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 and six months ended June 30, 2025 and June 30, 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; 43 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 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; 44 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 June 30, 2025, Peoples had 145 locations, including 127 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 June 30, 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. 45 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 permitted. Peoples does not expect the update will have a material impact on its consolidated financial statements. ASU 2025-01 - Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date: The 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 its 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 second quarter of 2025, Peoples recorded a provision for credit losses of $16.6 million, compared to a provision for credit losses of $10.2 million for the linked quarter and a provision for credit losses of $5.7 million for the second quarter of 2024. The provision for credit losses for the second quarter of 2025 was primarily driven by (i) net charge offs, (ii) an increase in reserves for individually-analyzed loans and leases, (iii) an increase in reserves for leases originated by our North Star Leasing division, (iv) a periodic refresh in loss drivers utilized within the CECL model, (v) deterioration in the economic forecasts used within the CECL model, and (vi) loan growth. The provision for the first quarter of 2025 was primarily driven by net charge-offs. The provision for credit losses for the second quarter of 2024 was driven by (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans, and (iii) 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 5.25% 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 $21.2 million for the second quarter of 2025, representing earnings per diluted common share of $0.59. In comparison, Peoples reported net income of $24.3 million, representing earnings per diluted common share of $0.68, for the first quarter of 2025, and net income of $29.0 million, representing earnings per diluted common share of $0.82, for the second quarter of 2024. Non-core items negatively impacted earnings per diluted common share by $0.01 for the second quarter of 2025, $0.01 for the first quarter of 2025, and $0.02 for the second quarter of 2024. For the six months ended June 30, 2025, Peoples recorded net income of $45.5 million, or $1.28 per diluted common share, compared to $58.6 million, or $1.66 per diluted common share, for the six months ended June 30, 2024. Net interest income was $87.6 million for the second quarter of 2025, and increased $2.3 million when compared to the linked quarter. Net interest margin was 4.15% for the second quarter of 2025, compared to 4.12% for the linked quarter. The increase in net interest income and net interest margin was primarily driven by lower deposit and borrowing costs. Net interest income for the second quarter of 2025 increased $1.0 million, or 1%, compared to the second quarter of 2024. The increase in net interest income compared to the second quarter of 2024 was driven by higher loan balances. Net interest margin for the second quarter of 2025 was 4.15% and decreased 3 basis points compared to 4.18% for the second quarter of 2024, impacted primarily by reductions in loan yields, driven by lower accretion income, partially offset by lower funding costs. Net interest income for the first six months of 2025 was $172.8 million, compared to $173.3 million for the same period of 2024. Net interest margin for the first six months of 2025 was 4.14%, compared to 4.22% for the same period of 2024 and was driven by lower accretion income. Accretion income, net of amortization expense, from acquisitions was $2.6 million for the second quarter of 2025, $3.5 million for the first quarter of 2025 and $5.8 million for the second quarter of 2024, which added 12 basis points, 17 basis points and 28 basis points, respectively, to net interest margin. The decrease in accretion income for the second quarter of 2025 when compared to the linked quarter and the second quarter of 2024 was driven by fewer loan payoffs and more accretion income recognized in 2024 from 46 Table of Contents the merger with Limestone Bancorp Inc. (the "Limestone Merger"). Accretion income, net of amortization expense, was $6.1 million and $12.3 million for the first six months of 2025 and 2024, respectively. Accretion income added 15 basis points and 30 basis points to net interest margin for the first six months of 2025 and 2024, respectively. The decrease in accretion income for the first six months of 2025 compared to the same period in 2024 was due to more accretion recognized in 2024 from the Limestone Merger. The provision for credit losses was $16.6 million for the second quarter of 2025, compared to a provision for credit losses of $10.2 million for the linked quarter and a provision for credit losses of $5.7 million for the second quarter of 2024. The provision for credit losses for the second quarter of 2025 was primarily driven by (i) net charge offs, (ii) an increase in reserves for individually-analyzed loans and leases, (iii) an increase in reserves for leases originated by our North Star Leasing division, (iv) a periodic refresh in loss drivers utilized within the CECL model, (v) deterioration in the economic forecasts used within the CECL model, and (vi) loan growth. The provision for credit losses for the linked quarter was primarily driven by net charge-offs. The provision for credit losses for the second quarter of 2024 was driven by (i) net charge-offs, (ii) an increase of reserves for individually analyzed loans and leases, and (iii) loan growth. Net charge-offs for the second quarter of 2025 were $7.0 million, or 0.43% of average total loans annualized, compared to net charge-offs of $8.1 million, or 0.52% of average total loans annualized, for the linked quarter and net charge-offs of $4.2 million, or 0.27% of average total loans annualized, for the second quarter of 2024. For additional information on credit trends and the allowance for credit losses, see the "FINANCIAL CONDITION - Allowance for Credit Losses" section below. The provision for credit losses for the first six months of 2025 was $26.8 million, compared to a provision for credit losses of $11.8 million for the first six months of 2024. The provision for credit losses for the first six months of 2025 was mainly a result of (i) net charge offs, (ii) an increase in reserves for individually-analyzed loans and leases, (iii) an increase in reserves for leases originated by our North Star Leasing division, (iv) a periodic refresh in loss drivers utilized within the CECL model, (v) deterioration in the economic forecasts used within the CECL model, and (vi) loan growth. The provision for credit losses for the first six months of 2024 was mainly a result of (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases and (iii) loan growth. Net charge-offs for the first six months of 2025 were $15.1 million, or 0.48% of average total loans annualized, compared to net charge-offs of $7.6 million, or 0.23% annualized, for the first six months of 2024. For additional information on credit trends and the allowance for credit losses, see the "Asset Quality" 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 second quarter of 2025 was $0.3 million, compared to a net loss of $0.4 million for the linked quarter and a net loss of $0.8 million for the second quarter of 2024. Net losses in both the second and first quarter of 2025 were driven by a $0.3 million loss on repossessed assets in each quarter. The net loss for the second quarter of 2024 was due to $0.4 million of net losses on repossessed assets. For the six months ended June 30, 2025, the total net loss was $0.6 million, compared to $1.1 million for the same period in 2024. These losses were primarily driven by $0.6 million and $0.7 million of losses on repossessed assets, respectively. Total non-interest income, excluding net gains and losses, for the second quarter of 2025 decreased $0.3 million compared to the linked quarter. The decrease in non-interest income, excluding net gains and losses, was primarily impacted by a decrease 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 increases in lease income and electronic banking income of $0.7 million and $0.4 million, respectively. Compared to the second quarter of 2024, total non-interest income, excluding net gains and losses, increased $2.7 million, due to an increase of $2.0 million in lease income, driven by operating lease income, an increase of $0.4 million in insurance income, and an increase of $0.3 million in other non-interest income, partially offset by a decrease of $0.3 million in deposit account service charges. For the first six months of 2025, total non-interest income, excluding gains and losses, increased $4.0 million, or 8%, compared to the first six months of 2024. The increase was driven by (i) a $3.5 million increase in lease income, driven by gains on early Vantage lease terminations and operating lease income, (ii) a $0.9 million increase in other non-interest income, driven by an increase in swap fee income due to customer demand, and (iii) a $0.7 million increase in trust and investment income, driven by an increase in assets under administration and management. These increases were partially offset by a $0.5 million decrease in deposit account service charges and a $0.4 million decrease in electronic banking income due to customer activity. Total non-interest expense decreased $0.4 million for the three months ended June 30, 2025, compared to the linked quarter. The decrease in total non-interest expense was primarily due to a decreases of $0.9 million in salaries and employee benefit costs and $0.4 million in other non-interest expense, partially offset by increases of $0.5 million in professional fees and $0.4 million in data processing and software expenses. The decrease in salaries and employee benefit costs was due to annual expenses that occur in the first quarter of each year including stock-based compensation expenses attributable to the forfeiture rate true-up on stock vested along with up-front expense on stock grants to certain retirement-eligible employees, and health savings account ("HSA") contributions. Compared to the second quarter of 2024, total non-interest expense increased $1.6 million, or 2%. The increase in total non-interest expense was primarily driven by increases of $2.3 million in salaries and employee benefit costs, which were driven by higher sales-based incentive, medical costs, and payroll taxes, $0.7 million in professional fees, and $0.6 million in data processing and software expense, offset by decreases of $1.6 million in other non-interest expense, driven by a one-time $1.3 million true-up of corporate expenses recorded in the second quarter of 2024, and $0.6 million in amortization of other intangible assets. 47 Table of Contents For the six months ended June 30, 2025, total non-interest expense increased $3.9 million, or 3%, compared to the first six months of 2024. The increase was driven by increases of (i) $3.3 million in salaries and employee benefits costs, which were driven by higher sales-based incentive and medical costs, (ii) $1.8 million in data processing and software expenses, (iii) $0.8 million in professional fees, and (iv) $0.6 million in operating lease expense, partially offset by decreases of $1.2 million in amortization of other intangible assets and $1.1 million in net occupancy and equipment expense. The efficiency ratio for the second quarter of 2025 was 59.3%, compared to 60.7% for the linked quarter and 59.2% for the second quarter of 2024. The efficiency ratio improved compared to the linked quarter mainly as the result of higher higher net interest income and lower non-interest expenses. The efficiency ratio for the first six months of 2025 was 60.0%, compared to 58.6% for the first six months of 2024. The efficiency ratio increased compared to the prior year first six months due to the increase in non-interest expense and lower net interest income. Peoples recorded income tax expense of $6.2 million with an effective tax rate of 22.7% for the second quarter of 2025, compared to income tax expense of $7.0 million with an effective tax rate of 22.4% for the linked quarter, and income tax expense of $6.9 million with an effective tax rate of 19.1% for the second quarter of 2024. The decrease in income tax expense when compared to the prior quarter was primarily due to lower net income. Peoples' income tax expense for the first half of 2025 was $13.3 million with an effective tax rate of 22.6%, compared to $15.1 million with an effective tax rate of 20.5% for the same period of 2024. Total assets were $9.54 billion as of June 30, 2025, $9.25 billion at March 31, 2025, $9.25 billion at December 31, 2024, and $9.23 billion at June 30, 2024. Total assets at June 30, 2025 increased when compared to at March 31, 2025 primarily due to increases in period-end loan and lease balances. The period-end total loan and lease balances at June 30, 2025 increased $173.1 million, or 11% annualized, compared to at March 31, 2025. The increase in the period-end total loan and lease balances was primarily driven by increases of $63.6 million in commercial and industrial loans, $29.8 million in residential real estate loans, $22.2 million in construction loans, $17.7 million in other commercial real estate loans, $13.5 million in premium finance loans, and $18.5 million in Vantage leases, offset by a decrease of $13.9 million in North Star leases. Total assets at June 30, 2025 increased compared to at June 30, 2024 due to increases of $276.2 million in total loans and leases and $135.2 million in total investment securities, partially offset by a decrease of $49.8 million in total cash and cash equivalents. Total liabilities were $8.39 billion at June 30, 2025, up from $8.11 billion at March 31, 2025, $8.14 billion at December 31, 2024, and $8.15 billion at June 30, 2024. The increase in total liabilities when compared to at March 31, 2025 was primarily due to an increase of $377.6 million in short-term borrowings, partially offset by a decrease of $97.5 million in period-end total deposits. The increase in total liabilities when compared to at June 30, 2024 was primarily due to a $339.4 million increase in period-end deposits, partially offset with a decrease of $85.9 million in short-term borrowings. The increase in deposits was primarily driven by an increase of $192.4 million in retail certificates of deposit, driven by current promotional offerings, an increase of $58.4 million in money market deposit accounts, an increase of $58.0 million in non-interest-bearing deposits, and an increase of $30.0 million in brokered certificates of deposit. Total stockholders' equity at June 30, 2025 increased $15.5 million compared to at March 31, 2025, which was primarily due to net income for the quarter of $21.2 million and a decrease of $5.4 million in accumulated other comprehensive loss, partially offset by dividends paid of $14.6 million. Accumulated unrealized losses related to the available-for-sale investment securities portfolio were $90.9 million and $96.6 million at June 30, 2025 and at March 31, 2025, respectively. Total stockholders' equity at June 30, 2025 increased $41.8 million, or 4%, compared to at December 31, 2024, which was due to net income of $45.5 million in the first six months of 2025 and a decrease of $20.1 million in accumulated other comprehensive loss, partially offset by dividends paid of $28.8 million. Total stockholders' equity at June 30, 2025 increased by $75.5 million compared to at June 30, 2024 and was impacted by net income of $104.2 million in the last twelve months and a decrease in accumulated other comprehensive loss of $19.9 million, partially offset by dividends paid of $57.2 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 all period presented. 48 Table of Contents The following table details the calculation of FTE net interest income: Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Net interest income $ 87,577 $ 85,255 $ 86,613 $ 172,832 $ 173,253 Taxable equivalent adjustment 280 283 352 563 705 FTE net interest income $ 87,857 $ 85,538 $ 86,965 $ 173,395 $ 173,958 49 Table of Contents The following tables detail Peoples’ average balance sheets for the periods presented: For the Three Months Ended June 30, 2025 March 31, 2025 June 30, 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 $ 86,655 $ 1,039 4.81 % $ 88,919 $ 900 4.10 % $ 178,094 $ 2,502 5.65 % Investment securities (a)(b): Taxable 1,734,193 15,593 3.60 % 1,718,453 15,372 3.58 % 1,684,939 14,886 3.54 % Nontaxable 176,691 1,215 2.75 % 178,582 1,226 2.75 % 185,433 1,258 2.71 % Total investment securities 1,910,884 16,808 3.52 % 1,897,035 16,598 3.50 % 1,870,372 16,144 3.45 % Loans (b)(c): Construction 335,396 5,935 7.00 % 313,130 5,572 7.12 % 328,943 6,595 7.93 % Commercial real estate, other 2,110,961 33,430 6.27 % 2,069,134 33,260 6.43 % 2,074,718 36,420 6.94 % Commercial and industrial 1,325,976 23,304 6.95 % 1,336,133 23,332 6.98 % 1,230,290 23,897 7.68 % Premium finance 267,294 5,743 8.50 % 259,241 5,585 8.62 % 260,513 5,746 8.73 % Leases 384,191 10,287 10.59 % 395,161 10,198 10.32 % 419,764 11,982 11.29 % Residential real estate (d) 974,203 12,226 5.02 % 956,049 12,215 5.11 % 925,629 11,460 4.95 % Home equity lines of credit 239,531 4,540 7.60 % 233,522 4,382 7.61 % 225,362 4,612 8.23 % Consumer, indirect 686,550 11,038 6.45 % 674,211 10,548 6.34 % 656,405 9,669 5.92 % Consumer, direct 119,358 2,337 7.85 % 117,881 2,234 7.69 % 119,048 2,095 7.08 % Total loans 6,443,460 108,840 6.71 % 6,354,462 107,326 6.77 % 6,240,672 112,476 7.16 % Allowance for credit losses (65,186) (63,060) (64,745) Net loans 6,378,274 108,840 6.77 % 6,291,402 107,326 6.84 % 6,175,927 112,476 7.23 % Total earning assets 8,375,813 126,687 6.01 % 8,277,356 124,824 6.04 % 8,224,393 131,122 6.34 % Goodwill and other intangible assets 398,940 401,344 407,864 Other assets 518,534 516,767 548,197 Total assets $ 9,293,287 $ 9,195,467 $ 9,180,454 Interest-bearing deposits: Savings accounts $ 889,877 $ 220 0.10 % $ 879,301 $ 250 0.12 % $ 892,465 $ 222 0.10 % Governmental deposit accounts 811,822 4,874 2.41 % 781,782 4,652 2.41 % 795,913 5,594 2.83 % Interest-bearing demand accounts 1,075,220 563 0.21 % 1,083,999 490 0.18 % 1,095,553 495 0.18 % Money market accounts 938,318 5,592 2.39 % 914,076 5,291 2.35 % 850,375 5,419 2.56 % Retail CDs 1,997,992 18,235 3.66 % 1,939,364 18,434 3.85 % 1,743,238 18,423 4.25 % Brokered CDs (e) 419,277 4,393 4.20 % 564,660 6,046 4.34 % 482,310 5,116 4.27 % Total interest-bearing deposits 6,132,506 33,877 2.22 % 6,163,182 35,163 2.31 % 5,859,854 35,269 2.42 % Borrowed funds: Short-term FHLB advances (e) 87,659 1,015 4.64 % 32,822 343 4.24 % 199,978 2,755 5.54 % Repurchase agreements and other 40,057 374 3.73 % 23,742 165 2.83 % 207,295 2,613 5.05 % Total short-term borrowings 127,716 1,389 4.36 % 56,564 508 3.63 % 407,273 5,368 5.29 % Long-term FHLB advances 131,625 1,315 4.01 % 131,769 1,302 4.01 % 132,579 1,316 3.99 % Long-term notes payable 47,116 856 7.27 % 50,341 895 7.10 % 48,175 842 6.99 % Other long-term borrowings (f) 55,257 1,393 9.97 % 54,990 1,418 10.32 % 54,207 1,362 9.93 % Total long-term borrowings 233,998 3,564 6.07 % 237,100 3,615 6.13 % 234,961 3,520 5.98 % Total borrowed funds 361,714 4,953 5.47 % 293,664 4,123 5.65 % 642,234 8,888 5.30 % Total interest-bearing liabilities 6,494,220 38,830 2.40 % 6,456,846 39,286 2.47 % 6,502,088 44,157 2.73 % Non-interest-bearing deposits 1,546,475 1,498,964 1,476,870 Other liabilities 105,339 116,797 140,042 Total liabilities 8,146,034 8,072,607 8,119,000 Total stockholders’ equity 1,147,253 1,122,860 1,061,454 Total liabilities and stockholders’ equity $ 9,293,287 $ 9,195,467 $ 9,180,454 Interest rate spread (b) $ 87,857 3.61 % $ 85,538 3.57 % $ 86,965 3.61 % Net interest margin (b) 4.15 % 4.12 % 4.18 % 50 Table of Contents For the Six Months Ended June 30, 2025 June 30, 2024 ( Dollars in thousands) Average Balance Income/ Expense Yield/Cost Average Balance Income/ Expense Yield/Cost Short-term investments $ 87,780 $ 1,938 4.45 % $ 160,238 $ 4,424 5.55 % Investment securities (a)(b): Taxable 1,726,366 30,965 3.59 % 1,671,453 28,850 3.45 % Nontaxable 177,631 2,441 2.75 % 180,032 2,528 2.81 % Total investment securities 1,903,997 33,406 3.51 % 1,851,485 31,378 3.39 % Loans (b)(c): Construction 324,325 11,507 7.06 % 334,196 12,998 7.69 % Commercial real estate, other 2,090,163 66,693 6.35 % 2,075,468 73,662 7.02 % Commercial and industrial 1,331,026 46,635 6.97 % 1,216,743 47,412 7.71 % Premium finance 263,290 11,328 8.56 % 235,459 10,310 8.66 % Leases 389,646 20,485 10.46 % 414,817 24,049 11.47 % Residential real estate (d) 965,176 24,440 5.06 % 928,309 22,782 4.91 % Home equity lines of credit 236,543 8,922 7.61 % 221,053 8,909 8.10 % Consumer, indirect 680,415 21,586 6.40 % 656,324 18,950 5.81 % Consumer, direct 118,623 4,572 7.77 % 121,569 4,194 6.94 % Total loans 6,399,207 216,168 6.74 % 6,203,938 223,266 7.14 % Allowance for credit losses (64,129) (62,990) Net loans 6,335,078 216,168 6.81 % 6,140,948 223,266 7.22 % Total earning assets 8,326,855 251,512 6.03 % 8,152,671 259,068 6.32 % Goodwill and other intangible assets 400,135 409,292 Other assets 517,505 539,089 Total assets $ 9,244,495 $ 9,101,052 Interest-bearing deposits: Savings accounts $ 884,282 $ 437 0.10 % $ 899,089 $ 448 0.10 % Governmental deposit accounts 796,885 9,526 2.41 % 779,906 10,679 2.75 % Interest-bearing demand accounts 1,079,921 1,086 0.20 % 1,102,293 947 0.17 % Money market accounts 926,264 10,884 2.37 % 817,567 10,307 2.54 % Retail CDs 1,968,840 36,669 3.76 % 1,662,832 34,323 4.15 % Brokered CDs (e) 491,567 10,440 4.28 % 525,653 11,015 4.21 % Total interest-bearing deposits 6,147,759 69,042 2.26 % 5,787,340 67,719 2.35 % Borrowed funds: Short-term FHLB advances (e) 60,392 1,357 4.53 % 167,525 4,582 5.50 % Repurchase agreements and other 31,944 539 3.37 % 230,527 5,824 5.05 % Total short-term borrowings 92,336 1,896 4.13 % 398,052 10,406 5.24 % Long-term FHLB advances 131,697 2,617 4.01 % 129,255 2,557 3.98 % Long-term notes payable 48,720 1,750 7.18 % 49,291 1,704 6.91 % Other long-term borrowings (f) 55,125 2,812 10.15 % 54,071 2,724 9.97 % Total long-term borrowings 235,542 7,179 6.10 % 232,617 6,985 5.99 % Total borrowed funds 327,878 9,075 5.55 % 630,669 17,391 5.12 % Total interest-bearing liabilities 6,475,637 78,117 2.43 % 6,418,009 85,110 2.66 % Non-interest-bearing deposits 1,522,851 1,489,304 Other liabilities 110,883 136,622 Total liabilities 8,109,371 8,043,935 Total stockholders’ equity 1,135,124 1,057,117 Total liabilities and stockholders’ equity $ 9,244,495 $ 9,101,052 Interest rate spread (b) $ 173,395 3.60 % $ 173,958 3.66 % Net interest margin (b) 4.14 % 4.22 % (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. 51 Table of Contents (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 interest payments on FHLB advances or brokered CDs were being hedged. (f) Included in other long-term borrowings are trust preferred securities and floating rate junior subordinated deferrable interest debentures. Peoples' deposit balances have increased primarily due to an increase in 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 June 30, 2025 Compared to Six Months Ended June 30, 2025 Compared to (Dollars in thousands) March 31, 2025 June 30, 2024 June 30, 2024 Increase (decrease) in: Rate Volume Total (a) Rate Volume Total (a) Rate Volume Total (a) INTEREST INCOME: Short-term investments $ 286 $ (147) $ 139 $ (322) $ (1,141) $ (1,463) $ (746) $ (1,740) $ (2,486) Investment Securities (b): Taxable 74 147 221 265 442 707 1,151 964 2,115 Nontaxable 12 (23) (11) 96 (139) (43) (54) (33) (87) Total investment income 86 124 210 361 303 664 1,097 931 2,028 Loans (b) : Construction (529) 892 363 (1,443) 783 (660) (1,099) (392) (1,491) Commercial real estate, other (2,908) 3,080 172 (6,806) 3,818 (2,988) (8,412) 1,443 (6,969) Commercial and industrial (11) (17) (28) (8,420) 7,827 (593) (9,290) 8,514 (776) Premium finance (376) 534 158 (591) 588 (3) (350) 1,368 1,018 Leases 1,141 (1,054) 87 (716) (981) (1,697) (2,111) (1,453) (3,564) Residential real estate (891) 902 11 158 608 766 737 921 1,658 Home equity lines of credit (29) 187 158 (1,319) 1,247 (72) (1,167) 1,180 13 Consumer, indirect 231 259 490 901 468 1,369 1,937 699 2,636 Consumer, direct 65 38 103 236 6 242 654 (276) 378 Total loan income (3,307) 4,821 1,514 (18,000) 14,364 (3,636) (19,101) 12,004 (7,097) Total interest income $ (2,935) $ 4,798 $ 1,863 $ (17,961) $ 13,526 $ (4,435) $ (18,750) $ 11,195 $ (7,555) INTEREST EXPENSE: Deposits: Savings accounts $ 28 $ 2 $ 30 $ 6 $ (4) $ 2 $ 10 $ 1 $ 11 Interest-bearing demand accounts (69) (4) (73) (61) (7) (68) (124) (15) (139) Money market accounts (587) 285 (302) (68) (105) (173) (190) (387) (577) Governmental deposit accounts (12) (210) (222) 634 86 720 981 172 1,153 Retail CDs 125 75 200 92 98 190 (800) (1,546) (2,346) Brokered CDs 1,588 65 1,653 625 97 722 115 461 576 Total deposit cost 1,073 213 1,286 1,228 165 1,393 (8) (1,314) (1,322) Borrowed funds: Short-term borrowings (417) (463) (880) 4,474 (494) 3,980 7,161 1,348 8,509 Long-term borrowings 33 17 50 (52) 6 (46) (250) 55 (195) Total borrowed funds cost (384) (446) (830) 4,422 (488) 3,934 6,911 1,403 8,314 Total interest expense 689 (233) 456 5,650 (323) 5,327 6,903 89 6,992 FTE net interest income $ (2,246) $ 4,565 $ 2,319 $ (12,311) $ 13,203 $ 892 $ (11,847) $ 11,284 $ (563) (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. Net interest income was $87.6 million for the second quarter of 2025 and increased $2.3 million when compared to the linked quarter. Net interest margin was 4.15% for the second quarter of 2025, compared to 4.12% for the linked quarter. The increase in net interest income and margin was primarily driven by lower deposit and borrowing costs. 52 Table of Contents Net interest income for the second quarter of 2025 increased $1.0 million, or 1%, compared to the second quarter of 2024. Net interest margin decreased 3 basis points when compared to the second quarter of 2024. The increase in net interest income was primarily driven by higher loan balances. The decrease in net interest margin was impacted by reductions in loan yields, driven by lower accretion income, partially offset with lower funding costs. For the first six months of 2025, net interest income decreased $0.4 million compared to the first six months of 2024, while net interest margin decreased 8 basis points to 4.14%. The decrease in net interest income and net interest margin for the first six months of 2025 compared to the first six months of 2024 was primarily driven by lower accretion income. Accretion income, net of amortization expense, from acquisitions was $2.6 million for the second quarter of 2025, $3.5 million for the linked quarter and $5.8 million for the second quarter of 2024, which added 12 basis points, 17 basis points and 28 basis points, respectively, to net interest margin. The decrease in accretion income for the second quarter of 2025 when compared to the linked quarter and the second quarter of 2024 was driven by fewer loan payoffs and more accretion income recognized in 2024 from the Limestone Merger. Accretion income, net of amortization expense, was $6.1 million and $12.3 million for the first six months of 2025 and 2024, respectively. Accretion income added 15 basis points and 30 basis points to net interest margin for the first six months of 2025 and 2024, respectively. The decrease in accretion income for the first six months of 2025 compared to the same period in 2024 was due to less accretion recognized from the Limestone Merger. 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Provision for other credit losses $ 16,475 $ 10,035 $ 5,397 $ 26,510 $ 11,231 Provision for checking account overdraft credit losses 167 155 286 322 554 Provision for credit losses $ 16,642 $ 10,190 $ 5,683 $ 26,832 $ 11,785 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 second quarter of 2025 was primarily driven by (i) net charge offs, (ii) an increase in reserves for individually-analyzed loans and leases, (iii) an increase in reserves for leases originated by our North Star Leasing division, (iv) a periodic refresh in loss drivers utilized within the CECL model, (v) deterioration in the economic forecasts used within the CECL model, and (vi) loan growth. The provision for credit losses for the first quarter of 2025 was primarily driven by net charge-offs. The provision for credit losses for the second quarter of 2024 was driven by (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, and (iii) loan growth. For the first half of 2025, the provision for credit losses was mainly a result of (i) net charge offs, (ii) an increase in reserves for individually-analyzed loans and leases, (iii) an increase in reserves for leases originated by our North Star Leasing division, (iv) a periodic refresh in loss drivers utilized within the CECL model, (v) deterioration in the economic forecasts used within the CECL model, and (vi) loan growth. For the same period of 2024 the provision for credit losses was driven by (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, and (iii) 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.” 53 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Net (loss) gain on investment securities $ — $ (2) $ (353) $ (2) $ (354) Net loss on asset disposals and other transactions: Net loss on other assets (267) (330) (397) (597) (706) Net gain on OREO 10 20 — 30 — Net loss on other transactions (23) (51) (31) (74) (63) Net loss on asset disposals and other transactions $ (280) $ (361) $ (428) $ (641) $ (769) The net loss on other assets for all periods presented was driven by losses recorded on repossessed assets. The net loss on investment securities reported for the second quarter of 2024 was attributable to a loss recorded on a contingent call of a security. 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 second quarter of 2025, 24% for the linked quarter, and 22% for the second quarter of 2024. For the first six months of 2025, total non-interest income, excluding net gains and losses, totaled 24% of total revenue compared to 23% for the same period in 2024. For the second quarter of 2025, electronic banking ("e-banking") income comprised the largest portion of Peoples' total non-interest income, excluding net gains and losses. Peoples' electronic 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 E-banking income $ 6,272 $ 5,885 $ 6,470 $ 12,157 $ 12,516 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. The following table details Peoples' insurance income: Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Property and casualty insurance commissions $ 3,791 $ 3,823 $ 3,432 $ 7,614 $ 7,017 Performance-based commissions 99 1,542 5 1,641 2,218 Life and health insurance commissions 659 689 672 1,348 1,372 Insurance income $ 4,549 $ 6,054 $ 4,109 $ 10,603 $ 10,607 Peoples' insurance income for the second quarter of 2025 decreased $1.5 million when compared to the linked quarter primarily due to seasonal performance-based commissions, which are annual in nature and typically occur in the first quarter of each year. Insurance income for the second quarter of 2025 increased when compared to the second quarter of 2024 due to higher commissions. Insurance income in the first half of 2025 remained flat compared to the same period of 2024. 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: 54 Table of Contents Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Fiduciary income $ 2,274 $ 2,092 $ 2,212 $ 4,366 $ 4,213 Brokerage income 2,240 2,146 1,989 4,386 3,831 Employee benefit fees 767 823 798 1,590 1,554 Trust and investment income $ 5,281 $ 5,061 $ 4,999 $ 10,342 $ 9,598 Fiduciary income and brokerage income in the second quarter of 2025 increased when compared to the linked quarter and to the second quarter of 2024 and was driven by an increase in assets under administration and management. Trust and investment income increased $0.7 million for the first half of 2025 when compared to 2024, due to higher brokerage income, primarily reflecting the increase in assets under management. The following table details Peoples' assets under administration and management: June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 (Dollars in thousands) Trust $ 2,138,439 $ 2,037,992 $ 2,061,267 $ 2,124,320 $ 2,071,832 Brokerage $ 1,724,311 $ 1,626,768 $ 1,614,189 $ 1,608,368 $ 1,567,775 Total $ 3,862,750 $ 3,664,760 $ 3,675,456 $ 3,732,688 $ 3,639,607 Quarterly average $ 3,736,778 $ 3,711,527 $ 3,706,804 $ 3,683,334 $ 3,587,952 The increase in assets under administration and management at June 30, 2025 compared to at March 31, 2025 was driven by market value fluctuations. The increase in assets under administration and management at June 30, 2025 when compared to at June 30, 2024 was 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Overdraft and non-sufficient funds fees $ 2,122 $ 2,103 $ 2,288 $ 4,225 $ 4,543 Account maintenance fees 1,669 1,644 1,716 3,313 3,434 Other fees and charges 268 268 335 536 585 Deposit account service charges $ 4,059 $ 4,015 $ 4,339 $ 8,074 $ 8,562 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 remained relatively flat for the second quarter of 2025 compared to the linked quarter. Deposit account service charges decreased when comparing the second quarter of 2025 to the second quarter of 2024. For the first half of 2025, total deposit account services charges decreased by $0.5 million from the same period of 2024, driven by timing of customer activity. The following table details the other items included within Peoples' total non-interest income: Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Lease income 4,189 3,446 2,147 7,635 4,163 Other non-interest income 1,478 1,472 1,141 2,950 2,059 Bank owned life insurance income 1,112 1,133 1,037 2,245 2,537 Mortgage banking income 220 396 243 616 564 Lease income is primarily comprised of (i) operating lease income, (ii) gains on the early termination of leases, net of any associated purchase accounting adjustments, (iii) month-to-month lease payments beyond maturity of the net investment in the lease, net of any associated purchase accounting adjustment, (iv) fees received for referrals, (v) gains and losses recognized on the sales of 55 Table of Contents residual assets, net of any purchase accounting impact, and (vi) syndication income. Lease income for the second quarter of 2025 increased compared to the linked quarter due to gains on early terminated Vantage leases. The increase when compared to the second quarter of 2024 was driven by increases in gains on terminated leases, operating lease income, and month-to-month lease income. Lease income increased $3.5 million for the first six months of 2025 when compared to the same period of 2024 due to gains on early Vantage lease terminations and an increase in operating lease income. Other non-interest income remained flat for the three months ended June 30, 2025 when compared to the linked quarter and increased $0.3 million compared to the second quarter of 2024 due to an increase in swap fee income. For the first half of 2025, other non-interest income increased by $0.9 million from the same period of 2024, primarily due to the increase in swap fee income which is driven by customer demand. Bank owned life insurance income for the second quarter of 2025 remained flat when compared to the linked quarter and the prior year quarter. Bank owned life insurance income decreased for the first half of 2025 when compared to the same period of 2024 primarily due to death benefits recorded in 2024. 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 second quarter of 2025 decreased when compared to each of the prior periods and was primarily driven by the decreased volume in loans sold as more production has been kept on the balance sheet relative to prior periods. Mortgage banking income increased for the first six months of 2025 when compared to the same period of 2024 due to higher production. In the second quarter of 2025, Peoples sold $0.3 million in loans into the secondary market with servicing retained and $10.3 million in loans with servicing released, compared to $0.2 million and $4.7 million, respectively, in the first quarter of 2025, and $2.6 million and $11.8 million, respectively, in the second quarter of 2024. For the first six months of 2025, Peoples sold $0.5 million in loans into the secondary market with servicing retained, and $10.3 million with servicing released, compared to $2.7 million and $18.8 million, respectively, for the first six months 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Base salaries and wages $ 24,942 $ 24,618 $ 24,437 $ 49,560 $ 49,234 Sales-based and incentive compensation 6,181 6,491 5,404 12,672 10,658 Employee benefits 5,692 4,522 4,862 10,214 8,800 Payroll taxes and other employment costs 2,078 2,779 1,825 4,857 4,661 Stock-based compensation 1,484 2,475 1,385 3,959 4,475 Deferred personnel costs (1,484) (1,064) (1,349) (2,548) (2,371) Salaries and employee benefit costs $ 38,893 $ 39,821 $ 36,564 $ 78,714 $ 75,457 Full-time equivalent employees: Actual at end of period 1,477 1,460 1,489 1,477 1,489 Average during the period 1,462 1,467 1,492 1,478 1,491 Base salaries and wages for the second quarter of 2025 and the first six months of 2025 increased compared to all prior periods. The increases when compared to the second quarter of 2024 and the first six months of 2024 were primarily driven by annual merit increases. Sales-based and incentive compensation decreased for the second quarter of 2025 compared to the linked quarter driven by a decrease in corporate incentives. Sales-based and incentive compensation increased compared the second quarter of 2024 due to an increase in corporate incentives. Sales-based and incentive compensation increased for the first half of 2025 when compare to 2024, due to an increase in corporate incentives and insurance commissions. The increase in employee benefits for the second quarter of 2025 compared to the linked quarter was primarily related to higher medical costs and an adjustment related to prior period nonqualified deferred compensation expense. Employee benefits increased for the second quarter of 2025 and the first six months of 2025 when compared to the same periods for 2024 due to higher medical costs. 56 Table of Contents Payroll taxes and other employment costs for the second quarter of 2025 decreased compared to the linked quarter due to seasonal expenses recognized in the first quarter of each year. For the first six months of 2025, payroll taxes and other employment costs increased slightly compared to the same period of 2024. 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 second quarter of 2025 increased when compared to the first quarter of 2025 and remained relatively flat compared to the second quarter of 2024. Similarly, deferred personnel costs increased for the first half of 2025 when compared to 2024. Peoples' net occupancy and equipment expense was comprised of the following: Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Depreciation $ 2,135 $ 2,125 $ 2,170 $ 4,259 $ 4,340 Repairs and maintenance costs 1,641 1,923 1,607 3,565 3,428 Property taxes, utilities and other costs 1,115 546 1,152 1,661 2,445 Net rent expense 799 1,018 1,213 1,817 2,212 Net occupancy and equipment expense $ 5,690 $ 5,612 $ 6,142 $ 11,302 $ 12,425 Net occupancy and equipment expense remained flat for the second quarter compared to the linked quarter and decreased $0.5 million compared to the second quarter of 2024 primarily due to a one time rent expense true-up adjustment recorded in the second quarter of 2024. Net occupancy and equipment expense for the first half of 2025 decreased when compared to the same period of the previous year 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Data processing and software expense $ 7,356 $ 7,005 $ 6,743 $ 14,361 $ 12,512 Professional fees 3,610 3,087 2,935 6,697 5,902 Amortization of other intangible assets 2,211 2,213 2,787 4,424 5,575 E-banking expense 2,018 2,025 1,941 4,043 3,722 FDIC insurance premiums 1,251 1,251 1,251 2,502 2,437 Other loan expenses 1,213 1,119 1,036 2,332 2,112 Operating lease expense 1,053 985 788 2,038 1,427 Marketing expense 718 903 681 1,621 1,737 Travel and entertainment expense 713 500 530 1,213 1,138 Communication expense 712 734 736 1,446 1,535 Franchise tax expense 678 929 760 1,607 1,641 Other non-interest expense 4,246 4,603 5,864 8,849 9,603 Data processing and software expenses for the second quarter of 2025 increased over all periods presented due to costs associated with recent technology projects. Professional fees for the second quarter of 2025 increased when compared to the linked quarter and to the second quarter of 2024 due to increased costs of professional services, primarily related to our credit card portfolio, and higher legal expenses incurred. 57 Table of Contents Professional fees increased for the first half of 2025 when compared to 2024 due to increased exam and audit fees and higher legal expenses. Amortization of other intangible assets for the second quarter of 2025 remained flat compared to the linked quarter and decreased $0.6 million compared to the prior year quarter due to decreases in amortization on core deposits and customer relationship intangibles. Amortization of other intangible assets decreased for the first half of 2025 when compared to 2024 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 the timing and volume of customer activity. E-banking expense remained relatively flat compared to the linked quarter and the second quarter of 2024. E-banking expense increased for the first half of 2025 when compared to 2024 due to customer activity. Peoples' FDIC insurance premiums for the second quarter of 2025 were flat when compared to the linked quarter and the second quarter of 2024. FDIC premiums increased slightly for the first half of 2025 when compared to 2024. Other loan expenses during the second quarter of 2025 remained relatively flat when compared to the linked quarter and increased slightly compared to the second quarter of 2024. Other loan expenses increased for the first half of 2025 when compared to 2024 due to increased down payment assistance expenses. Operating lease expense remained flat when compared to the linked quarter and increased compared to the second quarter of 2024 due to increased expense associated with an increase in the origination of operating leases. Operating lease expense increased for the first half of 2025 when compared to 2024 due to an increased volume of leases. Marketing expense for the second quarter of 2025 decreased when compared to the linked quarter primarily driven by a vendor credit received in the second quarter. Marketing expense decreased for the first half of 2025 when compared to 2024 due to decreased advertising expenses. Travel and entertainment expense increased compared to the linked quarter and to the second quarter of 2024 due to the timing of travel. Travel and entertainment remained flat for the first half of 2025 when compared to 2024. Communication expense remained relatively flat for the second quarter of 2025 when compared to both the linked quarter and the same period of the prior year. Communication expense decreased slightly for the first half of 2025 when compared to 2024. 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 decrease in franchise tax expense for the second quarter of 2025 compared to the linked quarter related to a one-time refund from the State of Ohio. Franchise tax expense remained flat for the first half of 2025 when compared to the first half of 2024. Other non-interest expense for the second quarter of 2025 decreased when compared to the linked quarter primarily due to lower corporate expenses. Other non-interest expense decreased for the second quarter and the first half of 2025 when compared to same periods in 2024 due to a one-time prior period true-up of corporate expenses recognized in the second quarter of 2024. Income Tax Expense Peoples recorded income tax expense of $6.2 million with an effective tax rate of 22.7% for the second quarter of 2025, compared to income tax expense of $7.0 million with an effective tax rate of 22.4% for the linked quarter and income tax expense of $6.9 million with an effective tax rate of 19.1% for the second quarter of 2024. The decrease in income tax expense when compared to the prior quarter is primarily due to lower pre-tax income. The effective tax rate in the prior year quarter was lower due to a $1.1 million one-time benefit related to a prior year amended return. Peoples recorded income tax expense of $13.3 million and $15.1 million, through the first six months of 2025 and 2024, respectively. The decrease for the first six months of 2025 compared to 2024 was driven by lower pre-tax 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. 58 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Pre-provision net revenue: Income before income taxes $ 27,453 $ 31,377 $ 35,876 $ 58,830 $ 73,728 Add: provision for credit losses 16,642 10,190 5,683 26,832 11,785 Add: loss on investment securities — 2 353 2 354 Add: loss on other assets 267 330 397 597 706 Add: loss on other transactions 23 51 31 74 63 Less: gain on OREO 10 20 — 30 — Pre-provision net revenue $ 44,375 $ 41,930 $ 42,340 $ 86,305 $ 86,636 The increase in the PPNR for the second quarter of 2025 compared to the linked quarter and the second quarter of 2024 was driven by an increase in net interest income due to higher income on loans and lower deposit and borrowing costs. PPNR for the first half of 2025 decreased slightly compared to 2024, primarily driven by lower accretion income, partially offset by lower funding costs. 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. 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Efficiency ratio: Total non-interest expense $ 70,362 $ 70,787 $ 68,758 $ 141,149 $ 137,223 Less: amortization of other intangible assets 2,211 2,213 2,787 4,424 5,575 Adjusted total non-interest expense 68,151 68,574 65,971 136,725 131,648 Total non-interest income 26,880 27,099 23,704 53,979 49,483 Less: net (loss) gain on investment securities — (2) (353) (2) (354) Less: net loss on asset disposals and other transactions (280) (361) (428) (641) (769) Total non-interest income excluding net losses 27,160 27,462 24,485 54,622 50,606 Net interest income 87,577 85,255 86,613 172,832 173,253 Add: FTE adjustment (a) 280 283 352 563 705 Net interest income on an FTE basis 87,857 85,538 86,965 173,395 173,958 Adjusted revenue $ 115,017 $ 113,000 $ 111,450 $ 228,017 $ 224,564 Efficiency ratio 59.25 % 60.68 % 59.19 % 59.96 % 58.62 % (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 second quarter of 2025 was 59.3%, compared to 60.7% for the linked quarter and 59.2% for the second quarter of 2024. The efficiency ratio improved compared to the linked quarter mainly as the result of higher net interest income and lower non-interest expenses. The efficiency ratio increased compared to the prior year first six months due to the increase in non-interest expense and lower net interest income. 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. 59 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Annualized net income adjusted for non-core items: Net income $ 21,212 $ 24,336 $ 29,007 $ 45,548 $ 58,591 Add: net loss on investment securities — 2 353 2 354 Less: tax effect of net loss on investment securities (a) — — 74 — 74 Add: net loss on asset disposals and other transactions 280 361 428 641 769 Less: tax effect of net loss on asset disposals and other transactions (a) 59 76 90 135 161 Add: acquisition-related expenses — — — — (84) Less: tax effect of acquisition-related expenses (a) — — — — (18) Net income adjusted for non-core items (after tax) $ 21,433 $ 24,623 $ 29,624 $ 46,056 $ 59,413 Days in the period 91 90 91 181 182 Days in the year 365 365 366 365 366 Annualized net income $ 85,081 $ 98,696 $ 116,666 $ 91,851 $ 117,826 Annualized net income adjusted for non-core items (after tax) $ 85,968 $ 99,860 $ 119,147 $ 92,875 $ 119,479 Return on average assets: Annualized net income $ 85,081 $ 98,696 $ 116,666 $ 91,851 $ 117,826 Total average assets 9,293,287 9,195,467 9,180,454 9,244,495 9,101,052 Return on average assets 0.92 % 1.07 % 1.27 % 0.99 % 1.29 % Return on average assets adjusted for non-core items: Annualized net income adjusted for non-core items (after tax) $ 85,968 $ 99,860 $ 119,147 $ 92,875 $ 119,479 Total average assets 9,293,287 9,195,467 9,180,454 9,244,495 9,101,052 Return on average assets adjusted for non-core items (after tax) 0.93 % 1.09 % 1.30 % 1.00 % 1.31 % (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 second quarter of 2025 decreased when compared to the linked quarter due to lower annualized net income. The decrease in the return on average assets and return on average assets adjusted for non-core items for the second quarter of 2025, compared to the second quarter of 2024, was attributable to a decrease in annualized net income driven by an increase in provision for credit losses and an increase in average assets. The decrease in return on average assets and return on average assets adjusted for non-core items for the first half of 2025 when compared to the same period of 2024 was primarily driven by a decrease in annualized net income from an increase in provision for credit losses 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 60 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 Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, (Dollars in thousands) 2025 2024 Annualized net income excluding amortization of other intangible assets: Net income $ 21,212 $ 24,336 $ 29,007 $ 45,548 $ 58,591 Add: amortization of other intangible assets 2,211 2,213 2,787 4,424 5,575 Less: tax effect of amortization of other intangible assets (a) 464 465 585 929 1,171 Net income excluding amortization of other intangible assets $ 22,959 $ 26,084 $ 31,209 $ 49,043 $ 62,995 Days in the period 91 90 91 181 182 Days in the year 365 365 366 365 366 Annualized net income $ 85,081 $ 98,696 $ 116,666 $ 91,851 $ 117,826 Annualized net income excluding amortization of other intangible assets $ 92,088 $ 105,785 $ 125,522 $ 98,899 $ 126,682 Average tangible equity: Total average stockholders' equity $ 1,147,253 $ 1,122,860 $ 1,061,454 $ 1,135,124 $ 1,057,117 Less: average goodwill and other intangible assets 398,940 401,344 407,864 400,135 409,292 Average tangible equity $ 748,313 $ 721,516 $ 653,590 $ 734,989 $ 647,825 Return on total average stockholders' equity ratio: Annualized net income $ 85,081 $ 98,696 $ 116,666 $ 91,851 $ 117,826 Total average stockholders' equity $ 1,147,253 $ 1,122,860 $ 1,061,454 $ 1,135,124 $ 1,057,117 Return on total average stockholders' equity 7.42 % 8.79 % 10.99 % 8.09 % 11.15 % Return on average tangible equity ratio: Annualized net income excluding amortization of other intangible assets $ 92,088 $ 105,785 $ 125,522 $ 98,899 $ 126,682 Average tangible equity $ 748,313 $ 721,516 $ 653,590 $ 734,989 $ 647,825 Return on average tangible equity 12.31 % 14.66 % 19.21 % 13.46 % 19.55 % (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. The decreases in the return on total average stockholders' equity and average tangible equity ratios for the second quarter and the first six months of 2025 compared to the same periods of 2024 was driven by lower net income. 61 Table of Contents FINANCIAL CONDITION Cash and Cash Equivalents At June 30, 2025, Peoples' interest-bearing deposits in other banks had decreased $45.0 million from December 31, 2024. The total cash and cash equivalents balance included $60.0 million of excess cash reserves being maintained at the FRB of Cleveland at June 30, 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 six months of 2025, Peoples' total cash and cash equivalents decreased $31.6 million, which reflected cash outflows of $331.0 million for investing activities, partially offset by cash inflows of $214.4 million for financing activities and $85.0 million from operating activities. Peoples' use of cash in investing activities reflected a $252.8 million net increase in loans held for investment and net cash outflows of $124.7 million related to the purchases of held-to-maturity investment securities. These were partially offset by net cash inflows for available-for-sale investment securities of $58.8 million. The cash provided by financing activities was driven by a net increase in short-term borrowings of $203.4 million. 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 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Available-for-sale securities, at fair value: Obligations of: U.S. Treasury and government agencies 6.22 % $ 13,880 $ 14,343 $ 15,196 $ 27,961 $ 28,343 U.S. government sponsored agencies 3.41 % 210,856 213,063 209,083 174,708 230,916 States and political subdivisions 2.56 % 193,363 195,505 196,301 206,779 202,804 Residential mortgage-backed securities 2.48 % 576,541 593,979 601,802 607,726 601,002 Commercial mortgage-backed securities 2.14 % 52,699 52,636 55,065 57,437 50,035 Bank-issued trust preferred securities 4.26 % 4,158 4,148 6,108 6,056 6,039 Total fair value $ 1,051,497 $ 1,073,674 $ 1,083,555 $ 1,080,667 $ 1,119,139 Total amortized cost $ 1,170,092 $ 1,199,677 $ 1,229,382 $ 1,189,792 $ 1,266,060 Net unrealized loss $ (118,595) $ (126,003) $ (145,827) $ (109,125) $ (146,921) Held-to-maturity securities, at amortized cost: Obligations of: U.S. government sponsored agencies 4.70 % $ 299,183 $ 222,698 $ 233,302 $ 196,642 $ 212,023 States and political subdivisions (a) 2.25 % 142,319 142,513 142,691 141,918 144,134 Residential mortgage-backed securities 4.47 % 360,559 290,023 300,290 256,329 246,283 Commercial mortgage-backed securities 2.48 % 98,195 98,469 98,754 98,984 99,782 Total amortized cost $ 900,256 $ 753,703 $ 775,037 $ 693,873 $ 702,222 Other investments $ 67,538 $ 51,322 $ 60,132 $ 55,691 $ 62,742 Total investment securities: Amortized cost $ 2,137,886 $ 2,004,702 $ 2,064,551 $ 1,939,356 $ 2,031,024 Carrying value $ 2,019,291 $ 1,878,699 $ 1,918,724 $ 1,830,231 $ 1,884,103 (a) Amortized cost is presented net of the allowance for credit losses of $237 at June 30, 2025 and at March 31, 2025 and $238 at June 30, 2024. For the second quarter of 2025, total investment securities increased compared to all prior periods 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. 62 Table of Contents Loans and Leases The following table provides information regarding outstanding loan balances: (Dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Originated loans and leases: Construction $ 288,824 $ 266,644 $ 271,975 $ 265,073 $ 291,240 Commercial real estate, other 1,468,120 1,413,759 1,310,127 1,283,903 1,240,069 Commercial real estate 1,756,944 1,680,403 1,582,102 1,548,976 1,531,309 Commercial and industrial 1,232,774 1,167,382 1,162,777 1,047,001 1,032,753 Premium finance 277,622 264,080 269,435 286,983 293,349 Leases 383,923 375,224 382,074 401,573 390,160 Residential real estate 483,486 458,663 448,884 441,730 441,293 Home equity lines of credit 197,875 187,887 182,831 180,737 172,766 Consumer, indirect 692,674 680,260 669,857 677,056 675,054 Consumer, direct 105,678 101,876 101,062 101,026 100,836 Consumer 798,352 782,136 770,919 778,082 775,890 Deposit account overdrafts 964 1,047 1,253 1,205 1,067 Total originated loans and leases $ 5,131,940 $ 4,916,822 $ 4,800,275 $ 4,686,287 $ 4,638,587 Acquired loans and leases (a): Construction $ 52,489 $ 52,460 $ 56,413 $ 55,021 $ 49,361 Commercial real estate, other 780,094 816,779 845,886 896,588 955,910 Commercial real estate 832,583 869,239 902,299 951,609 1,005,271 Commercial and industrial 174,608 176,445 184,868 203,151 225,310 Leases 16,129 20,230 24,524 31,436 40,491 Residential real estate 394,482 389,505 386,217 335,812 348,051 Home equity lines of credit 43,910 47,522 49,830 52,372 54,842 Consumer, direct 7,937 8,763 9,990 11,172 12,819 Total acquired loans and leases $ 1,469,649 $ 1,511,704 $ 1,557,728 $ 1,585,552 $ 1,686,784 Total loans and leases $ 6,601,589 $ 6,428,526 $ 6,358,003 $ 6,271,839 $ 6,325,371 Percent of loans and leases to total loans and leases: Construction 5.2 % 5.0 % 5.2 % 5.1 % 5.4 % Commercial real estate, other 34.0 % 34.7 % 33.9 % 34.8 % 34.7 % Commercial real estate 39.2 % 39.7 % 39.1 % 39.9 % 40.1 % Commercial and industrial 21.3 % 20.8 % 21.2 % 19.9 % 19.9 % Premium finance 4.2 % 4.1 % 4.2 % 4.6 % 4.6 % Leases 6.1 % 6.2 % 6.4 % 6.9 % 6.8 % Residential real estate 13.3 % 13.2 % 13.2 % 12.4 % 12.5 % Home equity lines of credit 3.7 % 3.7 % 3.7 % 3.7 % 3.6 % Consumer, indirect 10.5 % 10.6 % 10.5 % 10.8 % 10.7 % Consumer, direct 1.7 % 1.7 % 1.7 % 1.8 % 1.8 % Consumer 12.2 % 12.3 % 12.2 % 12.6 % 12.5 % Total percentage 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Residential real estate loans being serviced for others $ 326,710 $ 337,279 $ 346,189 $ 347,719 $ 341,298 (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 June 30, 2025 increased $173.1 million, or 11% annualized, compared to at March 31, 2025. The increase in the period-end loan and lease balances at June 30, 2025 compared to March 31, 2025 was primarily driven by increases of $63.6 million in commercial and industrial loans, $29.8 million in residential real estate loans, $22.2 million in construction loans, $17.7 million in other commercial real estate loans, and $13.5 million in premium finance loans. The increase in the period-end loan and lease balances at June 30, 2025 compared to at June 30, 2024 was primarily driven by loan growth of $149.3 million in commercial and industrial loans, $88.6 million in residential real estate loans, and $52.2 million in commercial real estate loans, partially offset by decreases of $30.6 million and $15.7 million in leases and premium finance loans, respectively. 63 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 12% 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 June 30, 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 June 30, 2025: (Dollars in thousands) Outstanding Balance Loan Commitments Total Exposure % of Total Construction: Apartment complexes $ 196,815 $ 199,916 $ 396,731 57.7 % Land development 38,766 33,742 72,508 10.5 % Land only 18,562 22,094 40,656 5.9 % Residential property 10,143 22,185 32,328 4.7 % Assisted living facilities and nursing homes 13,224 10,334 23,558 3.4 % Industrial 3,931 19,370 23,301 3.4 % Warehouse facilities 326 16,315 16,641 2.4 % Student housing 15,000 — 15,000 2.2 % Other (a) 44,546 22,363 66,909 9.8 % Total construction $ 341,313 $ 346,319 $ 687,632 100.0 % (a) All other total exposures by industry are less than 2% of the Total Exposure. 64 Table of Contents (Dollars in thousands) Outstanding Balance Loan Commitments Total Exposure % of Total Commercial real estate, other: Apartment complexes $ 420,122 $ 4,875 $ 424,997 18.4 % Retail facilities: Owner occupied $ 39,988 $ 1,167 $ 41,155 1.8 % Non-owner occupied 209,143 475 209,618 9.1 % Total retail facilities $ 249,131 $ 1,642 $ 250,773 10.9 % Light industrial facilities: Owner occupied $ 127,983 $ 2,515 $ 130,498 5.7 % Non-owner occupied 114,788 3,115 117,903 5.1 % Total light industrial facilities $ 242,771 $ 5,630 $ 248,401 10.8 % Lodging and lodging related: Owner occupied $ 29,958 $ — $ 29,958 1.3 % Non-owner occupied 168,932 2,676 171,608 7.4 % Total lodging and lodging related $ 198,890 $ 2,676 $ 201,566 8.7 % Office buildings and complexes: Owner occupied $ 66,798 $ 2,905 $ 69,703 3.0 % Non-owner occupied 115,323 2,132 117,455 5.1 % Total office buildings and complexes $ 182,121 $ 5,037 $ 187,158 8.1 % Assisted living facilities and nursing homes $ 117,127 $ 16 $ 117,143 5.1 % Warehouse facilities: Owner occupied $ 55,395 $ 269 $ 55,664 2.4 % Non-owner occupied 35,111 148 35,259 1.5 % Total warehouse facilities $ 90,506 $ 417 $ 90,923 3.9 % Restaurant/bar facilities: Owner occupied $ 54,455 $ — $ 54,455 2.4 % Non-owner occupied 29,143 — 29,143 1.3 % Total restaurant/bar facilities $ 83,598 $ — $ 83,598 3.7 % Mixed-use facilities: Owner occupied $ 36,553 $ 3,109 $ 39,662 1.7 % Non-owner occupied 33,144 1,200 34,344 1.5 % Total mixed-use facilities $ 69,697 $ 4,309 $ 74,006 3.2 % Healthcare facilities: Owner occupied $ 38,731 $ 31 $ 38,762 1.7 % Non-owner occupied 16,755 1,213 17,968 0.8 % Total healthcare facilities $ 55,486 $ 1,244 $ 56,730 2.5 % Other (a) 538,765 31,282 570,047 24.7 % Total commercial real estate, other $ 2,248,214 $ 57,128 $ 2,305,342 100.0 % (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 4% of total loans at June 30, 2025 and at December 31, 2024. The repayment of premium finance loans is secured by the underlying insurance policy prepaid premium, and therefore, geography is not a factor from a repayment perspective. The repayment of leases is secured by the underlying equipment collateral and not real estate, which mitigates geographic risk. 65 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) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Construction $ 1,347 $ 1,156 $ 878 $ 854 $ 673 Commercial real estate, other 17,144 17,155 16,256 17,239 19,852 Commercial and industrial 17,854 12,783 13,283 11,592 10,943 Premium finance 794 646 662 711 763 Leases 19,633 13,575 12,893 16,970 15,218 Residential real estate 6,113 6,786 6,491 6,058 5,939 Home equity lines of credit 1,814 1,863 1,792 1,804 1,737 Consumer, indirect 7,643 8,696 8,576 8,924 8,654 Consumer, direct 2,248 2,474 2,396 2,370 2,332 Deposit account overdrafts 91 98 121 117 136 Allowance for credit losses $ 74,681 $ 65,232 $ 63,348 $ 66,639 $ 66,247 As a percent of total loans 1.13 % 1.01 % 1.00 % 1.06 % 1.05 % The increase in the allowance for credit losses at June 30, 2025 compared to at March 31, 2025 and at June 30, 2024 was due to (i) an increase in reserves for individually-analyzed loans and leases, (ii) an increase in reserves for leases originated by our North Star Leasing division, (iii) a periodic refresh in loss drivers utilized within the CECL model, (iv) deterioration in the economic forecasts used within the CECL model, and (v) loan growth. 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. 66 Table of Contents The following table summarizes Peoples’ net charge-offs and recoveries: Three Months Ended (Dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Gross charge-offs: Commercial real estate, other 35 215 219 — — Commercial and industrial 556 380 118 259 56 Premium finance 93 71 63 37 55 Leases 5,099 5,654 7,706 3,753 2,377 Residential real estate — 142 144 — 64 Home equity lines of credit 12 — — 2 9 Consumer, indirect 1,693 1,866 1,331 1,820 1,567 Consumer, direct 96 155 149 162 141 Consumer 1,789 2,021 1,480 1,982 1,708 Deposit account overdrafts 245 277 310 558 338 Total gross charge-offs $ 7,829 $ 8,760 $ 10,040 $ 6,591 $ 4,607 Recoveries: Commercial real estate, other $ — $ 4 $ 24 $ 100 $ (80) Commercial and industrial 17 6 40 1 10 Premium finance 3 6 12 4 4 Leases 261 245 87 56 173 Residential real estate 50 49 45 58 68 Home equity lines of credit — — — — — Consumer, indirect 449 210 178 186 117 Consumer, direct 14 20 7 19 15 Consumer 463 230 185 205 132 Deposit account overdrafts 71 99 61 83 67 Total recoveries $ 865 $ 639 $ 454 $ 507 $ 374 Net charge-offs (recoveries): Commercial real estate, other 35 211 195 (100) 80 Commercial and industrial 539 374 78 258 46 Premium finance 90 65 51 33 51 Leases 4,838 5,409 7,619 3,697 2,204 Residential real estate (50) 93 99 (58) (4) Home equity lines of credit 12 — — 2 9 Consumer, indirect 1,244 1,656 1,153 1,634 1,450 Consumer, direct 82 135 142 143 126 Consumer 1,326 1,791 1,295 1,777 1,576 Deposit account overdrafts 174 178 249 475 271 Total net charge-offs $ 6,964 $ 8,121 $ 9,586 $ 6,084 $ 4,233 Ratio of net charge-offs (recoveries) to average total loans (annualized): Commercial real estate, other — % 0.01 % 0.01 % (0.01) % 0.01 % Commercial and industrial 0.03 % 0.02 % — % 0.02 % — % Premium finance 0.01 % — % — % — % — % Leases 0.30 % 0.35 % 0.50 % 0.23 % 0.14 % Residential real estate — % 0.01 % 0.01 % — % — % Home equity lines of credit — % — % — % — % — % Consumer, indirect 0.07 % 0.11 % 0.06 % 0.10 % 0.09 % Consumer, direct 0.01 % 0.01 % 0.01 % 0.01 % 0.01 % Consumer 0.08 % 0.12 % 0.07 % 0.11 % 0.10 % Deposit account overdrafts 0.01 % 0.01 % 0.02 % 0.03 % 0.02 % Total 0.43 % 0.52 % 0.61 % 0.38 % 0.27 % Each with "--%" not meaningful. 67 Table of Contents Total net charge-offs during the second quarter of 2025 were $7.0 million, or 0.43% of average total loans on an annualized basis, compared to $8.1 million, or 0.52% of average total loans on an annualized basis, during the linked quarter and $4.2 million, or 0.27% of average total loans on an annualized basis, during the second quarter of 2024. The decrease in net charge-offs when compared to the linked quarter was primarily related to improvements of $0.6 million in the lease portfolio and $0.4 million in indirect consumer loans, partially offset by an increase of $0.2 million in net charge-offs in commercial and industrial loans. The net charge-offs for the lease portfolio remain higher than historic norms and are the driver for the increase over June 30, 2024. The following table details Peoples’ nonperforming assets: (Dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Loans 90+ days past due and accruing: Commercial real estate, other $ 494 $ 284 $ 227 $ 3,838 $ 106 Commercial and industrial 36 106 78 413 208 Premium finance 3,533 2,502 4,947 7,771 2,546 Leases 547 218 803 12,675 3,193 Residential real estate 1,192 853 2,166 2,442 1,209 Home equity lines of credit 108 47 213 292 230 Consumer, indirect 98 77 159 46 67 Consumer, direct 118 120 44 101 33 Consumer 216 197 203 147 100 Total loans 90+ days past due and accruing $ 6,126 $ 4,207 $ 8,637 $ 27,578 $ 7,592 Nonaccrual loans: Commercial real estate, other 4,824 5,378 7,136 4,416 4,833 Commercial and industrial 5,514 5,747 6,809 7,008 6,030 Leases 11,907 12,079 8,850 12,428 11,849 Residential real estate 8,028 8,163 7,329 6,658 7,078 Home equity lines of credit 1,339 1,537 1,498 1,461 1,454 Consumer, indirect 2,697 2,521 2,374 2,726 2,261 Consumer, direct 176 203 133 110 164 Consumer 2,873 2,724 2,507 2,836 2,425 Total nonaccrual loans $ 34,485 $ 35,628 $ 34,129 $ 34,807 $ 33,669 Total nonperforming loans ("NPLs") $ 40,611 $ 39,835 $ 42,766 $ 62,385 $ 41,261 OREO: Commercial $ 5,891 $ 5,891 $ 5,891 $ 7,118 $ 7,118 Residential 122 89 279 279 291 Total OREO $ 6,013 $ 5,980 $ 6,170 $ 7,397 $ 7,409 Total nonperforming assets ("NPAs") $ 46,624 $ 45,815 $ 48,936 $ 69,782 $ 48,670 Criticized loans (a) $ 244,442 $ 226,542 $ 241,302 $ 237,627 $ 239,943 Classified loans (b) $ 125,014 $ 123,842 $ 128,815 $ 133,241 $ 120,180 Asset Quality Ratios (c): Nonaccrual loans as a percent of total loans 0.52 % 0.55 % 0.54 % 0.55 % 0.53 % NPLs as a percent of total loans (d) 0.61 % 0.62 % 0.67 % 0.99 % 0.65 % NPAs as a percent of total assets (d) 0.49 % 0.50 % 0.53 % 0.76 % 0.53 % NPAs as a percent of total loans and OREO (d) 0.71 % 0.71 % 0.77 % 1.11 % 0.77 % Allowance for credit losses as a percent of nonaccrual loans 216.56 % 183.09 % 185.61 % 191.45 % 196.76 % Allowance for credit losses as a percent of NPLs (d) 183.89 % 163.76 % 148.13 % 106.82 % 160.56 % Criticized loans as a percent of total loans (a) 3.70 % 3.52 % 3.80 % 3.79 % 3.79 % Classified loans as a percent of total loans (b) 1.89 % 1.93 % 2.03 % 2.12 % 1.90 % 68 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. Peoples' NPAs decreased from 0.50% of total assets at March 31, 2025 to 0.49% of total assets at June 30, 2025. Total loans 90+ days past due and accruing decreased at June 30, 2025 compared to June 30, 2024 driven down by leases. During the second quarter of 2025, criticized loans increased $17.9 million, while classified loans increased $1.2 million when compared to at March 31, 2025. The increase in criticized loans was driven by loan downgrades associated with one customer relationship, while the increase in the amounts of classified loans compared to at March 31, 2025 and at June 30, 2024 was driven by loan downgrades. The increase in NPAs compared to at March 31, 2025, was primarily driven by an increase in premium finance loans that were 90+ days past due and accruing. The decrease in NPAs compared to at June 30, 2024, was driven primarily by a reductions in leases that were 90+ days past due and accruing and commercial OREO, partially offset by an increase in residential real estate loans that were on nonaccrual status as of June 30, 2025. Deposits The following table details Peoples’ deposit balances: (Dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Non-interest-bearing deposits (a) $ 1,530,824 $ 1,526,285 $ 1,507,661 $ 1,453,441 $ 1,472,697 Interest-bearing deposits: Interest-bearing demand accounts (a) 1,058,910 1,087,197 1,085,152 1,065,912 1,083,512 Savings accounts 889,872 894,592 866,959 864,935 880,542 Retail CDs 2,005,322 1,965,978 1,921,415 1,884,139 1,812,874 Money market deposit accounts 927,543 967,331 878,254 894,690 869,159 Governmental deposit accounts 781,949 834,409 775,782 824,136 766,337 Brokered CDs 442,788 458,957 554,982 495,904 412,653 Total interest-bearing deposits 6,106,384 6,208,464 6,082,544 6,029,716 5,825,077 Total deposits $ 7,637,208 $ 7,734,749 $ 7,590,205 $ 7,483,157 $ 7,297,774 Demand deposits as a percent of total deposits 34 % 34 % 34 % 34 % 35 % (a) The sum of amounts presented is considered total demand deposits. At June 30, 2025, period-end total deposits decreased $97.5 million compared to at March 31, 2025, driven by decreases of $52.5 million in governmental deposits, $39.8 million in money market deposits, $28.3 million in interest-bearing demand accounts, and $16.2 million in brokered deposits, partially offset by an increase of $39.3 million in retail certificates of deposit. The decrease in governmental deposit accounts was due to the seasonality of those balances while the decrease in brokered deposit accounts was due to a strategic shift to other funding sources at lower rates. The increase in retail certificates of deposits was due to current specials being offered. Compared to June 30, 2024, period-end deposit balances increased $339.4 million, or 5%. The increase in total deposits was primarily driven by increases of $192.4 million in retail certificates of deposit, $58.4 million in money market deposits, and $58.1 million in non-interest bearing deposits. These were partially offset by a decrease of $24.6 million in interest-bearing demand accounts. The increase in retail certificates of deposits was driven by special promotional rate offerings over the past year. 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 June 30, 2025, Peoples had six effective interest rate swaps, with an aggregate notional value of $55.0 million, which were designated as cash flow hedges. Peoples continually evaluates the overall balance sheet position given the interest rate environment. 69 Table of Contents Borrowed Funds The following table details Peoples’ short-term borrowings and long-term borrowings: (Dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Short-term borrowings: FHLB Overnight borrowings $ 356,000 $ — $ 175,000 $ — $ 295,000 Retail repurchase agreements 23,569 19,228 18,367 12,945 24,733 Bank Term Funding Program ("BTFP") — — — 163,000 163,000 Other short-term borrowings 17,291 — 107 — — Total short-term borrowings $ 396,860 $ 19,228 $ 193,474 $ 175,945 $ 482,733 Long-term borrowings: FHLB advances $ 131,580 $ 131,716 $ 131,868 $ 132,157 $ 132,524 Vantage non-recourse debt 45,429 50,156 51,330 50,059 47,393 Other long-term borrowings 55,382 55,128 54,875 54,608 54,340 Total long-term borrowings $ 232,391 $ 237,000 $ 238,073 $ 236,824 $ 234,257 Total borrowed funds $ 629,251 $ 256,228 $ 431,547 $ 412,769 $ 716,990 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 June 30, 2025 increased compared to at March 31, 2025 due to higher FHLB overnight borrowings. Total borrowed funds decreased compared to at June 30, 2024 due to the payoff of the Bank Term Funding Program, partially offset by an increase in FHLB overnight borrowings. Capital/Stockholders’ Equity At June 30, 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 June 30, 2025, Peoples had a capital conservation buffer of 5.71%. The following table details Peoples' risk-based capital levels and corresponding ratios: (Dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Capital Amounts: Common Equity Tier 1 $ 857,036 $ 845,200 $ 833,128 $ 821,192 $ 799,710 Tier 1 888,282 876,246 863,974 851,823 830,126 Total (Tier 1 and Tier 2) 982,928 960,820 946,724 933,679 916,073 Net risk-weighted assets $ 7,170,842 $ 6,986,418 $ 6,971,490 $ 6,958,225 $ 6,814,149 Capital Ratios: Common Equity Tier 1 11.95 % 12.10 % 11.95 % 11.80 % 11.74 % Tier 1 12.39 % 12.54 % 12.39 % 12.24 % 12.18 % Total (Tier 1 and Tier 2) 13.71 % 13.75 % 13.58 % 13.42 % 13.44 % Tier 1 leverage ratio 9.83 % 9.80 % 9.73 % 9.59 % 9.29 % Peoples' risk-based capital ratios at June 30, 2025 decreased when compared to at March 31, 2025 due to the increase in assets, driven by loan growth in the quarter. 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 70 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) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Tangible equity: Total stockholders' equity $ 1,153,350 $ 1,137,821 $ 1,111,590 $ 1,124,972 $ 1,077,833 Less: goodwill and other intangible assets 397,785 400,099 402,422 403,922 406,417 Tangible equity $ 755,565 $ 737,722 $ 709,168 $ 721,050 $ 671,416 Tangible assets: Total assets $ 9,540,608 $ 9,246,000 $ 9,254,247 $ 9,140,471 $ 9,226,461 Less: goodwill and other intangible assets 397,785 400,099 402,422 403,922 406,417 Tangible assets $ 9,142,823 $ 8,845,901 $ 8,851,825 $ 8,736,549 $ 8,820,044 Tangible book value per common share: Tangible equity $ 755,565 $ 737,722 $ 709,168 $ 721,050 $ 671,416 Common shares outstanding 35,673,721 35,669,100 35,563,590 35,538,607 35,498,977 Tangible book value per common share $ 21.18 $ 20.68 $ 19.94 $ 20.29 $ 18.91 Tangible equity to tangible assets ratio: Tangible equity $ 755,565 $ 737,722 $ 709,168 $ 721,050 $ 671,416 Tangible assets $ 9,142,823 $ 8,845,901 $ 8,851,825 $ 8,736,549 $ 8,820,044 Tangible equity to tangible assets 8.26 % 8.34 % 8.01 % 8.25 % 7.61 % Tangible book value per common share increased to $21.18 at June 30, 2025 compared to $20.68 at March 31, 2025. The change in tangible book value per common share was due to tangible equity increasing during the second 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 June 30, 2025 increased compared to at June 30, 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. 71 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) June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024 300 $ 33,082 9.0 % $ 10,471 3.0 % $ (173,191) (8.9) % $ (127,697) (7.2) % 200 24,398 6.7 % 7,090 2.0 % (86,948) (4.5) % (88,238) (5.0) % 100 15,288 4.2 % 3,678 1.0 % (19,500) (1.0) % (45,430) (2.6) % (100) (14,011) (3.8) % (9,700) (2.7) % (33,717) (1.7) % 12,016 0.7 % (200) (26,603) (7.3) % (19,818) (5.6) % (112,648) (5.8) % (3,009) (0.2) % (300) (19,703) (5.4) % (19,964) (5.6) % (241,704) (12.4) % (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 June 30, 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 June 30, 2025, the bear steepener scenario produced an increase in net interest income of 1.4% and an increase in the economic value of equity of 3.1%. 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. Deposit costs decrease less quickly than variable rate asset yields over a short-term horizon but are mitigated to some extent over a longer horizon, resulting in a decreased amount of net interest income (margin) in a 12 month period and a relatively neutral impact to net interest income (margin) in a 24 month period. At June 30, 2025, the bull steepener scenario produced a decline of 0.9% to net interest income, as the impact of revised assumptions around deposit betas mitigate the impact of lower short-term rates over a 12-month horizon, and an increase in the economic value of equity of 0.6%. 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 June 30, 2025, Peoples had entered into six interest rate swap contracts with an aggregate notional value of $55.0 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 June 30, 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 72 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 June 30, 2025, Peoples Bank had liquid assets of $735.9 million, which represented 6.7% of total assets and unfunded loan commitments. Peoples also had an additional $142.7 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 contractual 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) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Home equity lines of credit $ 268,217 $ 257,349 $ 254,168 $ 248,400 $ 247,757 Unadvanced construction loans 362,405 350,382 370,086 376,595 371,322 Other loan commitments 791,389 729,254 759,790 815,199 759,121 Loan commitments $ 1,422,011 $ 1,336,985 $ 1,384,044 $ 1,440,194 $ 1,378,200 Standby letters of credit $ 6,774 $ 6,970 $ 8,398 $ 9,917 $ 10,507 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.