What changed in this filing

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Item 1. Business

2025-02-27 compared with 2024-02-28 · 68 added, 79 removed, 530 unchanged (22% of the section changed)

19 unchanged sentences

◦ merchant credit card transaction processing services;

◦ person-to-person payment processing via Zelle®;

◦ 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®;

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◦ asset management and administration services;

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

◦ 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.

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

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

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

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

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and Maryland.

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

Peoples 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, health care, education, municipal, agricultural, automotive, wholesale and retail trade, franchise, and service-related industries.

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.

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However, Peoples Bank also originates commercial loans with fixed interest rates for periods generally ranging from three to ten years.

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

In determining whether to grant a commercial loan,

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

At December 31, 2024, the commercial loan portfolio consisted of

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.

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Insurance Premium Finance Loans

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

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

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.

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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 6.7% of total loans at December 31, 2023, and 7.3% at December 31, 2022.

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.

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

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

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

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 12.9% of total loans at December 31, 2023, and 15.4% at December 31, 2022.

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.

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

At December 31, 2023, Peoples

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

At December 31, 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.

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

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

On an ongoing basis, the dealerships are monitored based on production volume, application approval rates, portfolio default rates, 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

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Customers repay the overdraft with their next deposit.

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

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

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.

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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 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.

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.

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

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

Peoples Bank also purchases certain “one-way buy” CDARS deposits, and overnight ICS network deposits which are utilized as a wholesale funding source, and these deposits are classified as brokered deposits in “Note 8 Deposits.”

Under these programs, funds from large customer deposits are placed into accounts issued by other members of the CDARS program or ICS network in increments below

the federal deposit insurance limits to ensure both principal and interest remain eligible for insurance.

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.

Additionally, in recent years, Peoples has issued brokered deposits to fund fixed-rate interest rate swaps.

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 of Cincinnati (the “FHLB”) and repurchase agreements.

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

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.

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

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

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.

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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 other various 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 Banks in 2023, and Peoples Bank has been recognized as a “Best Bank to Work For” by American Banker in each of 2021, 2022 and 2023.

Peoples 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.

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Managers complete quarterly performance reviews with employees, and semi-annual employee satisfaction pulse surveys are completed.

Peoples tracks and monitors employee turnover and executes exit interviews to better understand why employees choose to leave the organization.

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.

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Patent and Trademark Office (the “USPTO”).

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

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

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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, Vermont and Missouri affect the operations of Peoples Bank, including requirements to maintain reserves against deposits, restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon, restrictions relating to investments and other activities, limitations on credit exposure to correspondent banks, limitations on activities based on capital and surplus, limitations on transactions between Peoples Bank and Peoples, limitations on the payment of dividends, and limitations on branching.

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

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

Various requirements and restrictions under the laws of the U.S., and the states of Ohio, Kentucky, West Virginia, Virginia, Washington, D.C., Maryland, 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

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

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

The FDIC may increase or decrease the range of

assessments uniformly, except that no adjustments can deviate more than two basis points from the base assessment without notice and comment rule making.

The FDIC may also impose special assessments in emergency situations.

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

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

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%.

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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.

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

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

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

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.

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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 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.

In reviewing an application seeking approval of a merger or acquisition transaction, the bank

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.

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

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

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.

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• 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.

An affiliate of a bank is any company or entity that controls, is controlled by, or is under common control with the bank.

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.

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

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

Many of the CARES Act’s programs are dependent upon the direct involvement of U.S.

financial institutions, such as Peoples and Peoples Bank, and have been implemented through rules and guidance adopted by federal departments and agencies, including the U.S.

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

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

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

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.

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No collateral or personal guarantees were required for PPP loans.

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

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”).

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The PPP program ended May 31, 2021 and no new loans can be originated under that program.

On September 29, 2020, the federal bank regulatory agencies issued a final rule that neutralizes the regulatory capital and liquidity coverage ratio effects of participating in certain COVID-19 liquidity facilities due to the fact there is no credit or market risk in association with exposures pledged to such facilities.

As a result, the final rule supports the flow of credit to households and businesses affected by COVID-19.

On December 2, 2020, the federal bank regulatory agencies issued an interim final rule that provides temporary relief for specified community banking organizations related to certain regulations and reporting requirements as a result, in large part, of their growth in size from the response to COVID-19.

Community banking organizations are subject to different rules and requirements based on their risk profile and asset size.

Due to their involvement in federal COVID-19 response programs (such as the PPP) and other lending that supported the U.S.

economy, many community banking organizations experienced rapid and unexpected increases in their sizes, which were generally expected to be temporary.

The temporary increase in size could have subjected community banking organizations to new regulations or reporting requirements.

However community banking organizations with assets approaching the $10 billion threshold and that would otherwise have become subject to additional regulatory requirements upon crossing such threshold, including requirements related to capital adequacy standards, debit card interchange fees and routing, and management official interlocks, had until January 1, 2022 to either reduce their size or to prepare for new regulatory and reporting standards.

Capital Adequacy and Prompt Corrective Action

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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 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.

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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 “Outstanding” pursuant to its most recent CRA rating assigned by the Federal Reserve Board.

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, and additional requirements will be applicable on January 1, 2027.

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.

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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.

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

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

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

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

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.

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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 or deceptive acts or practices (“UDAP”).

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, which became fully effective on October 20, 2020.

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.

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

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

The 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.

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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.

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

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

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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 that expanded upon a prior proposed rule published in 2011.

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:

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

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

financial reporting requirements.

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

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

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

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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 determine a computer-security incident that rises to the level of a notification incident has occurred.

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.

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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 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.

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In addition, environmental assessments are typically required prior to any foreclosure activity involving non-residential real estate collateral.

Future Legislation

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.

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

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

The enactment of the Dodd-Frank Act,

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

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

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

What changed 10-K

Item 1. Business