets plus additional upward pressure on rates paid. Throughout 2024, deposits balances increased primarily due to special promotional offerings on retail CDs throughout the year. Management believes Peoples is in position to maintain strong asset quality metrics and continued growth into 2025. Peoples came through 2024 with positive financial results despite the challenging economic environment and believes it will continue this trend into 2025. For more information regarding risks and uncertainties that could impact the projections described above, please refer to “ITEM 1A RISK FACTORS” of this Form 10-K. 71 Interest Rate Sensitivity and Liquidity While Peoples is exposed to various business risks, the risks relating to interest rate sensitivity and liquidity are major risks that can materially impact future results of operations and financial condition due to their complexity and dynamic nature. The objective of Peoples' asset-liability management function is to measure and manage these risks in order to optimize net interest income within the constraints of prudent capital adequacy, liquidity and safety. This objective requires Peoples to focus on interest rate risk exposure and adequate liquidity through its management of the mix of assets and liabilities, their related cash flows and the rates earned and paid on those assets and liabilities. Ultimately, the asset-liability management function is intended to guide management in the acquisition and disposition of earning assets and selection of appropriate funding sources. Interest Rate Risk Interest rate risk (“IRR”) is one of the most significant risks arising in the normal course of business of financial services companies like Peoples. IRR is the potential for economic loss due to future interest rate changes that can impact the earnings stream, as well as market values, of financial assets and financial liabilities. Peoples’ exposure to IRR is due primarily to differences in the maturity or repricing of earning assets and interest-bearing liabilities. In addition, other factors, such as prepayments of loans and investment securities, or early withdrawal of deposits, can affect Peoples’ exposure to IRR and increase interest costs or reduce revenue streams. Peoples has assigned overall management of IRR to the ALCO, which has established an IRR management policy that sets minimum requirements and guidelines for monitoring and managing the level of IRR. The objective of Peoples’ IRR management policy is to assist the ALCO in its evaluation of the impact of changing interest rate conditions on earnings and the economic value of equity, as well as assist with the implementation of strategies intended to reduce Peoples’ IRR. The management of IRR involves either maintaining or changing the level of risk exposure by changing the repricing and maturity characteristics of the cash flows for specific assets or liabilities. Additional oversight of Peoples’ IRR is provided by the Board of Directors of Peoples Bank, which reviews and approves Peoples’ IRR management policy at least annually. The ALCO uses various methods to assess and monitor the current level of Peoples’ IRR and the impact of potential strategies or other changes. However, the ALCO predominantly relies on simulation modeling in its overall management of IRR since it is a dynamic measure. Simulation modeling also estimates the impact of potential changes in interest rates and balance sheet structures on future earnings and projected economic value of equity. The methods used by ALCO to assess IRR remain largely unchanged from those disclosed for the year ended December 31, 2023. The modeling process starts with a base case simulation using the current balance sheet and current interest rates held constant for the next twenty-four months. Alternate scenarios are prepared which simulate the impact of increasing and decreasing market interest rates, assuming parallel yield curve shifts. Comparisons produced from the simulation data, showing the changes in net interest income from the base interest rate scenario, illustrate the risks associated with the current balance sheet structure. Additional simulations, when deemed appropriate or necessary, are prepared using different interest rate scenarios from those used with the base case simulation and/or possible changes in balance sheet composition. The additional simulations include non-parallel shifts in interest rates whereby the direction and/or magnitude of changes in short-term interest rates is different from the changes applied to longer-term interest rates. Comparisons showing the net interest income and economic value of equity variances from the base case are provided to the ALCO for review and discussion. The ALCO has established limits on changes in the twelve-month net interest income forecast and the economic value of equity from the base case. The ALCO may establish risk tolerances for other parallel and non-parallel rate movements, as deemed necessary. The following table details the current policy limits used to manage the level of Peoples’ IRR: Immediate and Sustained Shift in Interest Rates Net Interest Income Economic Value of Equity + / - 100 basis points -5% -10% + / - 200 basis points -10% -15% + / - 300 basis points -15% -20% The following table shows the estimated changes in net interest income and the economic value of equity based upon a standard, parallel shock analysis with balances held constant (dollars in thousands): 72 Increase (Decrease) in Interest Rates Estimated Increase (Decrease) in Net Interest Income Estimated (Decrease) Increase in Economic Value of Equity (in Basis Points) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 300 10,471 3.0 % 15,063 4.6 % (127,697) (7.2) % (157,625) (9.4) % 200 7,090 2.0 % 10,282 3.1 % (88,238) (5.0) % (107,620) (6.4) % 100 3,678 1.0 % 5,468 1.7 % (45,430) (2.6) % (53,585) (3.2) % (100) (9,700) (2.7) % (7,427) (2.3) % 12,016 0.7 % 31,722 1.9 % (200) (19,818) (5.6) % (15,446) (4.7) % (3,009) (0.2) % 46,537 2.8 % (300) (19,964) (5.6) % (16,822) (5.1) % (25,823) (1.5) % 47,198 2.8 % This table uses a standard, parallel shock analysis for assessing the IRR to net interest income and the economic value of equity. A parallel shock assumes all points on the yield curve (one year, two year, three year, etc.) are directionally changed by the same degree. Management regularly assesses the impact of both increasing and decreasing interest rates. The table above shows the impact of upward and downward parallel shocks of 100, 200 and 300 basis points. Estimated changes in net interest income and the economic value of equity are partially driven by assumptions regarding the rate at which non-maturity deposits will reprice given a move in short-term interest rates. These assumptions are monitored closely by Peoples and are reviewed at least semi-annually. At December 31, 2024, the actual deposit betas experienced by Peoples in the repricing of non-maturity deposits were lower than those used in Peoples’ interest rate risk modeling. While parallel interest rate shock scenarios are useful in assessing the level of IRR inherent in the balance sheet, interest rates typically move in a nonparallel manner with differences in the timing, direction and magnitude of changes in short-term and long-term interest rates. Thus, any impact that might occur as a result of the Federal Reserve Board decreasing short-term interest rates in the future could be offset by an inverse movement in long-term rates, and vice versa. For this reason, Peoples considers other interest rate scenarios in addition to analyzing the impact of parallel yield curve shifts. These include various flattening and steepening scenarios in which short-term and long-term rates move in different directions with varying magnitude. Peoples believes these scenarios to be more reflective of how interest rates change versus the severe parallel rate shocks described above. Given the shape of market yield curves at December 31, 2024, consideration of the bull steepener and bear steepener scenarios provide insights which were not captured by parallel shifts. The bull steepener scenario highlights the risk to net interest income and the economic value of equity when short-term rates fall faster than long-term rates. In such a scenario, Peoples’ deposit and short-term borrowing costs, which are correlated with short-term rates, decrease, while long-term asset yields and long-long term borrowing costs, which are correlated with long-term rates remain constant. Decreased deposit and funding costs increase net interest income over a longer horizon; resulting in an increased amount of net income and net interest margin over a 24-month period. At December 31, 2024, the bull steepener scenario resulted in a decline in net interest income of 0.73%, as the impact of recent term funding mitigates the impact of lower short-term rates over a 12-month horizon, and an increase in economic value of equity of 1.90%. The bear steepener scenario highlights the risk to net interest income and the economic value of equity when short-term rates remain constant while long-term rates rise. In such a scenario, Peoples’ deposit and borrowing costs, which are generally correlated with short-term interest rates, remain constant, while asset yields, which are correlated with long-term interest rates, rise. At December 31, 2024, the bear steepener scenario resulted in an increase in net interest income of 0.79% and an increase in economic value of equity of 5.60% During 2024, Peoples’ was positioned to benefit from rising interest rates in terms of the potential impact on net interest income. The table above illustrates this point as net interest income increases in the rising rate scenarios and decreases in the falling rate scenarios. Peoples has entered into interest rate swaps as part of its interest rate risk management strategy. 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. As of December 31, 2024, Peoples had eight interest rate swap contracts, with an aggregate notional value of $75.0 million. Additional information regarding Peoples’ interest rate swaps can be found in “Note 15 Derivative Financial Instruments.” An asset/liability model used to produce the analysis above requires assumptions to be made such as prepayment rates on interest-earning assets and repricing impact on non-maturity deposits. These business assumptions are based on business plans, economic and market trends, and available industry data. Management believes that its methodology for developing such assumptions is reasonable; however, there can be no assurance that modeled results will be achieved or are indicative of future results. The asset/liability model along with key modeling assumptions are subjected to a third-party review annually for effectiveness and regulatory compliance. 73 Liquidity In addition to IRR management, another major objective of the ALCO is to ensure sufficient levels of liquidity are maintained. The ALCO defines liquidity as the ability to meet anticipated and unanticipated operating cash needs, loan demand and deposit withdrawals without incurring a sustained negative impact on profitability. A primary source of liquidity for Peoples is deposits. Liquidity is also provided by cash generated from earning assets such as loans and investment securities. Peoples also uses various wholesale funding sources to supplement funding from customer deposits. These external sources provide Peoples with the ability to obtain large quantities of funds in a relatively short time period in the event of sudden unanticipated cash needs. However, an over-utilization of external funding sources can expose Peoples to greater liquidity risk, as these external sources may not be accessible during times of market stress. Additionally, Peoples may be exposed to the risk associated with providing excess collateral to external funding providers, commonly referred to as counterparty risk. As a result, the ALCO’s liquidity management policy sets limits on the net liquidity position and the concentration of non-core funding sources, which includes wholesale funding and brokered deposits. In addition to external sources of funding, Peoples considers certain types of deposits to be less stable or “volatile funding.” These deposits include special money market products, large CDs and public funds. Peoples has established volatility factors for these various deposit products, and the liquidity management policy establishes a limit on the total level of volatile funding. Additionally, Peoples measures the maturities of external sources of funding for periods of one month, three months, six months and twelve months, and has established policy limits for the amounts maturing in each of these periods. The purpose of these limits is to minimize exposure to what is commonly termed rollover risk. An additional strategy used by Peoples in the management of liquidity risk is maintaining a targeted level of liquid assets. Management defines liquid assets as unencumbered cash (including cash on deposit at the FRB), and the market value of unpledged U.S. government and agency securities. Excluded from this definition are pledged securities, non-government securities, non-agency securities, municipal securities and loans. Management has established a minimum level of liquid assets in the liquidity management policy, which is expressed as a percentage of total loans and unfunded loan commitments. At December 31, 2024, Peoples maintained liquid assets of $696.9 million, representing 6.6% of total assets plus unfunded loan commitments. Peoples has also established a policy limit around the level of liquefiable assets expressed as a percentage of total loans and unfunded loan commitments. Liquefiable assets are defined as liquid assets plus the market value of unpledged securities not included in the liquid asset measurement. At December 31, 2024, Peoples maintained liquefiable assets of $857.1 million, representing 8.1% of total assets plus unfunded loan commitments. An essential element in the management of liquidity risk is a forecast of the sources and uses of anticipated cash flows. On a monthly basis, Peoples forecasts sources and uses of cash for the next twelve months. To assist in the management of liquidity, management has established a liquidity coverage ratio, which is defined as the total sources of cash divided by the total uses of cash. A ratio of greater than 1.0 times indicates that forecasted sources of cash are adequate to fund forecasted uses of cash. The liquidity management policy establishes a minimum limit of 1.0 times. At December 31, 2024, Peoples had a ratio of 8.69 times, which was within policy limits. Peoples also forecasts secondary or contingent sources of cash, and this includes external sources of funding and liquid assets. These sources of cash would be required if and when the forecasted liquidity coverage ratio dropped below the policy limit of 1.0 times. An additional liquidity measurement used by management includes the total forecasted sources of cash and the contingent sources of cash divided by the forecasted uses of cash. Management has established a minimum ratio of 3.0 times for this liquidity management policy limit. At December 31, 2024, Peoples had a ratio of 10.14 times, which was within policy limits. Peoples maintains multiple contingent sources of liquidity including secured wholesale funding lines and unsecured brokered deposit networks. Peoples’ primary sources of secured wholesale funding are the FHLB of Cincinnati and the FRB. As of December 31, 2024, Peoples had unused collateral-based borrowing capacities of $388.6 million and $416.9 million, respectively, available with the FHLB of Cincinnati and the FRB. Together, these unused borrowing capacities represent 7.6% of total assets and unfunded loan commitments. Additionally, Peoples had $230.0 million of unpledged loan collateral eligible to secure additional borrowing capacity with the FRB as of December 31, 2024. Disruptions in the sources and uses of cash can occur which can drastically alter the actual cash flows and negatively impact Peoples’ ability to access internal and external sources of cash. Such disruptions might occur due to increased withdrawals of deposits, increases in the funding required for loan commitments, a decrease in the ability to access external funding sources and other factors that would increase the need for funding and limit Peoples’ ability to access needed funds. As a result, Peoples maintains a liquidity contingency funding plan (“LCFP”) that considers various degrees of disruptions and develops action plans around these scenarios. Peoples’ LCFP identifies scenarios where funding disruptions might occur and creates scenarios of varying degrees of severity. The disruptions considered include an increase in funding of unfunded loan commitments, unanticipated withdrawals of deposits, decreases in the renewal of maturing CDs, and reductions in cash earnings. Additionally, the LCFP creates stress scenarios where access to external funding sources, or contingency funding, is suddenly limited, which includes a significant increase in the margin requirements where securities or loans are pledged, limited access to funding from other banks and limited 74 access to funding from the FHLB of Cincinnati and the FRB. Peoples’ LCFP scenarios include a base scenario, a mild stress scenario, a moderate stress scenario and a severe stress scenario. Each of these is defined as to the related severity and action plans are developed around each. Liquidity management also requires the monitoring of risk indicators that may alert the ALCO to a developing liquidity situation or crisis. Early detection of stress scenarios allows Peoples to take actions to help mitigate the impact to Peoples Bank’s business operations. The LCFP contains various indicators, termed key risk indicators (“KRIs”), that are monitored on a monthly basis, at a minimum. The KRIs include both internal and external indicators and include loan delinquency levels, criticized and classified loan levels, the ratios of non-performing loans to loans and to total assets, the total loan to total deposit ratio, the level of net non-core funding dependence, the level of contingency funding sources, the liquidity coverage ratio, changes in regulatory capital levels, forecasted operating loss, negative media concerning Peoples, irrational competitor pricing that persists, and an increase in rates for external funding sources. The LCFP establishes levels that define each of these KRIs under base, mild, moderate and severe scenarios. The LCFP is reviewed and updated at least on an annual basis by the ALCO and Peoples Bank’s Board of Directors. Additionally, testing of the LCFP is required on an annual basis. Various stress scenarios and the related actions are simulated according to the LCFP. The results are reviewed and discussed and changes or revisions are made to the LCFP accordingly. Additionally, the LCFP is subjected to a third-party review annually for effectiveness and regulatory compliance. Starting at March 31, 2020, there was an increase in deposit balances due to the influx of funds from fiscal stimulus, the PPP and other government actions that persisted throughout 2021. During 2022, deposit balances declined due to customers returning to pre-COVID-19 pandemic balances as well as rising market interest rates due to high levels of inflation. During 2023, the Federal Reserve continued a historically aggressive rate-hiking campaign, leading to higher interest rates and higher competition for deposits. As inflationary pressures cooled during 2024, the Federal Reserve began to lower rates starting the second half of the calendar year. Peoples continued to offer various CD special rates to retain current clients and attract new clients. Overall, management believes the current balance of cash and cash equivalents, anticipated investment portfolio cash flows and the availability of other funding sources will allow Peoples to meet anticipated cash obligations, as well as special needs and off-balance sheet commitments. Off-Balance Sheet Activities and Contractual Obligations Peoples routinely engages in activities that involve, to varying degrees, elements of risk that are not reflected in whole or in part in the Consolidated Financial Statements. These activities are part of Peoples’ normal course of business and include traditional off-balance sheet credit-related financial instruments, interest rate contracts, operating lease obligations, and commitments to make additional capital contributions in low-income housing tax credit investments. The following is a summary of Peoples’ significant off-balance sheet activities and contractual obligations. Detailed information regarding these activities and obligations can be found in the Notes to the Consolidated Financial Statements. Activity or Obligation Note Off-balance sheet credit-related financial instruments 16 Interest rate contracts 15 Operating lease obligations 6 Long-term borrowing obligations 10 Traditional off-balance sheet credit-related financial instruments are primarily commitments to extend credit and standby letters of credit. These activities are necessary to meet the financing needs of customers and could require Peoples to make cash payments to third parties in the event certain specified future events occur. The contractual amounts represent the extent of Peoples’ exposure in these off-balance sheet activities. However, since certain off-balance sheet commitments, particularly standby letters of credit, are expected to expire or be only partially used, the total amount of commitments does not necessarily represent future cash requirements. Peoples continues to lease certain facilities and equipment under noncancellable operating leases with terms providing for fixed monthly payments over periods generally ranging from two to 25 years. Several of Peoples’ leased facilities are inside retail shopping centers or office buildings and, as a result, are not available for purchase. Management believes these leased facilities increase Peoples’ visibility within its markets and afford sales associates additional access to current and potential clients. For certain acquisitions, often those involving insurance businesses and wealth management books of business, a portion of the consideration is contingent upon revenue metrics being achieved. US GAAP requires that the amounts be recorded upon acquisition based on the best estimate of the future amounts to be paid at the time of acquisition. Any subsequent adjustment to the estimate is recorded in net income. Based on the acquisitions completed to date, management does not expect contingent consideration to have a material impact on Peoples’ future performance. Management does not anticipate that Peoples’ current off-balance sheet activities will have a material impact on its future results of operations and financial condition based on historical experience and recent trends. 75 Effects of Inflation on Financial Statements Substantially all of Peoples’ assets relate to banking and are monetary in nature. As a result, inflation does not impact Peoples to the same degree as companies in capital-intensive industries in a replacement cost environment. During a period of rising prices, a net monetary asset position results in a loss in purchasing power and conversely a net monetary liability position results in an increase in purchasing power. The opposite would be true during a period of decreasing prices. In the banking industry, monetary assets typically exceed monetary liabilities. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Refer to the section captioned “Interest Rate Sensitivity and Liquidity” under “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of this Form 10-K, which is incorporated herein by reference. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements and accompanying notes, and the report of independent registered public accounting firm, are set forth immediately following “ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS” of this Form 10-K. ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE No response required. ITEM 9A CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Peoples’ management, with the supervision and participation of Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, has evaluated the effectiveness of Peoples’ disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2024. Based upon that evaluation, Peoples’ President and Chief Executive Officer, and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, have concluded that: (a) information required to be disclosed by Peoples in this Form 10-K and other reports Peoples files or submits under the Exchange Act would be accumulated and communicated to Peoples’ management, including its President and Chief Executive Officer, and its Executive Vice President, Chief Financial Officer and Treasurer, as appropriate to allow timely decisions regarding required disclosure; (b) information required to be disclosed by Peoples in this Form 10-K and other reports Peoples files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (c) Peoples’ disclosure controls and procedures were effective as of the end of the period covered by this Form 10-K. Management’s Annual Report on Internal Control Over Financial Reporting The “Report of Management’s Assessment of Internal Control Over Financial Reporting” required by Item 308(a) of SEC Regulation S-K is included on page 78 of this Form 10-K. Attestation Report of Independent Registered Public Accounting Firm The “Report of Independent Registered Public Accounting Firm” required by Item 308(b) of SEC Regulation S-K is included on page 80 of this Form 10-K. Ernst & Young LLP (U.S. PCAOB Auditor Firm I.D.: 42 ), the independent registered public accounting firm that audited Peoples’ consolidated financial statements included in this Form 10-K, has issued an attestation report on the effectiveness of Peoples’ internal control over financial reporting as of December 31, 2024. The report, which expresses the opinion that Peoples’ management has maintained effective internal control over financial reporting as of December 31, 2024, is included in the “Report of Independent Registered Public Accounting Firm.” Changes in Internal Control Over Financial Reporting There were no changes in Peoples’ internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, Peoples’ internal control over financial reporting. 76 ITEM 9B OTHER INFORMATION (a) None. (b) The following details the activity in respect of the adoption , modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K) by any director or any officer (as defined in Rule 16a-1(f) under the Exchange Act) of Peoples during the three months ended December 31, 2024: Trading Agreement Action Date Rule 10-b5-1* Total Common Shares to be Sold Expiration Date Craig Beam Director Adopt November 25, 2024 X 4,000 April 01, 2026 *Intended to satisfy the affirmative defense of Rules 10b5-1(c) ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not Applicable. 77 Report of Management’s Assessment of Internal Control Over Financial Reporting Peoples’ management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Peoples’ internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation, integrity, and fair presentation of Peoples’ Consolidated Financial Statements for external purposes in accordance with United States generally accepted accounting principles. With the supervision and participation of Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, Peoples’ management evaluated the effectiveness of Peoples’ internal control over financial reporting as of December 31, 2024, using the Internal Control-Integrated Framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on the results of its evaluation, Peoples’ management has concluded that Peoples’ internal control over financial reporting was effective at a reasonable assurance level as of December 31, 2024. No matter how well designed, internal control over financial reporting may not prevent or detect all misstatements. Projection of the evaluation of effectiveness to future periods is subject to risks, including but not limited to (a) controls may become inadequate due to changes in conditions; (b) a deterioration may occur in the degree of compliance with policies or procedures; and (c) the possibility of control circumvention or override occurring, any of which may lead to misstatements due to undetected error or fraud. Effective internal control over financial reporting can provide only a reasonable assurance with respect to financial statement preparation and financial reporting. Peoples’ management assessed the effectiveness of Peoples’ internal control over financial reporting as of December 31, 2024, and, based on this assessment, has concluded Peoples’ internal control over financial reporting was effective at a reasonable assurance level as of that date. Peoples’ independent registered public accounting firm, Ernst & Young LLP has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and has issued an audit report on Peoples’ internal control over financial reporting. By: /s/ TYLER WILCOX By: /s/ KATIE BAILEY Tyler Wilcox Katie Bailey President and Chief Executive Officer Executive Vice President, Chief Financial Officer and Treasurer February 27, 2025 78 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Peoples Bancorp Inc. Opinion on Internal Control Over Financial Reporting We have audited Peoples Bancorp Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Peoples Bancorp Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 27, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management’s Assessment of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Chicago, Illinois February 27, 2025 79 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Peoples Bancorp Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Peoples Bancorp Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accounting for the Allowance for Credit Losses Description of the Matter As discussed in Note 1 and Note 4 of the financial statements, management estimates the allowance for credit losses (ACL) based on relevant available information, from both internal and external sources, relating to past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The ACL is made up of both a quantitative modeled component as well as a qualitative component. The methodology for determining the quantitative component includes (1) a pooled component for loans that exhibit similar risk characteristics and (2) a specific component for those loans that do not exhibit similar risk characteristics. For loans exhibiting similar risk characteristics, the Company uses a loss driver method, which analyzes one or more economic variables to the change in default rate using a regression analysis, and a discounted cash flow methodology in determining an ACL for each loan segment. Management applies judgment in determining the extent of qualitative factors used in the qualitative component to adjust the loss rates for loan segments to reflect the impact these factors may have on expected losses in the loan portfolio. These include economic conditions, collateral, concentrations, troubled assets, Peoples' loss trends, peer loss trends, delinquency trends, portfolio composition and loan growth, underwriting, and certain other risks. The Company’s loan and lease portfolio totaled $6.36 billion as of December 31, 2024, and the associated ACL was $63.3 million. Auditing management’s estimate of the ACL involves a high degree of subjectivity due to the judgment required in assessing whether the economic forecast used is reasonable and supportable. Management’s determination of the economic forecast used in calculating the modeled ACL is highly judgmental and has a significant effect on the ACL. 80 How We Addressed the Matter in Our Audit We obtained an understanding of the Company’s processes for establishing the ACL through the year ended December 31, 2024. We evaluated the design and tested the operating effectiveness of the Company’s controls over the ACL process, which included, among others, management’s review and approval controls designed to assess and challenge whether the economic forecast used is reasonable and supportable. To test whether the economic forecast utilized by the Company in calculating the ACL was reasonable and supportable, our audit procedures included, among others, the following: 1) We obtained corroborative information, including employment statistics, economic reports and alternative economic forecasts, and considered any contrary evidence; 2) We evaluated the reliability of the external information source used by the Company in determining the economic forecast; 3) We verified the economic variables from the external information source were accurately input into the Company’s model used in estimating the ACL; 4) We compared the total ACL to the Company’s historical losses, considering changes in the current economic environment to evaluate whether the ACL appropriately reflected losses expected in the portfolio; and 5) We evaluated whether the total ACL appropriately reflected losses expected in the loan portfolio by comparing to peer bank data. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1995. Chicago, Illinois February 27, 2025 81 -PEOPLES BANCORP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, (Dollars in thousands) 2024 2023 Assets Cash and cash equivalents: Cash and due from banks $ 108,721 $ 111,680 Interest-bearing deposits in other banks 108,943 315,042 Total cash and cash equivalents 217,664 426,722 Available-for-sale investment securities, at fair value (amortized cost of $ 1,229,382 at December 31, 2024 and $ 1,184,288 at December 31, 2023) (a) 1,083,555 1,048,322 Held-to-maturity investment securities, at amortized cost (fair value of $ 692,499 at December 31, 2024 and $ 612,022 at December 31, 2023) (a) 774,800 683,657 Other investment securities 60,132 63,421 Total investment securities (a) 1,918,487 1,795,400 Loans and leases, net of deferred fees and costs (b) 6,358,003 6,159,196 Allowance for credit losses ( 63,348 ) ( 62,011 ) Net loans and leases 6,294,655 6,097,185 Loans held for sale 2,348 1,866 Bank premises and equipment, net of accumulated depreciation 103,669 103,856 Bank owned life insurance 143,710 140,554 Goodwill 363,199 362,169 Other intangible assets 39,223 50,003 Other assets 171,292 179,627 Total assets $ 9,254,247 $ 9,157,382 Liabilities Deposits: Non-interest-bearing $ 1,507,661 $ 1,567,649 Interest-bearing 6,082,544 5,535,272 Total deposits 7,590,205 7,102,921 Short-term borrowings 193,474 650,497 Long-term borrowings 238,073 216,241 Accrued expenses and other liabilities 120,905 134,189 Total liabilities 8,142,657 8,103,848 Stockholders’ Equity Preferred shares, no par value, 50,000 shares authorized and no shares issued at December 31, 2024 and December 31, 2023 — — Common shares, no par value, 50,000,000 shares authorized, 36,782,601 shares issued at December 31, 2024 and 36,736,041 shares issued at December 31, 2023, including shares held in treasury 866,844 865,227 Retained earnings 388,109 327,237 Accumulated other comprehensive loss, net of deferred income taxes ( 110,385 ) ( 101,590 ) Treasury stock, at cost, 1,311,175 common shares at December 31, 2024 and 1,511,348 common shares at December 31, 2023 ( 32,978 ) ( 37,340 ) Total stockholders’ equity 1,111,590 1,053,534 Total liabilities and stockholders’ equity $ 9,254,247 $ 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 $ 237 , respectively, at December 31, 2024 and $ 0 and $ 238 , respectively, at December 31, 2023. (b) Also referred to throughout this Form 10-K as “total loans” and “loans held for investment.” See Notes to the Consolidated Financial Statements 82 PEOPLES BANCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) 2024 2023 2022 Interest income: Interest and fees on loans $ 450,996 $ 383,032 $ 234,765 Interest and dividends on taxable investment securities 59,008 49,282 28,903 Interest on tax-exempt investment securities 3,963 4,326 4,176 Other interest income 6,809 2,763 1,710 Total interest income 520,776 439,403 269,554 Interest expense: Interest on deposits 142,114 71,934 9,171 Interest on short-term borrowings 15,545 19,935 2,661 Interest on long-term borrowings 14,416 8,160 4,280 Total interest expense 172,075 100,029 16,112 Net interest income 348,701 339,374 253,442 Provision for (recovery of) credit losses (a) 24,787 15,174 ( 3,510 ) Net interest income after provision for (recovery of) credit losses 323,914 324,200 256,952 Non-interest income: Electronic banking income 25,142 25,210 21,094 Trust and investment income 19,513 17,160 16,391 Insurance income 19,401 18,016 15,727 Deposit account service charges 17,584 16,682 14,583 Lease income 10,408 7,844 4,267 Bank owned life insurance income 4,216 4,151 2,624 Mortgage banking income 1,788 1,078 1,397 Net loss on asset disposals and other transactions ( 3,310 ) ( 2,837 ) ( 616 ) Net loss on investment securities ( 416 ) ( 3,700 ) ( 61 ) Other non-interest income (b) 5,040 3,809 3,430 Total non-interest income 99,366 87,413 78,836 Non-interest expense: Salaries and employee benefit costs 150,041 144,031 112,690 Net occupancy and equipment expense 24,151 21,368 19,516 Data processing and software expense 25,221 21,607 14,241 Professional fees 12,109 17,041 12,094 Amortization of other intangible assets 11,161 11,222 7,763 Electronic banking expense 7,548 7,150 9,231 Marketing expense 3,914 5,017 3,728 FDIC insurance expense 4,929 4,785 3,702 Franchise tax expense 3,222 3,540 3,487 Other loan expenses 4,147 2,859 2,735 Communication expense 3,145 2,834 2,484 Operating lease expense 3,539 1,687 — Travel and entertainment expense 2,656 2,401 1,400 Other non-interest expense 18,033 20,945 14,076 Total non-interest expense 273,816 266,487 207,147 Income before income taxes 149,464 145,126 128,641 Income tax expense 32,259 31,763 27,349 Net income $ 117,205 $ 113,363 $ 101,292 Earnings per common share – basic $ 3.34 $ 3.46 $ 3.61 Earnings per common share – diluted $ 3.31 $ 3.44 $ 3.60 Weighted-average number of common shares outstanding – basic 34,779,548 32,533,086 27,908,022 Weighted-average number of common shares outstanding – diluted 35,147,354 32,760,808 27,999,602 (a) The provision for credit losses includes changes related to the allowance for credit losses on loans, held-to-maturity investment securities, and the unfunded commitment liability. (b) Includes realized and unrealized gains on equity investment securities recorded in other non-interest income of $ 50 for the year ended December 31, 2024, and realized and unrealized losses on equity investment securities of $ 141 for the year ended December 31, 2023, and realized and unrealized gains on equity investment securities of $ 2 for the year ended December 31, 2022. See Notes to the Consolidated Financial Statements 83 4PEOPLES BANCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders’ Equity (Dollars in thousands) Balance, December 31, 2021 $ 686,282 $ 207,076 $ ( 11,619 ) $ ( 36,714 ) $ 845,025 Net income — 101,292 — — 101,292 Other comprehensive loss, net of tax — — ( 115,517 ) — ( 115,517 ) Cash dividends declared — ( 42,432 ) — — ( 42,432 ) Reissuance of treasury stock for common share awards ( 4,989 ) — — 4,989 — Reissuance of treasury stock for deferred compensation plan for Boards of Directors — — — 78 78 Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors — — — ( 1,745 ) ( 1,745 ) Common shares repurchased under share repurchase program — — — ( 7,407 ) ( 7,407 ) Common shares issued under dividend reinvestment plan 1,272 — — — 1,272 Common shares issued under compensation plan for Boards of Directors 83 — — 423 506 Stock-based compensation 3,707 — — — 3,707 Common shares issued under employee stock purchase plan 95 — — 454 549 Balance, December 31, 2022 $ 686,450 $ 265,936 $ ( 127,136 ) $ ( 39,922 ) $ 785,328 Net income — 113,363 — — 113,363 Other comprehensive loss, net of tax — — 25,546 — 25,546 Cash dividends declared — ( 52,062 ) — — ( 52,062 ) Reissuance of treasury stock for common share awards ( 5,944 ) — — 5,944 — 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 — — — ( 1,769 ) ( 1,769 ) Common shares repurchased under share repurchase program — — — ( 3,030 ) ( 3,030 ) Common shares issued under dividend reinvestment plan 1,324 — — — 1,324 Common shares issued under compensation plan for Boards of Directors 62 — — 486 548 Stock-based compensation 5,337 — — — 5,337 Common shares issued under employee stock purchase plan 69 — — 836 905 Issuance of common shares related to merger with Limestone Bancorp, Inc. 177,929 — — — 177,929 Balance, December 31, 2023 $ 865,227 $ 327,237 $ ( 101,590 ) $ ( 37,340 ) $ 1,053,534 84 PEOPLES BANCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED) Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders’ Equity (Dollars in thousands) Net income $ — $ 117,205 $ — $ — $ 117,205 Other comprehensive income, net of tax — — ( 8,795 ) — ( 8,795 ) Cash dividends declared — ( 56,333 ) — — ( 56,333 ) Reissuance of treasury stock for common share awards ( 6,880 ) — — 6,880 — 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 — — — ( 1,309 ) ( 1,309 ) Common shares repurchased under share repurchase program — — — ( 3,000 ) ( 3,000 ) Common shares issued under dividend reinvestment plan 1,501 — — — 1,501 Common shares issued under compensation plan for Boards of Directors 86 — — 406 492 Common shares issued under employee stock purchase plan 236 — — 1,043 1,279 Stock-based compensation 6,674 — — — 6,674 Balance, December 31, 2024 $ 866,844 $ 388,109 $ ( 110,385 ) $ ( 32,978 ) $ 1,111,590 See Notes to the Consolidated Financial Statements 85 PEOPLES BANCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Dollars in thousands) 2024 2023 2022 Net income $ 117,205 $ 113,363 $ 101,292 Other comprehensive income (loss): Available-for-sale investment securities: Gross unrealized holding (losses) gains arising in the period ( 10,276 ) 29,655 ( 161,730 ) Related tax benefit (expense) 2,350 ( 6,817 ) 37,733 Reclassification adjustment for net loss included in net income 416 3,700 61 Related tax expense ( 97 ) ( 864 ) ( 14 ) Net effect on other comprehensive income (loss) ( 7,607 ) 25,674 ( 123,950 ) Defined benefit plans: Net (loss) gain arising during the period — ( 303 ) 76 Related tax benefit (expense) — 71 ( 18 ) Amortization of unrecognized loss on service benefit plans — 9 63 Related tax benefit — ( 2 ) ( 15 ) Realized loss due to settlement and curtailment — 2,424 185 Related tax benefit — ( 566 ) ( 43 ) Net effect on other comprehensive income — 1,633 248 Cash flow hedges: Net (losses) gains arising during the period ( 1,550 ) ( 2,293 ) 10,606 Related tax benefit (expense) 362 532 ( 2,421 ) Net effect on other comprehensive income (loss) ( 1,188 ) ( 1,761 ) 8,185 Total other comprehensive income (loss), net of tax ( 8,795 ) 25,546 ( 115,517 ) Total comprehensive income (loss) $ 108,410 $ 138,909 $ ( 14,225 ) See Notes to the Consolidated Financial Statements 86 PEOPLES BANCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) 2024 2023 2022 Operating activities: Net income $ 117,205 $ 113,363 $ 101,292 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion, net 3,514 3,668 17,319 Provision for (recovery of) credit losses 24,787 15,174 ( 3,510 ) Bank owned life insurance income ( 4,216 ) ( 4,151 ) ( 2,624 ) Net loss on investment securities 416 3,700 61 Fair value adjustment on equity investment securities ( 50 ) 141 ( 2 ) Loans originated for sale ( 65,356 ) ( 33,196 ) ( 48,081 ) Proceeds from sales of loans 65,984 34,041 50,442 Net gains on sales of loans ( 1,376 ) ( 659 ) ( 994 ) Deferred income tax (benefit) expense 6,973 ( 238 ) 18,566 (Decrease) increase in accrued expenses ( 4,216 ) 13,194 ( 4,692 ) Decrease (increase) in interest receivable 1,293 ( 6,443 ) ( 5,836 ) Increase in other assets 5,626 962 1,629 Increase (decrease) in interest payable ( 1,674 ) 6,621 ( 420 ) Increase in operating lease assets ( 16,217 ) ( 13,817 ) — Change in lease right-of-use assets and lease liabilities 158 ( 335 ) ( 38 ) Stock-based compensation 7,324 6,025 4,325 Other, net 3,012 5,593 ( 7,598 ) Net cash provided by operating activities 143,187 143,643 119,839 Investing activities: Available-for-sale investment securities: Purchases ( 331,274 ) ( 75,351 ) ( 246,155 ) Proceeds from sales 28,369 198,893 28,663 Proceeds from principal payments, calls and prepayments 255,744 151,047 190,143 Held-to-maturity investment securities: Purchases ( 253,546 ) ( 207,428 ) ( 206,768 ) Proceeds from principal payments 162,497 84,116 19,033 Other investment securities: Purchases ( 28,431 ) ( 27,206 ) ( 23,632 ) Proceeds from sales 32,049 21,281 5,784 Net (increase) decrease in loans held for investment ( 199,243 ) ( 356,075 ) ( 58,142 ) Net expenditures for premises and equipment ( 6,822 ) ( 13,458 ) ( 6,753 ) Proceeds from sales of other real estate owned 9 129 572 Investment in bank owned life insurance — — ( 30,000 ) Proceeds from bank owned life insurance 1,060 227 689 Business acquisitions, net of cash received ( 1,579 ) 92,594 ( 85,791 ) Investment in limited partnership and tax credit funds ( 3,142 ) ( 1,699 ) ( 1,857 ) Net cash used in investing activities ( 344,309 ) ( 132,930 ) ( 414,214 ) Financing activities: Net (decrease) increase in non-interest-bearing deposits ( 59,988 ) ( 284,480 ) ( 52,020 ) Net increase (decrease) in interest-bearing deposits 547,098 436,545 ( 93,082 ) Net (decrease) increase in short-term borrowings ( 457,023 ) 90,359 328,611 Proceeds from long-term borrowings 55,277 115,108 24,804 Payments on long-term borrowings ( 34,641 ) ( 40,165 ) ( 125,345 ) Cash dividends paid ( 55,828 ) ( 51,845 ) ( 42,372 ) Repurchase of treasury stock under share repurchase program ( 3,000 ) ( 3,030 ) ( 7,407 ) Purchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock ( 1,309 ) ( 1,769 ) ( 1,745 ) Proceeds from issuance of common shares 1,478 1,264 1,226 Net cash (used in) provided by financing activities ( 7,936 ) 261,987 32,670 Net (decrease) increase in cash and cash equivalents ( 209,058 ) 272,700 ( 261,705 ) Cash and cash equivalents at beginning of period 426,722 154,022 415,727 Cash and cash equivalents at end of period $ 217,664 $ 426,722 $ 154,022 87 PEOPLES BANCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Dollars in thousands) 2024 2023 2022 Supplemental cash flow information: Interest paid $ 172,712 $ 90,367 $ 16,270 Income taxes paid 28,489 30,073 4,131 Supplemental noncash disclosures: Transfers from loans to other real estate owned $ 235 $ 31 $ 110 Noncash recognition of new leases 1,660 4,428 880 See Notes to the Consolidated Financial Statements 88 PEOPLES BANCORP INC. AND SUBSIDIARIES TABLE OF CONTENTS TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies 90 Note 2. Fair Value of Financial Instruments 97 Note 3. Investment Securities 101 Note 4. Loans and Leases, and Allowance for Credit Losses 105 Note 5. Bank Premises and Equipment 105 Note 6. Leases 106 Note 7. Goodwill and Other Intangible Assets 108 Note 8. Deposits 110 Note 9. Short-Term Borrowings 111 Note 10. Long-Term Borrowings 112 Note 11. Stockholders’ Equity 114 Note 12. Employee Benefit Plans 115 Note 13. Income Taxes 115 Note 14. Earnings Per Common Share 117 Note 15. Derivative Financial Instruments 117 Note 16. Off-Balance Sheet Risk 119 Note 17. Regulatory Matters 119 Note 18. Stock-Based Compensation 121 Note 19. Revenue 122 Note 20. Acquisitions 122 Note 21. Parent Company Only Financial Information 124 89 PEOPLES BANCORP INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Peoples Bancorp Inc. is a financial holding company that offers a full range of financial services and products primarily offered through its 148 financial service offices and ATMs, including 129 full-service branches in Ohio, Kentucky, West Virginia, Washington, D.C., Virginia, and Maryland as of December 31, 2024, as well as through online resources that are web-based and mobile-based. Peoples’ insurance, premium financing and equipment leasing services are offered nationwide. Brokerage services are offered exclusively through an unaffiliated registered broker-dealer located at Peoples Bank’s offices. Indirect consumer lending activities are provided through approved dealerships. Peoples Bank’s credit card and merchant processing services are provided through joint marketing arrangements with third parties. Note 1 Summary of Significant Accounting Policies The accounting and reporting policies of Peoples Bancorp Inc. and subsidiaries (“Peoples” refers to Peoples Bancorp Inc. and its consolidated subsidiaries collectively, except where the context indicates the reference relates solely to Peoples Bancorp Inc.) conform to U.S. generally accepted accounting principles (“US GAAP”) and to general practices within the banking industry. The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain items in prior financial statements have been reclassified to conform to the current presentation, which had no impact on net income, total comprehensive income, net cash provided by operating activities or total stockholders’ equity. The following is a summary of significant accounting policies followed in the preparation of the financial statements: Business Combinations: Business combinations are accounted for using the acquisition method of accounting. Under this accounting method, the acquired company’s net assets are recorded at fair value on the date of acquisition, and the results of operations of the acquired company are combined with those of Peoples from the acquisition date forward. Costs related to the acquisition are expensed as incurred. The purchase price paid over the fair value of the net assets acquired, including intangible assets with finite lives, is recorded as goodwill. Consolidation: Peoples’ Consolidated Financial Statements include subsidiaries in which Peoples has a controlling financial interest, principally defined as owning a voting interest of greater than 50%. The Consolidated Financial Statements include the accounts of Peoples and its consolidated subsidiaries, Peoples Bank (along with its wholly-owned subsidiaries, Peoples Insurance Agency, LLC (“Peoples Insurance”) and Vantage Financial, LLC (“Vantage”)), Peoples Investment Company, and NB&T Statutory Trust III, FNB Capital Trust One, Ascencia Statutory Trust I, and Porter Statutory Trusts II-IV, for which Peoples holds all of the common securities. All intercompany accounts and transactions have been eliminated. Fair Value Measurements: The measurement of fair value under US GAAP uses a hierarchy intended to maximize the use of observable inputs and minimize the use of unobservable inputs. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: Level 1: Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. government and agency securities actively traded in over-the-counter markets. Level 2: Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative financial instruments whose value is determined using a pricing model with observable market inputs or can be derived principally from, or corroborated by, observable market data. This category generally includes certain U.S. government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale. Level 3: Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as financial instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitization, and certain collateralized debt obligations. Operating Segments: As a community banking entity, Peoples offers its customers a full range of products including a complete line of banking, leasing, insurance, investment and trust solutions. Peoples’ business activities are currently confined to a single reportable operating segment, which is community banking. Peoples’ single operating segment was determined based on the similar economic characteristics shared by the components of community banking. Peoples’ chief operating decision maker (“CODM”) is composed of its President and Chief Executive Officer, and its Chief Financial Officer. Peoples’ CODM considers all components of consolidated interest income, interest expense, non-interest income, and non-interest expense as presented in Peoples’ Consolidated Statements of Income for the purposes of assessing performance of Peoples’ single reportable segment and 90 allocating resources within its reportable segment. The CODM does not review segment revenue or expense information at a lower level than what is included in Peoples’ Consolidated Statements of Income. Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, balances due from other banks, interest-bearing deposits in other banks, federal funds sold and other short-term investments with original maturities of 90 days or less. At December 31, 2024 and at December 31, 2023, Peoples had no restricted funds held in interest-bearing deposits in other banks which were being used as collateral and not available for withdrawal. Investment Securities: Investment securities are recorded initially at cost, which includes premiums and discounts if purchased at other than par or face value. Peoples amortizes premiums and accretes discounts as an adjustment to interest income on a level yield basis. The cost of investment securities sold, excluding equity investment securities, and any resulting gain or loss, is based on the specific identification method and recognized as of the trade date. The cost of equity investment securities is based on the weighted-average method. Peoples determines the appropriate classification of investment securities at the time of purchase. Held-to-maturity securities are those securities that Peoples has the positive intent and ability to hold to maturity and are recorded at amortized cost. Available-for-sale securities are those securities that would be available to be sold in the future in response to Peoples’ liquidity needs, changes in market interest rates, and asset-liability management strategies, among other considerations. Available-for-sale securities are reported at fair value, with unrealized gains and losses reported in total stockholders’ equity as a separate component of accumulated oth