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Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-07-31 · 321 added, 299 removed, 968 unchanged (39% of the section changed)

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.

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 nine months ended September 30, 2025 and September 30, 2024.

This MD&A should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the Notes thereto.

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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.

(1) the effects of interest rate policies, including any changes to such policies that may result from potential changes in the composition of the Federal Reserve Board, 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;

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(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.

economy generally, the current or future U.S.

government shutdown, 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.

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(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.

RISK FACTORS" of Peoples' 2024 Form 10-K and under the heading "Part II of this Form 10-Q.

Peoples encourages readers of this Form 10-Q to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance.

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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.

As of September 30, 2025, Peoples had 145 locations, including 127 full-service bank branches in Ohio, Kentucky, West Virginia, Virginia, Washington D.C.

and Maryland.

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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.

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 September 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.

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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.

◦ For the third quarter of 2025, Peoples recorded a provision for credit losses of $7.3 million, compared to a provision for credit losses of $16.6 million for the linked quarter and a provision for credit losses of $6.7 million for the third quarter of 2024.

The provision for credit losses for the third quarter of 2025 was primarily driven by (i) net charge offs, (ii) loan growth, (iii) a slight deterioration in the economic forecasts used within the CECL model, partially offset by reductions in reserves for individually analyzed loans and leases.

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.

The provision for the third quarter of 2024 was primarily driven by net charge-offs.

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%.

This rate remained unchanged until the latter half of 2024, where multiple rate cuts reduced the rate down to 4.25% to 4.50%.

The Federal Reserve Board announced a subsequent 25 basis point rate cut in September 2025, further reducing the rate to 4.00% to 4.25%.

The Federal Reserve Board has signaled that future rate reductions continue to be a possibility.

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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

the merger with Limestone Bancorp Inc.

Peoples reported net income of $29.5 million for the third quarter of 2025, representing earnings per diluted common share of $0.83.

In comparison, Peoples reported net income of $21.2 million, representing earnings per diluted common share of $0.59, for the second quarter of 2025, and net income of $31.7 million, representing earnings per diluted common share of $0.89, for the third quarter of 2024.

Non-core items negatively impacted earnings per diluted common share by $0.07 for the third quarter of 2025, $0.01 for the second quarter of 2025, and $0.01 for the third quarter of 2024.

For the nine months ended September 30, 2025, Peoples recorded net income of $75.0 million, or $2.10 per diluted common share, compared to $90.3 million, or $2.55 per diluted common share, for the nine months ended September 30, 2024.

Net interest income was $91.3 million for the third quarter of 2025, and increased $3.8 million, or 4%, when compared to the linked quarter.

Net interest margin was 4.16% for the third quarter of 2025, compared to 4.15% for the linked quarter.

The increase in net interest income and net interest margin was primarily driven by higher loan balances and higher yields on investment securities, respectively.

Net interest income for the third quarter of 2025 increased $2.4 million, or 3%, compared to the third quarter of 2024.

The increase in net interest income compared to the third quarter of 2024 was driven by growth in loan and investment portfolios.

Net interest margin for the third quarter of 2025 was 4.16% and decreased 11 basis points compared to 4.27% for the third quarter of 2024, impacted primarily by reductions in loan yields, driven by lower accretion income.

Net interest income for the first nine months of 2025 was $264.2 million, compared to $262.2 million for the same period of 2024.

Net interest margin for the first nine months of 2025 was 4.15%, compared to 4.24% for the same period of 2024 and was driven by lower accretion income.

Accretion income, net of amortization expense, from acquisitions was $1.7 million for the third quarter of 2025, $2.6 million for the second quarter of 2025 and $8.1 million for the third quarter of 2024, which added 8 basis points, 12 basis points and 39 basis points, respectively, to net interest margin.

The decrease in accretion income for the third quarter of 2025 when compared to the linked quarter and the third quarter of 2024 was driven by fewer loan payoffs and more accretion income recognized in 2024 from 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.

Accretion income, net of amortization expense, from acquisitions was $7.8 million and $20.3 million for the first nine months of 2025 and 2024, respectively.

Accretion income added 12 basis points and 33 basis points to net interest margin for the first nine months of 2025 and 2024, respectively.

The decrease in accretion income for the first nine 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 $7.3 million for the third quarter of 2025, compared to a provision for credit losses of $16.6 million for the linked quarter and a provision for credit losses of $6.7 million for the third quarter of 2024.

The provision for credit losses for the third quarter of 2025 was primarily driven by (i) net charge offs, (ii) loan growth, and (iii) a slight deterioration in the economic forecasts used within the CECL model, partially offset by reductions in reserves for individually analyzed loans and leases.

The provision for credit losses for the linked quarter 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.

Net charge-offs for the third quarter of 2025 were $6.8 million, or 0.41% of average total loans annualized, compared to net charge-offs of $7.0 million, or 0.43% of average total loans annualized, for the linked quarter and net charge-offs of $6.1 million, or 0.38% of average total loans annualized, for the third 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.

The provision for credit losses for the first nine months of 2025 was $34.1 million, compared to a provision for credit losses of $18.5 million for the first nine months of 2024.

The provision for credit losses during the first nine 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) deterioration in the economic forecasts used within the CECL model, (v) and loan growth.

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

Net charge-offs for the first nine months of 2025 were $21.9 million, or 0.45% of average total loans and leases annualized, compared to net charge-offs of $13.6 million, or 0.29% annualized, for the first nine 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.

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.

The net loss realized during the third quarter of 2025 was $3.1 million, compared to a net loss of $0.3 million for the linked quarter and a net loss of $0.9 million for the third quarter of 2024.

The net loss for the third quarter of 2025 was driven by a $2.7 million loss on the sale of lower-yielding available-for-sale securities.

The net loss for the second quarter of 2025 and for the third quarter of 2024 was due to $0.3 million and $0.5 million of net losses on repossessed assets, respectively.

For the nine months ended September 30, 2025, the total net loss was $3.7 million, compared to $2.0 million for the same period in 2024.

The net loss for the first nine months of 2025 was primarily driven by the $2.7 million loss on the sale of lower yielding available-for-sale securities.

The net loss recognized in the first nine months of 2024 was primarily driven by $1.3 million of net losses on repossessed assets.

Total non-interest income, excluding net gains and losses, for the third quarter of 2025 decreased $0.3 million compared to the linked quarter.

The decrease was primarily impacted by a decrease of $0.6 million in lease income, driven by gains on terminated Vantage leases recorded in the linked quarter, partially offset by an increase of $0.3 million in electronic banking ("e-banking") income, driven by debit card interchange fees.

Compared to the third quarter of 2024, total non-interest income, excluding net gains and losses, increased $1.2 million, due to an increase of $0.7 million in BOLI, an increase of $0.6 million in lease income, and an increase of $0.5 million in trust and investment income, which was driven by an increase in assets under administration and management, partially offset by a decrease of $0.8 million in mortgage banking income.

For the first nine months of 2025, total non-interest income, excluding gains and losses, increased $5.2 million, or 7%, compared to the first nine months of 2024.

The increase was driven by (i) a $4.0 million increase in lease income, driven by gains on early Vantage lease terminations and increased operating lease income, (ii) a $1.3 increase in trust and investment income, driven by an increase in assets under administration and management, and (iii) a $1.0 million increase in other non-interest income, primarily driven by an increase in swap fee income due to customer demand.

These increases were partially offset by a $0.8 million decrease in mortgage banking income and a $0.7 million decrease in deposit account service charges due to customer activity.

Total non-interest expense decreased $0.5 million for the three months ended September 30, 2025, compared to the linked quarter.

The decrease was primarily due to a decrease of $0.8 million in professional fees and $0.6 million in other non-interest expense, driven by lower corporate expenses, partially offset by increases of $0.3 million in marketing expenses and $0.2 million in franchise tax expenses.

Compared to the third quarter of 2024, total non-interest expense increased $3.8 million, or 6%.

The increase was primarily driven by increases of $1.6 million in salaries and employee benefit costs, which were driven by higher sales-based incentive, medical costs, and payroll taxes, $1.2 million in data processing and software expense, and $1.2 million in other non-interest expense, partially offset by a decrease of $0.6 million in amortization of other intangible assets.

For the nine months ended September 30, 2025, total non-interest expense increased $7.7 million, or 4%, compared to the first nine months of 2024.

The increase was driven by increases of (i) $4.9 million in salaries and employee benefits costs, which were driven by higher sales-based incentive and medical costs, (ii) $3.1 million in data processing and software expenses, (iii) $0.7 million in professional fees, and (iv) $0.6 million in operating lease expense, partially offset with decreases of $1.7 million in amortization of other intangible assets and $1.1 million in net occupancy and equipment expense.

The efficiency ratio for the third quarter of 2025 was 57.1%, compared to 59.3% for the linked quarter and 55.1% for the third 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 for the first nine months of 2025 was 59.0%, compared to 57.4% for the first nine months of 2024.

The efficiency ratio increased compared to the prior year first nine months due to the increase in non-interest expense and lower net interest income.

Peoples recorded income tax expense of $8.5 million with an effective tax rate of 22.4% for the third quarter of 2025, compared to income tax expense of $6.2 million with an effective tax rate of 22.7% for the linked quarter, and income tax expense of $9.2 million with an effective tax rate of 22.5% for the third quarter of 2024.

The increase in income tax expense when compared to the prior quarter was primarily due to higher pre-tax income.

Peoples' income tax expense for the first nine months of 2025 was $21.8 million with an effective tax rate of 22.5%, compared to $24.3 million with an effective tax rate of 21.2% for the same period of 2024.

Total assets were $9.62 billion as of September 30, 2025, $9.54 billion at June 30, 2025, $9.25 billion at December 31, 2024, and $9.14 billion at September 30, 2024.

Total assets at September 30, 2025 increased when compared to at June 30, 2025 primarily due to increases in period-end loan and lease balances.

Period-end total loan and lease balances at September 30, 2025 increased $127.1 million, or 8% annualized, compared to at June 30, 2025.

The increase in loans was driven by increases of $121.2 million in other commercial real estate loans and $82.1 million in commercial and industrial loans, partially offset by a decrease of $80.3 million in construction loans.

Total assets at September 30, 2025 increased compared to at December 31, 2024 due to increases of $370.7 million in total loans and leases and $157.0 million in held-to-maturity investment securities, partially offset by decreases in available-for sale investment securities of $106.6 million.

Total assets at September 30, 2025 increased compared to at September 30, 2024 due to increases of $456.9 million in total loans and leases and $142.7 million in total investment securities, partially offset by a decrease of $93.5 million in total cash and cash equivalents.

Total liabilities were $8.44 billion at September 30, 2025, up from $8.39 billion at June 30, 2025, $8.14 billion at December 31, 2024, and $8.02 billion at September 30, 2024.

The increase in total liabilities when compared to at June 30, 2025 was primarily due to an increase of $86.7 million in short-term borrowings, partially offset by a decrease of $5.0 million in period-end total deposits.

Total liabilities increased compared to at December 31, 2024 due to increases in short-term borrowings and non-interest bearing deposits of $290.1 million and $28.4 million, respectively, and were partially offset by a decrease in accrued expenses and other liabilities of $22.8 million.

The increase in total liabilities when compared to at September 30, 2024 was primarily due increases of $307.6 million and $149.0 million in short-term borrowings and period-end deposits, respectively.

The increase in deposits was primarily driven by an increase of $124.5 million in retail certificates of deposit, driven by current promotional offerings, $82.7 million in non-interest bearing deposits, and $53.5 million in money market deposits.

These were partially offset by a decrease of $79.1 million in brokered deposits and a $54.4 million decrease in governmental deposit accounts.

Total stockholders' equity at September 30, 2025 increased $29.4 million compared to at June 30, 2025, which was primarily due to net income for the quarter of $29.5 million and a decrease of $12.7 million in accumulated other comprehensive loss, partially offset by dividends paid of $14.7 million.

Accumulated unrealized losses related to the available-for-sale investment securities portfolio were $78.1 million and $90.9 million at September 30, 2025 and at June 30, 2025, respectively.

Total stockholders' equity at September 30, 2025 increased $71.2 million, or 6%, compared to at December 31, 2024, which was due to net income of $75.0 million in the first nine months of 2025 and a decrease of $32.8 million in accumulated other comprehensive loss, partially offset by dividends paid of $43.5 million.

Total stockholders' equity at September 30, 2025 increased by $57.8 million compared to at September 30, 2024 and was impacted by net income of $102.0 million in the last twelve months and a decrease in accumulated other comprehensive loss of $5.0 million, partially offset by dividends paid of $57.7 million.

RESULTS OF OPERATIONS

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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.

The following table details the calculation of FTE net interest income:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

4 unchanged sentences

For the Three Months Ended

June 30, 2025 March 31, 2025 June 30, 2024

September 30, 2025 June 30, 2025 September 30, 2024

( Dollars in thousands)

51 unchanged sentences

Net interest margin (b) 4.16 % 4.15 % 4.27 %

For the Six Months Ended

June 30, 2025 June 30, 2024

For the Nine Months Ended

September 30, 2025 September 30, 2024

( Dollars in thousands)

63 unchanged sentences

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

Three Months Ended September 30, 2025 Compared to

Nine Months Ended September 30, 2025 Compared to

(Dollars in thousands) June 30, 2025 September 30, 2024 September 30, 2024

Increase (decrease) in:

35 unchanged sentences

(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.

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.

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.

Net interest income was $91.3 million for the third quarter of 2025 and increased $3.8 million when compared to the linked quarter.

Net interest margin was 4.16% for the third quarter of 2025, compared to 4.15% for the linked quarter.

The increase in net interest income and margin was primarily driven by higher loan balances and higher yields on investment securities, respectively.

Net interest income for the third quarter of 2025 increased $2.4 million, or 3%, compared to the third quarter of 2024.

Net interest margin decreased 11 basis points when compared to the third quarter of 2024.

The increase in net interest income was primarily driven by growth in loan portfolios and reduced deposit costs.

The decrease in net interest margin was driven by reductions in loan yields, attributable to lower accretion income.

For the first nine months of 2025, net interest income increased $2.0 million compared to the first nine months of 2024, while net interest margin decreased 9 basis points to 4.15%.

The decrease in net interest margin for the first nine months of 2025 compared to the first nine months of 2024 was primarily driven by lower accretion income.

Accretion income, net of amortization expense, from acquisitions was $1.7 million for the third quarter of 2025, $2.6 million for the linked quarter and $8.1 million for the third quarter of 2024, which added 8 basis points, 12 basis points and 39 basis points, respectively, to net interest margin.

Accretion income, net of amortization expense, was $7.8 million and $20.3 million for the first nine months of 2025 and 2024, respectively.

Accretion income added 12 basis points and 33 basis points to net interest margin for the first nine months of 2025 and 2024, respectively.

The decrease in accretion income for the first nine 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.

2 unchanged sentences

The following table details Peoples’ provision for credit losses:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

3 unchanged sentences

The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management’s quarterly estimates.

The provision for credit losses for the first quarter of 2025 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.

The provision for credit losses for the linked 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.

For the first nine months 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) deterioration in the economic forecasts used within the CECL model, and (v) loan growth.

For the same period of 2024, the provision for credit losses was driven by (i) net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, (iii) economic forecast deterioration, and (iv) loan growth.

Additional information regarding changes in the allowance for credit losses and loan credit quality can be found later in this MD&A under the caption “FINANCIAL CONDITION - Allowance for Credit Losses.”

2 unchanged sentences

The following table details Peoples’ net losses for the periods presented:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

2 unchanged sentences

Net loss on other assets (424) (267) (764) (1,021) (1,470)

Net gain on OREO 10 20 — 30 —

Net gain (loss) on OREO — 10 (2) 30 (2)

Net loss on other transactions (54) (23) (29) (128) (92)

Net loss on asset disposals and other transactions $ (478) $ (280) $ (795) $ (1,119) $ (1,564)

The net loss on investment securities for the third quarter of 2025 was driven by the sale of lower-yielding available for sale securities.

The net loss on investment securities reported for the third quarter of 2024 was attributable to a loss recorded on a contingent call of a security.

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.

Total non-interest income, excluding net gains and losses, comprised 23% of Peoples' total revenues (defined as net interest income plus total non-interest income excluding net gains and losses) for the third quarter of 2025, 24% for the linked quarter, and 22% for the third quarter of 2024.

For the first nine 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 third quarter of 2025, e-banking income comprised the largest portion of Peoples' total non-interest income, excluding net gains and losses.

Peoples' e-banking services include ATM and debit cards, direct deposit services, internet and mobile banking, and remote deposit capture, and serve as alternative delivery channels to traditional sales offices for providing services to customers.

The following table details Peoples' e-banking income:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

3 unchanged sentences

The following table details Peoples' insurance income:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

6 unchanged sentences

Insurance income $ 4,469 $ 4,549 $ 4,271 $ 15,072 $ 14,878

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' insurance income for the third quarter of 2025 decreased slightly when compared to the linked quarter.

Insurance income for the third quarter of 2025 increased when compared to the third quarter of 2024 due to higher commissions.

Insurance income in the first nine months of 2025 increased compared to the same period of 2024 due to higher commissions.

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:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

3 unchanged sentences

Trust and investment income $ 5,414 $ 5,281 $ 4,882 $ 15,756 $ 14,480

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.

Brokerage income in the third quarter of 2025 increased when compared to the linked quarter and to the third quarter of 2024 and was driven by an increase in assets under administration and management.

Trust and investment income increased $1.3 million for the first nine months 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:

September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

(Dollars in thousands)

3 unchanged sentences

Quarterly average $ 3,955,007 $ 3,736,778 $ 3,711,527 $ 3,706,804 $ 3,683,334

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.

The increase in assets under administration and management at September 30, 2025 compared to at June 30, 2025 was driven by market value fluctuations.

The increase in assets under administration and management at September 30, 2025 when compared to at September 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

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

5 unchanged sentences

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.

Deposit account service charges increased slightly for the third quarter of 2025 compared to the linked quarter.

Deposit account service charges decreased when comparing the third quarter of 2025 to the third quarter of 2024.

For the first nine months of 2025, total deposit account service charges decreased by $0.7 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

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

5 unchanged sentences

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.

Lease income for the third quarter of 2025 decreased compared to the linked quarter due to gains on early terminated Vantage leases recognized in the linked quarter.

The increase when compared to the third quarter of 2024 was driven by increases in operating lease income and month-to-month lease income.

Lease income increased $4.0 million for the first nine months of 2025 when compared to the same period of 2024 due to increases in month-to-month lease income and operating lease income.

Other non-interest income decreased for the three months ended September 30, 2025 when compared to the linked quarter and remained relatively flat compared to the third quarter of 2024.

For the first nine months of 2025, other non-interest income increased by $1.0 million from the same period of 2024, primarily due to the increase in swap fee income which is driven by customer demand.

BOLI income for the third quarter of 2025 remained flat when compared to the linked quarter and increased $0.7 million when compared to the prior year quarter.

BOLI income increased for the first nine months of 2025 when compared to the same period of 2024 primarily due to changes in the cash surrender value of the underlying policies.

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.

Mortgage banking income for the third quarter of 2025 decreased when compared to the third quarter of 2024 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 decreased for the first nine months of 2025 when compared to the same period of 2024 due to lower production.

In the third quarter of 2025, Peoples sold $4.5 million in loans into the secondary market with servicing retained and $3.8 million in loans with servicing released, compared to $0.3 million and $10.2 million, respectively, in the second quarter of 2025, and $14.9 million and $12.0 million, respectively, in the third quarter of 2024.

For the first nine months of 2025, Peoples sold $5.0 million in loans into the secondary market with servicing retained, and $18.8 million with servicing released, compared to $17.6 million and $30.8 million, respectively, for the same period of 2024.

Non-Interest Expense

1 unchanged sentence

The following table details Peoples' salaries and employee benefit costs:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

9 unchanged sentences

Average during the period 1,460 1,462 1,495 1,468 1,493

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.

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.

Base salaries and wages for the third quarter of 2025 and the first nine months of 2025 increased compared to the same periods in 2024, primarily driven by annual merit increases.

Sales-based and incentive compensation increased for the third quarter of 2025 compared to the linked quarter and the third quarter of 2024 and was driven by an increase in corporate incentives.

Sales-based and incentive compensation increased for the first nine months of 2025 when compared to 2024, due to an increase in corporate incentives and insurance commissions.

The decrease in employee benefits for the third quarter of 2025 compared to the linked quarter was primarily related to lower medical costs and an adjustment related to prior period nonqualified deferred compensation expense.

Employee benefits increased for the third quarter of 2025 and the first nine months of 2025 when compared to the same periods for 2024 due to higher medical costs.

Payroll taxes and other employment costs for the third quarter of 2025 and for the first nine months of 2025 increased slightly when compared to all prior periods.

Stock-based compensation is generally recognized over the vesting period, which generally ranges from immediate vesting to vesting at the end of three years.

5 unchanged sentences

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.

Deferred personnel costs for the third quarter of 2025 increased when compared to the second quarter of 2025 and to the third quarter of 2024.

Similarly, deferred personnel costs increased for the first nine months of 2025 when compared to 2024.

Peoples' net occupancy and equipment expense was comprised of the following:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

4 unchanged sentences

Net occupancy and equipment expense $ 5,896 $ 5,690 $ 5,905 $ 17,198 $ 18,330

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.

Net occupancy and equipment expense remained roughly flat for the third quarter compared to the linked quarter and compared to the third quarter of 2024.

Net occupancy and equipment expense for the first nine months 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

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

11 unchanged sentences

Other non-interest expense 3,689 4,246 2,537 12,538 12,140

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.

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.

Data processing and software expenses for the third quarter and the first nine months of 2025 increased compared to the same periods in 2024 due to costs associated with recent technology projects.

Professional fees for the third quarter of 2025 decreased when compared to the linked quarter due to decreased professional services.

Professional fees increased for the first nine months of 2025 when compared to 2024 due to increased legal expenses and higher exam and audit fees.

Amortization of other intangible assets for the third 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 nine months 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.

E-banking expense increased slightly compared to the linked quarter and the third quarter of 2024.

E-banking expense increased for the first nine months of 2025 when compared to 2024 due to customer activity.

Peoples' FDIC insurance premiums for the third quarter of 2025 were flat when compared to the linked quarter and the third quarter of 2024.

FDIC premiums increased slightly for the first nine months of 2025 when compared to 2024.

Other loan expenses during the third quarter of 2025 remained relatively flat when compared to the linked quarter and increased slightly compared to the third quarter of 2024.

Other loan expenses increased for the first nine months 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 the third quarter of 2024.

Operating lease expense increased for the first nine months of 2025 when compared to 2024 due to an increased volume of leases.

Marketing expense for the third quarter of 2025 increased when compared to the linked quarter primarily driven by a vendor credit received in the second quarter.

Marketing expense decreased for the first nine months of 2025 when compared to 2024 due to lower advertising expenses.

Travel and entertainment expenses remained flat compared to the linked quarter and to the third quarter of 2024.

Travel and entertainment increased slightly for the first nine months of 2025 when compared to 2024 due to timing of travel.

Communication expense decreased for the third 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 nine months 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.

1 unchanged sentence

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.

The increase in franchise tax expense for the third 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 nine months of 2025 when compared to 2024.

Other non-interest expense for the third quarter of 2025 decreased when compared to the linked quarter primarily due to lower corporate expenses.

Other non-interest expense increased for the third quarter and the first nine months of 2025 when compared to same periods in 2024 due to increased expense on operating leases.

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.

Peoples recorded income tax expense of $8.5 million with an effective tax rate of 22.4% for the third quarter of 2025, compared to income tax expense of $6.2 million with an effective tax rate of 22.7% for the linked quarter and income tax expense of $9.2 million with an effective tax rate of 22.5% for the third quarter of 2024.

The increase in income tax expense when compared to the prior quarter was primarily due to higher pre-tax income.

The effective tax rate compared to the prior year quarter was relatively flat.

Peoples recorded income tax expense of $21.8 million and $24.3 million, through the first nine months of 2025 and 2024, respectively.

The decrease for the first nine months of 2025 compared to 2024 was driven by lower pre-tax income.

Additional information regarding income taxes can be found in "Note 13.

6 unchanged sentences

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

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

2 unchanged sentences

provision for credit losses 7,280 16,642 6,735 34,112 18,520

loss on OREO — — 2 — 2

loss on investment securities 2,580 — 74 2,582 428

3 unchanged sentences

Pre-provision net revenue $ 48,340 $ 44,375 $ 48,484 $ 134,645 $ 135,121

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.

The increase in the PPNR for the third quarter of 2025 compared to the linked quarter was driven by an increase in net interest income due to higher income on loans and investment securities.

PPNR for the first nine months of 2025 decreased slightly compared to 2024, primarily driven by lower accretion income, partially offset by lower funding costs.

Efficiency Ratio (Non-US GAAP)

3 unchanged sentences

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

4 unchanged sentences

Total non-interest income 23,827 26,880 24,794 77,806 74,277

net (loss) gain on investment securities — (2) (353) (2) (354)

net loss on investment securities (2,580) — (74) (2,582) (428)

net loss on asset disposals and other transactions (478) (280) (795) (1,119) (1,564)

6 unchanged sentences

(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 for the third quarter of 2025 was 57.1%, compared to 59.3% for the linked quarter and 55.1% for the third 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.

The efficiency ratio increased compared to the prior year first nine months due to the increase in non-interest expense.

Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business.

3 unchanged sentences

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

4 unchanged sentences

tax effect of net loss on investment securities (a)

542 — 16 542 90

net loss on asset disposals and other transactions

3 unchanged sentences

acquisition-related expenses

— — (662) — (746)

tax effect of acquisition-related expenses (a)

— — (139) — (157)

Net income adjusted for non-core items (after tax)

20 unchanged sentences

(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.

The return on average assets and the return on average assets adjusted for non-core items for the third quarter of 2025 increased when compared to the linked quarter due to higher annualized net income.

The decrease in the return on average assets and return on average assets adjusted for non-core items for the third quarter of 2025, compared to the third 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 nine months 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)

2 unchanged sentences

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

2025 March 31,

2025 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

(Dollars in thousands) 2025 2024

37 unchanged sentences

(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.

The return on total average stockholders' equity and average tangible equity ratios increased when compared to the linked quarter due to an increase in annualized net income.

The decreases in the return on total average stockholders' equity and average tangible equity ratios for the third quarter and the first nine months of 2025 compared to the same periods of 2024 were driven by lower net income.

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.

At September 30, 2025, Peoples' interest-bearing deposits in other banks had decreased $39.7 million from December 31, 2024.

The total cash and cash equivalents balance included $62.9 million of excess cash reserves being maintained at the FRB of Cleveland at September 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.

Through the first nine months of 2025, Peoples' total cash and cash equivalents decreased $27.4 million, which reflected cash outflows of $403.4 million for investing activities, partially offset by cash inflows of $276.5 million for financing activities and $99.4 million from operating activities.

Peoples' use of cash in investing activities reflected a $384.5 million net increase in loans held for investment and net cash outflows of $156.1 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.

These were offset by net cash inflows from the sale of available-for-sale investment securities of $147.4 million.

The cash provided by financing activities was driven by a net increase in short-term borrowings of $290.1 million.

2 unchanged sentences

The following table provides information regarding Peoples’ investment portfolio:

(Dollars in thousands) Weighted Average Yield June 30,

(Dollars in thousands) Weighted Average Yield September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Available-for-sale securities, at fair value:

21 unchanged sentences

Carrying value $ 1,972,721 $ 2,019,054 $ 1,878,462 $ 1,918,487 $ 1,829,995

(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.

(a) Amortized cost is presented net of the allowance for credit losses of $237 at September 30, 2025 and at June 30, 2025 and $236 at September 30, 2024.

For the third quarter of 2025, available-for-sale investment securities decreased compared to all prior periods due to the sale of lower-yielding securities.

For the third quarter of 2025, held-to-maturity 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.

1 unchanged sentence

The following table provides information regarding outstanding loan balances:

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Originated loans and leases:

65 unchanged sentences

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.

The period-end total loan and lease balances at September 30, 2025 increased $127.1 million, or 8% annualized, compared to at June 30, 2025.

The increase in the period-end loan and lease balances at September 30, 2025 compared to at June 30, 2025 was driven by increases of $121.2 million in other commercial real estate loans and $82.1 million in commercial and industrial loans, partially offset by a decrease of $80.3 million in construction loans.

The period-end loan and lease balances at September 30, 2025 compared to at September 30, 2024 increased $456.9 million, or 7%, compared to at September 30, 2024, driven by increases of $239.4 million in commercial and industrial loans, $188.9 million in other commercial real estate loans, and $98.2 million in residential real estate loans, partially offset by decreases of $59.0 million and $50.3 million in constructions loans and leases, respectively.

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:

Peoples' commercial lending activities continue to be spread over a diverse range of businesses from many sectors of the economy, with no single industry comprising over 14% 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 September 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 September 30, 2025:

(Dollars in thousands) Outstanding Balance Loan Commitments Total Exposure % of Total

3 unchanged sentences

Land only 16,144 25,987 42,131 7.0 %

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 10,781 29,358 40,139 6.6 %

Residential property 4,699 20,401 25,100 4.2 %

Warehouse facilities 1,278 14,361 15,639 2.6 %

Student housing 15,000 — 15,000 2.5 %

Retail facilities 4,217 9,894 14,111 2.3 %

Other (a) 35,662 28,675 64,337 10.6 %

4 unchanged sentences

Apartment complexes $ 524,353 $ 11,407 $ 535,760 22.0 %

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:

2 unchanged sentences

Total light industrial facilities $ 248,621 $ 10,533 $ 259,154 10.7 %

Retail facilities:

Owner occupied $ 208,964 $ 100 $ 209,064 8.6 %

Non-owner occupied 44,527 1,278 45,805 1.9 %

Total retail facilities $ 253,491 $ 1,378 $ 254,869 10.5 %

Lodging and lodging related:

28 unchanged sentences

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.

For all other states, the aggregate outstanding balances of commercial loans in each state were less than 6% of total loans at September 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.

4 unchanged sentences

The following details management's allocation of the allowance for credit losses:

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Construction $ 1,252 $ 1,347 $ 1,156 $ 878 $ 854

10 unchanged sentences

As a percent of total loans 1.11 % 1.13 % 1.01 % 1.00 % 1.06 %

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.

The increase in the allowance for credit losses at September 30, 2025 compared to at June 30, 2025 was driven by loan growth and a slight deterioration in the economic forecasts used within the CECL model, partially offset by reductions in reserves for individually analyzed loans and leases.

Compared to at September 30, 2024, the allowance for credit losses increased due to an increase in reserves for leases originated by our North Star Leasing division, a slight deterioration in the economic forecasts used within the CECL model, and 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.

1 unchanged sentence

Three Months Ended

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Gross charge-offs:

46 unchanged sentences

Each with "--%" not meaningful.

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.

Total net charge-offs during the third quarter of 2025 were $6.8 million, or 0.41% of average total loans on an annualized basis, compared to $7.0 million, or 0.43% of average total loans on an annualized basis, during the linked quarter and $6.1 million, or 0.38% of average total loans on an annualized basis, during the third quarter of 2024.

Compared to the linked quarter, net charge-offs decreased slightly, primarily driven by a decrease in net charge-offs in leases originated by the North Star Leasing business.

The increase in net charge-offs during the third quarter of 2025 versus the prior year third quarter was primarily attributable to an increase in charge-offs in leases originated by the North Star Leasing business.

The following table details Peoples’ nonperforming assets:

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Loans 90+ days past due and accruing:

40 unchanged sentences

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.

Peoples' NPAs decreased from 0.49% of total assets at June 30, 2025 to 0.47% of total assets at September 30, 2025.

Total loans 90+ days past due and accruing decreased at September 30, 2025 compared to September 30, 2024 driven down by leases and premium finance loans.

During the third quarter of 2025, criticized loans increased $23.9 million, while classified loans increased $33.6 million when compared to at June 30, 2025.

The increase in classified loans compared to at June 30, 2025 and at September 30, 2024 was driven by loan downgrades.

The decrease in NPAs compared to at June 30, 2025, was primarily driven by a decrease in premium finance loans that were 90+ days past due and accruing.

The decrease in NPAs compared to at September 30, 2024, was driven primarily by a reductions in leases that were 90+ days past due and accruing.

The following table details Peoples’ deposit balances:

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Non-interest-bearing deposits (a) $ 1,536,094 $ 1,530,824 $ 1,526,285 $ 1,507,661 $ 1,453,441

10 unchanged sentences

(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.

At September 30, 2025, period-end total deposits decreased $5.0 million compared to at June 30, 2025, driven by decreases of $25.9 million in brokered CDs and $12.2 million in governmental deposits, partially offset by increases of $20.6 million in money market deposits, $9.5 million in interest bearing demand accounts, and $5.3 million in non-interest bearing deposits.

The decrease in brokered deposit accounts was due to a strategic shift to other funding sources at lower rates.

Compared to September 30, 2024, period-end deposit balances increased $149.0 million, or 2%.

The increase in total deposits was primarily driven by increases of $124.5 million in retail CDs, $82.7 million in non-interest bearing deposits, and $53.5 million in money market deposits.

These were partially offset by decreases of $79.1 million in brokered CDs and $54.4 million in governmental deposits.

The increase in retail certificates of deposits was driven by special promotional rate offerings over the past year.

1 unchanged sentence

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.

As of September 30, 2025, Peoples had five effective interest rate swaps, with an aggregate notional value of $45.0 million, which were designated as cash flow hedges.

Peoples continually evaluates the overall balance sheet position given the interest rate environment.

1 unchanged sentence

The following table details Peoples’ short-term borrowings and long-term borrowings:

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Short-term borrowings:

20 unchanged sentences

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.

Total borrowed funds at September 30, 2025 increased compared to at June 30, 2025 due to higher overnight borrowings.

Total borrowed funds increased compared to at September 30, 2024 due to higher overnight borrowings, partially offset by the payoff of the Bank Term Funding Program.

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.

At September 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%.

At September 30, 2025, Peoples had a capital conservation buffer of 5.79%.

The following table details Peoples' risk-based capital levels and corresponding ratios:

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Capital Amounts:

8 unchanged sentences

Tier 1 leverage ratio 9.74 % 9.83 % 9.80 % 9.73 % 9.59 %

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.

Peoples' risk-based capital ratios at September 30, 2025 increased when compared to at June 30, 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.

5 unchanged sentences

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,

(Dollars in thousands) September 30,

2025 June 30,

2025 March 31,

1 unchanged sentence

2024 September 30,

2024 June 30,

Tangible equity:

25 unchanged sentences

8.53 % 8.26 % 8.34 % 8.01 % 8.25 %

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.

Tangible book value per common share increased to $22.05 at September 30, 2025 compared to $21.18 at June 30, 2025.

The change in tangible book value per common share was due to tangible equity increasing during the third 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 September 30, 2025 increased compared to at September 30, 2024 primarily due to net income over the last twelve months.

Interest Rate Sensitivity and Liquidity

12 unchanged sentences

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

(in Basis Points) September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024

300 $ 36,689 9.7 % $ 10,471 3.0 % $ (176,726) (8.7) % $ (127,697) (7.2) %

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(300) (15,633) (4.1) % (19,964) (5.6) % (322,964) (16.0) % (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.

This table uses a standard, parallel shock analysis on a static balance sheet 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.

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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.

Given the shape of market yield curves at September 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%.

At September 30, 2025, the bear steepener scenario produced an increase in net interest income of 0.8% and an increase in the economic value of equity of 5.6%.

The bull steepener scenario highlights the risk to net interest income and the economic value of equity when short-term rates fall faster than long-term rates.

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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%.

At September 30, 2025, the bull steepener scenario produced a decline of 0.7% 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 1.9%.

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.

As of September 30, 2025, Peoples had entered into five interest rate swap contracts with an aggregate notional value of $45.0 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.

At September 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.

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

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 revisits the model assumptions on an ongoing basis, and determined the methods used by the ALCO to monitor and 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 September 30, 2025, Peoples Bank had liquid assets of $597.9 million, which represented 5.5% of total assets and unfunded loan commitments.

Peoples also had an additional $137.3 million of unpledged investment securities not included in the measurement of liquid assets.

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(Dollars in thousands)

September 30,

2025 June 30,

2025 March 31,

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2024 September 30,

2024 June 30,

Home equity lines of credit $ 267,598 $ 268,217 $ 257,349 $ 254,168 $ 248,400

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis