PEOPLES BANCORP INC 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management’s Discussion and Analysis (“MD&A”) represents an overview of the results of operations and financial condition of Peoples at and for the three months ended March 31, 2025 and March 31, 2024. This MD&A should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the Notes thereto. Certain statements in this Form 10-Q, which are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include 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. These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties 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 in the State of Ohio, the FDIC, the Federal Reserve Board and the Consumer Financial Protection Bureau, 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, changes in the relationship of the U.S. and U.S. global trading partners), and changes in the federal, state, and local governmental 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; 38 Table of Contents (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 current expected credit losses ("CECL") model; (14) adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures, and the impacts of potential or imposed tariffs on markets, 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, and First Republic Bank in California, 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, increased 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) changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases; 39 Table of Contents (32) 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; (33) regulatory and legal matters, including the failure to resolve any 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; (34) Peoples' business may be adversely affected by increased political and regulatory scrutiny of corporate environmental, social and governance ("ESG") practices; (35) the effect of a fall in stock market prices on Peoples' asset and wealth management business; and (36) other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' 2024 Form 10-K. Peoples encourages readers of this Form 10-Q to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the filing of this Form 10-Q or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website – www.peoplesbancorp.com under the “Investor Relations” section. All forward-looking statements speak only as of the filing date of this Form 10-Q 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. This discussion and analysis should be read in conjunction with the Audited Consolidated Financial Statements, and Notes to the Audited Consolidated Financial Statements, contained in Peoples’ 2024 Form 10-K, as well as the Unaudited Condensed Consolidated Financial Statements, Notes to the Unaudited Condensed Consolidated Financial Statements, ratios, statistics and discussions contained elsewhere in this Form 10-Q. Business Overview The following discussion and analysis of Peoples’ Unaudited Condensed Consolidated Financial Statements is presented to provide insight into management’s assessment of the financial condition and results of operations. Peoples is a diversified financial services holding company that makes available a complete line of banking, trust and investment, insurance, premium financing and equipment leasing solutions through its subsidiaries. Peoples' business activities are currently limited to one reporting unit and reportable operating segment, which is community banking. Peoples provides services through traditional offices, automated teller machines ("ATMs"), interactive teller machines ("ITMs"), mobile banking, telephone and internet-based banking. Peoples offers a complete array of insurance products through Peoples Insurance, a subsidiary of Peoples Bank. Brokerage services are offered by Peoples exclusively through an unaffiliated registered broker-dealer located at Peoples Bank's offices. Peoples Bank offers insurance premium finance lending nationwide through its Peoples Premium Finance division. Peoples also offers lease financing through its North Star Leasing division and through Vantage, a subsidiary of Peoples Bank. As of March 31, 2025, Peoples had 147 locations, including 128 full-service bank branches in Ohio, Kentucky, West Virginia, Virginia, Washington D.C. and Maryland. Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the "ODFI"), the FRB of Cleveland and the FDIC. 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. Peoples Insurance is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states in which Peoples Insurance may do business. Critical Accounting Policies The accounting and reporting policies of Peoples conform to US GAAP. 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 materially differ from those estimates. Note 1 of the Notes to the Unaudited Condensed Consolidated Financial Statements describes Peoples' significant accounting policies. Management has identified the accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to understanding Peoples’ Unaudited Condensed Consolidated Financial Statements, and this MD&A at March 31, 2025, which have been disclosed in Peoples' 2024 Form 10-K and updated as necessary in "Note 1 Summary of Significant Accounting Policies" in the Notes to the Unaudited Condensed Consolidated Financial Statements included in this Form 10-Q. This MD&A should be read in conjunction with the policies disclosed in Peoples’ 2024 Form 10-K. 40 Table of Contents 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 annual consolidated financial statements. ASU 2025-01 - Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date: T he FASB issued ASU 2025-01 on January 6, 2025. It clarifies the effective date of ASU 2024-03, which pertains to disaggregation of income statement expenses. For public business entities, the new requirements will be effective for annual periods beginning after December 15, 2026. Peoples is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. Summary of Recent Transactions and Events The following is a summary of recent transactions and events that have impacted or are expected to impact Peoples’ results of operations or financial condition: ◦ For the first quarter of 2025, Peoples recorded a provision for credit losses of $10.2 million, compared to a provision for credit losses of $6.3 million for the linked quarter and a provision for credit losses of $6.1 million for the first quarter of 2024. The provision for credit losses for the first quarter of 2025 and fourth quarter of 2024 was primarily driven by net charge-offs. The provision for credit losses for the first quarter of 2024 was driven by (i) net charge-offs, (ii) a deterioration in macro-economic conditions used within the CECL model, (iii) an increase of reserves on individually analyzed loans and (iv) loan growth. For more information, please refer to the section titled "RESULTS OF OPERATIONS - Provision for Credit Losses" found later in this MD&A. ◦ 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. This rate remained unchanged until September 2024, at which point the Federal Reserve Board decreased rates by 50 basis points, reducing the rate to 4.75% to 5.00%. Subsequent 25 basis point cuts in both November and December 2024 brought the rate down further to 4.25% to 4.50%. The Federal Reserve Board has signaled that future rate reductions continue to be a possibility. The impact of these transactions and events, where material, is discussed in the applicable sections of this MD&A. EXECUTIVE SUMMARY Peoples reported net income of $24.3 million for the first quarter of 2025, representing earnings per diluted common share of $0.68. In comparison, Peoples reported net income of $26.9 million, representing earnings per diluted common share of $0.76, for the fourth quarter of 2024, and net income of $29.6 million, representing earnings per diluted common share of $0.84, for the first quarter of 2024. Non-core items negatively impacted earnings per diluted common share by $0.01 for the first quarter of 2025, $0.04 for the fourth quarter of 2024, and $0.01 for the first quarter of 2024. Net interest income was $85.3 million for the first quarter of 2025, and decreased $1.3 million when compared to the linked quarter. Net interest margin was 4.12% for the first quarter of 2025, compared to 4.15% for the linked quarter. The decrease in net interest income and net interest margin was primarily driven by a decrease in accretion income, net of amortization, from our acquisitions. Net interest income for the first quarter of 2025 decreased $1.4 million, or 2%, compared to the first quarter of 2024. The decrease in net interest income compared to the first quarter of 2024 was driven by lower accretion income. Net interest margin for the first quarter of 2025 was 4.12% and decreased 14 basis points compared to 4.26% for the first quarter of 2024, driven primarily by lower accretion income. Accretion income, net of amortization expense, from acquisitions was $3.5 million for the first quarter of 2025, $4.9 million for the fourth quarter of 2024 and $6.5 million for the first quarter of 2024, which added 17 basis points, 23 basis points and 32 basis points, respectively, to net interest margin. The decrease in accretion income for the first quarter of 2025 when compared to the linked quarter and the first quarter of 2024 was driven by fewer loan payoffs. The provision for credit losses was $10.2 million for the first quarter of 2025, compared to a provision for credit losses of $6.3 million for the linked quarter and a provision for credit losses of $6.1 million for the first quarter of 2024. The provision for credit losses for the first quarter of 2025 and fourth quarter of 2024 was primarily driven by net charge-offs. The provision for credit losses for the first quarter of 2024 was driven by (i) net charge-offs, (ii) a deterioration in macro-economic conditions used within the CECL model, (iii) an increase of reserves on individually analyzed loans and (iv) loan growth. Net charge-offs for the first quarter of 2025 were $8.1 million, or 0.52% of average total loans annualized, compared to net charge-offs of $9.6 million, or 0.61% of average total 41 Table of Contents loans annualized, for the linked quarter and net charge-offs of $3.3 million, or 0.22% of average total loans annualized, for the first quarter of 2024. The decrease relative to the linked quarter was driven by a decrease in charge-offs on leases originated by our North Star Leasing business, which comprised 31 basis points of the first quarter net charge-off rate and 49 basis points of the linked quarter net charge-off rate. For additional information on credit trends and the allowance for credit losses, see the "FINANCIAL CONDITION - Allowance for Credit Losses" section below. Net gains and losses include gains and losses on investment securities, asset disposals and other transactions, which are included in total non-interest income on the Consolidated Statements of Operations. The net loss realized during the first quarter of 2025 was $0.4 million, compared to a net loss of $1.7 million for the linked quarter and a net loss of $0.3 million for the first quarter of 2024. The net losses for the first quarter of 2025 and the first quarter of 2024 were driven primarily by net losses on repossessed assets of $0.3 million. The net loss reported as of December 31, 2024 was attributable to the write-down of an OREO property which totaled $1.2 million. Total non-interest income, excluding net gains and losses, for the first quarter of 2025 increased $0.6 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was primarily impacted by an increase of $1.5 million in insurance income due to seasonal performance-based commissions being paid in the first quarter of each year, partially offset by decreases in deposit account service charges and electronic banking income of $0.5 million and $0.4 million, respectively. Compared to the first quarter of 2024, total non-interest income, excluding net gains and losses, increased $1.3 million due to additional operating lease income of $1.4 million and additional trust and investment income of $0.5 million income, offset by decreases of $0.4 million in both insurance income and bank owned life insurance ("BOLI"). Total non-interest expense increased $0.3 million for the three months ended March 31, 2025, compared to the linked quarter. The increase in total non-interest expense was primarily due to an increase of $2.3 million in salaries and employee benefit costs, which was driven by annual merit increases, $1.3 million in stock-based compensation expenses attributable to forfeiture rate true-up on stock vested during the first quarter along with up-front expense on stock grants to certain retirement-eligible employees, and $0.7 million in health savings account ("HSA") contributions, partially offset by a decrease of $1.3 million in other non-interest expense, driven by acquisition-related expenses, coupled with decreases in amortization of other intangible assets and marketing expense. Compared to the first quarter of 2024, total non-interest expense increased $2.3 million, or 3%. The increase in total non-interest expense was primarily driven by increases of $1.2 million in data processing and software expense, $0.9 million in salaries and employee benefit costs, driven by higher sales-based compensation and higher medical costs, and $0.9 million in other non-interest expense, driven by increases in miscellaneous expense and higher postage costs, partially offset by a decrease of $0.7 million in net occupancy and equipment expense. The efficiency ratio for the first quarter of 2025 was 60.7%, compared to 59.6% for the linked quarter and 58.1% for the first quarter of 2024. The efficiency ratio increased compared to the linked quarter mainly as the result of higher non-interest expense, which was driven by annual expenses that occur in the first quarter of each year. The efficiency ratio increased for the first quarter of 2025 compared to the first quarter of 2024 due to higher non-interest expense. Peoples recorded income tax expense of $7.0 million with an effective tax rate of 22.4% for the first quarter of 2025, compared to income tax expense of $7.9 million with an effective tax rate of 22.7% for the linked quarter, and income tax expense of $8.3 million with an effective tax rate of 21.8% for the first quarter of 2024. The decrease in income tax expense for the first quarter of 2025 compared to the linked quarter and to the first quarter of 2024 was primarily due to lower net income. Total assets were $9.25 billion as of both March 31, 2025 and at December 31, 2024, and $9.27 billion at March 31, 2024. Total assets at March 31, 2025 remained flat when compared to at December 31, 2024 primarily due to a decrease in investment securities and cash and cash equivalents, offset by an increase in period-end loan and lease balances. The period-end total loan and lease balances at March 31, 2025 increased $70.5 million, or 4% annualized, compared to at December 31, 2024. The increase in the period-end total loan and lease balances was primarily driven by an increase of $74.5 million in other commercial real estate loans. Total assets at March 31, 2025 decreased compared to March 31, 2024 due to a decrease of $242.7 million in cash and cash equivalents, partially offset by an increase of $225.7 million in total loans and leases. The period-end loan and lease balances increased from March 31, 2024 to March 31, 2025 primarily as a result of organic growth in our commercial and industrial, residential real estate, and consumer indirect portfolios of $129.2 million, $66.3 million, and $30.0 million, respectively. Total liabilities were $8.11 billion at March 31, 2025, down from $8.14 billion at December 31, 2024, and $8.21 billion at March 31, 2024. The decrease in total liabilities when compared to at December 31, 2024 was primarily due to a decrease of $174.2 million in short-term borrowings, partially offset by an increase of $144.5 million in period-end total deposits. The decrease in total liabilities when compared to at March 31, 2024 was primarily due to a $494.3 million decrease in short- term borrowings, partially offset by a increase of $408.2 million in period-end deposits. The increase in deposits was primarily driven by an increase of $285.6 million in retail certificates of deposit, driven by current promotional offerings, and an increase of $107.4 million in money market deposit accounts. Total stockholders' equity at March 31, 2025 increased by $26.2 million compared to at December 31, 2024, which was primarily due to net income for the quarter of $24.3 million and a decrease of $14.7 million in accumulated other comprehensive loss, partially 42 Table of Contents offset by dividends paid of $14.2 million. Accumulated unrealized losses related to the available-for-sale investment securities portfolio were $96.6 million and $111.8 million at March 31, 2025 and at December 31, 2024, respectively. Total stockholders' equity at March 31, 2025 increased by $75.8 million compared to at March 31, 2024 and was impacted by net income of $112.0 million in the last twelve months and a decrease in accumulated other comprehensive loss of $13.2 million, partially offset by dividends paid of $56.8 million. RESULTS OF OPERATIONS Net Interest Income Net interest income, the amount by which interest income exceeds interest expense, remains Peoples' largest source of revenue. The amount of net interest income earned by Peoples each quarter is affected by various factors, including changes in market interest rates due to the Federal Reserve’s monetary policy, the level and degree of pricing competition for loans and deposits in Peoples’ markets, and the amount and composition of Peoples' earning assets and interest-bearing liabilities. Net interest margin, which is calculated by dividing fully tax-equivalent ("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 interest-earning assets and interest-bearing liabilities. FTE net interest income is calculated by increasing interest income to convert tax-exempt income earned on obligations of states and political subdivisions and tax-exempt loans to the pre-tax equivalent of taxable income using a federal statutory corporate income tax rate of 21% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024. The following table details the calculation of FTE net interest income: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Net interest income $ 85,255 $ 86,536 $ 86,640 Taxable equivalent adjustment 283 286 354 FTE net interest income $ 85,538 $ 86,822 $ 86,994 43 Table of Contents The following tables detail Peoples’ average balance sheets for the periods presented: For the Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 ( Dollars in thousands) Average Balance Income/ Expense Yield/Cost Average Balance Income/ Expense Yield/Cost Average Balance Income/ Expense Yield/Cost Short-term investments $ 88,919 $ 900 4.10 % $ 123,303 $ 1,432 4.62 % $ 142,381 $ 1,922 5.44 % Investment securities (a)(b): Taxable 1,718,453 15,372 3.58 % 1,729,784 15,116 3.49 % 1,657,967 13,965 3.37 % Nontaxable 178,582 1,226 2.75 % 180,482 1,237 2.74 % 174,632 1,270 2.91 % Total investment securities 1,897,035 16,598 3.50 % 1,910,266 16,353 3.42 % 1,832,599 15,235 3.33 % Loans (b)(c): Construction 313,130 5,572 7.12 % 324,856 6,139 7.39 % 339,448 6,404 7.48 % Commercial real estate, other 2,069,134 33,260 6.43 % 2,034,083 34,776 6.69 % 2,076,219 37,242 7.12 % Commercial and industrial 1,336,133 23,332 6.98 % 1,259,636 23,467 7.29 % 1,203,196 23,515 7.75 % Premium finance 259,241 5,585 8.62 % 277,219 5,772 8.15 % 210,405 4,564 8.60 % Leases 395,161 10,198 10.32 % 412,686 11,528 10.93 % 409,870 12,067 11.68 % Residential real estate (d) 956,049 12,215 5.11 % 909,719 12,125 5.33 % 930,989 11,322 4.86 % Home equity lines of credit 233,522 4,382 7.61 % 234,189 4,669 7.93 % 216,743 4,297 8.00 % Consumer, indirect 674,211 10,548 6.34 % 670,470 10,590 6.28 % 656,244 9,281 5.70 % Consumer, direct 117,881 2,234 7.69 % 118,370 2,229 7.49 % 124,091 2,098 6.82 % Total loans 6,354,462 107,326 6.77 % 6,241,228 111,295 7.01 % 6,167,205 110,790 7.15 % Allowance for credit losses (63,060) (65,798) (61,236) Net loans 6,291,402 107,326 6.84 % 6,175,430 111,295 7.09 % 6,105,969 110,790 7.22 % Total earning assets 8,277,356 124,824 6.04 % 8,208,999 129,080 6.20 % 8,080,949 127,947 6.31 % Goodwill and other intangible assets 401,344 402,930 410,719 Other assets 516,767 534,128 529,983 Total assets $ 9,195,467 $ 9,146,057 $ 9,021,651 Interest-bearing deposits: Savings accounts $ 879,301 $ 250 0.12 % $ 862,257 $ 209 0.10 % $ 905,713 $ 226 0.10 % Governmental deposit accounts 781,782 4,652 2.41 % 811,633 5,233 2.56 % 763,899 5,084 2.68 % Interest-bearing demand accounts 1,083,999 490 0.18 % 1,081,591 580 0.21 % 1,109,033 452 0.16 % Money market accounts 914,076 5,291 2.35 % 892,370 5,518 2.46 % 784,759 4,888 2.51 % Retail CDs 1,939,364 18,434 3.85 % 1,904,274 20,037 4.19 % 1,582,426 15,900 4.05 % Brokered CDs (e) 564,660 6,046 4.34 % 508,944 5,568 4.35 % 568,996 5,900 4.17 % Total interest-bearing deposits 6,163,182 35,163 2.31 % 6,061,069 37,145 2.44 % 5,714,826 32,450 2.28 % Borrowed funds: Short-term FHLB advances (e) 32,822 343 4.24 % 17,717 223 5.01 % 135,072 1,826 5.45 % Repurchase agreements and other 23,742 165 2.83 % 74,755 865 4.85 % 253,758 3,211 5.06 % Total short-term borrowings 56,564 508 3.63 % 92,472 1,088 4.70 % 388,830 5,037 5.19 % Long-term FHLB advances 131,769 1,302 4.01 % 131,950 1,328 4.00 % 125,931 1,241 3.97 % Long-term notes payable 50,341 895 7.10 % 51,140 899 7.03 % 50,407 862 6.84 % Other long-term borrowings (f) 54,990 1,418 10.32 % 54,745 1,798 12.84 % 53,936 1,363 10.02 % Total long-term borrowings 237,100 3,615 6.13 % 237,835 4,025 6.69 % 230,274 3,466 6.04 % Total borrowed funds 293,664 4,123 5.65 % 330,307 5,113 6.13 % 619,104 8,503 5.50 % Total interest-bearing liabilities 6,456,846 39,286 2.47 % 6,391,376 42,258 2.63 % 6,333,930 40,953 2.60 % Non-interest-bearing deposits 1,498,964 1,516,933 1,501,738 Other liabilities 116,797 117,151 133,202 Total liabilities 8,072,607 8,025,460 7,968,870 Total stockholders’ equity 1,122,860 1,120,597 1,052,781 Total liabilities and stockholders’ equity $ 9,195,467 $ 9,146,057 $ 9,021,651 Interest rate spread (b) $ 85,538 3.57 % $ 86,822 3.57 % $ 86,994 3.71 % Net interest margin (b) 4.12 % 4.15 % 4.26 % 44 Table of Contents (a) Average balances are based on carrying value. (b) Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate. (c) Average balances include nonaccrual and impaired loans. 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. (d) Loans held for sale are included in the average loan balance listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income. (e) 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 CDs for the periods presented in which FHLB advances and brokered CDs were being utilized. (f) Included in other long-term borrowings are trust preferred securities held for investments and floating rate junior subordinated deferrable interest debentures. Peoples' deposit balances have increased primarily due to an increase in money market deposit accounts and retail certificates of deposits driven by special promotional rate offerings over the past year. The following table provides an analysis of the changes in FTE net interest income: Three Months Ended March 31, 2025 Compared to (Dollars in thousands) December 31, 2024 March 31, 2024 Increase (decrease) in: Rate Volume Total (a) Rate Volume Total (a) INTEREST INCOME: Short-term investments $ (150) $ (382) $ (532) $ (398) $ (624) $ (1,022) Investment Securities (b): Taxable 828 (572) 256 888 520 1,408 Nontaxable 11 (23) (12) (196) 151 (45) Total investment income 839 (595) 244 692 671 1,363 Loans (b) : Construction (289) (278) (567) (311) (521) (832) Commercial real estate, other (4,301) 2,786 (1,515) (3,842) (140) (3,982) Commercial and industrial (4,605) 4,470 (135) (9,673) 9,490 (183) Premium finance 1,291 (1,478) (187) 18 1,003 1,021 Leases (754) (576) (1,330) (1,421) (448) (1,869) Residential real estate (2,175) 2,265 90 583 310 893 Home equity lines of credit (268) (19) (287) (960) 1,046 86 Consumer, indirect (27) (15) (42) 1,024 243 1,267 Consumer, direct 68 (63) 5 708 (572) 136 Total loan income (11,060) 7,092 (3,968) (13,874) 10,411 (3,463) Total interest income $ (10,371) $ 6,115 $ (4,256) $ (13,580) $ 10,458 $ (3,122) INTEREST EXPENSE: Deposits: Savings accounts $ (66) $ 25 $ (41) $ (20) $ (4) $ (24) Interest-bearing demand accounts 89 1 90 (32) (6) (38) Money market accounts 148 79 227 (111) (292) (403) Governmental deposit accounts 1,303 (722) 581 349 83 432 Retail CDs 1,300 303 1,603 (430) (2,103) (2,533) Brokered CDs (10) (467) (477) (124) (23) (147) Total deposit cost 2,764 (781) 1,983 (368) (2,345) (2,713) Borrowed funds: Short-term borrowings 888 (308) 580 9,392 (4,864) 4,528 Long-term borrowings 381 28 409 (298) 149 (149) Total borrowed funds cost 1,269 (280) 989 9,094 (4,715) 4,379 Total interest expense 4,033 (1,061) 2,972 8,726 (7,060) 1,666 FTE net interest income $ (6,338) $ 5,054 $ (1,284) $ (4,854) $ 3,398 $ (1,456) (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 change in each. (b) Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate. 45 Table of Contents Net interest income was $85.3 million for the first quarter of 2025 and decreased $1.3 million when compared to the linked quarter. Net interest margin was 4.12% for the first quarter of 2025, compared to 4.15% for the linked quarter. The decrease in net interest income and net interest margin was primarily driven by a decrease in accretion income, net of amortization, from acquisitions. Net interest income for the first quarter of 2025 decreased $1.4 million, or 2%, compared to the first quarter of 2024. Net interest margin decreased 14 basis points when compared to the first quarter of 2024. The decrease in net interest income and net interest margin compared to the first quarter of 2024 was driven by lower accretion income. Accretion income, net of amortization expense, from acquisitions was $3.5 million for the first quarter of 2025, $4.9 million for the linked quarter and $6.5 million for the first quarter of 2024, which added 17 basis points, 23 basis points and 32 basis points, respectively, to net interest margin. The decrease in accretion income for the first quarter of 2025 when compared to the linked quarter and the first quarter of 2024 was driven by fewer loan payoffs. Additional information regarding changes in the Unaudited Consolidated Balance Sheets can be found under appropriate captions of the “FINANCIAL CONDITION” section of this MD&A. 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 MD&A under the caption "FINANCIAL CONDITION - Interest Rate Sensitivity and Liquidity." Provision for Credit Losses The following table details Peoples’ provision for credit losses: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Provision for other credit losses $ 10,035 $ 6,014 $ 5,834 Provision for checking account overdraft credit losses 155 253 268 Provision for credit losses $ 10,190 $ 6,267 $ 6,102 The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management’s quarterly estimates. The provision for credit losses for the first quarter of 2025 and the fourth quarter of 2024 was mainly a result of net charge-offs. The provision for credit losses for the first quarter of 2024 was driven by (i) net charge-offs, (ii) a deterioration in macro-economic conditions used within the CECL model, (iii) an increase of reserves on individually analyzed loans and (iv) loan growth. Additional information regarding changes in the allowance for credit losses and loan credit quality can be found later in this MD&A under the caption “FINANCIAL CONDITION - Allowance for Credit Losses.” 46 Table of Contents Net Gain (Loss) Included in Total Non-Interest Income Net gain (loss) includes net gains and losses on investment securities, asset disposals and other transactions, which are recognized in total non-interest income. The following table details Peoples’ net losses for the periods presented: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Net (loss) gain on investment securities $ (2) $ 12 $ (1) Net loss on asset disposals and other transactions: Net loss on other assets (330) (458) (309) Net gain (loss) on OREO 20 (1,228) — Net loss on other transactions (51) (60) (32) Net loss on asset disposals and other transactions $ (361) $ (1,746) $ (341) The net loss on other assets during the first quarter of 2025 was driven by the loss recorded on repossessed assets. The net loss reported for the linked quarter was attributable to the write-down of an OREO property which totaled $1.2 million. The net loss reported for the quarter ended March 31, 2024 was driven by repossessed assets. Total Non-Interest Income, Excluding Net Gains and Losses Total non-interest income, excluding net gains and losses, comprised 24% of Peoples' total revenues (defined as net interest income plus total non-interest income excluding net gains and losses) for the first quarter of 2025, 24% for the linked quarter, and 23% for the first quarter of 2024. For the first quarter of 2025, insurance income comprised the largest portion of Peoples' total non-interest income, excluding net gains and losses. The following table details Peoples' insurance income: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Property and casualty insurance commissions $ 3,823 $ 3,822 $ 3,585 Performance-based commissions 1,542 — 2,213 Life and health insurance commissions 689 701 700 Insurance income $ 6,054 $ 4,523 $ 6,498 Peoples' insurance income for the first quarter of 2025 increased $1.5 million when compared to the linked quarter primarily due to seasonal performance-based commission being paid, which are annual in nature and typically occur in the first quarter of each year. Insurance income for the first quarter of 2025 decreased when compared to the first quarter of 2024 due to a decrease in the annual performance-based commissions being paid, partially offset with an increase in property and casualty insurance income. Peoples' electronic banking ("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 customers. The following table details Peoples' e-banking income: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) E-banking income $ 5,885 $ 6,267 $ 6,046 Peoples' e-banking income is derived largely from ATM and debit cards, as other services are mainly provided at no charge to customers. The amount of e-banking income is largely dependent on the timing and volume of customer activity. Peoples' trust and investment income, which includes fiduciary income, brokerage income, and employee benefit fees, continued to be based primarily upon the value of assets under administration and management, with additional income generated from transaction commissions, cross-selling of products and additional retirement plan services business. The following table details Peoples’ trust and investment income: 47 Table of Contents Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Fiduciary income $ 2,092 $ 2,095 $ 2,001 Brokerage income 2,146 2,142 1,842 Employee benefit fees 823 796 756 Trust and investment income $ 5,061 $ 5,033 $ 4,599 Fiduciary income and brokerage income in the first quarter of 2025 remained flat relative to the linked quarter. When compared to the first quarter of 2024, trust and investment income increased $0.5 million, which was driven by an increase in assets under administration and management. The following table details Peoples' assets under administration and management: March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 (Dollars in thousands) Trust $ 2,037,992 $ 2,061,267 $ 2,124,320 $ 2,071,832 $ 2,061,402 Brokerage $ 1,626,768 $ 1,614,189 $ 1,608,368 $ 1,567,775 $ 1,530,954 Total $ 3,664,760 $ 3,675,456 $ 3,732,688 $ 3,639,607 $ 3,592,356 Quarterly average $ 3,711,527 $ 3,706,804 $ 3,683,334 $ 3,587,952 $ 3,521,188 The decrease in assets under administration and management at March 31, 2025 compared to at December 31, 2024 were driven by market value fluctuations. The increase in assets under administration and management at March 31, 2025 when compared to at March 31, 2024 were primarily due to growth, as Peoples added new accounts and the underlying market values of assets under management grew. Deposit account service charges are based on the recovery of costs associated with services provided. The following table details Peoples' deposit account service charges: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Overdraft and non-sufficient funds fees $ 2,103 $ 2,414 $ 2,255 Account maintenance fees 1,644 1,764 1,718 Other fees and charges 268 324 250 Deposit account service charges $ 4,015 $ 4,502 $ 4,223 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 its cost recovery fees to ensure they are reasonable based on operational costs and similar to fees charged in Peoples' markets by competitors. Deposit account service charges decreased for the first quarter of 2025 compared to the linked quarter due to seasonality of customer activity. Deposit account service charges decreased slightly when comparing the first quarter of 2025 to the first quarter of 2024. The following table details the other items included within Peoples' total non-interest income: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Other non-interest income 1,472 1,906 918 Bank owned life insurance income 1,133 1,219 1,500 Lease income 3,446 3,200 2,016 Mortgage banking income 396 173 321 Other non-interest income decreased $0.4 million for the three months ended March 31, 2025 when compared to the linked quarter and increased $0.6 million compared to the first quarter of 2024. Bank owned life insurance income for the first quarter of 2025 decreased compared to the linked quarter and the prior year quarter primarily due to changes in the cash surrender values of the underlying policies. 48 Table of Contents 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, net of any associated purchase accounting adjustment, (iii) fees received for referrals, (iv) gains and losses recognized on the sales of residual assets, net of any purchase accounting impact, and (v) syndication income. Lease income for the first quarter of 2025 increased compared to the linked quarter due to an increase in month-to-month lease income. The increase when compared to the first quarter of 2024 was driven by increases in month-to-month lease income, operating lease income, and gains on terminated leases. Mortgage banking income is comprised mostly of net gains from the origination and sale of real estate loans in the secondary market, and, to a lesser extent, servicing income for loans sold with servicing retained. 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 for the first quarter of 2025 increased when compared to each of the prior periods and was primarily driven by higher production. In the first quarter of 2025, Peoples sold $0.2 million in loans into the secondary market with servicing retained and $4.7 million in loans with servicing released, compared to $6.5 million and $9.9 million, respectively, in the fourth quarter of 2024, and $0.2 million and $6.9 million, respectively, in the first quarter of 2024. Non-Interest Expense Salaries and employee benefit costs remain Peoples' largest non-interest expense, accounting for over one-half of total non-interest expense. The following table details Peoples' salaries and employee benefit costs: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Base salaries and wages $ 24,618 $ 25,133 $ 24,797 Sales-based and incentive compensation 6,491 5,641 5,254 Employee benefits 4,522 4,683 3,938 Payroll taxes and other employment costs 2,779 2,081 2,836 Stock-based compensation 2,475 1,187 3,090 Deferred personnel costs (1,064) (1,226) (1,022) Salaries and employee benefit costs $ 39,821 $ 37,499 $ 38,893 Full-time equivalent employees: Actual at end of period 1,460 1,479 1,498 Average during the period 1,467 1,487 1,492 Base salaries and wages for the first quarter of 2025 decreased compared to the linked quarter and remained relatively flat compared to the first quarter of 2024. Sales-based and incentive compensation increased for the first quarter of 2025 compared to the linked quarter and the first quarter of 2024 due to an increase in corporate incentives. The decrease in employee benefits for the first quarter of 2025 compared to the linked quarter was primarily related to an adjustment related to prior period nonqualified deferred compensation expense. The increase over the first quarter of 2024 was primarily due to increased medical costs. Payroll taxes and other employment costs for the first quarter of 2025 increased compared to the linked quarter due to seasonal expenses recognized in the first quarter of each year. Stock-based compensation is generally recognized over the vesting period, which generally ranges from immediate vesting to vesting at the end of three years. An adjustment is made at the vesting date to reverse expense relating to forfeitures for performance awards, and at the date of forfeiture to reverse expense for non-vested restricted common share awards. Stock grants to retirement eligible grantees are expensed either immediately or over a shorter period than three years. The majority of Peoples' stock-based compensation is attributable to annual equity-based incentive awards to employees, which are awarded in the first quarter of each year based upon Peoples achieving certain performance goals during the prior year, and are generally contingent on employment through the vesting period. 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 for the first quarter of 2025 remained relatively flat when compared to both the fourth quarter of 2024 and the first quarter of 2024. 49 Table of Contents Peoples' net occupancy and equipment expense was comprised of the following: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Depreciation $ 2,125 $ 2,145 $ 2,170 Repairs and maintenance costs 1,923 1,884 1,821 Property taxes, utilities and other costs 546 840 1,293 Net rent expense 1,018 952 999 Net occupancy and equipment expense $ 5,612 $ 5,821 $ 6,283 Net occupancy and equipment expense decreased for the first quarter compared to both the linked quarter and the first quarter of 2024 due to an adjustment of property tax accruals resulting from a review of recent assessments. The following table details the other items included in total non-interest expense: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Data processing and software expense $ 7,005 $ 6,598 $ 5,769 Professional fees 3,087 3,311 2,967 Amortization of other intangible assets 2,213 2,800 2,788 E-banking expense 2,025 1,982 1,781 FDIC insurance premiums 1,251 1,251 1,186 Other loan expenses 1,119 857 1,076 Operating lease expense 985 1,102 639 Franchise tax expense 929 664 881 Marketing expense 903 1,206 1,056 Communication expense 734 796 799 Travel and entertainment expense 500 723 608 Other non-interest expense 4,603 5,893 3,739 Data processing and software expenses for the first quarter of 2025 increased over all periods presented due to costs associated with recent technology projects. Professional fees for the first quarter of 2025 decreased when compared to the linked quarter due to lower costs of professional services and fewer legal expenses incurred. Professional fees for the first quarter of 2025 compared to the same period in 2024 remained flat. Amortization of other intangible assets for the first quarter of 2025 decreased $0.6 million compared to both the linked quarter and the prior year quarter due to decreases in amortization on core deposits and customer relationship intangibles. Peoples' e-banking expense is comprised of costs associated with debit and ATM cards and is driven by timing of customer activity. E-banking expense remained relatively flat compared to the linked quarter and increased $0.2 million compared to the first quarter of 2024. Peoples' FDIC insurance premiums for the first quarter of 2025 were relatively flat when compared to the linked quarter and the first quarter of 2024. Other loan expenses during the first quarter of 2025 increased $0.3 million when compared to the linked quarter. Other loan expenses were relatively flat when compared to the first quarter of 2024. Operating lease expense decreased when compared to the linked quarter due to less expense associated with Vantage and increased compared to the same period in 2024 due to the volume of leases. Peoples is subject to state franchise taxes, which are based largely on Peoples' equity, 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. The Ohio FIT is based on the total equity capital in proportion to the taxpayer's gross receipts in Ohio as of the most recent year-end. The increase in franchise tax expense for the first quarter of 2025 compared to the linked quarter relates to the prior quarter including a true-up driven by lower than estimated 50 Table of Contents apportionment in Ohio. The increase in franchise tax expense for the first quarter of 2025 when compared to the first quarter of 2024 was due to higher equity. Marketing expense for the first quarter of 2025 decreased when compared to both the linked quarter and the first quarter of 2024 due to less advertising expenses and promotional items. Communication expense remained relatively flat for the first quarter of 2025 when compared to both the linked quarter and the same period of the prior year. Travel and entertainment expense decreased over both the linked quarter and the same period for 2024 due to the timing of travel. Travel and entertainment expense will commonly spike in the fourth quarter due to additional travel and holiday gatherings. Other non-interest expense for the first quarter of 2025 decreased when compared to the linked quarter primarily due to a a legal contingency accrued at the end of the prior period of approximately $1.0 million. Other non-interest expense for the first quarter of 2025 compared to the same period of 2024 increased due to an increase in miscellaneous expense of $0.4 million and postage which was approximately $0.3 million. Income Tax Expense Peoples recorded income tax expense of $7.0 million with an effective tax rate of 22.4% for the first quarter of 2025, compared to income tax expense of $7.9 million with an effective tax rate of 22.7% for the linked quarter and income tax expense of $8.3 million with an effective tax rate of 21.8% for the first quarter of 2024. The decrease in income tax expense when compared to the linked quarter and to the first quarter of 2024 was primarily due to lower net income. Additional information regarding income taxes can be found in "Note 13. Income Taxes" of the Notes to the Consolidated Financial Statements included in Peoples' 2024 Form 10-K. 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. 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. This measure represents a Non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in earnings. The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Pre-provision net revenue: Income before income taxes $ 31,377 $ 34,855 $ 37,852 Add: provision for credit losses 10,190 6,267 6,102 Add: loss on OREO — 1,228 — Add: loss on investment securities 2 — 1 Add: loss on other assets 330 458 309 Add: loss on other transactions 51 60 32 Less: gain on OREO 20 — — Less: gain on investment securities — 12 — Pre-provision net revenue $ 41,930 $ 42,856 $ 44,296 The decrease in the PPNR for the first quarter of 2025 compared to the linked quarter and the first quarter of 2024 was driven by lower accretion income. 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 measure is Non-US GAAP since it excludes amortization of other intangible assets and all gains and losses included in earnings, and uses FTE net interest income. 51 Table of Contents The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Efficiency ratio: Total non-interest expense $ 70,787 $ 70,503 $ 68,465 Less: amortization of other intangible assets 2,213 2,800 2,788 Adjusted total non-interest expense 68,574 67,703 65,677 Total non-interest income 27,099 25,089 25,779 Less: net (loss) gain on investment securities (2) 12 (1) Less: net loss on asset disposals and other transactions (361) (1,746) (341) Total non-interest income excluding net losses 27,462 26,823 26,121 Net interest income 85,255 86,536 86,640 Add: FTE adjustment (a) 283 286 354 Net interest income on an FTE basis 85,538 86,822 86,994 Adjusted revenue $ 113,000 $ 113,645 $ 113,115 Efficiency ratio 60.68 % 59.57 % 58.06 % (a) Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate. The efficiency ratio for the first quarter of 2025 was 60.7%, compared to 59.6% for the linked quarter and 58.1% for the first quarter of 2024. The efficiency ratio increased compared to the linked quarter mainly as the result of higher non-interest expense, which was driven by annual expenses that occur in the first quarter of each year. The efficiency ratio increased for the first quarter of 2025 compared to the first quarter of 2024 due to higher non-interest expense. Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business. Return on Average Assets Adjusted for Non-Core Items Ratio (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 adjusted for non-core items ratio represents a Non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses and acquisition-related expenses. 52 Table of Contents The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented: Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Annualized net income adjusted for non-core items: Net income $ 24,336 $ 26,930 $ 29,584 Add: net loss on investment securities 2 — 1 Less: tax effect of net loss on investment securities (a) — — — Less: net gain on investment securities — 12 — Add: tax effect of net gain on investment securities (a) — 3 — Add: net loss on asset disposals and other transactions 361 1,746 341 Less: tax effect of net loss on asset disposals and other transactions (a) 76 367 72 Add: acquisition-related expenses — 1,144 (84) Less: tax effect of acquisition-related expenses (a) — 240 (18) Net income adjusted for non-core items (after tax) $ 24,623 $ 29,204 $ 29,788 Days in the period 90 92 91 Days in the year 365 366 366 Annualized net income $ 98,696 $ 107,135 $ 118,986 Annualized net income adjusted for non-core items (after tax) $ 99,860 $ 116,181 $ 119,807 Return on average assets: Annualized net income $ 98,696 $ 107,135 $ 118,986 Total average assets 9,195,467 9,146,057 9,021,651 Return on average assets 1.07 % 1.17 % 1.32 % Return on average assets adjusted for non-core items: Annualized net income adjusted for non-core items (after tax) $ 99,860 $ 116,181 $ 119,807 Total average assets 9,195,467 9,146,057 9,021,651 Return on average assets adjusted for non-core items (after tax) 1.09 % 1.27 % 1.33 % (a) Based on a 21% statutory federal corporate income tax rate. The return on average assets and the return on average assets adjusted for non-core items for the first quarter of 2025 decreased when compared to the linked quarter, due to a decrease in annualized net income resulting from higher non-interest expense and lower net interest income. The decrease in the return on average assets and return on average assets adjusted for non-core items for the first quarter of 2025, compared to the first quarter of 2024, was attributable to a decrease in annualized net income resulting from higher non-interest expense and an increase in average assets. Return on Average Tangible Equity Ratio (Non-US GAAP) The return on average tangible equity ratio is a key financial measure used to monitor performance. This ratio is calculated as annualized net income (less the after-tax impact of amortization of other intangible assets) divided by average tangible equity. This 53 Table of Contents 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. Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) Annualized net income excluding amortization of other intangible assets: Net income $ 24,336 $ 26,930 $ 29,584 Add: amortization of other intangible assets 2,213 2,800 2,788 Less: tax effect of amortization of other intangible assets (a) 465 588 585 Net income excluding amortization of other intangible assets $ 26,084 $ 29,142 $ 31,787 Days in the period 90 92 91 Days in the year 365 366 366 Annualized net income $ 98,696 $ 107,135 $ 118,986 Annualized net income excluding amortization of other intangible assets $ 105,785 $ 115,934 $ 127,847 Average tangible equity: Total average stockholders' equity $ 1,122,860 $ 1,120,597 $ 1,052,781 Less: average goodwill and other intangible assets 401,344 402,930 410,719 Average tangible equity $ 721,516 $ 717,667 $ 642,062 Return on total average stockholders' equity ratio: Annualized net income $ 98,696 $ 107,135 $ 118,986 Total average stockholders' equity $ 1,122,860 $ 1,120,597 $ 1,052,781 Return on total average stockholders' equity 8.79 % 9.56 % 11.30 % Return on average tangible equity ratio: Annualized net income excluding amortization of other intangible assets $ 105,785 $ 115,934 $ 127,847 Average tangible equity $ 721,516 $ 717,667 $ 642,062 Return on average tangible equity 14.66 % 16.15 % 19.91 % (a) Based on a 21% statutory federal corporate income tax rate. The return on total average stockholders' equity and average tangible equity ratios decreased when compared to the linked quarter due to a decrease in annualized net income mainly attributable to an increase in non-interest expense and a decrease in net interest income. The decreases in the return on total average stockholders' equity and average tangible equity ratios for the first quarter of 2025 compared to the same period of 2024 was driven by lower net income. 54 Table of Contents FINANCIAL CONDITION Cash and Cash Equivalents At March 31, 2025, Peoples' interest-bearing deposits in other banks had decreased $48.3 million from December 31, 2024. The total cash and cash equivalents balance included $52.6 million of excess cash reserves being maintained at the FRB of Cleveland at March 31, 2025, compared to $104.7 million at December 31, 2024. The amount of excess cash reserves maintained is dependent upon Peoples' daily liquidity position, which is driven primarily by changes in deposit and loan balances. Through the first three months of 2025, Peoples' total cash and cash equivalents decreased $30.7 million, which reflected cash outflows of $47.3 million for financing activities and $17.6 million for investing activities, partially offset by cash inflows of $34.3 million from operating activities. Peoples' use of cash in investing activities reflected a $74.8 million net increase in loans held for investment, partially offset by net cash inflows for available-for-sale investment securities and held-to-maturity investment securities for $29.4 million and $21.6 million, respectively. The cash used in financing activities was largely driven by a net decrease in short-term borrowings of $174.2 million, partially offset by an increase of $125.7 million in interest-bearing deposits and $18.6 million of non-interest bearing deposits. 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: (Dollars in thousands) Weighted Average Yield March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Available-for-sale securities, at fair value: Obligations of: U.S. Treasury and government agencies 5.23 % $ 14,343 $ 15,196 $ 27,961 $ 28,343 $ 28,773 U.S. government sponsored agencies 3.45 % 213,063 209,083 174,708 230,916 200,460 States and political subdivisions 2.87 % 195,505 196,301 206,779 202,804 208,750 Residential mortgage-backed securities 2.48 % 593,979 601,802 607,726 601,002 621,691 Commercial mortgage-backed securities 2.12 % 52,636 55,065 57,437 50,035 50,791 Bank-issued trust preferred securities 4.26 % 4,148 6,108 6,056 6,039 6,001 Total fair value $ 1,073,674 $ 1,083,555 $ 1,080,667 $ 1,119,139 $ 1,116,466 Total amortized cost $ 1,199,677 $ 1,229,382 $ 1,189,792 $ 1,266,060 $ 1,262,319 Net unrealized loss $ (126,003) $ (145,827) $ (109,125) $ (146,921) $ (145,853) Held-to-maturity securities, at amortized cost: Obligations of: U.S. government sponsored agencies 5.00 % $ 222,698 $ 233,302 $ 196,642 $ 212,023 $ 188,423 States and political subdivisions (a) 2.35 % 142,513 142,691 141,918 144,134 144,315 Residential mortgage-backed securities 4.12 % 290,023 300,290 256,329 246,283 246,579 Commercial mortgage-backed securities 2.48 % 98,469 98,754 98,984 99,782 100,427 Total amortized cost $ 753,703 $ 775,037 $ 693,873 $ 702,222 $ 679,744 Other investment securities $ 51,322 $ 60,132 $ 55,691 $ 62,742 $ 62,939 Total investment securities: Amortized cost $ 2,004,702 $ 2,064,551 $ 1,939,356 $ 2,031,024 $ 2,005,002 Carrying value $ 1,878,699 $ 1,918,724 $ 1,830,231 $ 1,884,103 $ 1,859,149 (a) Amortized cost is presented net of the allowance for credit losses of $237 at March 31, 2025 and at December 31, 2024 and $238 at March 31, 2024. For the first quarter of 2025, total investment securities decreased compared to the linked quarter due to principal payments received. Compared to March 31, 2024, held-to-maturity securities increased due to the purchases of higher-yielding, longer duration securities booked to held-to-maturity. Additional information regarding Peoples' investment portfolio can be found in "Note 3 Investment Securities" of the Notes to the Unaudited Condensed Consolidated Financial Statements. 55 Table of Contents Loans and Leases The following table provides information regarding outstanding loan balances: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Originated loans and leases: Construction $ 266,644 $ 271,975 $ 265,073 $ 291,240 $ 262,209 Commercial real estate, other 1,413,759 1,310,127 1,283,903 1,240,069 1,263,577 Commercial real estate 1,680,403 1,582,102 1,548,976 1,531,309 1,525,786 Commercial and industrial 1,167,382 1,162,777 1,047,001 1,032,753 972,191 Premium finance 264,080 269,435 286,983 293,349 238,962 Leases 375,224 382,074 401,573 390,160 373,626 Residential real estate 458,663 448,884 441,730 441,293 420,518 Home equity lines of credit 187,887 182,831 180,737 172,766 164,019 Consumer, indirect 680,260 669,857 677,056 675,054 650,228 Consumer, direct 101,876 101,062 101,026 100,836 99,022 Consumer 782,136 770,919 778,082 775,890 749,250 Deposit account overdrafts 1,047 1,253 1,205 1,067 1,306 Total originated loans and leases $ 4,916,822 $ 4,800,275 $ 4,686,287 $ 4,638,587 $ 4,445,658 Acquired loans and leases (a): Construction $ 52,460 $ 56,413 $ 55,021 $ 49,361 $ 52,478 Commercial real estate, other 816,779 845,886 896,588 955,910 980,203 Commercial real estate 869,239 902,299 951,609 1,005,271 1,032,681 Commercial and industrial 176,445 184,868 203,151 225,310 242,424 Leases 20,230 24,524 31,436 40,491 49,068 Residential real estate 389,505 386,217 335,812 348,051 361,370 Home equity lines of credit 47,522 49,830 52,372 54,842 57,060 Consumer, direct 8,763 9,990 11,172 12,819 14,566 Total acquired loans and leases $ 1,511,704 $ 1,557,728 $ 1,585,552 $ 1,686,784 $ 1,757,169 Total loans and leases $ 6,428,526 $ 6,358,003 $ 6,271,839 $ 6,325,371 $ 6,202,827 Percent of loans and leases to total loans and leases: Construction 5.0 % 5.2 % 5.1 % 5.4 % 5.1 % Commercial real estate, other 34.7 % 33.9 % 34.8 % 34.7 % 36.2 % Commercial real estate 39.7 % 39.1 % 39.9 % 40.1 % 41.3 % Commercial and industrial 20.8 % 21.2 % 19.9 % 19.9 % 19.6 % Premium finance 4.1 % 4.2 % 4.6 % 4.6 % 3.8 % Leases 6.2 % 6.4 % 6.9 % 6.8 % 6.8 % Residential real estate 13.2 % 13.2 % 12.4 % 12.5 % 12.6 % Home equity lines of credit 3.7 % 3.7 % 3.7 % 3.6 % 3.6 % Consumer, indirect 10.6 % 10.5 % 10.8 % 10.7 % 10.5 % Consumer, direct 1.7 % 1.7 % 1.8 % 1.8 % 1.8 % Consumer 12.3 % 12.2 % 12.6 % 12.5 % 12.3 % Total percentage 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Residential real estate loans being serviced for others $ 337,279 $ 346,189 $ 347,719 $ 341,298 $ 348,937 (a) Includes all loans acquired, and related loan discount recorded as part of acquisition accounting, in 2012 or thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals and increases in lines of credit). The period-end total loan and lease balances at March 31, 2025 increased $70.5 million, or 4% annualized, compared to at December 31, 2024. The increase in the period-end loan and lease balances at March 31, 2025 compared to December 31, 2024 was primarily driven by increases of $74.5 million in other commercial real estate loans, $13.1 million of residential real estate loans, and $10.4 million in indirect consumer loans, partially offset by a decrease of $11.1 million and $9.3 million in leases and construction loans, respectively. The increase in the period-end loan and lease balances at March 31, 2025 compared to at March 31, 2024 was primarily driven by loan growth of $129.2 million of commercial and industrial loans, $66.3 million of residential real estate loans, $30.0 million of indirect consumer loans, and $25.1 million of premium finance loans. These were partially offset by reductions in leases of $27.2 million and commercial real estate loans of $13.2 million. 56 Table of Contents 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, continued to comprise the largest portion of Peoples' loan portfolio at March 31, 2025. The following tables provide information regarding the largest concentrations of commercial construction loans and other commercial real estate loans within the loan portfolio at March 31, 2025: (Dollars in thousands) Outstanding Balance Loan Commitments Total Exposure % of Total Construction: Apartment complexes $ 182,211 $ 205,560 $ 387,771 59.4 % Residential property 16,138 21,952 38,090 5.8 % Land development 34,217 13,471 47,688 7.3 % Land only 10,710 30,917 41,627 6.4 % Assisted living facilities and nursing homes 8,941 14,608 23,549 3.6 % Lodging and lodging related 11,709 12,520 24,229 3.7 % Warehouse facilities 328 16,315 16,643 2.6 % Student housing 15,000 — 15,000 2.3 % Other (a) 39,850 18,075 57,925 8.9 % Total construction $ 319,104 $ 333,418 $ 652,522 100.0 % (a) All other total exposures by industry are less than 2% of the Total Exposure. 57 Table of Contents (Dollars in thousands) Outstanding Balance Loan Commitments Total Exposure % of Total Commercial real estate, other: Apartment complexes $ 410,413 $ 3,466 $ 413,879 18.0 % Retail facilities: Owner occupied $ 40,495 $ 804 $ 41,299 1.8 % Non-owner occupied 215,710 435 216,145 9.4 % Total retail facilities $ 256,205 $ 1,239 $ 257,444 11.2 % Light industrial facilities: Owner occupied $ 134,080 $ 6,958 $ 141,038 6.1 % Non-owner occupied 114,303 3,431 117,734 5.1 % Total light industrial facilities $ 248,383 $ 10,389 $ 258,772 11.2 % Office buildings and complexes: Owner occupied $ 73,632 $ 2,560 $ 76,192 3.3 % Non-owner occupied 118,803 1,462 120,265 5.2 % Total office buildings and complexes $ 192,435 $ 4,022 $ 196,457 8.5 % Lodging and lodging related: Owner occupied $ 30,185 $ — $ 30,185 1.3 % Non-owner occupied 145,473 1,263 146,736 6.4 % Total lodging and lodging related $ 175,658 $ 1,263 $ 176,921 7.7 % Assisted living facilities and nursing homes $ 117,524 $ 778 $ 118,302 5.2 % Warehouse facilities: Owner occupied $ 38,068 $ 509 $ 38,577 1.7 % Non-owner occupied 33,884 443 34,327 1.5 % Total warehouse facilities $ 71,952 $ 952 $ 72,904 3.2 % Restaurant/bar facilities: Owner occupied $ 55,194 $ — $ 55,194 2.4 % Non-owner occupied 30,651 — 30,651 1.3 % Total restaurant/bar facilities $ 85,845 $ — $ 85,845 3.7 % Mixed-use facilities: Owner occupied $ 42,574 $ 1,840 $ 44,414 1.9 % Non-owner occupied 33,640 1,221 34,861 1.5 % Total mixed-use facilities $ 76,214 $ 3,061 $ 79,275 3.4 % Healthcare facilities: Owner occupied $ 37,278 $ 19 $ 37,297 1.6 % Non-owner occupied 15,043 2,498 17,541 0.8 % Total healthcare facilities $ 52,321 $ 2,517 $ 54,838 2.4 % Other (a) 543,588 41,112 584,700 25.5 % Total commercial real estate, other $ 2,230,538 $ 68,799 $ 2,299,337 100.0 % (a) All other total exposures by industry are less than 2% of the Total Exposure. Peoples' commercial lending activities continue to focus on lending opportunities within Ohio, Kentucky, West Virginia, Virginia, Washington, D.C. and Maryland. For all other states, the aggregate outstanding balances of commercial loans in each state were less than 5% of total loans at March 31, 2025 and December 31, 2024. The repayment of premium finance loans is secured by the underlying insurance policy prepaid premium, and therefore, has no geographical impact from a repayment perspective. The repayment of leases is secured by the underlying equipment collateral and not real estate, which mitigates geographic risk. 58 Table of Contents Allowance for Credit Losses The amount of the allowance for credit losses at the end of each period represents management's estimate of expected losses from existing loans based upon its quarterly analysis of the loan portfolio. While this process involves allocations being made to specific loans and pools of loans, the entire allowance is available for all losses expected within the loan portfolio. The following details management's allocation of the allowance for credit losses: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Construction $ 1,156 $ 878 $ 854 $ 673 $ 701 Commercial real estate, other 17,155 16,256 17,239 19,852 21,788 Commercial and industrial 12,783 13,283 11,592 10,943 10,581 Premium finance 646 662 711 763 607 Leases 13,575 12,893 16,970 15,218 12,889 Residential real estate 6,786 6,491 6,058 5,939 5,866 Home equity lines of credit 1,863 1,792 1,804 1,737 1,689 Consumer, indirect 8,696 8,576 8,924 8,654 8,301 Consumer, direct 2,474 2,396 2,370 2,332 2,279 Deposit account overdrafts 98 121 117 136 121 Allowance for credit losses $ 65,232 $ 63,348 $ 66,639 $ 66,247 $ 64,822 As a percent of total loans 1.01 % 1.00 % 1.06 % 1.05 % 1.05 % The increase in the allowance for credit losses at March 31, 2025 compared to December 31, 2024 was primarily due to (i) a deterioration of macro-economic conditions used within the CECL model, (ii) an increase of reserves on individually analyzed loans and (iii) loan growth. The increase in the allowance balance at March 31, 2025 when compared to March 31, 2024 was driven by loan growth and a slight increase of reserves on individually analyzed loans. Additional information regarding Peoples' allowance for credit losses can be found in "Note 1 Summary of Significant Accounting Policies" in Peoples' 2024 Form 10-K and "Note 4 Loans and Leases" of the Notes to the Unaudited Condensed Consolidated Financial Statements in this Form 10-Q. 59 Table of Contents The following table summarizes Peoples’ net charge-offs and recoveries: Three Months Ended (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Gross charge-offs: Commercial real estate, other 215 219 — — 212 Commercial and industrial 380 118 259 56 235 Premium finance 71 63 37 55 54 Leases 5,654 7,706 3,753 2,377 1,270 Residential real estate 142 144 — 64 80 Home equity lines of credit — — 2 9 — Consumer, indirect 1,866 1,331 1,820 1,567 1,461 Consumer, direct 155 149 162 141 226 Consumer 2,021 1,480 1,982 1,708 1,687 Deposit account overdrafts 277 310 558 338 336 Total gross charge-offs $ 8,760 $ 10,040 $ 6,591 $ 4,607 $ 3,874 Recoveries: Commercial real estate, other $ 4 $ 24 $ 100 $ (80) $ 83 Commercial and industrial 6 40 1 10 7 Premium finance 6 12 4 4 8 Leases 245 87 56 173 212 Residential real estate 49 45 58 68 83 Home equity lines of credit — — — — 7 Consumer, indirect 210 178 186 117 71 Consumer, direct 20 7 19 15 9 Consumer 230 185 205 132 80 Deposit account overdrafts 99 61 83 67 74 Total recoveries $ 639 $ 454 $ 507 $ 374 $ 554 Net charge-offs (recoveries): Commercial real estate, other 211 195 (100) 80 129 Commercial and industrial 374 78 258 46 228 Premium finance 65 51 33 51 46 Leases 5,409 7,619 3,697 2,204 1,058 Residential real estate 93 99 (58) (4) (3) Home equity lines of credit — — 2 9 (7) Consumer, indirect 1,656 1,153 1,634 1,450 1,390 Consumer, direct 135 142 143 126 217 Consumer 1,791 1,295 1,777 1,576 1,607 Deposit account overdrafts 178 249 475 271 262 Total net charge-offs $ 8,121 $ 9,586 $ 6,084 $ 4,233 $ 3,320 Ratio of net charge-offs (recoveries) to average total loans (annualized): Commercial real estate, other 0.01 % 0.01 % (0.01) % 0.01 % 0.01 % Commercial and industrial 0.02 % — % 0.02 % — % 0.02 % Premium finance — % — % — % — % — % Leases 0.35 % 0.50 % 0.23 % 0.14 % 0.07 % Residential real estate 0.01 % 0.01 % — % — % — % Home equity lines of credit — % — % — % — % — % Consumer, indirect 0.11 % 0.06 % 0.10 % 0.09 % 0.09 % Consumer, direct 0.01 % 0.01 % 0.01 % 0.01 % 0.01 % Consumer 0.12 % 0.07 % 0.11 % 0.10 % 0.10 % Deposit account overdrafts 0.01 % 0.02 % 0.03 % 0.02 % 0.02 % Total 0.52 % 0.61 % 0.38 % 0.27 % 0.22 % Each with "--%" not meaningful. 60 Table of Contents Total net charge-offs during the first quarter of 2025 were $8.1 million, or 0.52% of average total loans on an annualized basis, compared to $9.6 million, or 0.61% of average total loans on an annualized basis, during the linked quarter and $3.3 million, or 0.22% of average total loans on an annualized basis, during the first quarter of 2024. The decrease in net charge-offs when compared to the linked quarter was primarily related to a slight improvement in the lease portfolio of $2.2 million, partially offset by an increase of $0.5 million in indirect consumer loans. The net charge-offs for the lease portfolio remain higher than historic norms and are the driver for the increase over March 31, 2024. The following table details Peoples’ nonperforming assets: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Loans 90+ days past due and accruing: Commercial real estate, other $ 284 $ 227 $ 3,838 $ 106 $ 231 Commercial and industrial 106 78 413 208 10 Premium finance 2,502 4,947 7,771 2,546 2,208 Leases 218 803 12,675 3,193 4,070 Residential real estate 853 2,166 2,442 1,209 780 Home equity lines of credit 47 213 292 230 181 Consumer, indirect 77 159 46 67 134 Consumer, direct 120 44 101 33 48 Consumer 197 203 147 100 182 Total loans 90+ days past due and accruing $ 4,207 $ 8,637 $ 27,578 $ 7,592 $ 7,662 Nonaccrual loans: Commercial real estate, other 5,378 7,136 4,416 4,833 3,773 Commercial and industrial 5,747 6,809 7,008 6,030 6,205 Leases 12,079 8,850 12,428 11,849 10,136 Residential real estate 8,163 7,329 6,658 7,078 7,450 Home equity lines of credit 1,537 1,498 1,461 1,454 1,134 Consumer, indirect 2,521 2,374 2,726 2,261 2,506 Consumer, direct 203 133 110 164 157 Consumer 2,724 2,507 2,836 2,425 2,663 Total nonaccrual loans $ 35,628 $ 34,129 $ 34,807 $ 33,669 $ 31,361 Total nonperforming loans ("NPLs") $ 39,835 $ 42,766 $ 62,385 $ 41,261 $ 39,023 OREO: Commercial $ 5,891 $ 5,891 $ 7,118 $ 7,118 $ 7,118 Residential 89 279 279 291 120 Total OREO $ 5,980 $ 6,170 $ 7,397 $ 7,409 $ 7,238 Total nonperforming assets ("NPAs") $ 45,815 $ 48,936 $ 69,782 $ 48,670 $ 46,261 Criticized loans (a) $ 226,542 $ 241,302 $ 237,627 $ 239,943 $ 256,565 Classified loans (b) $ 123,842 $ 128,815 $ 133,241 $ 120,180 $ 147,518 Asset Quality Ratios (c): Nonaccrual loans as a percent of total loans 0.55 % 0.54 % 0.55 % 0.53 % 0.51 % NPLs as a percent of total loans (d) 0.62 % 0.67 % 0.99 % 0.65 % 0.63 % NPAs as a percent of total assets (d) 0.50 % 0.53 % 0.76 % 0.53 % 0.50 % NPAs as a percent of total loans and OREO (d) 0.71 % 0.77 % 1.11 % 0.77 % 0.74 % Allowance for credit losses as a percent of nonaccrual loans 183.09 % 185.61 % 191.45 % 196.76 % 206.70 % Allowance for credit losses as a percent of NPLs (d) 163.76 % 148.13 % 106.82 % 160.56 % 166.11 % Criticized loans as a percent of total loans (a) 3.52 % 3.80 % 3.79 % 3.79 % 4.14 % Classified loans as a percent of total loans (b) 1.93 % 2.03 % 2.12 % 1.90 % 2.38 % 61 Table of Contents (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 period indicated. (d) NPLs include loans 90+ days past due and accruing and nonaccrual loans. NPAs include nonperforming loans and OREO. Compared to at December 31, 2024, Peoples' NPAs decreased from 0.53% of total assets to 0.50% of total assets at March 31, 2025. Total loans 90+ days past due and accruing in total decreased at March 31, 2025 compared to March 31, 2024 because of a reduction of leases. During the first quarter of 2025, criticized loans decreased $14.8 million, while classified loans decreased $5.0 million when compared to at December 31, 2024. The decrease in the amounts of criticized and classified loans compared to at December 31, 2024 and at March 31, 2024 was primarily driven by paydowns and upgrades of the risk rating of commercial loans. The decrease in NPAs compared to at December 31, 2024, was primarily driven by decreases of residential real estate loans and premium finance loans that were 90+ days past due and accruing. The decrease in NPAs compared to at March 31, 2024, was driven primarily by leases 90+ days past due and accruing and a reduction of OREO, partially offset by an increase in nonaccrual leases. Deposits The following table details Peoples’ deposit balances: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Non-interest-bearing deposits (a) $ 1,526,285 $ 1,507,661 $ 1,453,441 $ 1,472,697 $ 1,468,363 Interest-bearing deposits: Interest-bearing demand accounts (a) 1,086,112 1,085,152 1,065,912 1,083,512 1,107,712 Savings accounts 895,677 866,959 864,935 880,542 901,493 Retail CDs 1,965,978 1,921,415 1,884,139 1,812,874 1,680,413 Money market deposit accounts 967,331 878,254 894,690 869,159 859,961 Governmental deposit accounts 834,409 775,782 824,136 766,337 825,170 Brokered CDs 458,957 554,982 495,904 412,653 483,444 Total interest-bearing deposits 6,208,464 6,082,544 6,029,716 5,825,077 5,858,193 Total deposits $ 7,734,749 $ 7,590,205 $ 7,483,157 $ 7,297,774 $ 7,326,556 Demand deposits as a percent of total deposits 34 % 34 % 34 % 35 % 35 % (a) The sum of amounts presented is considered total demand deposits. At March 31, 2025, period-end total deposits increased $144.5 million, or 2%, compared to at December 31, 2024, driven by increases of $89.1 million in money market deposit accounts, $58.6 million in governmental deposit accounts, and $44.6 million in retail certificates of deposits, partially offset by a decrease of $96.0 million in brokered deposits. The increase in governmental deposit accounts was due to the seasonality of those balances and the increase in retail certificates of deposits was due to current specials being offered. The decrease in brokered deposit accounts was due to the aforementioned influx of deposits. Compared to March 31, 2024, period-end deposit balances increased $408.2 million, or 6%. The increase was driven by increases of $285.6 million in retail certificates of deposits, $107.4 million in money market deposit accounts, and $57.9 million of non-interest bearing deposits, partially offset by decreases of $24.5 million and $21.6 million in brokered deposits and interest-bearing deposits, respectively. The increase in retail certificates of deposits was driven by special promotional rate offerings over the past year. Given the rate environment, there has been a mix shift in the deposit portfolio over the last twelve months. As part of its funding strategy, Peoples hedges 90-day brokered CDs or FHLB advances with interest rate swaps. The interest rate swaps pay a fixed rate of interest while receiving a floating rate component of interest tied to term SOFR, which offsets the rate on the brokered CDs or FHLB advances. As of March 31, 2025, Peoples had seven effective interest rate swaps, with an aggregate notional value of $65.0 million, which were designated as cash flow hedges. Peoples continually evaluates the overall balance sheet position given the interest rate environment. 62 Table of Contents Borrowed Funds The following table details Peoples’ short-term borrowings and long-term borrowings: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Short-term borrowings: FHLB Overnight borrowings $ — $ 175,000 $ — $ 295,000 $ 260,192 Retail repurchase agreements 19,228 18,367 12,945 24,733 90,304 Bank Term Funding Program ("BTFP") — — 163,000 163,000 163,000 Other short-term borrowings — 107 — — — Total short-term borrowings $ 19,228 $ 193,474 $ 175,945 $ 482,733 $ 513,496 Long-term borrowings: FHLB advances $ 131,716 $ 131,868 $ 132,157 $ 132,524 $ 132,683 Vantage non-recourse debt 50,156 51,330 50,059 47,393 49,529 Other long-term borrowings 55,128 54,875 54,608 54,340 54,071 Total long-term borrowings $ 237,000 $ 238,073 $ 236,824 $ 234,257 $ 236,283 Total borrowed funds $ 256,228 $ 431,547 $ 412,769 $ 716,990 $ 749,779 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 and floating rate junior subordinated deferrable interest debentures. Total borrowed funds at March 31, 2025 decreased compared to at December 31, 2024 and at March 31, 2024, primarily due to lower FHLB overnight borrowings. Capital/Stockholders’ Equity At March 31, 2025, capital levels for both Peoples and Peoples Bank remained substantially higher than the minimum amounts needed to be considered "well capitalized" institutions under applicable banking regulations. These higher capital levels reflect Peoples' desire to maintain a strong capital position. In order to avoid limitations on dividends, equity repurchases and compensation, Peoples must exceed the three minimum required ratios by at least the capital conservation buffer of 2.50%, which applies to the common equity tier 1 ("CET1") ratio, the tier 1 capital ratio and the total risk-based capital ratio. At March 31, 2025, Peoples had a capital conservation buffer of 5.75%. The following table details Peoples' risk-based capital levels and corresponding ratios: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Capital Amounts: Common Equity Tier 1 $ 845,200 $ 833,128 $ 821,192 $ 799,710 $ 780,018 Tier 1 876,245 863,974 851,823 830,126 810,219 Total (Tier 1 and Tier 2) 960,819 946,724 933,679 916,073 894,663 Net risk-weighted assets $ 6,986,419 $ 6,971,490 $ 6,958,225 $ 6,814,149 $ 6,674,196 Capital Ratios: Common Equity Tier 1 12.10 % 11.95 % 11.80 % 11.74 % 11.69 % Tier 1 12.54 % 12.39 % 12.24 % 12.18 % 12.14 % Total (Tier 1 and Tier 2) 13.75 % 13.58 % 13.42 % 13.44 % 13.40 % Tier 1 leverage ratio 9.81 % 9.73 % 9.59 % 9.29 % 9.16 % Peoples' risk-based capital ratios at March 31, 2025 increased when compared to at December 31, 2024, and to at March 31, 2024, due to net income during the quarter, partially offset by dividends paid. In addition to traditional capital measurements, management uses tangible capital measures to evaluate the adequacy of Peoples' stockholders' equity. Such ratios represent Non-US GAAP financial measures since their calculation removes the impact of goodwill and other intangible assets acquired through acquisitions on amounts reported in the Unaudited Consolidated Balance Sheets. 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 similar level of intangible assets to that of Peoples. Further, intangible assets generally are difficult to convert into cash, especially during a financial crisis, and could decrease substantially in 63 Table of Contents 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. The following table reconciles the calculation of these Non-US GAAP financial measures to amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Tangible equity: Total stockholders' equity $ 1,137,821 $ 1,111,590 $ 1,124,972 $ 1,077,833 $ 1,062,002 Less: goodwill and other intangible assets 400,099 402,422 403,922 406,417 409,285 Tangible equity $ 737,722 $ 709,168 $ 721,050 $ 671,416 $ 652,717 Tangible assets: Total assets $ 9,246,000 $ 9,254,247 $ 9,140,471 $ 9,226,461 $ 9,270,774 Less: goodwill and other intangible assets 400,099 402,422 403,922 406,417 409,285 Tangible assets $ 8,845,901 $ 8,851,825 $ 8,736,549 $ 8,820,044 $ 8,861,489 Tangible book value per common share: Tangible equity $ 737,722 $ 709,168 $ 721,050 $ 671,416 $ 652,717 Common shares outstanding 35,669,100 35,563,590 35,538,607 35,498,977 35,486,234 Tangible book value per common share $ 20.68 $ 19.94 $ 20.29 $ 18.91 $ 18.39 Tangible equity to tangible assets ratio: Tangible equity $ 737,722 $ 709,168 $ 721,050 $ 671,416 $ 652,717 Tangible assets $ 8,845,901 $ 8,851,825 $ 8,736,549 $ 8,820,044 $ 8,861,489 Tangible equity to tangible assets 8.34 % 8.01 % 8.25 % 7.61 % 7.37 % Tangible book value per common share increased to $20.68 at March 31, 2025 compared to $19.94 at December 31, 2024. The change in tangible book value per common share was due to tangible equity increasing during the first quarter of 2025 primarily due to a decrease in accumulated other comprehensive loss over the last three months. Tangible book value per common share at March 31, 2025 increased compared to at March 31, 2024 primarily due to net income over the last twelve months. 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 impact interest costs or revenue streams. Peoples has assigned overall management of IRR to its Asset-Liability Committee (the “ALCO”), which has established an IRR management policy that sets minimum requirements and guidelines for monitoring and managing the level of IRR, including the review of assumptions used in modeling IRR. 64 Table of Contents 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): Increase (Decrease) in Interest Rate Estimated Increase (Decrease) in Net Interest Income Estimated (Decrease) Increase in Economic Value of Equity (in Basis Points) March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024 300 $ 18,876 5.3 % $ 10,471 3.0 % $ (108,903) (6.0) % $ (127,697) (7.2) % 200 13,226 3.7 % 7,090 2.0 % (70,567) (3.9) % (88,238) (5.0) % 100 7,099 2.0 % 3,678 1.0 % (33,106) (1.8) % (45,430) (2.6) % (100) (12,309) (3.4) % (9,700) (2.7) % (5,850) (0.3) % 12,016 0.7 % (200) (26,990) (7.6) % (19,818) (5.6) % (40,569) (2.2) % (3,009) (0.2) % (300) (17,783) (5.0) % (19,964) (5.6) % (92,496) (5.1) % (25,823) (1.5) % 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, as well as assumptions regarding prepayment speeds on mortgage-backed securities. These and other modeling assumptions are monitored closely by Peoples on an ongoing basis. 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 increasing short-term interest rates in the future could be offset by an inverse movement in long-term interest 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 interest 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 March 31, 2025, consideration of the bear steepener and bull steepener scenarios provide insights which were not captured by parallel shifts. The bear steepener scenario highlights the risk to net interest income and economic value of equity when short-term interest rates remain constant while long-term interest 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 March 31, 2025, the bear steepener scenario produced an increase in net interest income of 0.8% and an increase in the economic value of equity of 5.6%. 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-term borrowing costs, which are more correlated with long-term rates, remain constant. Decreased deposit and funding costs would be more than offset by increased variable rate asset yields over a longer horizon; resulting in an increased amount of net interest income and net interest margin over a 24-month period. At March 31, 2025, the bull steepener scenario produced a decline of 0.7% to net interest income, as the impact of recent term funding mitigates the impact of lower short-term rates over a 12-month horizon, and an increase in the economic value of equity of 2.6%. Over a 24-month horizon, the bull steepener scenario produced a decrease of 1.2% to net interest income. 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 March 31, 2025, Peoples had entered into seven interest rate swap contracts with an aggregate notional value of $65.0 million. Additional information regarding Peoples’ interest rate swaps can be found in “Note 10 Derivative Financial Instruments” of the Notes to the Unaudited Condensed Consolidated Financial Statements. At March 31, 2025, Peoples' Unaudited Consolidated Balance Sheet was positioned to benefit from rising interest rates, while also mitigating the impact to net interest income decreasing rate scenarios. The table above illustrates this point as changes to net interest income increase in the rising interest rate scenarios. Liquidity In addition to IRR management, another major objective of the ALCO is to maintain a sufficient level of liquidity. In light of the recent bank failures, Peoples revisited the model assumptions, and determined the methods used by the ALCO to monitor and 65 Table of Contents evaluate the adequacy of Peoples Bank's liquidity position remain appropriate and are largely unchanged from those disclosed in Peoples' 2024 Form 10-K. At March 31, 2025, Peoples Bank had liquid assets of $520.4 million, which represented 4.9% of total assets and unfunded loan commitments. Peoples also had an additional $158.1 million of unpledged investment securities not included in the measurement of liquid assets. Management believes the current mix of short-term liquidity sources, loan and security portfolio cash flows, and 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 In the normal course of business, Peoples is a party to financial instruments with off-balance sheet risk necessary to meet the financing needs of Peoples' customers. These financial instruments include commitments to extend credit and standby letters of credit. The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Unaudited Consolidated Balance Sheets. The contract amounts of these instruments express the extent of involvement Peoples has in these financial instruments. Loan Commitments and Standby Letters of Credit Loan commitments are made to accommodate the financial needs of Peoples' customers. Standby letters of credit are instruments issued by Peoples Bank guaranteeing the beneficiary payment by Peoples Bank in the event of default by Peoples Bank's customer in the performance of an obligation or service. Historically, most loan commitments and standby letters of credit expire unused. Peoples Bank's exposure to credit loss in the event of nonperformance by the counter-party to the financial instrument for loan commitments and standby letters of credit is represented by the contractual amount of those instruments. Peoples Bank uses the same underwriting standards in making commitments and conditional obligations as it does for on-balance sheet instruments. The amount of collateral obtained is based on management's credit evaluation of the customer. Collateral held varies, but may include accounts receivable, inventory, property, plant, and equipment, and income-producing commercial properties. Peoples Bank routinely engages in activities that involve, to varying degrees, elements of risk that are not reflected in whole or in part in the Unaudited Condensed Consolidated Financial Statements. These activities are part of Peoples Bank's normal course of business and include traditional off-balance sheet credit-related financial instruments, interest rate contracts and commitments to make additional capital contributions in low-income housing tax credit investments. Traditional off-balance sheet credit-related financial instruments continue to represent the most significant off-balance sheet exposure. The following table details the total contractual amount of loan commitments and standby letters of credit: (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Home equity lines of credit $ 257,349 $ 254,168 $ 248,400 $ 247,757 $ 246,035 Unadvanced construction loans 350,382 370,086 376,595 371,322 349,850 Other loan commitments 729,254 759,790 815,199 759,121 714,513 Loan commitments $ 1,336,985 $ 1,384,044 $ 1,440,194 $ 1,378,200 $ 1,310,398 Standby letters of credit $ 6,970 $ 8,398 $ 9,917 $ 10,507 $ 13,131 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information called for by this Item 3 is provided under the caption “FINANCIAL CONDITION - Interest Rate Sensitivity and Liquidity” under “ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in this Form 10-Q, and is incorporated herein by reference.