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Peoples Bancorp
PEBO
#5681
Rank
$1.20 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$33.66
Share price
-0.56%
Change (1 day)
27.11%
Change (1 year)
๐Ÿฆ Banks๐Ÿ’ณ Financial services
Categories
  1. Peoples Bancorp
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2023 Q1

Peoples Bancorp - 10-Q quarterly report FY2023 Q1


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

(Mark One)
  ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      
  For the quarterly period ended March 31, 2023

OR
  ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
            For the transition period from ____ to ____

Commission File Number: 000-16772
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PEOPLES BANCORP INC.
(Exact name of Registrant as specified in its charter)
Ohio 31-0987416
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
138 Putnam Street, P.O. Box 738,
Marietta,Ohio 45750
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (740)373-3155
 Not Applicable 
 (Former name, former address and former fiscal year, if changed since last report) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, without par valuePEBOThe Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated fileroSmaller reporting company☐
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No  ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 28,485,213 common shares, without par value, at April 28, 2023.

Table of Contents
3
ITEM 1.  FINANCIAL STATEMENTS
3
CONSOLIDATED BALANCE SHEETS (Unaudited)
3
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
7
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
39
EXECUTIVE SUMMARY
42
RESULTS OF OPERATIONS
44
FINANCIAL CONDITION
57
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
68
ITEM 4.  CONTROLS AND PROCEDURES
69
69
ITEM 1.  LEGAL PROCEEDINGS
69
ITEM 1A.  RISK FACTORS
69
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
70
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
70
ITEM 4. MINE SAFETY DISCLOSURES
70
ITEM 5.  OTHER INFORMATION
70
ITEM 6.  EXHIBITS
71
74


2
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 March 31,
2023		December 31,
2022
(Dollars in thousands)(Unaudited)
Assets  
Cash and cash equivalents:
Cash and balances due from banks$97,101 $94,679 
Interest-bearing deposits in other banks60,053 59,343 
Total cash and cash equivalents157,154 154,022 
Available-for-sale investment securities, at fair value (amortized cost of $1,196,521 at March 31, 2023 and $1,300,719 at December 31, 2022) (a)
1,049,497 1,131,399 
Held-to-maturity investment securities, at amortized cost (fair value of $624,436 at March 31, 2023 and $478,509 at December 31, 2022) (a)
694,072 560,212 
Other investment securities52,763 51,609 
Total investment securities (a)1,796,332 1,743,220 
Loans and leases, net of deferred fees and costs (b)4,759,718 4,707,150 
Allowance for credit losses (53,303)(53,162)
Net loans and leases (c)4,706,415 4,653,988 
Loans held for sale2,527 2,140 
Bank premises and equipment, net of accumulated depreciation86,567 82,934 
Bank owned life insurance105,999 105,292 
Goodwill292,597 292,397 
Other intangible assets31,965 33,932 
Other assets131,964 139,379 
Total assets$7,311,520 $7,207,304 
Liabilities  
Deposits:
Non-interest-bearing$1,555,064 $1,589,402 
Interest-bearing4,233,463 4,127,539 
Total deposits5,788,527 5,716,941 
Short-term borrowings490,670 500,138 
Long-term borrowings95,629 101,093 
Accrued expenses and other liabilities 117,151 103,804 
Total liabilities6,491,977 6,421,976 
Stockholders’ equity  
Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2023 and at December 31, 2022
— — 
Common shares, no par value, 50,000,000 shares authorized, 29,868,456 shares issued at March 31, 2023 and 29,857,920 shares issued at December 31, 2022, including at each date shares held in treasury
684,367 686,450 
Retained earnings 281,771 265,936 
Accumulated other comprehensive loss, net of deferred income taxes(110,979)(127,136)
Treasury stock, at cost, 1,457,611 shares at March 31, 2023 and 1,643,461 shares at December 31, 2022
(35,616)(39,922)
Total stockholders’ equity819,543 785,328 
Total liabilities and stockholders’ equity$7,311,520 $7,207,304 
(a)    Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $0 and $241, respectively, at March 31, 2023 and December 31, 2022.
(b)    Also referred to throughout this Quarterly Report on Form 10-Q as "total loans" and "loans held for investment."
(c)    Also referred to throughout this Quarterly Report on Form 10-Q as "net loans"


See Notes to the Unaudited Condensed Consolidated Financial Statements

3
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
(Dollars in thousands, except per share data)20232022
Interest income:
Interest and fees on loans and leases$71,762 $50,200 
Interest and dividends on taxable investment securities11,003 6,050 
Interest on tax-exempt investment securities996 1,015 
Other interest income 388 160 
Total interest income84,149 57,425 
Interest expense:
Interest on deposits5,661 2,053 
Interest on short-term borrowings4,457 338 
Interest on long-term borrowings1,153 724 
Total interest expense11,271 3,115 
Net interest income72,878 54,310 
Provision for (recovery of) credit losses1,853 (6,807)
Net interest income after provision for (recovery of) credit losses71,025 61,117 
Non-interest income:
Electronic banking income5,443 5,253 
Insurance income5,425 4,731 
Trust and investment income4,084 4,276 
Deposit account service charges3,523 3,426 
Lease income1,077 775 
Bank owned life insurance income707 431 
Mortgage banking income314 436 
Net loss on asset disposals and other transactions(246)(127)
Net (loss) gain on investment securities(1,935)130 
Other non-interest income668 719 
Total non-interest income19,060 20,050 
Non-interest expense:
Salaries and employee benefit costs32,028 27,729 
Net occupancy and equipment expense4,955 5,088 
Data processing and software expense4,562 2,916 
Professional fees2,881 3,672 
Amortization of other intangible assets1,871 1,708 
Electronic banking expense1,491 2,759 
Franchise tax expense1,034 764 
Marketing expense930 995 
FDIC insurance expense801 1,194 
Other loan expenses739 832 
Communication expense613 625 
Other non-interest expense4,574 3,347 
Total non-interest expense56,479 51,629 
Income before income taxes33,606 29,538 
Income tax expense7,046 5,961 
Net income$26,560 $23,577 
Earnings per common share - basic$0.95 $0.84 
Earnings per common share - diluted$0.94 $0.84 
Weighted-average number of common shares outstanding - basic27,891,760 28,006,165 
Weighted-average number of common shares outstanding - diluted28,021,879 28,129,131 
Cash dividends declared$10,725 $10,176 
Cash dividends declared per common share$0.38 $0.36 

See Notes to the Unaudited Condensed Consolidated Financial Statements

4
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
Three Months Ended
March 31,
(Dollars in thousands)20232022
Net income$26,560 $23,577 
Other comprehensive income (loss):
Available-for-sale investment securities:
Gross unrealized holding gain (loss) arising during the period20,362 (71,637)
Related tax (expense) benefit(4,647)16,448 
Reclassification adjustment for net loss (gain) included in net income1,935 (130)
Related tax (expense) benefit(452)30 
Net effect on other comprehensive income (loss)17,198 (55,289)
Defined benefit plan:
Net loss arising during the period— (14)
  Related tax benefit— 3 
Amortization of unrecognized loss and service cost on benefit plans2 21 
Related tax benefit— (5)
Net effect on other comprehensive income (loss)2 5 
Cash flow hedges:
Net (loss) gain arising during the period(1,356)5,456 
  Related tax benefit (expense)313 (1,220)
Net effect on other comprehensive income (loss)(1,043)4,236 
Total other comprehensive gain (loss), net of tax16,157 (51,048)
Total comprehensive income (loss)$42,717 $(27,471)

See Notes to the Unaudited Condensed Consolidated Financial Statements


5
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
Accumulated Other Comprehensive LossTotal Stockholders' Equity
Common SharesRetained EarningsTreasury Stock
(Dollars in thousands)
Balance, December 31, 2022$686,450 $265,936 $(127,136)$(39,922)$785,328 
Net income— 26,560 — — 26,560 
Other comprehensive gain, net of tax— — 16,157 — 16,157 
Cash dividends declared— (10,725)— — (10,725)
Reissuance of treasury stock for common share awards(4,685)— — 4,685 — 
Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors— — — (920)(920)
Common shares issued under dividend reinvestment plan402 — — — 402 
Common shares issued under compensation plan for Boards of Directors8 — — 128 136 
Common shares issued under employee stock purchase plan42 — — 413 455 
Stock-based compensation2,150 — — — 2,150 
Balance, March 31, 2023$684,367 $281,771 $(110,979)$(35,616)$819,543 
Accumulated Other Comprehensive LossTotal Stockholders' Equity
Common SharesRetained EarningsTreasury Stock
(Dollars in thousands)
Balance, December 31, 2021$686,282 $207,076 $(11,619)$(36,714)$845,025 
Net income— 23,577 — — 23,577 
Other comprehensive loss, net of tax— — (51,048)— (51,048)
Cash dividends declared— (10,176)— — (10,176)
Reissuance of treasury stock for common share awards(3,998)— — 3,998 — 
Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors— — — (1,230)(1,230)
Common shares issued under dividend reinvestment plan305 — — — 305 
Common shares issued under compensation plan for Boards of Directors31 — — 93 124 
Common shares issued under employee stock purchase plan46 — — 140 186 
Stock-based compensation1,577 — — — 1,577 
Balance, March 31, 2022$684,243 $220,477 $(62,667)$(33,713)$808,340 

See Notes to the Unaudited Condensed Consolidated Financial Statements

6
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
(Dollars in thousands)20232022
Net cash provided by operating activities$47,997 $15,710 
Investing activities:
Available-for-sale investment securities:
Purchases(22,873)(165,305)
Proceeds from sales95,362 4,218 
Proceeds from principal payments, calls and prepayments27,922 60,520 
Held-to-maturity investment securities:
Purchases(167,169)(15,463)
Proceeds from principal payments33,324 4,512 
Other investment securities:
Purchases(4,792)(8,208)
Proceeds from sales3,746 237 
Net (increase) decrease in loans held for investment(52,386)75,740 
Net expenditures for premises and equipment(2,757)(2,053)
Proceeds from sales of other real estate owned107 124 
Business acquisitions, net of cash received(200)(80,532)
Investment in limited partnership and tax credit funds(267)(1,151)
Net cash used in investing activities(89,983)(127,361)
Financing activities:  
Net (decrease) increase in non-interest-bearing deposits(34,338)25,246 
Net increase in interest-bearing deposits105,991 115,255 
Net decrease in short-term borrowings(9,468)(27,252)
Proceeds from long-term borrowings2,899 — 
Payments on long-term borrowings(8,450)(260)
Cash dividends paid(10,993)(10,438)
Purchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock
(920)(1,230)
Proceeds from issuance of common shares397 282 
Net cash provided by financing activities45,118 101,603 
Net increase (decrease) in cash and cash equivalents3,132 (10,048)
Cash and cash equivalents at beginning of period154,022 415,727 
Cash and cash equivalents at end of period$157,154 $405,679 
Supplemental cash flow information:
     Interest paid$9,675 $2,656 
     Income taxes paid105 — 
Supplemental noncash disclosures:
     Transfers from total loans to other real estate owned— 36 
Noncash recognition of new leases336 726 
 See Notes to the Unaudited Condensed Consolidated Financial Statements


7
PEOPLES BANCORP INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Summary of Significant Accounting Policies
Basis of Presentation: The accompanying Unaudited Condensed Consolidated Financial Statements of Peoples Bancorp Inc. and its subsidiaries ("Peoples" refers to Peoples Bancorp Inc. and its consolidated subsidiaries collectively, except where the context indicates the reference relates solely to Peoples Bancorp Inc.) have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") for interim financial information and the instructions for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, these financial statements do not contain all of the information and footnotes required by US GAAP for annual financial statements and should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2022 ("Peoples' 2022 Form 10-K").
The accounting and reporting policies followed in the presentation of the accompanying Unaudited Condensed Consolidated Financial Statements are consistent with those described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2022 Form 10-K, as updated by the information contained in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 (this "Form 10-Q"). Management has evaluated all significant events and transactions that occurred after March 31, 2023 for potential recognition or disclosure in these unaudited condensed consolidated financial statements.  In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly such information for the periods and at the dates indicated.  Such adjustments are normal and recurring in nature.  Intercompany accounts and transactions have been eliminated.  The Consolidated Balance Sheet at December 31, 2022, contained herein, has been derived from the audited Consolidated Balance Sheet included in Peoples’ 2022 Form 10-K. 
The preparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.  Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year, due in part to seasonal variations and unusual or infrequently occurring items.
New Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by Peoples as of the required effective dates. The following paragraphs related to new pronouncements should be read in conjunction with "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2022 Form 10-K. Unless otherwise discussed, management believes the impact of any recently issued standards, including those issued but not yet effective, will not have a material impact on Peoples' financial statements taken as a whole.
Accounting Standards Update ("ASU") 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This guidance was further updated by ASU 2021-01. This update was effective as of March 12, 2020 through December 31, 2022. The FASB further updated the guidance with ASU 2022-06, which deferred the sunset date of ASC Topic 848, Reference Rate Reform (Topic 848) from December 31, 2022 to December 31, 2024. ASU 2020-04 was early adopted by Peoples as of September 30, 2021, and did not have a significant impact on Peoples' Consolidated Financial Statements, but is expected to reduce the accounting burden of assessing contracts impacted by reference rate reform. Peoples established a working group, consisting of key stakeholders from throughout the company, to monitor developments relating to LIBOR changes and to guide the transition. This team has worked to successfully ensure that technology systems are prepared for the transition, loan documents that reference LIBOR-based rates have been appropriately amended to reference other methods of interest rate determinations and internal and external stakeholders have been apprised of the transition. Based on the transition progress to date, Peoples ceased originating LIBOR-based products and began originating SOFR-indexed products. Peoples will continue to transition all remaining LIBOR-based products to SOFR-indexed products. Peoples will also continue to evaluate the transition process and align its trajectory with regulatory guidelines regarding the cessation of LIBOR as well as monitor new developments for transitioning to alternative reference rates, if necessary and as needed.
ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings ("TDRs") and Vintage Disclosures. This ASU eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors and amends the guidance on disclosures to include current-period gross write-offs by year of origination. This ASU also updates the requirements related to accounting for credit losses under Accounting Standards Codification ("ASC") 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. For entities that have already adopted ASU 2016-13, as Peoples has, the amendments in ASU 2022-02 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
Effective January 1, 2023, Peoples adopted the amendments within ASU 2022-02, using the prospective transition method. The adoption of this guidance did not have a material impact on Peoples' consolidated financial statements.

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Pursuant to the guidance in ASU 2022-02, when a loan is restructured, Peoples continues to measure the allowance for credit losses on the loan using a discounted cash flow approach that utilizes a prepayment-adjusted discount rate based on the loan’s restructured terms. Under the TDR accounting model, Peoples modeled a 12-month extension of the contractual terms for TDRs that were to mature within the next 12 months. As Peoples has elected a prospective transition, the extension on a loan that was previously restructured and accounted for as a TDR will continue to be measured as it had been historically in Peoples' allowance for credit losses until the loan is paid off, sold, liquidated, or subsequently restructured. Refer to "Note 4 Loans and Leases" for additional information.
Note 2 Fair Value of Assets and Liabilities
Fair value represents the amount expected to be received to sell an asset or paid to transfer a liability in its principal or most advantageous market in an orderly transaction between market participants at the measurement date. In accordance with fair value accounting guidance, Peoples measures, records and reports various types of assets and liabilities at fair value on either a recurring or a non-recurring basis in the Unaudited Condensed Consolidated Financial Statements. Those assets and liabilities are presented below in the sections entitled “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis” and “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis.”
Depending on the nature of the asset or the liability, Peoples uses various valuation methodologies and assumptions to estimate fair value. The measurement of fair value under US GAAP uses a hierarchy, which is described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2022 Form 10-K.
Assets and liabilities are assigned to a level within the fair value hierarchy based on the lowest level of significant input used to measure fair value. Assets and liabilities may change levels within the fair value hierarchy due to market conditions or other circumstances. Those transfers are recognized on the date of the event that prompted the transfer. There were no transfers of assets or liabilities required to be measured at fair value on a recurring basis between levels of the fair value hierarchy during the periods presented.
Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis
The following table provides the fair value for assets and liabilities required to be measured and reported at fair value on a recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy.
 Recurring Fair Value Measurements at Reporting Date
March 31, 2023December 31, 2022
(Dollars in thousands)Level 1Level 2Level 3Level 1Level 2Level 3
Assets:   
Available-for-sale investment securities:
Obligations of:   
U.S. Treasury and government agencies
$58,438 $— $— $152,422 $— $— 
 U.S. government sponsored agencies— 98,311 — — 88,115 — 
States and political subdivisions
— 224,996 — — 225,882 — 
Residential mortgage-backed securities— 605,270 — — 604,653 — 
Commercial mortgage-backed securities— 52,153 — — 50,049 — 
Bank-issued trust preferred securities— 10,329 — — 10,278 — 
Total available-for-sale securities$58,438 $991,059 $— $152,422 $978,977 $— 
Equity investment securities (a)168 199 — 147 199 — 
Derivative assets (b)— 27,339 — — 34,123 — 
Liabilities:
Derivative liabilities (c)$— $23,100 $— $— $28,529 $— 
(a)    Included in "Other investment securities" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 3 Investment Securities" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
(b)    Included in "Other assets" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 10 Derivative Financial Instruments" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
(c)    Included in "Accrued expenses and other liabilities" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 10 Derivative Financial Instruments" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
Available-for-Sale Investment Securities: The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, LIBOR (or other relevant) yield curves, credit spreads and prices from market makers and live trading systems (Level 2). Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

9
Equity Investment Securities: The fair values of Peoples' equity investment securities are obtained from quoted prices in active exchange markets for identical assets or liabilities (Level 1) or quoted prices in less active markets (Level 2).
Derivative Assets and Derivative Liabilities: Derivative assets and derivative liabilities are recognized on the Unaudited Consolidated Balance Sheets at their fair value within "Other assets" and "Accrued expenses and other liabilities", respectively. The fair value for derivative financial instruments is determined based on market prices, broker-dealer quotations on similar products, or other related input parameters (Level 2).
Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis
The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy at March 31, 2023 and December 31, 2022.
 Non-Recurring Fair Value Measurements at Reporting Date
March 31, 2023December 31, 2022
(Dollars in thousands)Level 2Level 3Level 2Level 3
Assets:
Collateral dependent loans$— $8,860 $— $10,354 
Loans held for sale (a)$1,251 $— $1,254 $— 
Other real estate owned$— $— $— $55 
(a) Loans held for sale are presented gross of a valuation allowance of $99 and $105 at March 31, 2023 and at December 31, 2022, respectively.

Collateral Dependent Loans: Loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty, are considered collateral dependent. Peoples utilizes outside third-party appraisal services to value the underlying collateral, which Peoples then uses to report the loans at their fair value (Level 3).
Loans Held for Sale: Loans originated and intended to be sold in the secondary market, generally one-to-four family residential loans, are carried, in aggregate, at the lower of cost or estimated fair value. Peoples uses a valuation model using quoted market prices of similar instruments in arriving at the fair value (Level 2).
Other Real Estate Owned ("OREO"):, included in "Other assets" on the Unaudited Consolidated Balance Sheets, is comprised primarily of commercial and residential real estate properties acquired by Peoples in satisfaction of a loan. OREO obtained in satisfaction of a loan is recorded at the lower of cost or estimated fair value, less estimated costs to sell the property. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is based on recent real estate appraisals and is updated at least annually. These appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales approach and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available (Level 3).
Servicing Rights: Servicing rights are included in "Other intangible assets" on the Unaudited Consolidated Balance Sheets. The fair value of servicing rights is determined by using a discounted cash flow model, which estimates the present value of the future net cash flows of the servicing portfolio based on various factors, such as servicing costs, expected prepayment speeds and discount rates (Level 3). The carrying value of servicing rights is not re-measured to fair value on a recurring basis. Peoples assesses the carrying value of servicing rights quarterly for impairment.


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Financial Instruments Not Required to be Measured or Reported at Fair Value
The following table provides the carrying amount for each class of assets and liabilities and the fair value for certain financial instruments that are not required to be measured or reported at fair value on the Unaudited Consolidated Balance Sheets.
 Fair Value Measurements of Other Financial Instruments
(Dollars in thousands)Fair Value Hierarchy LevelMarch 31, 2023December 31, 2022
Carrying AmountFair ValueCarrying AmountFair Value
Assets:
Cash and cash equivalents1$157,154 $157,154 $154,022 $154,022 
Held-to-maturity investment securities:
   Obligations of:
U.S. government sponsored agencies2194,184 186,446 132,366 123,020 
States and political subdivisions (a)2145,085 114,192 145,263 108,776 
Residential mortgage-backed securities2245,294 230,377 176,215 157,998 
Commercial mortgage-backed securities2105,002 89,919 101,861 85,354 
Commercial mortgage-backed securities34,748 3,502 4,748 3,361 
        Total held-to-maturity securities694,313 624,436 560,453 478,509 
Other investment securities:
Other investment securities at cost:
Federal Home Loan Bank ("FHLB") stock N/A27,381 27,381 26,605 26,605 
Federal Reserve Bank ("FRB") stockN/A21,231 21,231 21,231 21,231 
Banker's Bank of Kentucky ("BBKY") stockN/A355 355 355 355 
Total other investment securities at cost48,967 48,967 48,191 48,191 
Other investment securities at fair value:
Nonqualified deferred compensation (b)12,405 2,405 2,048 2,048 
Other investment securities (c)21,024 1,024 1,024 1,024 
Total other investment securities 52,396 52,396 51,263 51,263 
Loans and leases, net of deferred fees and costs (d)34,759,718 4,522,720 4,707,150 4,516,695 
Bank owned life insurance 2105,999 105,999 105,292 105,292 
Liabilities:
Deposits2$5,788,527 $4,924,296 $5,716,941 $4,682,491 
Short-term borrowings2490,670 496,786 500,138 504,584 
Long-term borrowings295,629 96,822 101,093 101,992 
(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $241 at both March 31, 2023 and December 31, 2022.
(b) Nonqualified deferred compensation includes mutual funds as part of the investment.
(c)     "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at March 31, 2023
and at December 31, 2022, which are reported in the Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis
table above and not included in this table.
(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $53.3 million and $53.2 million at March 31, 2023 and at December 31, 2022, respectively.

For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument. These financial instruments include cash and cash equivalents, and overnight borrowings. Peoples used the following methods and assumptions in estimating the fair value of the following financial instruments:
Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, balances due from other banks, interest-bearing deposits in other banks, federal funds sold and other short-term investments with original maturities of ninety days or less. The carrying amount for cash and cash equivalents balances are a reasonable estimate of fair value (Level 1).
Held-to-Maturity Investment Securities: The fair values used by Peoples are obtained from an independent pricing service and represent fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, relevant yield curves, credit spreads and prices from market makers and live trading systems (Level 2). When observable market data is absent, the independent pricing service estimates prices based on underlying cash flow characteristics and discount rates and compares them to similar securities (Level 3). Management reviews the valuation

11
methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.
Other Investment Securities: Other investment securities at cost are not recorded at fair value as they are not marketable securities. Other investment securities at fair value are valued using quoted prices in an active market (Level 1) or quoted prices in less active markets (Level 2).
Loans and Leases, Net of Deferred Fees and Costs: The fair value of portfolio loans and leases assumes sale of the underlying notes to a third-party financial investor. Accordingly, this value is not necessarily the value to Peoples if the notes were held to maturity. Peoples considers interest rate, credit and market factors in estimating the fair value of loans and leases (Level 3). Fair values for loans and leases are estimated using a discounted cash flow methodology. The discount rates take into account interest rates currently being offered to customers for loans and leases with similar terms, the credit risk associated with the loans and leases and other market factors, including liquidity.
Bank Owned Life Insurance: Peoples' bank owned life insurance policies are recorded at their cash surrender value (Level 2). Peoples recognizes tax-exempt income from the periodic increases in the cash surrender value of these policies and from death benefits.
Deposits: The fair value of fixed-maturity certificates of deposit ("CDs") is estimated using a discounted cash flow calculation based on current rates offered for deposits of similar remaining maturities. Demand and other non-fixed-maturity deposits are estimated using a discounted cash flow calculation based on maturity, attrition and re-pricing assumptions (Level 2).
Short-term Borrowings: The fair value of short-term borrowings is estimated using a discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 
Long-term Borrowings: The fair value of long-term borrowings is estimated using a discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 
Certain financial assets and financial liabilities that are not required to be measured or reported at fair value can be subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). These financial assets and liabilities include the following: customer relationships, the deposit base, and other information required to compute Peoples’ aggregate fair value, which are not included in the above information. Accordingly, the fair values described above are not intended to represent the aggregate fair value of Peoples.

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Note 3 Investment Securities
Available-for-sale
The following table summarizes Peoples' available-for-sale investment securities:

(Dollars in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
March 31, 2023    
Obligations of:    
U.S. Treasury and government agencies$61,584 $— $(3,146)$58,438 
U.S. government sponsored agencies109,927 22 (11,638)98,311 
States and political subdivisions254,523 32 (29,559)224,996 
Residential mortgage-backed securities697,452 1,070 (93,252)605,270 
Commercial mortgage-backed securities62,256 — (10,103)52,153 
Bank-issued trust preferred securities10,779 40 (490)10,329 
Total available-for-sale securities$1,196,521 $1,164 $(148,188)$1,049,497 
December 31, 2022    
Obligations of:    
U.S. Treasury and government agencies$158,473 $— $(6,051)$152,422 
U.S. government sponsored agencies101,753 18 (13,656)88,115 
States and political subdivisions261,612 12 (35,742)225,882 
Residential mortgage-backed securities707,025 1,017 (103,389)604,653 
Commercial mortgage-backed securities61,091 — (11,042)50,049 
Bank-issued trust preferred securities10,765 57 (544)10,278 
Total available-for-sale securities$1,300,719 $1,104 $(170,424)$1,131,399 

The gross gains and losses realized by Peoples from sales of available-for-sale securities for the periods ended March 31 were as follows:
Three Months Ended
March 31,
(Dollars in thousands)20232022
Gross gains realized$78 $146 
Gross losses realized(2,013)(16)
Net (loss) gain realized$(1,935)$130 
The cost of investment securities sold, and any resulting gain or loss, were based on the specific identification method and recognized as of the trade date.

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The following table presents a summary of available-for-sale investment securities that had been in a continuous unrealized loss position for the periods identified:
 Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)
Fair
Value
Unrealized LossNo. of Securities
Fair
Value
Unrealized LossNo. of Securities
Fair
Value
Unrealized Loss
March 31, 2023        
Obligations of:
U.S. Treasury and government agencies
$— $— — $58,438 $3,146 18 $58,438 $3,146 
U.S. government sponsored agencies
24,093 222 18 71,220 11,416 14 95,313 11,638 
States and political subdivisions52,634 355 96 161,939 29,204 117 214,573 29,559 
Residential mortgage-backed securities
22,648 486 32 572,090 92,766 212 594,738 93,252 
Commercial mortgage-backed securities
1,627 8 1 50,526 10,095 23 52,153 10,103 
Bank-issued trust preferred securities
478 22 1 7,533 468 4 8,011 490 
Total$101,480 $1,093 148 $921,746 $147,095 388 $1,023,226 $148,188 
December 31, 2022        
Obligations of:
U.S. Treasury and government agencies
$112,730 $2,772 13 $39,692 $3,279 11 $152,422 $6,051 
U.S. government sponsored agencies
15,166 249 17 66,706 13,407 18 81,872 13,656 
States and political subdivisions60,324 714 114 156,900 35,028 117 217,224 35,742 
Residential mortgage-backed securities
104,959 8,087 105 488,452 95,302 139 593,411 103,389 
Commercial mortgage-backed securities
1,874 129 2 48,175 10,913 21 50,049 11,042 
Bank-issued trust preferred securities
4,400 100 3 3,556 444 2 7,956 544 
Total$299,453 $12,051 254 $803,481 $158,373 308 $1,102,934 $170,424 
Management evaluates available-for-sale investment securities for an allowance for credit losses on a quarterly basis. At March 31, 2023, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses. At March 31, 2023, Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery. Further, the unrealized losses at both March 31, 2023 and December 31, 2022 were largely attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit-related losses. Accrued interest receivable is not included in investment securities balances, and is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses. Interest receivable on investment securities was $6.7 million at March 31, 2023 and $7.8 million at December 31, 2022.
At March 31, 2023, approximately 99% of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S. government sponsored agencies. The remaining 1%, or four positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004. Of the four positions, three positions had a fair value of less than 90% of their book values. Management analyzed the underlying credit quality of these mortgage-backed securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities. Obligations of the U.S. treasury and government agencies, obligations of U.S. government sponsored agencies, and obligations of states and political subdivisions were issued by the U.S. Treasury Department or Federal government-sponsored entities. The decline in fair values was attributable to changes in interest rates and not credit quality. Therefore, management does not consider these to be impaired securities.
The unrealized loss with respect to the four bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at March 31, 2023 was attributable to the subordinated nature of the debt.

14
The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at March 31, 2023. The weighted-average yields are based on the amortized cost. In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.
 
(Dollars in thousands)Within 1 Year1 to 5 Years5 to 10 YearsOver 10 YearsTotal
Amortized cost     
Obligations of:     
U.S. Treasury and government agencies$12,495 $49,089 $— $— $61,584 
U.S. government sponsored agencies9,309 47,321 45,042 8,255 109,927 
States and political subdivisions25,699 47,241 67,302 114,281 254,523 
Residential mortgage-backed securities1 1,415 56,175 639,861 697,452 
Commercial mortgage-backed securities1,635 7,463 29,862 23,296 62,256 
Bank-issued trust preferred securities— 6,279 4,500 — 10,779 
Total available-for-sale securities$49,139 $158,808 $202,881 $785,693 $1,196,521 
Fair value     
Obligations of:     
U.S. Treasury and government agencies$12,195 $46,243 $— $— $58,438 
U.S. government sponsored agencies9,154 44,088 38,785 6,284 98,311 
States and political subdivisions25,637 45,497 57,761 96,101 224,996 
Residential mortgage-backed securities1 1,358 51,295 552,616 605,270 
Commercial mortgage-backed securities1,627 6,771 24,990 18,765 52,153 
Bank-issued trust preferred securities— 6,284 4,045 — 10,329 
Total available-for-sale securities$48,614 $150,241 $176,876 $673,766 $1,049,497 
Total weighted-average yield2.58 %2.27 %1.69 %1.89 %1.93 %
Held-to-maturity
The following table summarizes Peoples’ held-to-maturity investment securities:
(Dollars in thousands)Amortized CostAllowance for Credit Losses Gross Unrealized GainsGross Unrealized LossesFair Value
March 31, 2023    
Obligations of:   
 U.S. government sponsored agencies$194,184 $— $385 $(8,123)$186,446 
States and political subdivisions145,085 (241)199 (30,851)114,192 
Residential mortgage-backed securities245,294 — 1,321 (16,345)230,377 
Commercial mortgage-backed securities109,750 — 49 (16,378)93,421 
Total held-to-maturity securities$694,313 $(241)$1,954 $(71,697)$624,436 
December 31, 2022    
Obligations of:    
U.S. government sponsored agencies$132,366 $— $130 $(9,476)$123,020 
States and political subdivisions145,263 (241)162 (36,408)108,776 
Residential mortgage-backed securities176,215 — 244 (18,461)157,998 
Commercial mortgage-backed securities106,609 — — (17,894)88,715 
Total held-to-maturity securities$560,453 $(241)$536 $(82,239)$478,509 
There were no sales of held-to-maturity securities for either of the three months ended March 31, 2023 or 2022.
Management evaluates held-to-maturity investment securities for an allowance for credit losses on a quarterly basis. Peoples has determined that the loss given default for U.S. government sponsored enterprise investment securities is zero, due to the fact that it is unlikely the ultimate guarantor (the U.S. government) would not perform on its implicit guarantee in the event of default. The remaining securities are included in the calculation of the allowance for credit losses for held-to-maturity investment securities. Peoples recorded $241,000 of allowance for credit losses for held-to-maturity securities at both March 31, 2023, and December 31, 2022.
The following table presents a summary of held-to-maturity investment securities that had been in a continuous unrealized loss position for the periods identified:

15
 Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair
Value		Unrealized LossNo. of SecuritiesFair
Value		Unrealized LossNo. of SecuritiesFair
Value		Unrealized Loss
March 31, 2023        
Obligations of:
U.S. government sponsored agencies$81,988 $413 14 30,303 7,710 9 $112,291 $8,123 
States and political subdivisions— — — 110,831 30,851 67 110,831 30,851 
Residential mortgage-backed securities
67,554 884 20 87,045 15,461 23 154,599 16,345 
Commercial mortgage-backed securities
22,008 462 5 65,621 15,916 31 87,629 16,378 
Total$171,550 $1,759 39 $293,800 $69,938 130 $465,350 $71,697 
December 31, 2022        
Obligations of:
U.S. government sponsored agencies$59,905 $651 17 29,306 8,825 9 $89,211 $9,476 
States and political subdivisions3,590 1,072 3 101,863 35,336 64 105,453 36,408 
Residential mortgage-backed securities
71,582 2,904 21 72,862 15,557 18 144,444 18,461 
Commercial mortgage-backed securities
26,869 650 8 61,846 17,244 29 88,715 17,894 
Total$161,946 $5,277 49 $265,877 $76,962 120 $427,823 $82,239 
The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at March 31, 2023. The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a blended federal and state corporate income tax rate of 23.3% and 23.3% for the three months ended March 31, 2023 and December 31, 2022, respectively. In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.
(Dollars in thousands)Within 1 Year1 to 5 Years5 to 10 YearsOver 10 YearsTotal
Amortized cost     
Obligations of:     
U.S. government sponsored agencies2,126 $24,178 $71,008 $96,872 $194,184 
States and political subdivisions— 5,214 9,402 130,469 145,085 
Residential mortgage-backed securities— 890 — 244,404 245,294 
Commercial mortgage-backed securities5,004 6,129 34,744 63,873 109,750 
Total held-to-maturity securities$7,130 $36,411 $115,154 $535,618 $694,313 
Fair value     
Obligations of:     
U.S. government sponsored agencies2,102 $23,398 $70,844 $90,102 $186,446 
States and political subdivisions— 4,944 8,165 101,083 114,192 
Residential mortgage-backed securities— 866 — 229,511 230,377 
Commercial mortgage-backed securities4,899 5,471 30,996 52,055 93,421 
Total held-to-maturity securities$7,001 $34,679 $110,005 $472,751 $624,436 
Total weighted-average yield2.01 %2.01 %4.29 %3.45 %3.50 %
Other Investment Securities
Peoples' other investment securities on the Unaudited Consolidated Balance Sheets consist largely of shares of FHLB stock and of FRB stock.

16
The following table summarizes the carrying value of Peoples' other investment securities:
(Dollars in thousands)March 31, 2023December 31, 2022
FHLB stock$27,381 $26,605 
FRB stock21,231 21,231 
Nonqualified deferred compensation2,405 2,048 
Equity investment securities367 346 
Other investment securities1,379 1,379 
Total other investment securities$52,763 $51,609 
During the three months ended March 31, 2023, Peoples redeemed $3.7 million of FHLB stock in order to be in compliance with the requirements of the FHLB. Peoples purchased $4.5 million of additional FHLB stock during the three months ended March 31, 2023, as a result of the FHLB's capital requirements on FHLB advances during the first quarter.
During the three months ended March 31, 2023 and 2022, Peoples recognized a gain of $21,000 and a loss of $7,000, respectively, for the change in fair value of equity investment securities in "Other non-interest income".
At March 31, 2023, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies. There were no equity investment securities of a single issuer that exceeded 10% of Peoples' stockholders' equity.
Pledged Securities
Peoples has pledged available-for-sale investment securities and held-to-maturity investment securities to secure public and trust department deposits, and repurchase agreements in accordance with federal and state requirements. Peoples has also pledged available-for-sale investment securities to secure additional borrowing capacity at the FHLB and the FRB as well as to derivative counterparties as collateral on unrealized interest rate swaps.
The following table summarizes the carrying amount of Peoples' pledged securities:
 Carrying Amount
(Dollars in thousands)March 31, 2023December 31, 2022
Securing public and trust department deposits, and repurchase agreements:
     Available-for-sale$704,074 $779,244 
     Held-to-maturity372,372 312,921 
Securing additional borrowing capacity at the FHLB and the FRB:
     Available-for-sale3,949 3,972 
     Held-to-maturity145,867 128,870 
Note 4 Loans and Leases
Peoples' loan portfolio consists of various types of loans and leases originated primarily as a result of lending opportunities within Peoples' footprint. Peoples also originates insurance premium finance loans nationwide through its Peoples Premium Finance division, and originates leases nationwide through its North Star Leasing ("NSL") division and its Vantage Financial, LLC ("Vantage") subsidiary. Throughout this Form 10-Q, loans and leases are referred to as "total loans" and "loans held for investment".

17
The major classifications of loan balances (in each case, net of deferred fees and costs) excluding loans held for sale, were as follows:
(Dollars in thousands)March 31,
2023		December 31, 2022
Construction$232,296 $246,941 
Commercial real estate, other1,481,062 1,423,518 
Commercial and industrial891,139 892,634 
Premium finance158,263 159,197 
Leases354,641 345,131 
Residential real estate712,602 723,360 
Home equity lines of credit174,383 177,858 
Consumer, indirect647,177 629,426 
Consumer, direct107,406 108,363 
Deposit account overdrafts749 722 
Total loans, at amortized cost$4,759,718 $4,707,150 
Accrued interest receivable is not included within the loan balances, but is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses. Total interest receivable on loans was $15.4 million at March 31, 2023 and December 31, 2022.
Nonaccrual and Past Due Loans
A loan is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. A loan may be placed on nonaccrual status regardless of whether or not such loan is considered past due.
The amortized cost of loans on nonaccrual status and of loans delinquent for 90 days or more and accruing was as follows:
March 31, 2023December 31, 2022
(Dollars in thousands)
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Construction$1 $— $12 $— 
Commercial real estate, other11,345 150 12,121 167 
Commercial and industrial3,064 228 3,462 130 
Premium finance— 764 — 504 
Leases3,884 2,491 3,178 3,041 
Residential real estate8,641 238 9,496 917 
Home equity lines of credit793 127 820 58 
Consumer, indirect2,147 13 2,176 — 
Consumer, direct105 3 208 25 
Total loans, at amortized cost$29,980 $4,014 $31,473 $4,842 
(a) There were $3.4 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2023 and $1.4 million at December 31, 2022.
During the first three months of 2023, nonaccrual loans declined compared to at December 31, 2022, which was primarily due to $0.9 million of residential real estate being loans on nonaccrual status as of December 31, 2022 that were accruing as of March 31, 2023. The decrease in accruing loans 90+ days past due at March 31, 2023 when compared to at December 31, 2022, was primarily due to reductions of $0.7 million and $0.6 million in residential real estate loans and leases, respectively.
The amount of interest income recognized on loans past due 90 days or more and accruing during the three months ended March 31, 2023 was $0.5 million.
The following table presents the aging of the amortized cost of past due loans:
Loans Past Due
Current
Loans
Total
Loans
(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal
March 31, 2023

18
Loans Past Due
Current
Loans
Total
Loans
(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal
Construction$— $— $1 $1 $232,295 $232,296 
Commercial real estate, other2,382 36 10,475 12,893 1,468,169 1,481,062 
Commercial and industrial641 863 2,928 4,432 886,707 891,139 
Premium finance886 307 764 1,957 156,306 158,263 
Leases7,054 2,908 6,310 16,272 338,369 354,641 
Residential real estate7,921 1,240 4,521 13,682 698,920 712,602 
Home equity lines of credit520 351 594 1,465 172,918 174,383 
Consumer, indirect3,541 769 811 5,121 642,056 647,177 
Consumer, direct402 8 44 454 106,952 107,406 
Deposit account overdrafts— — — — 749 749 
Total loans, at amortized cost$23,347 $6,482 $26,448 $56,277 $4,703,441 $4,759,718 
December 31, 2022
Construction$196 $161 $9 $366 $246,575 $246,941 
Commercial real estate, other2,279 1,051 10,370 13,700 1,409,818 1,423,518 
Commercial and industrial2,522 289 3,449 6,260 886,374 892,634 
Premium finance646 816 504 1,966 157,231 159,197 
Leases6,074 1,921 6,218 14,213 330,918 345,131 
Residential real estate10,113 2,128 5,519 17,760 705,600 723,360 
Home equity lines of credit987 149 552 1,688 176,170 177,858 
Consumer, indirect5,866 1,048 921 7,835 621,591 629,426 
Consumer, direct703 70 108 881 107,482 108,363 
Deposit account overdrafts— — — — 722 722 
Total loans, at amortized cost$29,386 $7,633 $27,650 $64,669 $4,642,481 $4,707,150 
Delinquency trends remained stable, as 98.8% of Peoples' loan portfolio was considered “current” at March 31, 2023, compared to 98.6% at December 31, 2022.
Pledged Loans
Peoples has pledged certain loans secured by one-to-four family and multifamily residential mortgages, home equity lines of credit and commercial real estate loans under a blanket collateral agreement to secure borrowings from the FHLB. Peoples also has pledged eligible commercial and industrial loans to secure borrowings with the FRB. Loans pledged are summarized as follows:
(Dollars in thousands)March 31, 2023December 31, 2022
Loans pledged to FHLB$918,075 $783,843 
Loans pledged to FRB332,521 339,005 
Credit Quality Indicators
As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2022 Form 10-K, Peoples categorizes the majority of its loans into risk categories based upon an established risk grading matrix using a scale of 1 to 8. Loan grades are assigned at the time a new loan or lending commitment is extended by Peoples and may be changed at any time when circumstances warrant. Commercial loans to borrowers with an aggregate unpaid principal balance in excess of $1.0 million are reviewed at least on an annual basis for possible credit deterioration. Commercial leases, as well as loan relationships whose aggregate credit exposure to Peoples is equal to or less than $1.0 million are reviewed at least on an event driven basis. Triggers for review include knowledge of adverse events affecting the borrower's business, receipt of financial statements indicating deteriorating credit quality or other similar events. Adversely classified loans are reviewed on a quarterly basis. A description of the general characteristics of the risk grades used by Peoples, follows:
“Pass” (grades 1 through 4): Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations. Loans in this risk grade would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the loan if required, for any weakness that may exist.

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“Special Mention” (grade 5): Loans in this risk grade are the equivalent of the regulatory definition of “Other Assets Especially Mentioned.” Loans in this risk category possess some credit deficiency or potential weakness, which requires a high level of management attention. Potential weaknesses include declining trends in operating earnings and cash flows and/or reliance on a secondary source of repayment. If left uncorrected, these potential weaknesses may result in noticeable deterioration of the repayment prospects for the loan or in Peoples' credit position.
“Substandard” (grade 6): Loans in this risk grade are inadequately protected by the borrower's current financial condition and payment capability or the collateral pledged, if any. Loans so classified have one or more well-defined weaknesses that jeopardize the orderly repayment of the loans. They are characterized by the distinct possibility that Peoples will sustain some loss if the weaknesses are not corrected.
“Doubtful” (grade 7): Loans in this risk grade have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of current existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, classification of each of these loans as an estimated loss is deferred until its more exact status may be determined.
“Loss” (grade 8): Loans in this risk grade are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean a loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future. Charge-offs against the allowance for credit losses are taken during the period in which the loan becomes uncollectible. Consequently, Peoples typically does not maintain a recorded investment in loans within this category.
Consumer loans and other smaller-balance loans are evaluated and categorized as "substandard," "doubtful" or "loss" based upon the regulatory definition of these classes and consistent with regulatory requirements. Leases are categorized as "special mention", "substandard", or "loss" based upon delinquency status and the prospect of collecting the remaining net investment balance owed under the lease. All other loans not evaluated individually, nor meeting the regulatory conditions to be categorized as described above, would be considered as being "not rated."
The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at March 31, 2023:
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20232022202120202019PriorRevolving Loans
Total
Loans
Construction

  Pass$4,420 $101,719 $87,280 $23,208 $3,241 $9,692 $— $— $229,560 
  Special mention968 1,600 — — — 128 — — 2,696 
  Substandard— — — — — 40 — — 40 
     Total5,388 103,319 87,280 23,208 3,241 9,860 — — 232,296 
Current period gross charge-offs— — 9 — — — 9 
Commercial real estate, other

  Pass76,569 173,133 219,202 223,034 214,534 458,817 25,537 — 1,390,826 
  Special mention— — 184 1,200 5,128 17,998 50 — 24,560 
  Substandard— — 10,027 2,523 1,580 51,290 216 — 65,636 
  Doubtful— — — — — 40 — — 40 
     Total76,569 173,133 229,413 226,757 221,242 528,145 25,803 — 1,481,062 
Current period gross charge-offs— — — — — 33 33 
Commercial and industrial
  Pass31,958 157,317 135,973 60,760 70,506 124,255 208,303 — 789,072 
  Special mention— 8,794 14,375 20,441 2,021 7,579 25,116 — 78,326 
  Substandard4 317 10,065 3,217 2,154 3,038 4,744 — 23,539 
  Doubtful— — — — — 202 — — 202 
     Total31,962 166,428 160,413 84,418 74,681 135,074 238,163 — 891,139 

20
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20232022202120202019PriorRevolving Loans
Total
Loans
Current period gross charge-offs— — — — — 1 1 
Premium finance
Pass79,103 79,160 — — — — — — 158,263 
     Total79,103 79,160 — — — — — — 158,263 
Current period gross charge-offs23 — — — — — 23 
Leases
  Pass68,756 151,048 79,901 29,306 13,233 3,398 — — 345,642 
  Special mention16 1,212 2,087 371 7 21 — — 3,714 
  Substandard127 1,691 2,091 512 410 454 — — 5,285 
     Total68,899 153,951 84,079 30,189 13,650 3,873 — — 354,641 
Current period gross charge-offs— 108 189 100 58 14 469 
Residential real estate
  Pass10,786 77,494 136,027 57,950 42,022 377,777 — — 702,056 
  Substandard— — 280 146 560 9,488 — — 10,474 
   Loss— — — — — 72 — — 72 
     Total10,786 77,494 136,307 58,096 42,582 387,337 — — 712,602 
Current period gross charge-offs— — — — — 41 41 
Home equity lines of credit
  Pass4,830 43,159 34,111 18,852 13,774 58,278 114 635 173,118 
  Substandard— — 72 21 63 1,105 — — 1,261 
   Loss— — — — — 4 — — 4 
     Total4,830 43,159 34,183 18,873 13,837 59,387 114 635 174,383 
Current period gross charge-offs— — — — — 19 19 
Consumer, indirect
  Pass67,265 293,761 135,301 88,220 31,003 28,840 — — 644,390 
  Substandard— 566 849 590 315 423 — — 2,743 
   Loss— 33 10 1 — — — — 44 
     Total67,265 294,360 136,160 88,811 31,318 29,263 — — 647,177 
Current period gross charge-offs18 471 279 90 21 50 929 
Consumer, direct
  Pass11,420 46,431 24,731 12,561 5,345 6,566 — — 107,054 

21
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20232022202120202019PriorRevolving Loans
Total
Loans
  Substandard— 12 35 91 32 167 — — 337 
   Loss— — — — — 15 — — 15 
     Total11,420 46,443 24,766 12,652 5,377 6,748 — — 107,406 
Current period gross charge-offs— 40 12 34 10 8 104 
Deposit account overdrafts749 — — — — — — — 749 
Current period gross charge-offs227 — — — — — 227 
Total loans, at amortized cost356,971 1,137,447 892,601 543,004 405,928 1,159,687 264,080 635 4,759,718 
Total current period gross charge-offs$268 $619 $489 $224 $89 $166 $1,855 
The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the then most recent analysis performed at December 31, 2022:
Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20222021202020192018PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Construction

  Pass$82,143 $110,719 $27,893 $20,223 $656 $4,061 $44 $81 $245,739 
  Special mention— — — — — 818 — — 818 
  Substandard— 2 — — — 382 — — 384 
     Total82,143 110,721 27,893 20,223 656 5,261 44 81 246,941 
Commercial real estate, other

  Pass165,282 224,727 227,799 202,877 110,564 369,578 27,300 5,217 1,328,127 
  Special mention— 189 1,099 5,519 3,111 29,334 105 — 39,357 
  Substandard— 8,327 2,591 1,366 1,296 42,172 216 190 55,968 
  Doubtful— — — — — 66 — — 66 
     Total165,282 233,243 231,489 209,762 114,971 441,150 27,621 5,407 1,423,518 
Commercial and industrial
  Pass167,937 142,615 72,573 71,497 40,229 91,853 215,116 3,722 801,820 
  Special mention10,248 14,981 11,923 2,711 236 4,877 16,235 — 61,211 
  Substandard84 9,801 3,417 2,410 1,459 3,620 8,603 611 29,394 
  Doubtful— — — — — 209 — — 209 
     Total178,269 167,397 87,913 76,618 41,924 100,559 239,954 4,333 892,634 
Premium finance
  Pass158,778 419 — — — — — — 159,197 
Total158,778 419 — — — — — — 159,197 
Leases
Pass191,148 90,738 34,627 15,951 3,269 1,119 — — 336,852 
Special mention1,741 2,477 140 22 24 — — — 4,404 
Substandard546 1,840 571 464 454 — — — 3,875 
Total193,435 95,055 35,338 16,437 3,747 1,119 — — 345,131 
Residential real estate

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Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20222021202020192018PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
  Pass78,313 138,860 58,869 42,840 28,174 364,635 — — 711,691 
  Substandard— — 137 569 563 10,302 — — 11,571 
   Loss— — — — — 98 — — 98 
     Total78,313 138,860 59,006 43,409 28,737 375,035 — — 723,360 
Home equity lines of credit
  Pass41,781 35,768 19,863 14,820 13,800 50,291 334 2,096 176,657 
  Substandard— 60 — 53 126 958 — — 1,197 
   Loss— — — — — 4 — — 4 
     Total41,781 35,828 19,863 14,873 13,926 51,253 334 2,096 177,858 
Consumer, indirect
  Pass305,814 149,445 100,027 35,988 22,789 12,741 — — 626,804 
  Substandard384 811 659 266 304 193 — — 2,617 
   Loss— 5 — — — — — — 5 
     Total306,198 150,261 100,686 36,254 23,093 12,934 — — 629,426 
Consumer, direct
  Pass50,889 28,351 14,558 6,333 3,725 3,975 — — 107,831 
  Special mention— — — — — — — — — 
  Substandard97 63 138 46 21 150 — — 515 
   Loss— — — — — 17 — — 17 
     Total50,986 28,414 14,696 6,379 3,746 4,142 — — 108,363 
Deposit account overdrafts722 — — — — — — — 722 
Total loans, at amortized cost$1,255,907 $960,198 $576,884 $423,955 $230,800 $991,453 $267,953 $11,917 $4,707,150 
Collateral Dependent Loans
Peoples has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans:
• Construction loans are typically secured by owner occupied commercial real estate or non-owner occupied investment real estate. Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development, and other commercial and industrial real estate in process of construction.
•Commercial real estate loans can be secured by either owner occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate.
•Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property.
•Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage.
•Home equity lines of credit are generally secured by second mortgages on residential real estate property.
•Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property. Some consumer loans are unsecured and have no underlying collateral.
•Leases are secured by commercial equipment and other essential business assets.

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•Premium finance loans are secured by the unearned portion of the insurance premium being financed.
The following table details Peoples' amortized cost of collateral dependent loans:
(Dollars in thousands)March 31, 2023December 31, 2022
Commercial real estate, other7,862 8,362 
Commercial and industrial470 1,456 
Residential real estate528 536 
Total collateral dependent loans$8,860 $10,354 
The decrease in collateral dependent loans at March 31, 2023, compared to December 31, 2022, was primarily due to two large relationships that were paid in full during the three months ended March 31, 2023.
Modifications for Borrowers Experiencing Financial Difficulty Subsequent to the Adoption of ASU 2022-02
As part of Peoples' loss mitigation activities, Peoples may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty. The most common modifications to the contractual terms of a loan to a borrower experiencing financial difficulty include an extension of the maturity date, a reduction in the interest rate for the remaining life of the loan, a temporary period of interest-only payments, and a reduction in the contractual payment amount for either a short period or the remaining term of the loan.
In addition to loan modifications, Peoples also provides other loss mitigation options, such as forbearance and repayment plans, to assist borrowers who experience financial difficulties. In assessing whether or not a borrower is experiencing financial difficulty, Peoples considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (1) the borrower is currently in payment default on any of the borrower's debt; (2) a payment default is probable in the foreseeable future without the modification; (3) the borrower has declared or is in the process of declaring bankruptcy; and (4) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification.

The following table displays the amortized cost of loans that were restructured during the three months ended March 31, 2023, presented by loan classification.
For the Three Months Ended March 31, 2023
Payment Delay (Only)
(Dollars in thousands)Forbearance PlanPayment DeferralTerm ExtensionForbearance Plan and Term ExtensionTotal
Percentage of Total by Loan Category(a)(b)
Construction$— $1,600 $— $— $1,600 0.69 %
Commercial real estate200 — — — 200 0.01 %
Commercial and industrial— — 9 335 344 0.04 %
Residential real estate— — 221 — 221 0.03 %
Consumer, indirect— — 28 — 28 — %
Total$200 $1,600 $258 $335 $2,393 0.05 %
(a) Based on the amortized cost basis as of period end, divided by the period end amortized cost basis of the corresponding class of financing receivable.
(b) Each with "--%" not meaningful.

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The following table summarizes the financial impacts of loan modifications and payment deferrals made to loans during the three months ended March 31, 2023, presented by loan classification.
For the Three Months Ended March 31, 2023
Weighted-Average Term Extension
(in months)
Average Amount Capitalized as a Result of a Payment Delay(a)
Commercial and industrial12$— 
Residential real estate2108,969 
Consumer, indirect2— 
(a) Represents the average amount of delinquency-related amounts that were capitalized as part of the loan balance. Amounts are in whole dollars.
As of March 31, 2023, there were no loans that were modified for borrowers experiencing financial difficulty since the adoption of ASU 2022-02 on January 1, 2023, and subsequently defaulted during the period. For purposes of this disclosure, Peoples defines loans that had a payment default as loans that are 90 days or more past due following a modification through the three months ended March 31, 2023.
The following table displays an aging analysis of loans that were modified on or after January 1, 2023, the date Peoples adopted ASU 2022-02, through March 31, 2023, presented by classification and class of financing receivable.
As of March 31, 2023
(Dollars in thousands)30-59 Days Delinquent60-89 Days Delinquent90+ Days DelinquentTotal DelinquentCurrentTotal
Construction$— $— $— $— $1,600 $1,600 
Commercial real estate— — — — 200 200 
Commercial and industrial— — — — 344 344 
Residential real estate— — — — 221 221 
Consumer, indirect28 — — 28 — 28 
Total loans modified(a)
$28 $— $— $28 $2,365 $2,393 
(a) Represents the amortized cost basis as of period end.
Troubled Debt Restructurings Disclosures Prior to the Adoption of ASU 2022-02
Prior to the adoption of ASU 2022-02, Peoples accounted for a modification to the contractual terms of a loan that resulted in granting a concession to a borrower experiencing financial difficulties as a TDR. See “Note 1 Summary of Significant Accounting Policies” in Peoples' 2022 Form 10-K for more information on our TDR policy and the COVID-19 relief from TDR accounting and disclosure requirements, and “Note 1, Summary of Significant Accounting Policies” in this report for more information on the adoption of ASU 2022-02.

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The following table summarizes the loans that were modified as TDRs during the three months ended March 31, 2022:
Three Months Ended
Recorded Investment (a)
(Dollars in thousands)Number of ContractsPre-ModificationPost-ModificationRemaining Recorded Investment
March 31, 2022
Construction1 $344 $344 $343 
Commercial real estate, other1 102 102 102 
Commercial and industrial1 4 4 4 
Residential real estate10 493 502 501 
Home equity lines of credit1 22 22 21 
Consumer, indirect10 106 106 105 
Consumer, direct2 14 14 14 
   Consumer12 120 120 119 
Total26 $1,085 $1,094 $1,090 
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.
On March 22, 2020, federal and state government banking regulators issued a joint statement, with which the FASB concurred as to the approach, regarding accounting for loan modifications for borrowers affected by COVID-19. In this guidance, short-term modifications, made on a good faith basis in response to COVID-19, to borrowers who were current prior to any relief, are not considered TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment which are insignificant. Under the guidance, the borrowers that are considered to be current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. In addition, modification or deferral programs mandated by the U.S. federal government or any state government related to COVID-19 are not in the scope of accounting for TDRs, as defined in ASC 310-40.
Allowance for Credit Losses
As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2022 Form 10-K, Peoples' estimates the allowance for credit losses using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In management's estimation of expected credit losses, Peoples uses a one year reasonable and supportable period across all segments. Following the reasonable and supportable period, Peoples reverts the macroeconomic variables to their long run average over a four quarter reversion period.

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Changes in the allowance for credit losses for the three months ended March 31, 2023 and March 31, 2022 are summarized below:
(Dollars in thousands)
Beginning Balance, December 31, 2022
Initial Allowance for Acquired PCD AssetsProvision for (Recovery of) Credit Losses (a)Charge-offsRecoveries
Ending Balance, March 31, 2023
Construction$1,250 $— $32 $(9)$— $1,273 
Commercial real estate, other17,710 — (1,230)(33)27 16,474 
Commercial and industrial8,229 — 79 (1)— 8,307 
Premium finance344 — 103 (23)9 433 
Leases8,495 — 1,003 (469)80 9,109 
Residential real estate6,357 — 159 (41)29 6,504 
Home equity lines of credit1,693 — 43 (19)— 1,717 
Consumer, indirect7,448 — 1,183 (929)79 7,781 
Consumer, direct1,575 — 133 (104)15 1,619 
Deposit account overdrafts61 — 180 (227)72 86 
Total$53,162 $— $1,685 $(1,855)$311 $53,303 
(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(Dollars in thousands)Beginning Balance,
December 31, 2021		Initial Allowance for Acquired PCD Assets (a)(Recovery of) Provision for Credit Losses (b)Charge-offsRecoveries
Ending Balance, March 31, 2022
Construction$2,999 $— $(268)$— $— $2,731 
Commercial real estate, other29,147 (217)(7,646)(278)49 21,055 
Commercial and industrial11,063 (165)(325)(463)4 10,114 
Premium finance379 — (20)(14)— 345 
Leases4,797 132 1,243 (473)176 5,875 
Residential real estate7,233 (521)78 (309)14 6,495 
Home equity lines of credit2,005 (11)(113)(16)29 1,894 
Consumer, indirect5,326 (41)186 (385)86 5,172 
Consumer, direct961 — 200 (136)11 1,036 
Deposit account overdrafts57 — 199 (259)54 51 
Total$63,967 $(823)$(6,466)$(2,333)$423 $54,768 

(a)Includes purchase price adjustments related to acquisitions previously completed but were within the 12-month measurement period.
(b)Amount does not include the provision for the allowance for credit losses on unfunded commitments.s adopted ASU 2016-13 - Financial Instruments
(c)
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments
During the first quarter of 2023, Peoples recorded a provision for credit losses for loans of $1.7 million, largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for

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individually analyzed loans. Net charge-offs for the first quarter of 2023 were $1.5 million, primarily due to net charge-offs of indirect consumer loans of $0.9 million.
During the first quarter of 2022, Peoples recorded a recovery of credit losses of $6.8 million driven by a continued improvement in economic factors and changes in loss drivers used in the CECL model. Leases designated as purchased-credit deteriorated ("PCD") acquired from Vantage increased the allowance for credit losses by $132,000. Net charge-offs for the first quarter of 2022 were $1.9 million, and included charge-offs of two commercial and industrial loans aggregating $0.7 million.
Peoples had recorded an allowance for unfunded commitments of $2.1 million as of March 31, 2023, an increase compared to $2.0 million at December 31, 2022. The allowance for unfunded commitments (also referred to as "unfunded commitment liability") is presented in the “Accrued expenses and other liabilities” line of the Unaudited Consolidated Balance Sheets. The change in the allowance for unfunded commitments is also reflected in the "Provision for (recovery of) credit losses" line of the Unaudited Consolidated Statements of Operations.
Note 5 Goodwill and Other Intangible Assets
Goodwill
The following table details changes in the recorded amount of goodwill:
(Dollars in thousands)March 31, 2023December 31, 2022
Goodwill, beginning of year$292,397 $264,193 
Goodwill recorded from acquisitions200 28,204 
Goodwill, end of period$292,597 $292,397 
On January 3, 2023, Peoples acquired a trust and investment business, for which it recognized $200,000 in goodwill.
On March 7, 2022, Peoples Bank purchased 100% of the equity of Vantage pursuant to an Equity Purchase Agreement, dated February 16, 2022, at which point Vantage became a legal subsidiary of Peoples Bank. In 2022, Peoples recorded $27.2 million of goodwill related to this acquisition, which was offset partially by an adjustment of $1.3 million to the goodwill balance related to the merger with Premier Financial Bancorp, Inc. (“Premier” and the "Premier Merger").
Other Intangible Assets
Other intangible assets were comprised of the following at March 31, 2023, and at December 31, 2022:
(Dollars in thousands)Core DepositsCustomer RelationshipsIndefinite-Lived Trade NamesTotal
March 31, 2023
Gross intangibles$26,464 $39,241 $2,491 $68,196 
Accumulated amortization(20,983)(16,968)— (37,951)
Total acquisition-related intangibles$5,481 $22,273 $2,491 $30,245 
Servicing rights1,720 
Total other intangibles$31,965 
December 31, 2022
Gross intangibles$26,464 $25,173 $1,274 $52,911 
Intangibles recorded from acquisitions— 14,067 1,217 15,284 
Accumulated amortization(20,667)(15,412)— (36,079)
Total acquisition-related intangibles$5,797 $23,828 $2,491 $32,116 
Servicing rights1,816 
Total other intangibles$33,932 

Peoples recorded no other intangible assets for the three months ended March 31, 2023.
Other intangible assets recorded from the above-mentioned acquisitions in 2022 were $10.8 million of customer relationship intangible assets, $1.2 million of non-compete intangible assets, and $1.2 million of indefinite-lived trade name intangible assets related to the Vantage acquisition. Peoples also recorded $2.0 million of customer relationship intangible assets and $0.1 million of non-compete intangible assets related to the acquisition of Elite. Refer to "Note 13 Acquisitions" for additional information.
The following table details estimated aggregate future amortization of other intangible assets at March 31, 2023:

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(Dollars in thousands)Core DepositsCustomer RelationshipsTotal
Remaining nine months of 2023$942 $4,705 $5,647 
20241,058 5,325 6,383 
2025891 4,255 5,146 
2026731 3,114 3,845 
2027572 2,289 2,861 
Thereafter1,287 2,585 3,872 
Total$5,481 $22,273 $27,754 
The weighted average amortization period of other intangible assets is 7.2 years.
Note 6 Deposits
Peoples’ deposit balances were comprised of the following:

(Dollars in thousands)March 31, 2023December 31, 2022
Retail CDs:  
$100 or more$331,912 $263,341 
Less than $100290,179 266,895 
Retail CDs622,091 530,236 
Interest-bearing deposit accounts1,085,169 1,160,182 
Savings accounts1,024,638 1,068,547 
Money market deposit accounts579,106 617,029 
Governmental deposit accounts649,303 625,965 
Brokered CDs273,156 125,580 
Total interest-bearing deposits4,233,463 4,127,539 
Non-interest-bearing deposits$1,555,064 1,589,402 
Total deposits$5,788,527 $5,716,941 

Uninsured deposits were $1.7 billion and $1.6 billion at March 31, 2023 and December 31, 2022, respectively. Uninsured amounts are estimated based on the portion of the respective customer account balances that met or exceeded the FDIC limit of $250,000. Peoples pledges investment securities against certain governmental deposit accounts, which covered over $698.9 million of the uninsured deposit balances at March 31, 2023.

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Uninsured time deposits are broken out below by time remaining until maturity.
(Dollars in thousands)March 31, 2023December 31, 2022
3 months or less$16,476 $19,282 
Over 3 to 6 months18,190 14,871 
Over 6 to 12 months32,554 14,383 
Over 12 months64,405 52,216 
Total$131,625 $100,752 
The contractual maturities of CDs for each of the next five years, including the remainder of 2023, and thereafter are as follows:
(Dollars in thousands)RetailBrokeredTotal
Remaining nine months ending December 31, 2023$270,212 $273,156 $543,368 
Year ending December 31, 2024271,410 — 271,410 
Year ending December 31, 202531,984 — 31,984 
Year ending December 31, 202619,269 — 19,269 
Year ending December 31, 202726,482 — 26,482 
Thereafter2,734 — 2,734 
Total CDs$622,091 $273,156 $895,247 
At March 31, 2023, Peoples had thirteen effective interest rate swaps, with an aggregate notional value of $125.0 million, of which $125.0 million were funded by brokered CDs. Brokered CDs used to fund interest rate swaps are expected to be extended every 90 days through the maturity dates of the swaps. Additional information regarding Peoples' interest rate swaps can be found in "Note 10 Derivative Financial Instruments."
Note 7 Stockholders’ Equity
The following table details the progression in Peoples’ common shares and treasury stock during the three months ended March 31, 2023:
 Common SharesTreasury
Stock
Shares at December 31, 202229,857,920 1,643,461 
Changes related to stock-based compensation awards:  
Release of restricted common shares— 25,977 
Cancellation of restricted common shares— 4,557 
Grant of restricted common shares— (196,713)
Grant of unrestricted common shares— (1,300)
Changes related to deferred compensation plan for Boards of Directors:
Purchase of treasury stock— 4,665 
Disbursed out of treasury stock— (730)
Common shares issued under dividend reinvestment plan10,536 — 
Common shares issued under compensation plan for Boards of Directors
— (5,272)
Common shares issued under employee stock purchase plan
— (17,034)
Shares at March 31, 202329,868,456 1,457,611 
On January 28, 2021, Peoples' Board of Directors approved a share repurchase program authorizing Peoples to purchase up to an aggregate of $30.0 million of Peoples' outstanding common shares. At March 31, 2023, Peoples had repurchased 263,183 common shares totaling $7.4 million under the share repurchase program. There were no common shares repurchased during the first three months of 2023.
Under Peoples' Amended Articles of Incorporation, Peoples is authorized to issue up to 50,000 preferred shares, in one or more series, having such voting powers, designations, preferences, rights, qualifications, limitations and restrictions as determined by Peoples' Board of Directors. At March 31, 2023, Peoples had no preferred shares issued or outstanding.
On January 23, 2023, Peoples' Board of Directors declared a quarterly cash dividend of $0.38 per common share, payable on February 21, 2023, to shareholders of record on February 6, 2023. On April 24, 2023, Peoples' Board of Directors declared a quarterly cash dividend of $0.39 per common share, payable on May 22, 2023, to shareholders of record on May 8, 2023. The following table details the cash dividends declared per common share during the first two quarters of 2023 and the comparable periods of 2022:
20232022
First quarter$0.38 $0.36 
Second quarter0.39 0.38 
Total dividends declared$0.77 $0.74 
Accumulated Other Comprehensive (Loss) Income
The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income for the three months ended March 31, 2023:
(Dollars in thousands)Unrealized (Loss) Gain on SecuritiesUnrecognized Net Pension and Postretirement CostsUnrealized Gain (Loss) on Cash Flow HedgesAccumulated Other Comprehensive (Loss) Income
Balance, December 31, 2022$(129,896)$(1,633)$4,393 $(127,136)
Reclassification adjustments to net income:
  Realized loss on sale of securities, net of tax1,483 — — 1,483 
Other comprehensive income (loss), net of reclassifications and tax
15,715 2 (1,043)14,674 
Balance, March 31, 2023$(112,698)$(1,631)$3,350 $(110,979)
Note 8 Employee Benefit Plans
Peoples sponsors a noncontributory defined benefit pension plan that covers substantially all employees hired before January 1, 2010. The plan provides retirement benefits based on an employee’s years of service and compensation. For employees hired before January 1, 2003, the amount of postretirement benefit is based on the employee’s average monthly compensation over the highest five consecutive years out of the employee’s last ten years with Peoples while an eligible employee. For employees hired on or after January 1, 2003, the amount of postretirement benefit is based on 2% of the employee’s annual compensation during the years 2003 through 2009, plus accrued interest. Effective January 1, 2010, the pension plan was closed to new entrants. Effective March 1, 2011, the accrual of pension plan benefits for all participants was frozen. Peoples recognized this freeze as a curtailment as of December 31, 2010 and March 1, 2011, under the terms of the pension plan. Effective July 1, 2013, a participant in the pension plan who is employed by Peoples may elect to receive or to commence receiving such person's retirement benefits as of the later of such person's normal retirement date or the first day of the month first following the date such person makes an election to receive his or her retirement benefits.
Peoples also provides post-retirement health and life insurance benefits to certain former employees and directors. Only those individuals who retired before January 27, 2012 were eligible for life insurance benefits. As of January 1, 2011, all retirees who desire to participate in the Peoples Bank medical plan do so by electing COBRA, which provides up to 18 months of coverage; retirees over the age of 65 also have the option to pay to participate in a group Medicare supplemental plan. Peoples only pays 100% of the cost of health benefits for those individuals who retired before January 1, 1993. For all others, the retiree is responsible for most, if not all, of the cost of the health benefits. Peoples’ policy is to fund the cost of the benefits as they arise.

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The expected long-term rate of return on plan assets, which was determined as of January 1, 2023, is 7.0%. The following table details the components of the net periodic cost for the noncontributory defined benefit pension plan described above, which is included in salaries and employee benefit costs on the Unaudited Consolidated Statements of Operations:
Pension Benefits
 Three Months Ended
 March 31,
(Dollars in thousands)20232022
Interest cost$88 $66 
Expected return on plan assets(166)(168)
Amortization of net loss2 20 
Settlement of benefit obligation— — 
Net periodic loss$(76)$(82)
Under US GAAP, Peoples is required to recognize a settlement gain or loss when the aggregate amount of lump-sum distributions to participants equals or exceeds the sum of the service and interest cost components of the net periodic pension cost. The amount of settlement gain or loss recognized is the pro rata amount of the unrealized gain or loss existing immediately prior to the settlement. In general, both the projected benefit obligation and the fair value of plan assets are required to be remeasured in order to determine the settlement gain or loss.
Peoples did not record a settlement charge during the three months ended March 31, 2023 or March 31, 2022 under the noncontributory defined benefit pension plan.
Note 9 Earnings Per Common Share
The calculations of basic and diluted earnings per common share were as follows:
Three Months Ended
March 31,
(Dollars in thousands, except per common share data)20232022
Net income available to common shareholders$26,560 $23,577 
Less: Dividends paid on unvested common shares(102)(48)
Add: Undistributed loss allocated to unvested common shares(34)(21)
Net earnings allocated to common shareholders$26,424 $23,508 
Weighted-average common shares outstanding27,891,760 28,006,165 
Effect of potentially dilutive common shares130,119 122,966 
Total weighted-average diluted common shares outstanding28,021,879 28,129,131 
Earnings per common share:
Basic$0.95 $0.84 
Diluted$0.94 $0.84 
Anti-dilutive common shares excluded from calculation:
Restricted common shares 155,018 — 
Note 10 Derivative Financial Instruments
Peoples utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. The fair value of derivative financial instruments is included in the "Other assets" and the "Accrued expenses and other liabilities" lines in the accompanying Unaudited Consolidated Balance Sheets, while cash activity related to these derivative financial instruments is included in the activity in "Net cash provided by operating activities" in the Unaudited Condensed Consolidated Statements of Cash Flows.

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Derivative Financial Instruments and Hedging Activities - Risk Management Objective of Using Derivative Financial Instruments
Peoples is exposed to certain risks arising from both its business operations and economic conditions. Peoples principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Peoples manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities. Peoples also manages interest rate risk through the use of derivative financial instruments. Specifically, Peoples enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or expected cash amounts, the values of which are determined by interest rates. Peoples’ derivative financial instruments are used to manage differences in the amount, timing and duration of Peoples' known or expected cash receipts and its known or expected cash payments principally related to certain variable rate borrowings. Peoples also has interest rate derivative financial instruments that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in Peoples' assets or liabilities. Peoples manages a matched book with respect to customer-related derivative financial instruments in order to minimize its net risk exposure resulting from such transactions.
Cash Flow Hedges of Interest Rate Risk
Peoples' objectives in using interest rate derivative financial instruments are to add stability to interest income and expense, and to manage its exposure to interest rate movements. To accomplish these objectives, 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. At March 31, 2023, Peoples had entered into thirteen interest rate swap contracts with an aggregate notional value of $125.0 million. Peoples will pay a fixed rate of interest for up to ten years while receiving a floating rate component of interest equal to the three-month LIBOR rate. The interest received on the floating rate component is intended to offset the interest paid on rolling three-month brokered CDs, which will continue to be rolled through the life of the swaps. At March 31, 2023 and at December 31, 2022, the interest rate swaps were designated as cash flow hedges of $125.0 million in brokered CDs, which are expected to be extended every 90 days through the maturity dates of the swaps.
For derivative financial instruments designated as cash flow hedges, the effective and ineffective portions of changes in the fair value of each derivative financial instrument is reported in accumulated other comprehensive (loss) income ("AOCI") (outside of earnings), net of tax, and are reclassified to interest expense as interest payments are made or received on Peoples' variable-rate liabilities. Peoples assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the hedging derivative financial instrument with the changes in cash flows of the designated hedged transaction. The reset dates and the payment dates on the brokered CDs are matched to the reset dates and payment dates on the receipt of the three-month LIBOR floating portion of the swaps to ensure effectiveness of the cash flow hedge. During the three months ended March 31, 2023, and 2022, Peoples had recorded reclassifications of gains to earnings of $0.1 million and reclassifications of losses to earnings of $0.6 million, respectively. During the next twelve months, Peoples estimates that $1.3 million of AOCI will be reclassified as a reduction to interest expense.
The following table summarizes information about the interest rate swaps designated as cash flow hedges:
(Dollars in thousands)March 31,
2023		December 31,
2022
Notional amount$125,000 $125,000 
Weighted average pay rates2.26 %2.26 %
Weighted average receive rates4.31 %4.44 %
Weighted average maturity2.3 years2.6 years
Pre-tax changes in fair value included in AOCI$4,370 $5,727 

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The following table presents changes in fair value recorded in AOCI and in the Consolidated Statements of Operations related to the cash flow hedges for three months ended March 31, 2023, and 2022:
Three Months Ended
March 31,
(Dollars in thousands)20232022
Amount of (losses) gains recorded in AOCI, pre-tax$(1,356)$5,456 
The following table reflects the cash flow hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:
March 31,
2023		December 31,
2022
(Dollars in thousands)Notional AmountFair ValueNotional AmountFair Value
Included in "Other assets":
Interest rate swaps related to debt$125,000 $4,239 $125,000 $5,594 
Non-Designated Hedges
Peoples maintains an interest rate protection program for commercial loan customers, which was established in 2010. Under this program, Peoples originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples on terms that match the terms of the loan. By entering into the interest rate swap with the customer, Peoples Bank effectively provides the customer with a fixed rate loan while creating a variable rate asset for Peoples Bank. Peoples Bank offsets its exposure in the swap by entering into an offsetting interest rate swap with an unaffiliated institution. These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative financial instrument. These interest rate swaps did not have a material impact on Peoples' results of operations or financial condition at or for the three months ended March 31, 2023 and as of or for the year ended December 31, 2022.
The following table reflects the non-designated hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:
March 31,
2023		December 31,
2022
(Dollars in thousands)Notional AmountFair ValueNotional AmountFair Value
Included in "Other assets":
Interest rate swaps related to commercial loans$381,196 $23,100 $390,126 $28,529 
Included in "Accrued expenses and other liabilities":
Interest rate swaps related to commercial loans$381,196 $23,100 $390,126 $28,529 
Pledged Collateral
Peoples pledges or receives collateral for all interest rate swaps. When the fair value of Peoples' interest rate swaps is in a net liability position, Peoples must pledge collateral, and, when the fair value of Peoples' interest rate swaps is in a net asset position, the respective counterparties must pledge collateral. At March 31, 2023 and December 31, 2022, Peoples had no cash pledged, while counterparties had $16.7 million of cash pledged at March 31, 2023 and $20.9 million of cash pledged at December 31, 2022. Peoples had no pledged investment securities at March 31, 2023 or at December 31, 2022, while the counterparties had pledged investment securities in the amounts of $2.4 million at March 31, 2023 and $2.5 million at December 31, 2022.
Note 11 Stock-Based Compensation
Under the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan (the "2006 Equity Plan"), Peoples may grant, among other awards, nonqualified stock options, incentive stock options, restricted common share awards, stock appreciation rights, performance units and unrestricted common share awards to employees and non-employee directors. The total number of common shares available under the 2006 Equity Plan is 891,340. The maximum number of common shares that can be issued for incentive stock options is 500,000 common shares. Since February 2009, Peoples has granted restricted common shares to employees, and periodically to non-employee directors, subject to the terms and conditions prescribed by the 2006 Equity Plan. In general, common shares issued in connection with stock-based awards are issued from treasury shares to the extent available. If no treasury shares are available, common shares are issued from authorized but unissued common shares.

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Restricted Common Shares
 Under the 2006 Equity Plan, Peoples may award restricted common shares to officers, key employees and non-employee directors. In general, the restrictions on the restricted common shares awarded to employees expire after periods ranging from one to five years. Since 2018, common shares awarded to non-employee directors have vested immediately upon grant with no restrictions. In the first three months of 2023, Peoples granted an aggregate of 188,372 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date; provided that in order for the restricted common shares to vest in full, Peoples must have reported positive net income and maintained a well-capitalized status by regulatory standards for each of the three fiscal years preceding the vesting date.
The following table summarizes the changes to Peoples’ restricted common shares for the three months ended March 31, 2023:
Time-Based VestingPerformance-Based Vesting
 Number of Common SharesWeighted-Average Grant Date Fair ValueNumber of Common SharesWeighted-Average Grant Date Fair Value
Oustanding at January 1, 2023138,522 $27.25 295,875 $32.20 
Awarded8,341 28.70 188,372 30.30 
Released(5,316)31.35 (70,458)32.91 
Forfeited— — (4,557)31.46 
Outstanding at March 31, 2023141,547 $27.18 409,232 $31.21 
For the three months ended March 31, 2023, the total intrinsic value for restricted common shares released was $2.3 million compared to $3.3 million for the three months ended March 31, 2022.
Stock-Based Compensation
Peoples recognizes stock-based compensation, which is included as a component of Peoples’ salaries and employee benefit costs, for restricted and unrestricted common shares, as well as purchases made by participants in the employee stock purchase plan. For restricted common shares, Peoples recognizes stock-based compensation based on the estimated fair value of the awards expected to vest on the grant date. The estimated fair value is then expensed over the vesting period, which is normally three years. Peoples also has an employee stock purchase plan whereby employees can purchase Peoples' common shares at a discount of 15%. The following table summarizes the amount of stock-based compensation expense and related tax benefit recognized for each period:
Three Months Ended
March 31,
(Dollars in thousands)20232022
Employee stock-based compensation expense:
Stock grant expense$2,150 $1,577 
Employee stock purchase plan expense39 28 
Total employee stock-based compensation expense2,189 1,605 
Non-employee director stock-based compensation expense136 124 
Total stock-based compensation expense2,325 1,729 
Recognized tax benefit(543)(396)
Net stock-based compensation expense$1,782 $1,333 
The fair value of restricted common share awards on the grant date is the market price of Peoples' common shares on that date. Total unrecognized stock-based compensation expense related to unvested restricted common share awards was $7.0 million at March 31, 2023, which will be recognized over a weighted-average period of 2.2 years.
Note 12 Revenue
The following table details Peoples' revenue from contracts with customers:
 Three Months Ended
March 31,
(Dollars in thousands)20232022
Insurance income:
Commission and fees from sale of insurance policies (a)$3,816 $3,313 
Fees related to third-party administration services (a)82 72 

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 Three Months Ended
March 31,
(Dollars in thousands)20232022
Performance-based commissions (b)1,527 1,346 
Trust and investment income:
Fiduciary income (a)2,457 1,965 
Brokerage income (a)1,627 2,311 
Electronic banking income:
Interchange income (a)4,181 4,113 
Promotional and usage income (a)1,262 1,140 
Deposit account service charges:
Ongoing maintenance fees for deposit accounts (a)1,461 1,311 
Transaction-based fees (b)2,062 2,115 
Commercial loan swap fees (b)— 168 
Other non-interest income transaction-based fees (b)430 257 
Total revenue from contracts with customers$18,905 $18,111 
Timing of revenue recognition:
Services transferred over time$14,886 $14,225 
Services transferred at a point in time4,019 3,886 
Total revenue from contracts with customers$18,905 $18,111 
(a) Services transferred over time.
(b) Services transferred at a point in time.
Peoples records contract assets for income that has been recognized over a period of time for fulfillment of performance obligations, but has not yet been received related to electronic banking income and certain insurance income. This income typically relates to bonuses for which Peoples is eligible, but will not receive until a certain time in the future. Peoples records contract liabilities for payments received for commission income related to the sale of insurance policies, for which the performance obligations have not yet been fulfilled. The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled, which is over the insurance policy period. Peoples also records contract liabilities for bonuses received related to electronic banking income, for which the performance obligations have not yet been fulfilled. The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled related to electronic banking income.
The following table details the changes in Peoples' contract assets and contract liabilities for the three-month period ended March 31, 2023:
 Contract AssetsContract Liabilities
(Dollars in thousands)
Balance, January 1, 2023$1,294 $5,634 
     Additional income receivable50 — 
     Recognition of income previously deferred— (70)
Balance, March 31, 2023$1,344 $5,564 
Note 13 Acquisitions
Vantage Financial, LLC
On March 7, 2022, Peoples Bank purchased 100% of the equity of Vantage, a nationwide provider of equipment financing headquartered in Excelsior, Minnesota. Peoples Bank acquired assets comprising Vantage's lease business, including $154.9 million in leases and certain third-party debt in the amount of $106.9 million. Under the terms of the agreement, Peoples Bank paid cash consideration of $54.0 million, and also repaid $28.9 million in recourse debt on behalf of Vantage, for total consideration of $82.9 million. Vantage offers mid-ticket equipment leases, primarily for business essential information technology equipment across a wide-array of industries.

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Peoples recorded acquisition-related expenses during the three months ended March 31, 2023 and 2022 of $45,000 and $0.8 million, respectively, in professional fees related to the Vantage acquisition.
The following table provides the purchase price calculation as of the date of the acquisition of Vantage, and the assets acquired and liabilities assumed at their estimated fair values.
(Dollars in thousands)Fair Value
Total purchase price$82,893 
Net assets at fair value
Assets
Cash and due from banks$1,444 
Leases155,726 
Allowance for credit losses (on purchased credit deteriorated leases)(801)
Net leases154,925 
Bank premises and equipment116 
Other intangible assets13,207 
Other assets1,506 
    Total assets$171,198 
Liabilities
Borrowings$106,919 
Accrued expenses and other liabilities8,550 
Total liabilities$115,469 
Net assets$55,729 
Goodwill$27,164 
The goodwill recorded in connection with the Vantage acquisition is related to expected synergies to be gained from the combination of Vantage with Peoples' operations. The employees retained from the Vantage acquisition should allow Peoples to continue to grow the lease portfolio, along with Peoples' resources, and should benefit Peoples in future periods. During Peoples' evaluation of intangible assets, it was determined that an assembled workforce intangible asset was not separately recognizable and was included in goodwill. Peoples recorded other intangible assets, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction.
The following table details the fair value adjustment for acquired purchased credit deteriorated leases as of the acquisition date:
(Dollars in thousands)Par ValueAllowance for Credit LossesNon-Credit PremiumFair Value
Purchased credit deteriorated leases
Leases$3,412 $(801)$1,120 $3,731 
Fair value$3,412 $(801)$1,120 $3,731 
Note 14 Leases
Peoples has elected certain practical expedients, in accordance with ASC 842 - Leases ("ASC 842"). As a lessor, Peoples has made an accounting policy election to exclude from the consideration in the contract, and from variable payments not included in the consideration in the contract, all sales and other similar taxes assessed. Peoples has also made an accounting policy election to account for each separate lease component of a contract and its associated non-lease components as a single lease component for all leases subject to ASC 842.
Lessor Arrangements
Leases originated by Peoples, that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff, are reported at the net investment of the lease, net of initial direct costs, charge-offs and an allowance for credit losses. Peoples considers leases past due if any required principal or interest payments have not been received as of the date such payments were required to be made under the terms of the lease agreement. Upon detection of the reduced ability of a lessee to meet cash flow obligations, leases are typically charged down to the net realizable value, with the residual balance placed on nonaccrual status. Leases

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deemed to be uncollectable are charged against the allowance for credit losses, while recoveries of previously charged-off amounts are credited to the allowance for credit losses.
Peoples began originating leases with the acquisition of leases from NSL in the second quarter of 2021, and expanded its lease portfolio with the acquisition of Vantage in the first quarter of 2022. The leases acquired from NSL were determined to be sales-type leases, as the premise for these leases is dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment. Originated leases continue to be classified as sales-type leases. These leases do not typically contain residual value guarantees; however, if a lease contains a residual value guarantee, Peoples reduces its residual asset risk by obtaining a security deposit from the lessee. The leases acquired from Vantage were determined to be either sales-type or direct financing leases based primarily on whether they included a dollar buy-out or a fair market value buy-out, respectively. As a lessor, Peoples originates commercial equipment leases either directly to the customer or indirectly through vendor programs. Equipment leases consist of automotive, construction, health care, manufacturing, office, restaurant, information technology and other equipment. These leases include an estimated residual value, which is assessed for impairment as part of the allowance for credit losses. Other non-interest income noted in the table below includes gain on the early termination of leases, syndicated leases, and other fees. Additional information regarding Peoples' leases can be found in "Note 4 Loans and Leases."
The table below details Peoples' lease income:
 Three Months Ended
(Dollars in thousands)March 31, 2023March 31, 2022
Interest and fees on leases (a)$9,643 $6,102 
Other non-interest income1,077 775 
Total lease income$10,720 $6,877 
(a)Included in "Interest and fees on loans and leases" in the Unaudited Consolidated Statements
of Operations. For additional information, see "Note 4 Loans and Leases" of the Notes to
the Unaudited Condensed Consolidated Financial Statements.

The following table summarizes the net investment in leases, which is included in "Loans and leases, net of deferred costs" on the Unaudited Consolidated Balance Sheets:
(Dollars in thousands)March 31, 2023December 31, 2022
Lease payments receivable, at amortized cost$381,549 $367,681 
Estimated residual values36,078 35,045 
Initial direct costs4,623 4,233 
Deferred revenue(67,609)(61,828)
Net investment in leases354,641 345,131 
Allowance for credit losses - leases(9,109)(8,495)
Net investment in leases, after allowance for credit losses$345,532 $336,636 
The following table summarizes the contractual maturities of leases:
(Dollars in thousands)Balance
Remaining nine months ending December 31, 2023$68,772 
Year ending December 31, 202487,814 
Year ending December 31, 202598,604 
Year ending December 31, 202664,769 
Year ending December 31, 202742,481 
Thereafter19,109 
Lease payments receivable, at amortized cost$381,549 
Lessee Arrangements
Peoples leases certain banking facilities and equipment under various agreements with original terms providing for fixed monthly payments over periods generally ranging from two to thirty years. Certain leases may include options to extend or terminate the lease. Only those renewal and termination options which Peoples is reasonably certain of exercising are included in the calculation of the lease liability. Certain leases contain rent escalation clauses calling for rent increases over the term of the lease, which are included in the calculation of the lease liability. At March 31, 2023, Peoples did not have any leases that met the criteria for finance leases. Right of Use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to

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make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the remaining lease term. Operating lease ROU assets include lease payments made at or before the commencement date and initial indirect costs. Operating lease ROU assets exclude lease incentives. Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term and do not have a ROU asset or lease liability.
The table below details Peoples' lease expense, which is included in "Net occupancy and equipment expense" in the Unaudited Consolidated Statements of Operations:
 Three Months Ended
(Dollars in thousands)March 31, 2023March 31, 2022
Operating lease expense695 603 
Short-term lease expense95 168 
Total lease expense$790 $771 
Peoples utilizes an incremental borrowing rate to determine the present value of lease payments for each lease, as the lease agreements do not provide an implicit rate. The estimated incremental borrowing rate reflects a secured rate and is based on the term of the lease and the interest rate environment at the lease commencement or remeasurement date.
The following table details the ROU assets, the lease liabilities and other information related to Peoples' operating leases at the dates shown:
(Dollars in thousands)March 31, 2023December 31, 2022
ROU assets:
Other assets$7,181 $6,825 
Lease liabilities:
     Accrued expenses and other liabilities$7,880 $7,551 
Other information:
     Weighted-average remaining lease term8.5 years8.8 years
     Weighted-average discount rate2.67 %2.70 %
During the three months ended March 31, 2023 and 2022, Peoples paid cash of $0.7 million and $0.6 million, respectively, for operating leases.
The following table summarizes the maturity of remaining lease liabilities:
(Dollars in thousands)Balance
Remaining nine months ending December 31, 2023$2,008 
Year ending December 31, 20241,650 
Year ending December 31, 20251,088 
Year ending December 31, 2026905 
Year ending December 31, 2027747 
Thereafter3,007 
Total undiscounted lease payments$9,405 
Imputed interest$(1,525)
Total lease liabilities$7,880 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis (“MD&A”) represents an overview of the results of operations and financial condition of Peoples for the three months ended March 31, 2023 and March 31, 2022. This MD&A should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the Notes thereto.
Certain statements in this Form 10-Q, which are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate," "estimate," "may," "feel," "expect," "believe," "plan," "will," "will likely," "would," "should," "could," "project," "goal," "target," "potential," "seek," "intend," "continue," "remain," and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to:
(1)the magnitude and continued duration of the recovery from the COVID-19 pandemic and its ongoing impact on the global economy and financial market conditions and Peoples’ businesses, results of operations and financial conditions;
(2)ongoing increasing interest rate policies, changes in the interest rate environment due to economic conditions and/or the fiscal and monetary policy measures undertaken by the U.S. government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity;
(3)the effects of inflationary pressures and the impact of rising interest rates on borrowers’ liquidity and ability to repay;
(4)the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the ongoing increasing interest rate policies of the Federal Reserve Board, the completion and successful integration of planned acquisitions, including the recently-completed acquisition of Vantage and the pending Limestone Merger, and the expansion of commercial and consumer lending activities;
(5)competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, which can in turn impact Peoples' credit spreads, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals;
(6)uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies in the State of Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses;
(7)the effects of easing restrictions on participants in the financial services industry;
(8)local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, ineffective management of the U.S. federal budget or debt, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, and changes in the relationship of the U.S. and U.S. global trading partners) and the impact these conditions may have on Peoples, Peoples' customers and Peoples' counterparties, and Peoples' assessment of the impact, which may be different than anticipated;
(9)Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;
(10)changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties' performance and creditworthiness generally, which may be less favorable than expected in light of recent inflationary pressures and adversely impact the amount of interest income generated;
(11)Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
(12)future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses;

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(13)changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations;
(14)the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model;
(15)the replacement of the London Interbank Offered Rate ("LIBOR") with other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies;
(16)adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;
(17)the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
(18)Peoples' ability to receive dividends from Peoples' subsidiaries;
(19)Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
(20)the impact of larger or similar-sized financial institutions encountering problems, such as the recent closures of Silicon Valley Bank in California and Signature Bank in New York, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity, including potential increased regulatory requirements and costs, increased reputational risk and potential impacts to macroeconomic conditions;
(21)Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;
(22)Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples' primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands;
(23)operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and Peoples' subsidiaries are highly dependent;
(24)changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;
(25)the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business;
(26)the impact on Peoples' businesses, personnel, facilities, or systems, of losses related to acts of fraud, theft, misappropriation or violence;
(27)the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts;
(28)the potential further deterioration of the U.S. economy due to financial, political or other shocks;
(29)the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;
(30)the impact on Peoples' businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples' intellectual property;
(31)risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets;
(32)Peoples' ability to integrate the pending Limestone Merger, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;
(33)the risk that expected revenue synergies and cost savings from the pending Limestone Merger, may not be fully realized or realized within the expected time frame;

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(34)changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases;
(35)the effect of a fall in stock market prices on the asset and wealth management business;
(36)Peoples' continued ability to grow deposits or maintain adequate deposit levels in light of the recent bank failures; and
(37)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' 2022 Form 10-K, and under the heading "ITEM 1A. RISK FACTORS" in 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. Peoples undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the filing of this Form 10-Q or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website – www.peoplesbancorp.com under the “Investor Relations” section.
All forward-looking statements speak only as of the filing date of this Form 10-Q and are expressly qualified in their entirety by the cautionary statements.  Although management believes the expectations in these forward-looking statements are based on reasonable assumptions within the bounds of management’s knowledge of Peoples’ business and operations, it is possible that actual results may differ materially from these projections.
This discussion and analysis should be read in conjunction with the Audited Consolidated Financial Statements, and Notes thereto, contained in Peoples’ 2022 Form 10-K, as well as the Unaudited Condensed Consolidated Financial Statements, Notes to the Unaudited Condensed Consolidated Financial Statements, ratios, statistics and discussions contained elsewhere in this Form 10-Q.
Business Overview
The following discussion and analysis of Peoples’ Unaudited Condensed Consolidated Financial Statements is presented to provide insight into management’s assessment of the financial condition and results of operations.
Peoples is a diversified financial services holding company that makes available a complete line of banking, trust and investment, insurance, premium financing and equipment leasing solutions through its subsidiaries. Peoples provides services through traditional offices, ATMs, mobile banking and telephone and internet-based banking. Peoples offers a complete array of insurance products through Peoples Insurance, a subsidiary of Peoples Bank. Brokerage services are offered by Peoples exclusively through an unaffiliated registered broker-dealer located at Peoples Bank's offices. Peoples Bank offers insurance premium finance lending nationwide through its Peoples Premium Finance division. Peoples also offers lease financing through its North Star Leasing division and through Vantage, a subsidiary of Peoples Bank. As of March 31, 2023, Peoples had 130 locations, including 113 full-service bank branches in Ohio, West Virginia, Kentucky, Virginia, Washington D.C. and Maryland. Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the "ODFI"), the FRB of Cleveland and the FDIC. Peoples Bank must also follow the regulations promulgated by the Consumer Financial Protection Bureau (the "CFPB") which regulates consumer financial products and services and certain financial services providers. Peoples Insurance is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states in which Peoples Insurance may do business.
Critical Accounting Policies
The accounting and reporting policies of Peoples conform to US GAAP. The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Note 1 of the Notes to the Unaudited Condensed Consolidated Financial Statements describes Peoples' significant accounting policies. Management has identified the accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to understanding Peoples’ Unaudited Condensed Consolidated Financial Statements, and MD&A at March 31, 2023, which have been disclosed in Peoples' 2022 Form 10-K and updated in "Note 1 Summary of Significant Accounting Policies" in this Form 10-Q. This MD&A should be read in conjunction with the policies disclosed in Peoples’ 2022 Form 10-K.
Summary of Recent Transactions and Events
The following is a summary of recent transactions and events that have impacted or are expected to impact Peoples’ results of operations or financial condition:
◦On October 25, 2022, Peoples announced the Limestone Merger, a transaction valued at approximately $208.2 million at the time of the announcement. The Limestone Merger closed on April 30, 2023. As of March 31, 2023, Peoples had recognized $1.0 million in acquisition-related expenses associated with this pending transaction.
◦On April 1, 2022, Peoples Insurance acquired substantially all of the assets and rights of an insurance agency with five locations in eastern Kentucky and certain rights to related customer accounts, which were previously developed and

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maintained by Elite, pursuant to an Asset Purchase Agreement between Peoples Insurance and Elite. Total consideration for this transaction was $4.4 million. Peoples recognized intangibles of $2.1 million, primarily comprised of a customer relationship intangible.
◦On March 7, 2022, Peoples completed its acquisition of Vantage pursuant to an Equity Purchase Agreement, dated February 16, 2022, in which Peoples Bank purchased 100% of the equity of Vantage. Peoples Bank acquired assets comprising Vantage's lease business, including $154.9 million in leases and certain third-party debt in the amount of $106.9 million. Peoples paid total consideration of $82.9 million. Based in Excelsior, Minnesota, Vantage offers mid-ticket equipment leases primarily for business essential information technology equipment across a wide array of industries. Peoples recorded goodwill in the amount of $27.2 million and other intangible assets of $13.2 million, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction.
◦During the first quarter of 2023, Peoples recorded a provision for credit losses of $1.9 million, compared to a provision for credit losses of $2.3 million in the linked quarter and a recovery of credit losses of $6.8 million in the first quarter of 2022. The provision for credit losses in the first quarter of 2023 was largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for individually analyzed loans. For more information, please refer to the section titled "RESULTS OF OPERATIONS - Provision for (Recovery of) Credit Losses" found later in this discussion.
◦During the first quarter of 2023, Peoples incurred $0.6 million of acquisition-related expenses, compared to $0.7 million in the fourth quarter of 2022 and $1.4 million in the first quarter of 2022. The acquisition-related expenses in 2023 were primarily related to the Limestone Merger, while the acquisition-related expenses in 2022 were primarily related to the Vantage acquisition.
◦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% on March 16, 2022, to 0.75% to 1.00% on May 4, 2022, to 1.50% to 1.75% on June 15, 2022, to 2.25% to 2.50% on July 27, 2022, to 3.00% to 3.25% on September 21, 2022, to 3.75% to 4.00% on November 2, 2022, to 4.25% to 4.50% on December 14, 2022, to 4.50% to 4.75% on February 1, 2023, to 4.75% to 5.00% on March 23, 2023, 5.00% to 5.25% on May 3, 2023 and has stated it may continue to raise rates throughout 2023.
The impact of these transactions and events, where material, is discussed in the applicable sections of this MD&A.
EXECUTIVE SUMMARY
Peoples reported net income of $26.6 million for the first quarter of 2023, representing earnings per diluted common share of $0.94. In comparison, Peoples reported earnings per diluted common share of $0.95 for the fourth quarter of 2022, and of $0.84 for the first quarter of 2022. Non-core items, and the related tax effect of each, in net income primarily included acquisition-related expenses. Non-core items negatively impacted earnings per diluted common share by $0.05 for the first quarter of 2023, $0.03 for the fourth quarter of 2022, and $0.04 for the first quarter of 2022.
Net interest income was $72.9 million for the first quarter of 2023, an increase of $2.3 million, or 3%, compared to the linked quarter. Net interest margin was 4.53% for the first quarter of 2023, compared to 4.44% for the linked quarter. The increases in net interest income and net interest margin were driven by 50 basis points of improvement in loan yields due to recent increases in market interest rates and a shift in the composition of the loan portfolio into higher-yielding leases, and 41 basis points of improvement in investment yields when compared to the linked quarter due to purchases of investment securities with higher interest rates and sales of lower-yielding investment securities. Net interest income for the first quarter of 2023 increased $18.6 million, or 34%, compared to the first quarter of 2022. Net interest margin increased 112 basis points compared to 3.41% for the first quarter of 2022. The increase in net interest income compared to the first quarter of 2022 was driven by increases in market interest rates and a full quarter of income from the Vantage acquisition.
Accretion income, net of amortization expense, from acquisitions was $2.0 million for the first quarter of 2023, $2.2 million for the fourth quarter of 2022 and $2.7 million for the first quarter of 2022, which added 13 basis points, 14 basis points and 17 basis points, respectively, to net interest margin. The decreases in accretion income for the first quarter of 2023 when compared to the linked quarter and the first quarter of 2022 were driven by less loan accretion due to lower pay-offs and less accretion from the merger with Premier Financial Bancorp, Inc. ("Premier") and the Vantage acquisition.

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The provision for credit losses was $1.9 million for the first quarter of 2023, compared to a provision for credit losses of $2.3 million for the linked quarter and a recovery of credit losses of $6.8 million for the first quarter of 2022. The provisions for credit losses in the first quarter of 2023 and the linked quarter were largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for individually analyzed loans. The recovery of credit losses in the first quarter of 2022 was attributable to an improvement in economic factors and loss drivers within the current expected credit loss ("CECL") model. Net charge-offs for the first quarter of 2023 were $1.5 million, or 0.13% of average total loans annualized, compared to net charge-offs of $2.1 million, or 0.18% of average total loans annualized, for the linked quarter and net charge-offs of $1.9 million, or 0.17% of average total loans annualized, for the first quarter of 2022. For additional information on credit trends and the allowance for credit losses, see the "FINANCIAL CONDITION - Allowance for Credit Losses" section below.
Net gains and losses include gains and losses on investment securities, asset disposals and other transactions, which are included in total non-interest income on the Consolidated Statements of Operations. The net loss realized during the first quarter of 2023 was $2.2 million, compared to a net loss of $0.5 million for the linked quarter, and a net gain of $3,000 for the first quarter of 2022. During the first quarter of 2023, Peoples executed the sale of $96.7 million of its lower yielding available-for-sale securities for a pre-tax net loss of $2.0 million. Proceeds from the sale were used to pay down overnight borrowings. The realized losses recognized due to these transactions are projected to be earned back within the 2023 fiscal year. The net loss for the linked quarter was primarily due to net losses on repossessed assets and net losses on sales of investment securities.
Total non-interest income, excluding net gains and losses, for the first quarter of 2023 increased $1.7 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was due to a $1.7 million increase in insurance income due to seasonal performance-based commissions being earned in the first quarter of each year. Compared to the first quarter of 2022, non-interest income, excluding net gains and losses, increased $1.2 million, primarily due to a $0.7 million increase in insurance income which was attributable to an increase in property and casualty insurance commissions.
Total non-interest expense increased $3.1 million, or 6%, for the three months ended March 31, 2023, compared to the linked quarter. The increase in total non-interest expense for the first quarter of 2023 was attributable to an increase in salaries and employee benefit costs. The increase in salaries and employee benefit costs was due to anticipated additional expenses typically recognized in the first quarter of each year. These expenses included annual merit increases, stock-based compensation expenses attributable to retirement-eligible employees, and employer health savings account ("HSA") contributions. Compared to the first quarter of 2022, total non-interest expense increased $4.9 million, or 9%, primarily due to increases in (i) salaries and employee benefit costs, (ii) data processing and software expense and (iii) other non-interest expense. The increases were due to growth, including through acquisitions. Partially offsetting these increases were decreases in electronic banking expense and professional fees.
The efficiency ratio for the first quarter of 2023 was 57.8%, compared to 56.7% for the linked quarter, and 66.8% for the first quarter of 2022. The increase in the efficiency ratio compared to the linked quarter was primarily due to the increases in non-interest expenses, which were partially offset by higher net interest income due to increases in the market interest rates. The decrease in the efficiency ratio compared to the prior year quarter was primarily due to a decrease in acquisition-related expenses. The efficiency ratio, adjusted for non-core items, was 57.2% for the first quarter of 2023, compared to 55.9% for the linked quarter and 64.8% for the first quarter of 2022. The efficiency ratio is typically higher in the first quarter of the year driven by the aforementioned salaries and employee benefit costs, and specifically by higher payroll taxes, employer HSA contributions and stock-based compensation expenses for certain employees. Peoples continues to focus on controlling expenses, while recognizing some necessary costs in order to continue growing the business.
Peoples recorded income tax expense of $7.0 million with an effective tax rate of 21.0% for the first quarter of 2023, compared to income tax expense of $7.1 million with an effective tax rate of 21.0% for the linked quarter, and income tax expense of $6.0 million with an effective tax rate of 20.2% for the first quarter of 2022. The increase in income tax expense for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, was driven by higher income before income taxes.
At March 31, 2023, total assets were $7.31 billion, compared to $7.21 billion at December 31, 2022 and $7.24 billion at March 31, 2022. The $104.2 million increase in total assets compared to at December 31, 2022 was primarily due to increases in held-to-maturity investment securities and loans and leases, net of deferred fees and costs, partially offset by a decrease in available-for-sale investment securities. Management underwent an initiative during the first quarter of 2023 to sell lower yielding available-for-sale investment securities whose proceeds were used to pay down higher cost funding. Separately, the increase in the period-end loan and lease balances was primarily driven by increases of (i) $57.5 million in other commercial real estate loans, (ii) $17.8 million in indirect consumer loans and (iii) $9.5 million in leases, partially offset by a reductions of $14.6 million in construction loans and $10.8 million in residential real estate loans. The $72.3 million increase in total assets compared to at March 31, 2022 was largely attributable to increases in loans and leases as well as the aforementioned net increase in investment securities, partially offset by decreases in interest-bearing deposits at other banks. The increase in the period-end loan and lease balances when compared to at March 31, 2022 was primarily driven by increases of $122.4 million in indirect consumer loans and $87.6 million in leases, partially offset by a reduction of $43.8 million in residential real estate loans.
Total liabilities were $6.49 billion at March 31, 2023, up from $6.42 billion at December 31, 2022 and $6.43 billion at March 31, 2022. The increase in total liabilities compared to at December 31, 2022 was attributable to an increase in total deposits and long-term

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borrowings. The increase in total deposits when compared to at December 31, 2022 was primarily driven by an increase of $147.6 million in brokered certificates of deposits, which are primarily used as a source of funding. Excluding the increase in brokered certificates of deposits, total deposits at March 31, 2023 decreased $76.0 million when compared to at December 31, 2022, primarily due to reductions of (i) $75.0 million in interest-bearing deposit accounts (ii) $43.9 million in savings accounts, (iii) $37.9 million in money market deposit accounts, and (iv) $34.3 million in non-interest bearing deposit accounts, partially offset by an increase of $91.9 million in retail certificates of deposit. The increase in total liabilities compared to at March 31, 2022 was primarily due to an increase in short-term borrowings, partially offset decreases in total deposits and long-term borrowings. Deposits decreased primarily due to reductions in non-interest-bearing deposits, interest-bearing demand deposit accounts, governmental deposit accounts, and money market deposit accounts of $111.6 million, $94.0 million, $85.5 million and $77.2 million, respectively, partially offset by an increase of $185.8 million in brokered certificates of deposits.
Total stockholders' equity at March 31, 2023 increased by $34.2 million compared to at December 31, 2022, which reflected net income for the quarter of $26.6 million and a decrease in accumulated other comprehensive loss of $16.2 million, partially offset by dividends paid of $10.7 million. The change in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period. Accumulated unrealized losses related to the available-for-sale investment securities portfolio were $112.7 million and $129.9 million at March 31, 2023 and at December 31, 2022, respectively. Total stockholders' equity at March 31, 2023 increased by $11.2 million compared to at March 31, 2022, which was primarily due to net income of $104.3 million in the last twelve months partially offset by an increase in accumulated other comprehensive loss of $48.3 million. The increase in accumulated other comprehensive loss was the result of an increase of $51.5 million in unrealized losses related to the available-for-sale investment securities portfolio from March 31, 2022 to March 31, 2023.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income, the amount by which interest income exceeds interest expense, remains Peoples' largest source of revenue.  The amount of net interest income earned by Peoples each quarter is affected by various factors, including changes in market interest rates due to the Federal Reserve’s monetary policy, the level and degree of pricing competition for loans and deposits in Peoples’ markets, and the amount and composition of Peoples' earning assets and interest-bearing liabilities. 
Net interest margin, which is calculated by dividing 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 blended corporate income tax rate of 23.3% for each of the three months ended March 31, 2023 and December 31, 2022, and a 22.9% blended corporate income tax rate for the three months ended March 31, 2022.
The following table details the calculation of FTE net interest income:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Net interest income$72,878 $70,613 $54,310 
Taxable equivalent adjustment399 412 391 
Fully tax-equivalent net interest income$73,277 $71,025 $54,701 

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The following tables detail Peoples’ average balance sheets for the periods presented:
 For the Three Months Ended
 March 31, 2023December 31, 2022March 31, 2022
(Dollars in thousands)
Average BalanceIncome/ ExpenseYield/CostAverage BalanceIncome/ ExpenseYield/CostAverage BalanceIncome/ ExpenseYield/Cost
Short-term investments $35,223 $388 4.47 %$44,421 $404 3.61 %$332,098 $160 0.20 %
Investment securities (a)(b):   
Taxable1,597,688 11,049 2.77 %1,459,879 8,376 2.29 %1,465,998 6,096 1.66 %
Nontaxable190,566 1,298 2.72 %192,863 1,365 2.83 %204,381 1,316 2.58 %
Total investment securities1,788,254 12,347 2.76 %1,652,742 9,741 2.35 %1,670,379 7,412 1.78 %
Loans (b)(c):   
Construction239,492 3,963 6.62 %234,233 3,596 6.01 %225,676 2,155 3.82 %
Commercial real estate, other1,333,062 19,794 5.94 %1,293,500 18,431 5.58 %1,362,434 14,782 4.34 %
Commercial and industrial877,391 14,610 6.66 %885,111 13,455 5.95 %888,598 8,023 3.61 %
Premium finance147,895 2,150 5.81 %161,382 1,898 4.60 %132,758 1,164 3.51 %
Leases342,583 9,643 11.26 %325,113 8,448 10.17 %162,277 6,102 15.04 %
Residential real estate (d)839,822 9,717 4.63 %853,354 9,321 4.37 %913,730 9,766 4.28 %
Home equity lines of credit176,327 2,966 6.82 %177,778 2,723 6.08 %163,339 1,612 4.00 %
Consumer, indirect640,359 7,231 4.58 %612,696 6,834 4.43 %523,770 5,045 3.91 %
Consumer, direct108,488 1,739 6.50 %113,045 1,763 6.19 %106,298 1,595 6.09 %
Total loans4,705,419 71,813 6.12 %4,656,212 66,469 5.62 %4,478,880 50,244 4.50 %
Allowance for credit losses (52,669)(52,253)(61,947)
Net loans4,652,750 71,813 6.19 %4,603,959 66,469 5.68 %4,416,933 50,244 4.56 %
Total earning assets6,476,227 84,548 5.23 %6,301,122 76,614 4.79 %6,419,410 57,816 3.61 %
Goodwill and other intangible assets325,545  327,377 304,124 
Other assets420,692  438,694 344,282 
    Total assets
$7,222,464  $7,067,193 $7,067,816 
Interest-bearing deposits:   
Savings accounts$1,044,392 $136 0.05 %$1,069,646 $138 0.05 %$1,050,813 $34 0.01 %
Governmental deposit accounts
637,959 1,066 0.68 %688,815 710 0.41 %670,419 447 0.27 %
Interest-bearing demand accounts
1,103,966 180 0.07 %1,152,709 186 0.06 %1,171,266 92 0.03 %
Money market accounts583,574 825 0.57 %615,460 522 0.34 %650,272 97 0.06 %
Retail certificates of deposit576,645 1,750 1.23 %534,145 717 0.53 %626,978 871 0.56 %
Brokered deposits (e)224,325 1,704 3.08 %87,934 515 2.32 %91,531 512 2.27 %
Total interest-bearing deposits
4,170,861 5,661 0.55 %4,148,709 2,788 0.27 %4,261,279 2,053 0.20 %
Borrowed funds:   
Short-term FHLB advances (e)377,578 4,314 4.63 %181,946 1,570 3.42 %55,000 313 2.31 %
Repurchase agreements and other93,848 143 0.61 %96,242 99 0.41 %99,346 25 0.10 %
Total short-term borrowings471,426 4,457 3.83 %278,188 1,669 2.38 %154,346 338 0.89 %
Long-term FHLB advances34,015 204 2.43 %34,297 210 2.43 %85,653 306 1.45 %
Long-term notes payable50,656 653 5.16 %53,528 661 4.94 %29,780 298 4.02 %
Trust Preferred13,806 296 8.58 %13,771 261 7.42 %13,665 120 3.51 %
Total long-term borrowings98,477 1,153 4.69 %101,596 1,132 4.45 %129,098 724 2.26 %
  Total borrowed funds569,903 5,610 3.98 %379,784 2,801 2.93 %283,444 1,062 1.51 %
      Total interest-bearing liabilities
4,740,764 11,271 0.96 %4,528,493 5,589 0.49 %4,544,723 3,115 0.28 %
Non-interest-bearing deposits1,556,636   1,639,580 1,606,665 
Other liabilities123,599   130,470 81,676 
Total liabilities6,420,999   6,298,543 6,233,064 
Total stockholders’ equity801,465   768,650 834,752 
Total liabilities and stockholders’ equity$7,222,464   $7,067,193 $7,067,816 
Interest rate spread (b) $73,277 4.27 %$71,025 4.30 %$54,701 3.33 %
Net interest margin (b)4.53 %4.44 %3.41 %


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(a)Average balances are based on carrying value.
(b)Interest income and yields are presented on a fully tax-equivalent basis, using a 23.3% blended corporate income tax rate for each of the three months ended March 31, 2023 and December 31, 2022, and a 22.9% blended corporate income tax rate for the three months ended March 31, 2022.
(c)Average balances include nonaccrual and impaired loans. Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status. Loan fees included in interest income were immaterial for all periods presented.
(d)Loans held for sale are included in the average loan balance listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income.
(e)Interest related to interest rate swap transactions is included, as appropriate to the transaction, in interest expense on short-term FHLB advances and interest expense on brokered deposits for the periods presented in which FHLB advances and brokered deposits were being utilized.
Peoples' average balances compared to prior periods have been impacted by recent acquisitions, including Vantage on March 7, 2022, which added to average lease and borrowed funds balances. Peoples has begun to reduce cash balances after previously maintaining high cash balances in recent prior periods due to an influx of deposits.
The following table provides an analysis of the changes in FTE net interest income:
Three Months Ended March 31, 2023 Compared to
(Dollars in thousands)December 31, 2022March 31, 2022
Increase (decrease) in:RateVolume
Total (a)
RateVolume
Total (a)
INTEREST INCOME:
Short-term investments $350 $(366)$(16)$1,337 $(1,109)$228 
Investment Securities (b):
Taxable1,837 836 2,673 4,363 590 4,953 
Nontaxable(42)(25)(67)320 (338)(18)
Total investment income1,795 811 2,606 4,683 252 4,935 
Loans (b):
  
Construction300 67 367 1,669 139 1,808 
Commercial real estate, other927 436 1,363 7,144 (2,132)5,012 
Commercial and industrial1,925 (770)1,155 7,288 (701)6,587 
Premium finance1,134 (882)252 840 146 986 
Leases795 400 1,195 (9,374)12,915 3,541 
Residential real estate1,245 (849)396 3,167 (3,216)(49)
Home equity lines of credit393 (150)243 1,217 137 1,354 
Consumer, indirect173 224 397 954 1,232 2,186 
Consumer, direct301 (325)(24)111 33 144 
Total loan income7,193 (1,849)5,344 13,016 8,553 21,569 
Total interest income$9,338 $(1,404)$7,934 $19,036 $7,696 $26,732 
INTEREST EXPENSE:  
Deposits:  
Savings accounts$14 $(16)$(2)$104 $(2)$102 
Governmental deposit accounts694 (338)356 770 (151)619 
Interest-bearing demand accounts24 (30)(6)124 (36)88 
Money market accounts482 (179)303 798 (70)728 
Retail certificates of deposit974 59 1,033 1,355 (476)879 
Brokered deposits206 983 1,189 236 956 1,192 
Total deposit cost2,394 479 2,873 3,387 221 3,608 
Borrowed funds:  
Short-term borrowings738 2,050 2,788 715 3,404 4,119 
Long-term borrowings217 (196)21 1,047 (618)429 
Total borrowed funds cost955 1,854 2,809 1,762 2,786 4,548 
Total interest expense3,349 2,333 5,682 5,149 3,007 8,156 
Fully tax-equivalent net interest income $5,989 $(3,737)$2,252 $13,887 $4,689 $18,576 

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(a)The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the dollar amounts of the change in each.
(b)Interest income and yields are presented on a fully tax-equivalent basis using a 23.3% blended corporate income tax rate for each of the three months ended March 31, 2023 and December 31, 2022, and a 22.9% blended corporate income tax rate for the three months ended March 31, 2022.
Compared to the linked quarter, net interest income increased 3% and net interest margin expanded by 9 basis points. Both increases were primarily driven by 50 basis points of improvement in loan yields due to recent increases in market interest rates and a shift in the composition of the loan portfolio into higher-yielding leases, which resulted in 41 basis points of improvement in investment yields when compared to the linked quarter due to purchases of investment securities with higher interest rates and sales of lower-yielding investment securities. Borrowing costs increased 105 basis points as a result of increase in short-term borrowings due to utilizing overnight FHLB advances and brokered certificates of deposits in recent quarters.
Net interest income grew 34% over the prior year quarter and net interest margin increased by 112 basis points. The increase in net interest income compared to the first quarter of 2022 was driven by increases in market interest rates and a full quarter of income from the Vantage acquisition. Compared to the prior year quarter, loan yields grew 162 basis points due to the rising interest rate environment and both acquisitive and organic growth, while borrowing costs increased 247 basis points as a result of increase in short-term borrowings due to the utilization of FHLB overnight advances mentioned above.
Peoples recognized interest income on deferred loan fees/costs associated with PPP loans of $1.2 million during the first quarter of 2022 along with $154,000 of interest earned on PPP loans. The interest income recognized on PPP loans added 5 basis points to net interest margin for the first quarter of 2022. The deferred loan fees/costs associated with PPP loans and interest earned on PPP loans were minimal for the first quarter of 2023 and the linked quarter.
Accretion income, net of amortization expense, from acquisitions was $2.0 million for the first quarter of 2023, $2.2 million for the linked quarter and $2.7 million for the first quarter of 2022, which added 13 basis points, 14 basis points and 17 basis points, respectively, to net interest margin. The decreases in accretion income for the first quarter of 2023 when compared to the linked quarter and the first quarter of 2022 were driven by less loan accretion due to lower pay-offs and less accretion from the merger with Premier and the Vantage acquisition.
Additional information regarding changes in the Unaudited Consolidated Balance Sheets can be found under appropriate captions of the “FINANCIAL CONDITION” section of this MD&A. Additional information regarding Peoples' interest rate risk and the potential impact of interest rate changes on Peoples' results of operations and financial condition can be found later in this MD&A under the caption "FINANCIAL CONDITION - Interest Rate Sensitivity and Liquidity."
Provision for (Recovery of) Credit Losses
The following table details Peoples’ provision for (recovery of) credit losses:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Provision for (recovery of) other credit losses$1,673 $2,023 $(7,006)
Provision for checking account overdraft credit losses180 278 199 
Provision for (recovery of) credit losses$1,853 $2,301 $(6,807)
As a percentage of average total loans (a)0.16 %0.20 %(0.62)%
(a) Presented on an annualized basis.
The provision for (recovery of) 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 provisions for credit losses in the first quarter of 2023 and the linked quarter were largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for individually analyzed loans.
During the first quarter of 2022, Peoples recorded a recovery of credit losses of $6.8 million due to an improvement in the economic forecast, along with payoffs of several loans during the quarter, which were partially offset by $0.4 million for the establishment of an allowance for credit losses for the non-purchased credit deteriorated leases from the Vantage acquisition.
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.”

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Net (Loss) Gain Included in Total Non-Interest Income
Net (loss) gain includes net losses and net gains on investment securities, asset disposals and other transactions, which are recognized in total non-interest income. The following table details Peoples’ net losses and net gains for the periods presented:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Net (loss) gain on investment securities$(1,935)$(168)$130 
Net loss on asset disposals and other transactions:
Net loss on other assets$(229)$(278)$(22)
Net loss on OREO(10)— (1)
Net loss on other transactions (7)(23)(104)
Net loss on asset disposals and other transactions$(246)$(301)$(127)
The net loss on investment securities in the first quarter of 2023 due to a $2.0 million pre-tax net loss on the sale of the available-for-sale investment securities. During the first quarter of 2023, Peoples executed the sale of $96.7 million of its lower yielding available-for-sale securities which were used to pay down overnight borrowings. The loss on the sale of the securities had a nominal impact on tangible book value as such loss was previously reflected in capital through accumulated other comprehensive loss. The realized losses recognized due to these transactions are projected to be earned back within the 2023 fiscal year.
The net loss on asset disposals and other transactions decreased slightly in the first quarter of 2023 when compared to the linked quarter and increased when compared to the prior year quarter. The net loss for the first quarter of 2023 was primarily due to net losses on furniture and fixture disposals. The net loss for the linked quarter was primarily due to net losses on other assets, which was mainly due to net losses on repossessed assets.
During the first three months of 2022, Peoples sold several investment securities, resulting in a net gain on investment securities, which was offset by a net loss on other transactions primarily driven by an adjustment to the gain on sale of loans recognized in the fourth quarter of 2022, and was driven by changes to the acquisition-date fair value of loans acquired in the merger with Premier that were subsequently sold.
Total Non-Interest Income, Excluding Net Gains and Losses
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 first quarter of 2023, compared to 22% for the linked quarter and 27% for the prior year quarter. The increase in this ratio compared to the linked quarter was due to an increase in insurance income due to seasonal performance-based commissions being earned in the first quarter of each year. The decline in this ratio compared to the prior year quarter was primarily due to higher net interest income associated with a full quarter of income from the acquisition of Vantage coupled with the increases in the market interest rates.
For the first quarter of 2023, electronic banking income comprised the largest portion of Peoples' total non-interest income, excluding net gains and losses. Peoples' electronic banking ("e-banking") services include ATM and debit cards, direct deposit services, internet and mobile banking, and remote deposit capture, and serve as alternative delivery channels to traditional sales offices for providing services to customers. The following table details Peoples' e-banking income:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
E-banking income$5,443 $5,161 $5,253 
Peoples' e-banking income is derived largely from ATM and debit cards, as other services are mainly provided at no charge to customers. The amount of e-banking income is largely dependent on the timing and volume of customer activity. E-banking income increased compared to each of the linked quarter and the prior year quarter primarily due to more customer activity.

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The following table details Peoples' insurance income:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Property and casualty insurance commissions
$3,252 $3,127 $2,862 
Performance-based commissions
1,527 4 1,346 
Life and health insurance commissions
564 511 452 
Other fees and charges
82 90 71 
Insurance income$5,425 $3,732 $4,731 
During the first quarter of 2023, Peoples' insurance income grew 45% when compared to the linked quarter. This increase in insurance income was due to seasonal performance-based commissions being earned, which are annual in nature and typically occur in the first quarter of each year. Compared to the first quarter of 2022, insurance income increased 15% and was driven by higher performance-based property and casualty insurance commissions.
Peoples' fiduciary income and brokerage income 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
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Fiduciary income$1,805 $1,792 $1,965 
Brokerage income1,627 1,485 1,649 
Employee benefit fees652 638 662 
Trust and investment income$4,084 $3,915 $4,276 
Fiduciary income and brokerage income increased slightly in the current quarter relative to the linked quarter, due to an increase in assets under administration and management. When compared to the first quarter of 2022, trust and investment income declined due to less fiduciary income, primarily due to market volatility.
The following table details Peoples' assets under administration and management:
March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
(Dollars in thousands)
Trust$1,803,887 $1,764,639 $1,682,334 $1,731,454 $1,927,828 
Brokerage
1,318,300 1,211,868 1,127,831 1,068,261 1,152,530 
Total
$3,122,187 $2,976,507 $2,810,165 $2,799,715 $3,080,358 
Quarterly average$3,076,285 $2,965,985 $2,844,181 $2,927,405 $3,106,021 
The increases in assets under administration and management at March 31, 2023, compared to at December 31, 2022 and March 31, 2022 were driven by market value fluctuations and a $30 million increase in brokerage assets due to an acquisition of an independent financial advisor in January of 2023.
Deposit account service charges are based on the recovery of costs associated with services provided. The following table details Peoples' deposit account service charges:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Overdraft and non-sufficient funds fees$1,842 $2,170 $1,902 
Account maintenance fees1,461 1,352 1,311 
Other fees and charges220 244 213 
Deposit account service charges$3,523 $3,766 $3,426 
The amount of deposit account service charges, particularly fees for overdrafts and non-sufficient funds, is largely dependent on the timing and volume of customer activity. Management periodically evaluates its cost recovery fees to ensure they are reasonable based on operational costs and similar to fees charged in Peoples' markets by competitors. Deposit account service charges decreased

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for the current quarter compared to the linked quarter due to a decline in overdraft and non-sufficient funds fees. Deposit account service charges increased slightly for the current quarter compared to the prior year quarter due to increased maintenance fee rates.
The following table details the other items included within Peoples' total non-interest income:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Lease income1,077 1,336 775 
Bank owned life insurance income707 702 431 
Mortgage banking income314 281 436 
Other non-interest income668 611 719 
Lease income is primarily comprised of (i) gains on the early termination of leases, (ii) fees received for referrals, (iii) gains and losses recognized on the sales of residual assets and (iv) syndication income. The first quarter of 2023 decrease in lease income when compared to the linked quarter was due to seasonal fluctuations in syndication income, as the fourth quarter of each year typically has a higher volume of originations. The first quarter of 2023 increase in lease income when compared to the first quarter of 2022 was due to a full quarter of income from the Vantage acquisition in 2023 versus only a month of income in 2022.
Bank owned life insurance income for the current quarter was relatively flat compared to the linked quarter and increased when compared to the same 2022 period. The first quarter of 2023 increase in bank owned life insurance income when compared to the first quarter of 2022 was due to an additional $30.0 million of investments in bank owned life insurance policies during the second quarter of 2022.
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 current quarter was relatively flat when compared to the linked quarter. Mortgage banking income declined for the current year quarter compared to the prior year quarter due to the increased market interest rate environment in recent quarters and a lower volume of new loan originations.
In the first quarter of 2023, Peoples sold $0.8 million in loans to the secondary market with servicing retained and $7.4 million in loans with servicing released, compared to $2.5 million and $9.5 million, respectively, in the fourth quarter of 2022, and $7.2 million and $7.9 million, respectively, in the first quarter of 2022.
Non-Interest Expense
Salaries and employee benefit costs remain Peoples' largest non-interest expense, accounting for over one-half of total non-interest expense.  The following table details Peoples' salaries and employee benefit costs:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Base salaries and wages$20,332 $19,747 $17,676 
Employee benefits4,115 3,372 3,621 
Sales-based and incentive compensation3,945 5,284 3,636 
Payroll taxes and other employment costs2,370 1,591 2,091 
Stock-based compensation2,189 832 1,605 
Deferred personnel costs(923)(2,068)(900)
Salaries and employee benefit costs$32,028 $28,758 $27,729 
Full-time equivalent employees:  
Actual at end of period1,286 1,267 1,245 
Average during the period1,283 1,261 1,215 
Base salaries and wages for the current quarter increased compared to linked quarter primarily due to annual merit increases. The current quarter increase compared to the prior year quarter was primarily driven by a rise in annual merit increases as well as a full quarter of expenses related to the additional salaries associated with the acquisition of Vantage.
The increases in employee benefits for the current quarter compared to the linked quarter, was primarily due to annual contributions to employee health savings accounts that occur primarily in the first quarter of each year. The increase in employee

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benefits for the current quarter compared to the first quarter of 2022 was due to higher medical costs reflecting a full quarter of expenses in 2023 for the Vantage employees versus a month of expenses in the first quarter of 2022.
The decrease in sales-based and incentive compensation for the current quarter compared to the linked quarter was primarily due to the overall company performance measures used in calculating retail incentive awards.
Payroll taxes and other employment costs increased compared to the prior quarter and the first quarter of 2022 and were primarily related to higher base salaries and wages. Also impacting the increase in payroll taxes and other employment costs when compared to the linked quarter were seasonal expenses recognized in the first quarter of each year.
Stock-based compensation is generally recognized over the vesting period, which generally ranges from immediate vesting to vesting at the end of three years. An adjustment is made at the vesting date to reverse expense relating to forfeitures for performance awards, and at the date of forfeiture to reverse expense for non-vested restricted awards. Stock grants to retirement eligible grantees are expensed either immediately or over a shorter period than three years. The majority of Peoples' stock-based compensation is attributable to annual equity-based incentive awards to employees, which are awarded in the first quarter of each year and are based upon Peoples achieving certain performance goals during the prior year and are generally contingent on employment through the vesting period. Stock-based compensation for the first three months of 2023 increased when compared to the first three months of 2022 due to additional employees, including the ones added in the acquisition of Vantage.
Deferred personnel costs represent the portion of current period salaries and employee benefit costs considered to be direct loan origination costs.  These costs are capitalized and recognized over the life of the loan as a yield adjustment in interest income.  As a result, the amount of deferred personnel costs for each period corresponds directly with the volume of loan originations, coupled with the average deferred costs per loan that are updated annually at the beginning of each year. The decrease in deferred personnel costs for the current quarter compared to the linked quarter was primarily due to a prior period adjustment of costs to originate leases.
Peoples' net occupancy and equipment expense was comprised of the following:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Depreciation$1,790 $1,700 $1,823 
Repairs and maintenance costs1,261 1,364 1,378 
Property taxes, utilities and other costs1,157 1,014 1,202 
Net rent expense747 769 685 
Net occupancy and equipment expense$4,955 $4,847 $5,088 
The first quarter of 2023 net occupancy and equipment expense increased slightly when compared to the linked quarter due to increases in depreciation and property taxes, utilities and other costs, partially offset by reductions in repairs and maintenance costs and net rent expense. When compared to the first quarter of 2022, net occupancy and equipment expense decreased due to less depreciation, repairs and maintenance costs and property taxes, utilities and other costs due to having less geographic locations as of the first quarter of 2023.
The following table details the other items included in total non-interest expense:
 Three Months Ended
 March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Data processing and software expense$4,562 $5,013 $2,916 
Professional fees2,881 3,310 3,672 
Amortization of other intangible assets1,871 1,998 1,708 
E-banking expense1,491 1,097 2,759 
Franchise tax expense1,034 546 764 
Marketing expense930 737 995 
FDIC insurance premiums801 781 1,194 
Other loan expenses739 947 832 
Communication expense613 611 625 
Other non-interest expense4,574 4,721 3,347 
Data processing and software expense increased when compared to the first quarter of 2022, driven by software upgrades and implementation of new systems, coupled with the increased size of Peoples' organization.

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Professional fees decreased for the current quarter compared to the comparative periods due to less acquisition-related expenses being reported when compared to those periods.
Amortization of other intangible assets for the current quarter decreased when compared to the linked quarter due to decreased amortization of intangible assets recognized as a result of recent acquisitions. Amortization of other intangible assets for the current quarter increased when compared to the first quarter of 2022 due to amortization of intangible assets recognized in the Vantage acquisition.
Peoples' e-banking expense is comprised of costs associated with debit and ATM cards, as well as Internet and mobile banking costs. E-banking expense increased during the current quarter compared to the linked quarter, and is correlated to e-banking income, which also increased from the linked quarter primarily due to more customer activity. E-banking expense decreased for the first quarter of 2023 when compared to the first quarter of 2022 due to a decline in customer activity compared to last year.
Peoples is subject to state franchise taxes, which are based largely on Peoples' equity, in the states where Peoples has a physical presence. Franchise tax expense also includes the Ohio Financial Institution Tax ("FIT"), which is a business privilege tax that is imposed on financial institutions organized for profit and doing business in Ohio. The Ohio FIT is based on the total equity capital in proportion to the taxpayer's gross receipts in Ohio as of the most recent year-end. The increase versus the linked quarter was driven by a refund received in the linked quarter. The increase from the first quarter of 2022 was driven by recent growth through acquisitions and organic means.
Marketing expense increased for the first quarter of 2023 when compared to the linked quarter primarily due to higher media advertising expenses and donations compared to the prior period.
Peoples' FDIC insurance premiums decreased for the current quarter compared to the first quarter of 2022 due to an adjustment in the first quarter of 2022 relating to prior acquisitions.
Other loan expenses during the first three months of 2023 decreased when compared to the linked quarter primarily due to lower indirect lending volume and decreased collection expense.
Other non-interest expense increased during the current quarter when compared to the first quarter of 2022 due to an increase in acquisition-related expenses related to the Limestone Merger.
Income Tax Expense
Peoples recorded income tax expense of $7.0 million with an effective tax rate of 21.0% for the first quarter of 2023, compared to income tax expense of $7.1 million with an effective tax rate of 21.0% for the linked quarter and income tax expense of $6.0 million with an effective tax rate of 20.2% for the first quarter of 2022. Income tax expense for the first quarter of 2023, compared to the linked quarter, was relatively flat due to similar income before income taxes. The increase in income tax expense for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, was driven by a higher income before income taxes.
Additional information regarding income taxes can be found in "Note 13. Income Taxes" of the Notes to the Consolidated Financial Statements included in Peoples' 2022 Form 10-K.
Pre-Provision Net Revenue (Non-US GAAP)
Pre-provision net revenue ("PPNR") has become a key financial measure used by state and federal bank regulatory agencies when assessing the capital adequacy of financial institutions. PPNR is defined as net interest income plus total non-interest income, excluding all gains and losses, minus total non-interest expense. As a result, PPNR represents the earnings capacity that can be either retained in order to build capital or used to absorb unexpected losses and preserve existing capital. This ratio represents a Non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in earnings.

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The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented:    
Three Months Ended
March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Pre-provision net revenue:
Income before income taxes$33,606 $33,980 $29,538 
Add: provision for credit losses 1,853 2,301 — 
Add: loss on OREO10 — 1 
Add: loss on investment securities 1,935 168 — 
Add: loss on other assets229 278 22 
Add: loss on other transactions7 23 104 
Less: recovery of credit losses— — 6,807 
Less: gain on investment securities— — 130 
Pre-provision net revenue$37,640 $36,750 $22,728 
Total average assets$7,222,464$7,067,193$7,067,816
Pre-provision net revenue to total average assets (annualized)2.11 %2.06 %1.30 %
Weighted-average common shares outstanding - diluted28,021,87927,981,65628,129,131
Pre-provision net revenue per common share - diluted$1.34 $1.31 $0.81 
The increase in the PPNR for the first quarter of 2023 compared to the first quarter of 2022 was driven by increased net interest income reflecting the positive impact of recent increases in market interest rates as well as a provision for credit losses in the first quarter of 2023 compared to the recovery of credit losses in the first quarter of 2022.
Core Non-Interest Expense (Non-US GAAP)
Core non-interest expense is a financial measure used to evaluate Peoples' recurring expense stream. This measure is Non-US GAAP since it excludes the impact of all acquisition-related expenses, pension settlement charges and COVID-19-related expenses.
The following table provides a reconciliation of this Non-US GAAP measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented:
Three Months Ended
March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Core non-interest expense:
Total non-interest expense$56,479 $53,366 $51,629 
Less: acquisition-related expenses551 702 1,373 
Less: pension settlement charges— 46 — 
Less: COVID-19-related expenses— 2 94 
Core non-interest expense$55,928 $52,616 $50,162 
Efficiency Ratio (Non-US GAAP)
The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income excluding net gains and losses. This measure is Non-US GAAP since it excludes amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.

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The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented:
Three Months Ended
March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Efficiency ratio:
Total non-interest expense$56,479 $53,366 $51,629 
Less: amortization of other intangible assets1,871 1,998 1,708 
Adjusted total non-interest expense54,608 51,368 49,921 
Total non-interest income19,060 19,034 20,050 
Less: net (loss) gain on investment securities(1,935)(168)130 
Less: net loss on asset disposals and other transactions(246)(302)(127)
Total non-interest income excluding net gains and losses21,241 19,504 20,047 
Net interest income72,878 70,613 54,310 
Add: fully tax-equivalent adjustment (a)399 412 391 
Net interest income on a fully tax-equivalent basis73,277 71,025 54,701 
Adjusted revenue$94,518 $90,529 $74,748 
Efficiency ratio57.78 %56.74 %66.79 %
Efficiency ratio adjusted for non-core items:
Core non-interest expense$55,928 $52,616 $50,162 
Less: amortization of other intangible assets1,871 1,998 1,708 
Adjusted core non-interest expense54,057 50,618 48,454 
Non-interest income excluding net gains and losses21,241 19,504 20,047 
Net interest income on a fully tax-equivalent basis73,277 71,025 54,701 
Adjusted revenue$94,518 $90,529 $74,748 
Efficiency ratio adjusted for non-core items57.19 %55.91 %64.82 %
(a) Tax effect is calculated using a 23.3% blended corporate income tax rate for each of the three months ended March 31, 2023 and December 31, 2022, and a 22.9% blended corporate income tax rate for the three months ended March 31, 2022.
The efficiency ratio and the efficiency ratio adjusted for non-core items for the first quarter of 2023 increased when compared to the linked quarter, primarily due to the increases in non-interest expenses due to seasonal first quarter expenses partially offset by higher net interest income driven by increases in the market interest rates. The improvements in the efficiency ratio and the efficiency ratio adjusted for non-core items compared to the prior year quarter were driven by higher net interest income due to increases in market interest rates over the last twelve months.
Return on Average Assets Adjusted for Non-Core Items Ratio (Non-US GAAP)
In addition to return on average assets, management uses return on average assets adjusted for non-core items to monitor performance. The return on average assets adjusted for non-core items ratio represents a Non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses, acquisition-related expenses, pension settlement charges and COVID-19-related expenses.

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The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented:
Three Months Ended
March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Annualized net income adjusted for non-core items:
Net income
$26,560 $26,849 $23,577 
Add: net loss on investment securities
1,935 168 — 
Less: tax effect of net loss on investment securities (a)
406 35 — 
Less: net gain on investment securities
— — 130 
Add: tax effect of net gain on investment securities (a)
— — 27 
Add: net loss on asset disposals and other transactions
246 302 127 
Less: tax effect of net loss on asset disposals and other transactions (a)
52 63 27 
Add: acquisition-related expenses
551 702 1,373 
Less: tax effect of acquisition-related expenses (a)
116 147 288 
Add: pension settlement charges
— 46 — 
Less: tax effect of pension settlement charges (a)
— 10 — 
Add: COVID-19-related expenses— 2 94 
Less: tax effect of COVID-19-related expenses (a)— — 20 
Net income adjusted for non-core items (after tax)
$28,718 27,814 24,733 
Days in the period90 92 90 
Days in the year365 365 365 
Annualized net income
$107,716 $106,520 $95,618 
Annualized net income adjusted for non-core items (after tax)
$116,467 $110,349 $100,306 
Return on average assets:
Annualized net income
$107,716 $106,520 $95,618 
Total average assets7,222,464 7,067,193 7,067,816 
Return on average assets
1.49 %1.51 %1.35 %
Return on average assets adjusted for non-core items:
Annualized net income adjusted for non-core items (after tax)
$116,467 $110,349 $100,306 
Total average assets
7,222,464 7,067,193 7,067,816 
Return on average assets adjusted for non-core items (after tax)
1.61 %1.56 %1.42 %
(a) Based on a 21% statutory federal corporate income tax rate.
The return on average assets for the current quarter decreased slightly when compared to the linked quarter, due to an increase in average assets. The increase in the return on average assets for the first quarter of 2023, compared to the first quarter of 2022, was attributable to higher net interest income and non-interest income, which were driven by the increases in market interest rates.
Return on Average Tangible Equity Ratio (Non-US GAAP)
The return on average tangible equity ratio is a key financial measure used to monitor performance. This ratio is calculated as annualized net income (less the after-tax impact of amortization of other intangible assets) divided by average tangible equity. This

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measure is Non-US GAAP since it excludes amortization of other intangible assets from earnings and the impact of goodwill and other intangible assets acquired through acquisitions on total stockholders' equity.
Three Months Ended
March 31,
2023		December 31,
2022		March 31,
2022
(Dollars in thousands)
Annualized net income excluding amortization of other intangible assets:
Net income
$26,560 $26,849 $23,577 
Add: amortization of other intangible assets
1,871 1,998 1,708 
Less: tax effect of amortization of other intangible assets (a)
393 420 359 
Net income excluding amortization of other intangible assets
$28,038 $28,427 $24,926 
Days in the period
90 92 90 
Days in the year
365 365 365 
Annualized net income
$107,716 $106,520 $95,618 
Annualized net income excluding amortization of other intangible assets
$113,710 $112,781 $101,089 
Average tangible equity:
Total average stockholders' equity
$801,465 $768,650 $834,752 
Less: average goodwill and other intangible assets
325,545 327,377 304,124 
Average tangible equity
$475,920 $441,273 $530,628 
Return on total average stockholders' equity ratio:
Annualized net income
$107,716 $106,520 $95,618 
Total average stockholders' equity
$801,465 $768,650 $834,752 
Return on total average stockholders' equity
13.44 %13.86 %11.45 %
Return on average tangible equity ratio:
Annualized net income excluding amortization of other intangible assets
$113,710 $112,781 $101,089 
Average tangible equity
$475,920 $441,273 $530,628 
Return on average tangible equity
23.89 %25.56 %19.05 %
(a) Based on a 21% statutory federal corporate income tax rate.
The return on total average stockholders' equity and average tangible equity ratios were lower in the current quarter relative to the linked quarter, due to issuance of treasury stock for employee stock awards in the first quarter as well as decreases in accumulated other comprehensive losses on available-for-sale investment securities, partially offset by an increase in total net interest income driven by the recent increases in market interest rates. The return on total average stockholders' equity and average tangible equity ratios were higher in the current quarter when compared to the same 2022 period due to greater accumulated other comprehensive losses on available-for-sale investment securities in 2023, which reduced average tangible equity.

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FINANCIAL CONDITION
Cash and Cash Equivalents
At March 31, 2023, Peoples' interest-bearing deposits in other banks had increased $0.7 million from December 31, 2022. The total cash and cash equivalents balance included $53.7 million of excess cash reserves being maintained at the FRB of Cleveland at March 31, 2023, compared to $33.1 million at December 31, 2022. The amount of excess cash reserves maintained is dependent upon Peoples' daily liquidity position, which is driven primarily by changes in deposit and loan balances.
Through the first three months of 2023, Peoples' total cash and cash equivalents increased $3.1 million as Peoples had $48.0 million of cash provided by operating activities and $45.1 million of cash provided by financing activities, substantially offset by $90.0 million of cash used in investing activities. Peoples' cash used in investing activities reflected net cash outflows from held-to-maturity investment securities of $133.8 million and cash outflows from a $52.4 million net increase in loans held for investment, partially offset by net cash inflows from available-for-sale investment securities of $100.4 million. The cash provided by financing activities was largely driven by a $106.0 million net increase in interest-bearing deposits, partially offset by net cash outflows of $34.3 million, $11.0 million and $9.5 million from a net decrease in non-interest-bearing deposits, cash dividends paid, and payments on long-term borrowings, respectively. Peoples paid $82.9 million in cash for the Vantage acquisition during the first quarter of 2022.
Further information regarding the management of Peoples' liquidity position can be found later in this discussion under “Interest Rate Sensitivity and Liquidity.”
Investment Securities
The following table provides information regarding Peoples’ investment portfolio:
(Dollars in thousands)Weighted Average YieldMarch 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Available-for-sale securities, at fair value:    
Obligations of:     
U.S. Treasury and government agencies
1.54 %$58,438 $152,422 $172,055 $175,255 $167,406 
U.S. government sponsored agencies2.10 %98,311 88,115 80,915 82,465 80,654 
States and political subdivisions2.19 %224,996 225,882 230,022 249,402 231,644 
Residential mortgage-backed securities1.83 %605,270 604,653 624,061 691,735 753,353 
Commercial mortgage-backed securities1.58 %52,153 50,049 52,504 58,301 58,112 
Bank-issued trust preferred securities5.38 %10,329 10,278 10,287 10,440 10,670 
Total fair value$1,049,497 $1,131,399 $1,169,844 $1,267,598 $1,301,839 
Total amortized cost$1,196,521 $1,300,719 $1,349,800 $1,389,621 $1,381,259 
Net unrealized loss$(147,024)$(169,320)$(179,956)$(122,023)$(79,420)
Held-to-maturity securities, at amortized cost:
Obligations of:
U.S. government sponsored agencies4.61 %$194,184 $132,366 $59,871 $50,990 $38,486 
States and political subdivisions (a)2.23 %144,844 $145,022 145,252 151,034 151,217 
Residential mortgage-backed securities3.83 %245,294 176,215 111,707 112,095 115,613 
Commercial mortgage-backed securities2.49 %109,750 106,609 90,971 86,601 79,340 
Total amortized cost$694,072 $560,212 $407,801 $400,720 $384,656 
Other investment securities$52,763 $51,609 $39,039 $41,655 $41,840 
Total investment securities:
Amortized cost$1,943,356 $1,912,540 $1,796,640 $1,831,996 $1,807,755 
Carrying value$1,796,332 $1,743,220 $1,616,684 $1,709,973 $1,728,335 
(a)Amortized cost is presented net of the allowance for credit losses of $241 at March 31, 2023, $241 at December 31, 2022 and $286 at March 31, 2022.
For the first quarter of 2023, total investment securities increased compared to the prior quarter, largely due to investments made in held-to-maturity residential mortgage-backed securities and obligations of U.S. government sponsored agencies, in an effort to improve investment yields and reduce risk, partially offset by the reduction in available-for-sale securities. During the first quarter of 2023, Peoples executed the sale of $96.7 million of its lower yielding available-for-sale securities for an after-tax loss of $1.6 million. Proceeds from the sale were used to pay down overnight borrowings. The realized losses recognized due to these transactions are projected to be earned back within the 2023 fiscal year.

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Additional information regarding Peoples' investment portfolio can be found in "Note 3 Investment Securities" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
Loans
The following table provides information regarding outstanding loan balances:
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Originated loans:
     
Construction
$222,915 $212,869 $175,388 $144,062 $171,934 
Commercial real estate, other
995,176 919,531 891,576 899,774 854,721 
     Commercial real estate
1,218,091 1,132,400 1,066,964 1,043,836 1,026,655 
Commercial and industrial
840,194 835,178 814,593 777,050 791,307 
Premium finance158,263 159,197 167,682 152,237 145,813 
Leases251,711 226,438 178,083 149,894 97,168 
Residential real estate
386,964 384,262 381,104 373,010 364,989 
Home equity lines of credit
132,531 132,093 124,524 115,935 107,414 
Consumer, indirect
647,177 629,426 592,309 563,088 524,778 
Consumer, direct
99,299 98,706 99,282 95,371 87,994 
    Consumer
746,476 728,132 691,591 658,459 612,772 
Deposit account overdrafts
749 722 597 851 699 
Total originated loans
$3,734,979 $3,598,422 $3,425,138 $3,271,272 $3,146,817 
Acquired loans (a):
Construction
$9,381 $34,072 $40,233 $58,526 $66,371 
Commercial real estate, other
485,886 503,987 531,903 560,249 602,511 
     Commercial real estate
495,267 538,059 572,136 618,775 668,882 
Commercial and industrial
50,945 57,456 62,879 81,402 95,844 
Premium finance— — — — — 
Leases102,930 118,693 134,764 164,628 169,900 
Residential real estate
325,638 339,098 352,257 369,995 391,440 
Home equity lines of credit
41,852 45,765 50,001 53,400 54,874 
Consumer, indirect
— — — — — 
Consumer, direct
8,107 9,657 14,032 16,433 19,396 
    Consumer
8,107 9,657 14,032 16,433 19,396 
Total acquired loans
$1,024,739 $1,108,728 $1,186,069 $1,304,633 $1,400,336 
Total loans
$4,759,718 $4,707,150 $4,611,207 $4,575,905 $4,547,153 
Percent of loans to total loans:
 
Construction
4.9 %5.2 %4.7 %4.4 %5.2 %
Commercial real estate, other
31.1 %30.2 %30.9 %32.0 %32.1 %
     Commercial real estate
36.0 %35.4 %35.6 %36.4 %37.3 %
Commercial and industrial
18.7 %19.0 %19.0 %18.8 %19.5 %
Premium finance3.3 %3.4 %3.6 %3.3 %3.2 %
Leases7.4 %7.3 %6.8 %6.9 %5.9 %
Residential real estate
15.0 %15.4 %15.9 %16.2 %16.6 %
Home equity lines of credit
3.7 %3.8 %3.8 %3.7 %3.6 %
Consumer, indirect
13.6 %13.4 %12.8 %12.3 %11.5 %
Consumer, direct
2.3 %2.3 %2.5 %2.4 %2.4 %
    Consumer
15.9 %15.7 %15.3 %14.7 %13.9 %
Total percentage
100.0 %100.0 %100.0 %100.0 %100.0 %
Residential real estate loans being serviced for others
$384,005 $392,364 $400,736 $410,007 $420,024 
(a)    Includes all loans acquired, and related loan discount recorded as part of acquisition accounting, in 2012 or thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals and increases in lines of credit).
Period-end total loan balances at March 31, 2023 increased $52.6 million, or 4% annualized, compared to at December 31, 2022. The increase in the period-end loan and lease balances was primarily driven by increases of (i) $57.5 million in other commercial real estate loans, (ii) $17.8 million in indirect consumer loans and (iii) $9.5 million in leases, partially offset by a reductions of $14.6 million in construction loans and $10.8 million in residential real estate loans. The increase of $212.6 million in the period-end loan

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and lease balances when compared to March 31, 2022 was primarily driven by increases of $122.4 million in indirect consumer loans and $87.6 million in leases, partially offset by a reduction of $43.8 million in residential real estate loans. The increases in the period-end loan and lease balances when compared to the prior periods was due to growth. The reduction in the period-end residential real estate loans balance when compared to all comparative prior periods was due to a lower inventory of homes for sale.
Loan Concentration
Peoples categorizes its commercial loans according to standard industry classifications and monitors for concentrations in a single industry or multiple industries that could be impacted by changes in economic conditions in a similar manner. Peoples' commercial lending activities continue to be spread over a diverse range of businesses from all sectors of the economy, with no single industry comprising over 10% of Peoples' total loan portfolio.
Loans secured by commercial real estate, including commercial construction loans, continued to comprise the largest portion of Peoples' loan portfolio. The following tables provide information regarding the largest concentrations of commercial construction loans and commercial real estate loans within the loan portfolio at March 31, 2023:
(Dollars in thousands)Outstanding BalanceLoan CommitmentsTotal Exposure% of Total
Construction:    
Apartment complexes$120,995 $179,179 $300,174 64.1 %
Mixed-use facilities19,478 4,787 24,265 5.2 %
Assisted living facilities and nursing homes16,385 5,226 21,611 4.6 %
Land only21,690 8,081 29,771 6.4 %
Office buildings and complexes12,301 4,158 16,459 3.5 %
Industrial6,734 4,047 10,781 2.3 %
Other (a)34,713 30,391 65,104 13.9 %
Total construction$232,296 $235,869 $468,165 100.0 %
(a) All other total exposures by industry are less than 2% of the Total Exposure.

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(Dollars in thousands)Outstanding BalanceLoan CommitmentsTotal Exposure% of Total
Commercial real estate, other:    
Office buildings and complexes:  
Owner occupied$61,296 $1,943 $63,239 4.0 %
Non-owner occupied90,954 3,846 94,800 6.1 %
Total office buildings and complexes152,250 5,789 158,039 10.1 %
Retail facilities:
Owner occupied39,551 1,480 41,031 2.6 %
Non-owner occupied144,979 4,008 148,987 9.5 %
Total retail facilities184,530 5,488 190,018 12.1 %
Mixed-use facilities:
Owner occupied44,518 550 45,068 2.9 %
Non-owner occupied60,932 1,323 62,255 4.0 %
Total mixed-use facilities105,450 1,873 107,323 6.9 %
Apartment complexes112,419 37,757 150,176 9.6 %
Light industrial facilities: 
Owner occupied92,338 2,726 95,064 6.1 %
Non-owner occupied47,983 3,055 51,038 3.2 %
Total light industrial facilities140,321 5,781 146,102 9.3 %
Assisted living facilities and nursing homes62,701 5,151 67,852 4.3 %
Warehouse facilities:
Owner occupied36,307 1,285 37,592 2.3 %
Non-owner occupied27,590 241 27,831 1.8 %
Total warehouse facilities63,897 1,526 65,423 4.1 %
Lodging and lodging related:
Owner occupied28,859 661 29,520 1.9 %
Non-owner occupied79,821 1 79,822 5.1 %
Total lodging and lodging related108,680 662 109,342 7.0 %
Education services:
Owner occupied18,148 — 18,148 1.2 %
Non-owner occupied31,734 5,523 37,257 2.4 %
Total education services49,882 5,523 55,405 3.6 %
Healthcare facilities:
Owner occupied21,855 300 22,155 1.4 %
Non-owner occupied9,518 — 9,518 0.6 %
Total healthcare facilities31,373 300 31,673 2.0 %
Restaurant/bar facilities:
Owner occupied28,715 9 28,724 1.8 %
Non-owner occupied10,464 248 10,712 0.7 %
Total restaurant/bar facilities39,179 257 39,436 2.5 %
Land only
Owner occupied6,143 339 6,482 0.4 %
Non-owner occupied32,257 — 32,257 2.1 %
Total land only38,400 339 38,739 2.5 %
Other (a)430,380 15,645 446,025 28.5 %
Total commercial real estate, other$1,481,062 $85,752 $1,566,814 100.0 %
(a) All other total exposures by industry are less than 2% of the Total Exposure.
Peoples' commercial lending activities continue to focus on lending opportunities within Ohio, Kentucky, West Virginia, Virginia, Washington, D.C. and Maryland. In all other states, the aggregate outstanding balances of commercial loans in each state were less than 4% of total loans at both March 31, 2023 and December 31, 2022. The repayment of premium finance loans is secured by the underlying insurance policy prepaid premium, and therefore, has no geographical impact from a repayment perspective. The repayment of leases is secured by the underlying equipment collateral and not real estate, which mitigates geographic risk.

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Small Business Administration Paycheck Protection Program ("PPP")
In March 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act created the PPP targeted to provide small businesses with support to cover payroll and certain other specified expenses. Loans made under the PPP are fully guaranteed by the SBA. The PPP loans also afford borrowers forgiveness up to the principal amount of the PPP covered loan, plus accrued interest, if the loan proceeds are used to retain workers and maintain payroll and/or to make certain mortgage interest, lease and utility payments, and certain other criteria are satisfied. The SBA will reimburse PPP lenders for any amount of a PPP covered loan that is forgiven, and PPP lenders will not be held liable for any representations made by PPP borrowers in connection with their requests for loan forgiveness.
Peoples is a PPP participating lender, and the PPP loans originated are included in commercial and industrial loans. Peoples also recorded deferred loan origination fees related to the PPP loans, net of deferred loan origination costs, which will be amortized over the life of the respective loans, or until forgiven by the SBA, and will be recognized in net interest income. The following table details Peoples' PPP loan balances and related income:
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
PPP aggregate outstanding principal balances$2,184 $2,458 $3,789 $15,582 $42,871 
PPP net deferred loan origination fees25 27 61 421 995 
Accretion of net deferred loan origination fees2 34 360 574 1,215 
Allowance for Credit Losses
The amount of the allowance for credit losses at the end of each period represents management's estimate of expected losses from existing loans based upon its quarterly analysis of the loan portfolio. While this process involves allocations being made to specific loans and pools of loans, the entire allowance is available for all losses expected within the loan portfolio.
The following details management's allocation of the allowance for credit losses:
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Construction$1,273 $1,250 $1,464 $1,531 $2,731 
Commercial real estate, other16,474 17,710 17,695 18,708 21,055 
Commercial and industrial8,307 8,229 8,611 8,572 10,114 
Premium finance433 344 553 311 345 
Leases9,109 8,495 7,890 7,585 5,875 
Residential real estate6,504 6,357 6,464 6,332 6,495 
Home equity lines of credit1,717 1,693 1,644 1,699 1,894 
Consumer, indirect7,781 7,448 6,912 6,234 5,172 
Consumer, direct1,619 1,575 1,592 1,321 1,036 
Deposit account overdrafts86 61 41 53 51 
Allowance for credit losses$53,303 $53,162 $52,866 $52,346 $54,768 
As a percent of total loans1.12 %1.13 %1.15 %1.14 %1.20 %
The reduction in the allowance for credit losses at March 31, 2023 compared to March 31, 2022 was driven by decreases in the allowances for individually analyzed loans, offset by loan growth and deterioration in the economic forecast.
Additional information regarding Peoples' allowance for credit losses can be found in "Note 1 Summary of Significant Accounting Policies" in Peoples' 2022 Form 10-K and "Note 4 Loans and Leases" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
The following table summarizes Peoples’ net charge-offs and recoveries:
Three Months Ended
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Gross charge-offs:  
Construction$9 $16 $— $— $— 
Commercial real estate, other$33 132 57 22 278 
Commercial and industrial1 24 36 420 463 
Premium finance23 42 38 30 14 

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Three Months Ended
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Leases469 888 731 493 473 
Residential real estate41 144 168 47 309 
Home equity lines of credit19 42 5 25 16 
Consumer, indirect929 799 600 449 385 
Consumer, direct104 86 81 60 136 
    Consumer1,033 885 681 509 521 
Deposit account overdrafts227 308 274 405 259 
Total gross charge-offs$1,855 $2,481 $1,990 $1,951 $2,333 
Recoveries: 
Commercial real estate, other$27 33 $39 $176 $49 
Commercial and industrial— 40 3 2 4 
Premium finance9 4 1 8 — 
Leases80 81 99 64 176 
Residential real estate29 20 36 14 14 
Home equity lines of credit— 16 — — 29 
Consumer, indirect79 88 71 83 86 
Consumer, direct15 16 9 11 11 
    Consumer94 104 80 94 97 
Deposit account overdrafts72 50 44 52 54 
Total recoveries$311 $348 $302 $410 $423 
Net charge-offs (recoveries): 
Construction$9 $16 $— $— $— 
Commercial real estate, other6 99 18 (154)229 
Commercial and industrial1 (16)33 418 459 
Premium finance14 38 37 22 14 
Leases389 807 632 429 297 
Residential real estate12 124 132 33 295 
Home equity lines of credit19 26 5 25 (13)
Consumer, indirect850 711 529 366 299 
Consumer, direct89 70 72 49 125 
    Consumer939 781 601 415 424 
Deposit account overdrafts155 258 230 353 205 
Total net charge-offs $1,544 $2,133 $1,688 $1,541 $1,910 
Ratio of net charge-offs to average total loans (annualized):
Construction— %— %— %— %— %
Commercial real estate, other— %0.01 %— %(0.01)%0.02 %
Commercial and industrial— %— %— %0.04 %0.03 %
Premium finance— %— %— %— %— %
Leases0.04 %0.07 %0.06 %0.04 %0.03 %
Residential real estate— %0.01 %0.01 %— %0.03 %
Home equity lines of credit— %— %— %— %— %
Consumer, indirect0.07 %0.06 %0.05 %0.03 %0.03 %
Consumer, direct0.01 %0.01 %0.01 %0.01 %0.01 %
    Consumer0.08 %0.07 %0.06 %0.04 %0.04 %
Deposit account overdrafts0.01 %0.02 %0.02 %0.03 %0.02 %
Total0.13 %0.18 %0.15 %0.14 %0.17 %
Each with "--%" not meaningful.
Net charge-offs during the first quarter of 2023 were 0.13% of average total loans on an annualized basis. The decrease for the current quarter when compared to the linked quarter was driven by a decrease in charge-offs on leases, residential real estate loans and deposit account overdrafts, partially offset by an increase in charge-offs on indirect consumer loans. The decrease in net charge-offs during the current quarter versus the prior year quarter was primarily attributable to decreases in net charge-offs in (i) commercial and

62
industrial loans, (ii) residential real estate loans, and (iii) other commercial real estate loans, partially offset by an increase in net charge-offs in indirect consumer loans.
The following table details Peoples’ nonperforming assets: 
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Loans 90+ days past due and accruing:     
Commercial real estate, other150 167 1,472 330 603 
Commercial and industrial228 130 266 89 53 
Premium finance764 504 308 304 613 
Leases2,491 3,041 4,654 5,722 3,921 
Residential real estate238 917 1,499 1,687 677 
Home equity lines of credit127 58 23 89 75 
Consumer, indirect13 — 195 15 17 
Consumer, direct3 25 7 — — 
   Consumer16 25 202 15 17 
Total loans 90+ days past due and accruing$4,014 $4,842 $8,424 $8,236 $5,959 
Nonaccrual loans: 
Construction$1 $12 $2 $5 $6 
Commercial real estate, other11,345 12,121 11,916 14,253 14,942 
Commercial and industrial3,064 3,462 2,385 1,849 3,393 
Leases3,884 3,178 2,094 1,573 1,731 
Residential real estate8,641 9,496 8,728 9,194 9,135 
Home equity lines of credit793 820 921 890 937 
Consumer, indirect2,147 2,176 1,627 1,558 1,628 
Consumer, direct105 208 158 166 231 
   Consumer2,252 2,384 1,785 1,724 1,859 
Total nonaccrual loans$29,980 $31,473 $27,831 $29,488 $32,003 
Total nonperforming loans ("NPLs")$33,994 $36,315 $36,255 $37,724 $37,962 
OREO: 
Commercial$8,730 $8,730 $8,730 $9,065 $9,106 
Residential48 165 110 145 301 
Total OREO$8,778 $8,895 $8,840 $9,210 $9,407 
Total nonperforming assets ("NPAs")$42,772 $45,210 $45,095 $46,934 $47,369 
Criticized loans (a)$198,812 $191,355 $164,775 $181,395 $190,315 
Classified loans (b)93,168 89,604 94,848 115,483 109,530 
Asset Quality Ratios (c):
Nonaccrual loans as a percent of total loans (d)0.63 %0.67 %0.60 %0.64 %0.70 %
NPLs as a percent of total loans (d)0.71 %0.77 %0.79 %0.82 %0.83 %
NPAs as a percent of total assets (d)0.58 %0.63 %0.64 %0.64 %0.65 %
NPAs as a percent of total loans and OREO (d)0.90 %0.96 %0.98 %1.02 %1.04 %
Allowance for credit losses as a percent of nonaccrual loans177.80 %168.91 %189.95 %177.52 %171.13 %
Allowance for credit losses as a percent of NPLs (d)156.80 %146.39 %145.82 %138.76 %144.27 %
Criticized loans as a percent of total loans (a)4.18 %4.07 %3.57 %3.96 %4.19 %
Classified loans as a percent of total loans (b)1.96 %1.90 %2.06 %2.52 %2.41 %
(a)    Includes loans categorized as special mention, substandard or doubtful.
(b)    Includes loans categorized as substandard or doubtful.
(c)    Data presented as of the end of the period indicated.

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(d)    NPLs include loans 90+ days past due and accruing and nonaccrual loans. NPLs in periods prior to March 31, 2023 also include TDRs. NPAs include nonperforming loans and OREO.
Compared to December 31, 2022, Peoples' NPAs decreased from 0.63% to 0.58% of total assets. Loans 90+ days past due and accruing decreased compared to at December 31, 2022, mostly due to declines in residential real estate loans and leases that were 90+ days past due, partially offset by an increase in premium finance loans that that were 90+ days past due. During the first quarter of 2023, criticized loans increased $7.5 million, while classified loans increased $3.6 million when compared to at December 31, 2022. The increase in the amount of criticized loans compared to at December 31, 2022 was primarily related to downgrades of three commercial and industrial relationships. The increase in classified loans compared to the linked quarter was driven by the downgrade of one commercial and industrial relationship.
Deposits
The following table details Peoples’ deposit balances:
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Non-interest-bearing deposits (a)$1,555,064 $1,589,402 $1,635,953 $1,661,865 $1,666,668 
Interest-bearing deposits: 
Interest-bearing demand accounts (a)1,085,169 1,160,182 1,162,012 1,143,010 1,179,199 
Savings accounts1,024,638 1,068,547 1,077,383 1,080,053 1,065,678 
Retail certificates of deposit ("CDs") 622,091 530,236 544,741 584,259 612,936 
Money market deposit accounts579,106 617,029 624,708 645,242 656,266 
Governmental deposit accounts649,303 625,965 734,734 728,057 734,784 
Brokered CDs273,156 125,580 86,089 86,739 87,395 
Total interest-bearing deposits4,233,463 4,127,539 4,229,667 4,267,360 4,336,258 
  Total deposits$5,788,527 $5,716,941 $5,865,620 $5,929,225 $6,002,926 
Demand deposits as a percent of total deposits46 %48 %48 %47 %47 %
(a)The sum of amounts presented is considered total demand deposits.
At March 31, 2023, period-end deposits increased $71.6 million, or 1%, compared to at December 31, 2022. The increase when compared to at December 31, 2022 was primarily driven by an increase of $147.6 million in brokered certificates of deposits, which are primarily used as a source of funding. Excluding the increase in brokered certificates of deposits, total deposits at March 31, 2023 decreased $76.0 million, or 1%, when compared to at December 31, 2022 due to reductions of (i) $75.0 million in interest-bearing deposit accounts, (ii) $43.9 million in savings accounts, (iii) $37.9 million in money market deposit accounts, and (iv) $34.3 million in non-interest bearing deposit accounts, partially offset by an increase of $91.9 million in retail certificates of deposit.
Period-end deposit balances decreased $214.4 million, or 4%, compared to at March 31, 2022. Deposits decreased primarily due to reductions in non-interest-bearing deposits, interest-bearing deposit accounts, governmental deposit accounts, and money market deposit accounts of $111.6 million, $94.0 million, $85.5 million and $77.2 million, respectively, partially offset by an increase of $185.8 million in brokered certificates of deposits.
As part of its funding strategy, Peoples hedges 90-day brokered CDs with interest rate swaps. The swaps pay a fixed rate of interest while receiving three-month LIBOR, which offsets the rate on the brokered CDs. As of March 31, 2023, Peoples had thirteen effective interest rate swaps, with an aggregate notional value of $125.0 million, which were designated as cash flow hedges of overnight brokered CDs and are expected to be extended every 90 days through the maturity dates of the swaps. Peoples continually evaluates the overall balance sheet position given the interest rate environment.

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Borrowed Funds
The following table details Peoples’ short-term and long-term borrowings:
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Short-term borrowings:
     
Overnight borrowings
$390,000 $400,000 $(5,000)$— $— 
FHLB 90-day advances
— — 40,000 40,000 40,000 
Current portion of long-term FHLB advances
— — — — 15,000 
Retail repurchase agreements
100,670 100,138 98,611 286,442 89,275 
Total short-term borrowings
$490,670 $500,138 $133,611 $326,442 $144,275 
Long-term borrowings:
 
FHLB advances
$33,941 $34,158 $34,662 $35,348 $85,564 
Vantage non-recourse debt
47,864 53,147 55,781 74,622 102,364 
Junior subordinated debt securities
13,824 13,788 13,753 13,717 13,682 
Total long-term borrowings
$95,629 $101,093 $104,196 $123,687 $201,610 
Total borrowed funds
$586,299 $601,231 $237,807 $450,129 $345,885 
Borrowed funds, in total, which include overnight borrowings, are mainly a function of loan growth and changes in total deposit balances. Total borrowed funds decreased compared to at December 31, 2022, due to lower overnight borrowings. Total short-term borrowings at March 31, 2023 increased when compared to at March 31, 2022 due to outstanding FHLB overnight borrowings of $390.0 million at March 31, 2023, while there were no FHLB overnight borrowings at March 31, 2022.
Capital/Stockholders’ Equity
At March 31, 2023, capital levels for both Peoples and Peoples Bank remained substantially higher than the minimum amounts needed to be considered "well capitalized" institutions under applicable banking regulations. These higher capital levels reflect Peoples' desire to maintain a strong capital position. In order to avoid limitations on dividends, equity repurchases and compensation, Peoples must exceed the three minimum required ratios by at least the capital conservation buffer of 2.50%, which applies to the common equity tier 1 ("CET1") ratio, the tier 1 capital ratio and the total risk-based capital ratio. At March 31, 2023, Peoples had a capital conservation buffer of 5.35%.
The following table details Peoples' risk-based capital levels and corresponding ratios:
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Capital Amounts:     
Common Equity Tier 1$624,292 $604,566 $584,880 $564,708 $547,215 
Tier 1638,116 618,354 598,633 578,425 560,897 
Total (Tier 1 and Tier 2)682,477 662,421 643,189 622,516 607,493 
Net risk-weighted assets$5,110.318 $5,071,240 $4,955,627 $4,857,818 $4,752,428 
Capital Ratios:
Common Equity Tier 112.22 %11.92 %11.80 %11.62 %11.51 %
Tier 112.49 %12.19 %12.08 %11.91 %11.80 %
Total (Tier 1 and Tier 2)13.35 %13.06 %12.98 %12.81 %12.78 %
Tier 1 leverage ratio9.02 %8.92 %8.64 %8.38 %8.29 %
Peoples' regulatory capital and related ratio levels improved during the first quarter of 2023 when compared to at December 31, 2022 and at March 31, 2022 due to net income during the first quarter of 2023, partially offset by dividends paid. The ratios were negatively impacted at March 31, 2022 by the cash acquisition of Vantage, in connection with which Peoples recorded goodwill and intangible assets. The impact of the Vantage acquisition on Peoples' regularity capital and related ratios levels at March 31, 2022, was partially offset by net income exceeding dividends declared during the period ended March 31, 2022.
In addition to traditional capital measurements, management uses tangible capital measures to evaluate the adequacy of Peoples' stockholders' equity. Such ratios represent Non-US GAAP financial measures since their calculation removes the impact of goodwill and other intangible assets acquired through acquisitions on amounts reported in the Unaudited Consolidated Balance Sheets. Management believes this information is useful to investors since it facilitates the comparison of Peoples' operating performance, financial condition and trends to peers, especially those without a similar level of intangible assets to that of Peoples. Further,

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intangible assets generally are difficult to convert into cash, especially during a financial crisis, and could decrease substantially in value should there be deterioration in the overall franchise value. As a result, tangible equity represents a conservative measure of the capacity for Peoples to incur losses but remain solvent.
The following table reconciles the calculation of these Non-US GAAP financial measures to amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements:
(Dollars in thousands)March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Tangible equity:     
Total stockholders' equity
$819,543 $785,328 $760,511 $786,824 $808,340 
Less: goodwill and other intangible assets
324,562 326,329 328,428 328,132 341,865 
Tangible equity
$494,981 $458,999 $432,083 $458,692 $466,475 
Tangible assets:
 
Total assets
$7,311,520 $7,207,304 $7,005,854 $7,278,292 $7,239,261 
Less: goodwill and other intangible assets
324,562 326,329 328,428 328,132 341,865 
Tangible assets
$6,986,958 $6,880,975 $6,677,426 $6,950,160 $6,897,396 
Tangible book value per common share:    
Tangible equity
$494,981 $458,999 $432,083 $458,692 $466,475 
Common shares outstanding
28,488,158 28,287,837 28,278,078 28,290,115 28,453,175 
Tangible book value per common share
$17.37 $16.23 $15.28 $16.21 $16.39 
Tangible equity to tangible assets ratio:
Tangible equity
$494,981 $458,999 $432,083 $458,692 $466,475 
Tangible assets
$6,986,958 $6,880,975 $6,677,426 $6,950,160 $6,897,396 
Tangible equity to tangible assets
7.08 %6.67 %6.47 %6.60 %6.76 %
Tangible book value per common share increased to $17.37 at March 31, 2023, compared to $16.23 at December 31, 2022. The change in tangible book value per common share was due to tangible equity increasing during the first quarter of 2023 as a result of a decrease in other comprehensive losses recognized on available-for-sale investment securities, which the decrease was driven by sales during the quarter. Tangible book value per common share increased compared to at March 31, 2022 primarily due to net income over the last twelve months, partially offset by an increase in accumulated other comprehensive loss.
Interest Rate Sensitivity and Liquidity
While Peoples is exposed to various business risks, the risks relating to interest rate sensitivity and liquidity are major risks that can materially impact future results of operations and financial condition due to their complexity and dynamic nature. The objective of Peoples' asset-liability management function is to measure and manage these risks in order to optimize net interest income within the constraints of prudent capital adequacy, liquidity and safety. This objective requires Peoples to focus on interest rate risk exposure and adequate liquidity through its management of the mix of assets and liabilities, their related cash flows and the rates earned and paid on those assets and liabilities. Ultimately, the asset-liability management function is intended to guide management in the acquisition and disposition of earning assets and selection of appropriate funding sources.
Interest Rate Risk
Interest rate risk ("IRR") is one of the most significant risks arising in the normal course of business of financial services companies like Peoples. IRR is the potential for economic loss due to future interest rate changes that can impact the earnings stream, as well as market values, of financial assets and liabilities. Peoples' exposure to IRR is due primarily to differences in the maturity or repricing of earning assets and interest-bearing liabilities. In addition, other factors, such as prepayments of loans and investment securities, or early withdrawal of deposits, can affect Peoples' exposure to IRR and increase interest costs or reduce revenue streams.
Peoples has assigned overall management of IRR to its Asset-Liability Committee (the “ALCO”), which has established an IRR management policy that sets minimum requirements and guidelines for monitoring and managing the level of IRR. The methods used by the ALCO to assess IRR remain largely unchanged from those disclosed in Peoples' 2022 Form 10-K.

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The following table shows the estimated changes in net interest income and the economic value of equity based upon a standard, parallel shock analysis with balances held constant (dollars in thousands):
 
Increase (Decrease) in Interest Rate
Estimated Increase (Decrease) in
Net Interest Income
Estimated Decrease in Economic Value of Equity
(in Basis Points)March 31, 2023December 31, 2022March 31, 2023December 31, 2022
300$10,891 3.7 %$13,000 4.4 %$(110,529)(7.5)%$(82,959)(5.4)%
2007,534 2.6 %8,716 3.0 %(72,312)(4.9)%(55,809)(3.6)%
1004,161 1.4 %4,380 1.5 %(35,824)(2.4)%(28,157)(1.8)%
(100)(8,608)(2.9)%(11,404)(3.9)%6,268 0.4 %(21,124)(1.4)%
(200)(23,095)(7.8)%(27,659)(9.4)%(35,500)(2.4)%(80,484)(5.2)%
(300)(38,575)(13.1)%(43,728)(14.8)%(105,742)(7.1)%(152,152)(9.8)%
This table uses a standard, parallel shock analysis for assessing the IRR to net interest income and the economic value of equity. A parallel shock assumes all points on the yield curve (one year, two year, three year, etc.) are directionally changed by the same degree. Management regularly assesses the impact of both increasing and decreasing interest rates. The table above shows the impact of upward and downward parallel shocks of 100, 200 and 300 basis points.
Estimated changes in net interest income and the economic value of equity are partially driven by assumptions regarding the rate at which non-maturity deposits will reprice given a move in short-term interest rates, as well as assumptions regarding prepayment speeds on mortgage-backed securities. These and other modeling assumptions are monitored closely by Peoples on an ongoing basis.
While parallel interest rate shock scenarios are useful in assessing the level of IRR inherent in the balance sheet, interest rates typically move in a nonparallel manner with differences in the timing, direction and magnitude of changes in short-term and long-term interest rates. Thus, any impact that might occur as a result of the Federal Reserve Board increasing short-term interest rates in the future could be offset by an inverse movement in long-term interest rates, and vice versa. For this reason, Peoples considers other interest rate scenarios in addition to analyzing the impact of parallel yield curve shifts. These include various flattening and steepening scenarios in which short-term and long-term interest rates move in different directions with varying magnitude. Peoples believes these scenarios to be more reflective of how interest rates change versus the severe parallel rate shocks described above. Given the shape of market yield curves at March 31, 2023, consideration of the bear steepener and bear flattener scenarios provide insights which were not captured by parallel shifts.
The bear steepener scenario highlights the risk to net interest income and economic value of equity when short-term interest rates remain constant while long-term interest rates rise. In such a scenario, Peoples' deposit and borrowing costs, which are generally correlated with short-term interest rates, remain constant, while asset yields, which are correlated with long-term interest rates, rise. At March 31, 2023, the bear steepener scenario produced an increase in net interest income of 0.1% and a decline in the economic value of equity of 1.4%.
The bear flattener scenario highlights the risk to net interest income and the economic value of equity when short-term rates rise while long-term rates remain constant. In such a scenario, Peoples' variable rate asset yields along with deposit and short-term borrowing costs, which are correlated with short-term rates, increase, while long-term asset yields and long-term borrowing costs, which are more correlated with long-term rates, remain constant. Increased deposit and funding costs would be more than offset by increased variable rate asset yields; resulting in an increased amount of net interest income and a higher net interest margin. At March 31, 2023, the bear flattener scenario produced no change to net interest income and a decline in the economic value of equity of 0.8%.
As of March 31, 2023, the yield curve was inverted. A notable non-parallel shift scenario would be a continued increase in short-term interest rates relative to long-term interest rates in which the yield curve would further invert. As of March 31, 2023, this inversion scenario would have resulted in no change to net interest income and a decrease in the economic value of equity of (0.8)%. Peoples was within its policy limitations for this alternative scenario as of March 31, 2023, which set the maximum allowable downside exposure as 5.0% of net interest income and 10.0% of the economic value of equity.
Peoples has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for Peoples making fixed payments. As of March 31, 2023, Peoples had entered into thirteen interest rate swap contracts with an aggregate notional value of $125.0 million. Additional information regarding Peoples’ interest rate swaps can be found in “Note 10 Derivative Financial Instruments” of the Notes to the Unaudited Condensed Consolidated Financial Statements.
At March 31, 2023, Peoples' Unaudited Consolidated Balance Sheet was positioned to benefit from rising interest rates in terms of the potential impact on net interest income. The table above illustrates this point as changes to net interest income

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increase in the rising interest rate scenarios. While the heavy concentration of floating rate loans remains the largest contributor to the level of asset sensitivity, the decrease in economic value of equity asset sensitivity, as measured, from December 31, 2022 was largely attributable to increased effective duration within the investment securities portfolio.
Liquidity
In addition to IRR management, another major objective of the ALCO is to maintain a sufficient level of liquidity. The methods used by the ALCO to monitor and evaluate the adequacy of Peoples Bank's liquidity position remain unchanged from those disclosed in Peoples' 2022 Form 10-K.
At March 31, 2023, Peoples Bank had liquid assets of $318.0 million, which represented 3.9% of total assets and unfunded loan commitments. Peoples also had an additional $231.4 million of unpledged investment securities not included in the measurement of liquid assets.
Management believes the current mix of short-term liquidity sources, loan and security portfolio cash flows, and availability of other funding sources will allow Peoples to meet anticipated cash obligations, as well as special needs and off-balance sheet commitments.
Off-Balance Sheet Activities and Contractual Obligations
In the normal course of business, Peoples is a party to financial instruments with off-balance sheet risk necessary to meet the financing needs of Peoples' customers. These financial instruments include commitments to extend credit and standby letters of credit. The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Unaudited Consolidated Balance Sheets. The contract amounts of these instruments express the extent of involvement Peoples has in these financial instruments.
Loan Commitments and Standby Letters of Credit
Loan commitments are made to accommodate the financial needs of Peoples' customers. Standby letters of credit are instruments issued by Peoples Bank guaranteeing the beneficiary payment by Peoples Bank in the event of default by Peoples Bank's customer in the performance of an obligation or service. Historically, most loan commitments and standby letters of credit expire unused. Peoples Bank's exposure to credit loss in the event of nonperformance by the counter-party to the financial instrument for loan commitments and standby letters of credit is represented by the contractual amount of those instruments. Peoples Bank uses the same underwriting standards in making commitments and conditional obligations as it does for on-balance sheet instruments. The amount of collateral obtained is based on management's credit evaluation of the customer. Collateral held varies, but may include accounts receivable, inventory, property, plant, and equipment, and income-producing commercial properties.
Peoples Bank routinely engages in activities that involve, to varying degrees, elements of risk that are not reflected in whole or in part in the Unaudited Condensed Consolidated Financial Statements. These activities are part of Peoples Bank's normal course of business and include traditional off-balance sheet credit-related financial instruments, interest rate contracts and commitments to make additional capital contributions in low-income housing tax credit investments. Traditional off-balance sheet credit-related financial instruments continue to represent the most significant off-balance sheet exposure.
The following table details the total contractual amount of loan commitments and standby letters of credit:
 (Dollars in thousands)
March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Home equity lines of credit$201,692 $197,995 $194,685 $188,803 $184,616 
Unadvanced construction loans241,225 270,229 320,825 237,129 203,719 
Other loan commitments717,149 730,015 653,384 566,624 616,696 
Loan commitments$1,160,066 $1,198,239 $1,168,894 $992,556 $1,005,031 
Standby letters of credit$15,046 $15,451 $15,096 $15,977 $12,729 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for by this Item 3 is provided under the caption “Interest Rate Sensitivity and Liquidity” under “ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in this Form 10-Q, and is incorporated herein by reference.


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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Peoples' management, with the participation of Peoples' President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, has evaluated the effectiveness of Peoples’ disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2023.  Based upon that evaluation, Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer have concluded that:
(a)information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q and other reports Peoples files or submits under the Exchange Act would be accumulated and communicated to Peoples’ management, including its President and Chief Executive Officer and its Executive Vice President, Chief Financial Officer and Treasurer, as appropriate to allow timely decisions regarding required disclosure;
(b)information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q and other reports Peoples files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and
(c)Peoples’ disclosure controls and procedures were effective as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q.
 Changes in Internal Control Over Financial Reporting
There were no changes in Peoples' internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during Peoples' fiscal quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, Peoples’ internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Peoples or one of its subsidiaries from time to time is engaged in various litigation matters including the defense of claims of improper loan or deposit practices or lending violations. In addition, in the ordinary course of their respective businesses or operations, Peoples or one of its subsidiaries may be named as a plaintiff, a defendant, or a party to a legal proceeding or any of their respective properties may be subject to various pending and threatened legal proceedings and various actual and potential claims. In view of the inherent difficulty of predicting the outcome of such matters, Peoples cannot state what the eventual outcome of any such matters will be; however, based on management's current knowledge and after consultation with legal counsel, Peoples' management believes that damages, if any, and other amounts related to pending legal proceedings will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of Peoples.
ITEM 1A. RISK FACTORS
The disclosure below supplements the risk factors previously disclosed under “ITEM 1A. RISK FACTORS” of Part I of Peoples’ 2022 Form 10-K. These risk factors are not the only risks Peoples faces. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially adversely affect Peoples’ business, financial condition and/or operating results. In the first quarter of 2023, we identified the following additional risk factor:
General Risks
•The impact of larger or similar-sized financial institutions encountering problems may adversely affect Peoples' business, earnings and financial condition.
Peoples is exposed to the risk that when a peer financial institution experiences financial difficulties, there could be an adverse impact on the regional banking industry and the business environment in which Peoples operates. The recent bank failures of Silicon Valley Bank in California, Signature Bank in New York, and First Republic Bank in California during the first and second quarters of 2023 have caused a degree of panic and uncertainty in the investor community and among bank customers generally. While Peoples does not believe that the circumstances of these three banks' failures are indicators of broader issues with the banking system, the failures may reduce customer confidence, affect sources of funding and liquidity, increase regulatory requirements and costs, adversely affect financial markets and/or have a negative reputational ramification for the banking industry, including Peoples. Peoples will continue to monitor the ongoing events concerning these three banks as well as any future potential bank failures and volatility within the banking industry generally, together with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in the banking industry.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table details repurchases by Peoples and purchases by “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Exchange Act of Peoples’ common shares during the three months ended March 31, 2023:
Period
Total Number of Common Shares Purchased		 
Average Price Paid per Common Share		 
 
Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (3)

Maximum
Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs (3)
January 1 – 31, 20232,077 (2)$28.38 (2)— $22,606,290 
February 1 – 28, 202324,350 (3)$30.27 (3)— $22,606,290 
March 1 – 31, 20232,579 (2)(3)$30.43 (2)(3)— $22,606,290 
Total29,006  $30.15  — $22,606,290 
(1)On January 29, 2021, Peoples announced that on January 28, 2021, Peoples' Board of Directors authorized a share repurchase program authorizing Peoples to purchase up to an aggregate of $30 million of Peoples' outstanding common shares. There were no common shares repurchased under the share repurchase program during the three months ended March 31, 2023.
(2)Information reported includes 2,077 common shares and 952 common shares purchased in open market transactions during January 2023 and March 2023, respectively, by Peoples Bank under the Rabbi Trust Agreement. The Rabbi Trust Agreement establishes a rabbi trust that holds assets to provide funds for the payment of the benefits under the Peoples Bancorp Inc. Third Amended and Restated Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries.
(3)Information reported includes 24,350 common shares and 1,627 common shares withheld to satisfy income taxes associated with restricted common shares which were granted under the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan and vested during February 2023 and March 2023, respectively.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5. OTHER INFORMATION
None.

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Table of Contents
ITEM 6. EXHIBITS
Exhibit
Number		 
 
Description
 
 
Exhibit Location
2.1
Agreement and Plan of Merger, dated as of March 26, 2021, by and between Peoples Bancorp Inc. and Premier Financial Bancorp, Inc.+
Included as Annex A to the preliminary joint proxy statement/prospectus which forms a part of the Registration Statement of Peoples Bancorp Inc. ("Peoples") on Form S-4/A filed on June 1, 2021 (Registration No. 333-256040)
2.2
Agreement and Plan of Merger, dated as of October 24, 2022, by and between Peoples Bancorp Inc. and Limestone Bancorp, Inc.+
Included as Annex A to the preliminary joint proxy statement/prospectus which forms a part of the Registration Statement of Peoples on Form S-4/A filed on January 6, 2023 (Registration No. 333-268728)
3.1(a) 
Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on May 3, 1993) P
 Incorporated herein by reference to Exhibit 3(a) to Peoples' Registration Statement on Form 8-B filed on July 20, 1993 (File No. 0-16772)
     
3.1(b)
 Certificate of Amendment to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on April 22, 1994) Incorporated herein by reference to Exhibit 3.1(b) to Peoples' Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017 (File No. 0-16772) ("Peoples' September 30, 2017 Form 10-Q")
     
3.1(c)
 Certificate of Amendment to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on April 9, 1996) Incorporated herein by reference to Exhibit 3.1(c) to Peoples' September 30, 2017 Form 10-Q
     
3.1(d)
 Certificate of Amendment to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on April 23, 2003) Incorporated herein by reference to Exhibit 3(a) to Peoples’ Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 (File No. 0-16772) (“Peoples’ March 31, 2003 Form 10-Q”)
     
3.1(e)
 Certificate of Amendment by Shareholders to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on January 22, 2009) Incorporated herein by reference to Exhibit 3.1 to Peoples’ Current Report on Form 8-K dated and filed on January 23, 2009 (File No. 0-16772)
     
3.1(f)
 Certificate of Amendment by Directors to Articles filed with the Ohio Secretary of State on January 28, 2009, evidencing adoption of amendments by the Board of Directors of Peoples Bancorp Inc. to Article FOURTH of the Amended Articles of Incorporation to establish express terms of Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each without par value, of Peoples Bancorp Inc. Incorporated herein by reference to Exhibit 3.1 to Peoples’ Current Report on Form 8-K dated and filed on February 2, 2009 (File No. 0-16772)
     
3.1(g)
 Certificate of Amendment by the Shareholders to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on July 28, 2021) Incorporated herein by reference to Exhibit 3.1(g) to Peoples' Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 (File No. 0-16772) ("Peoples' June 30, 2021 Form 10-Q")
3.1(h)
Amended Articles of Incorporation of Peoples Bancorp Inc. (representing the Amended Articles of Incorporation in compiled form incorporating all amendments through the date of this Quarterly Report on Form 10-Q) [For purposes of SEC reporting compliance only--not filed with Ohio Secretary of State]

 
Incorporated herein by reference to Exhibit 3.1(h) to Peoples' June 30, 2021 Form 10-Q
3.2(a) 
Code of Regulations of Peoples Bancorp Inc. P
 Incorporated herein by reference to Exhibit 3(b) to Peoples’ Registration Statement on Form 8-B filed on July 20, 1993 (File No. 0-16772)
     
3.2(b)
 Certified Resolutions Regarding Adoption of Amendments to Sections 1.03, 1.04, 1.05, 1.06, 1.08, 1.10, 2.03(C), 2.07, 2.08, 2.10 and 6.02 of the Code of Regulations of Peoples Bancorp Inc. by shareholders on April 10, 2003 Incorporated herein by reference to Exhibit 3(c) to Peoples’ March 31, 2003 Form 10-Q
 +Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of SEC Regulation S-K. A copy of any omitted schedules or exhibits will be furnished supplementally by Peoples Bancorp Inc. to the SEC, or the staff of the SEC, on a confidential basis upon request.
PPeoples Bancorp Inc. filed this exhibit with the SEC in paper form originally and this exhibit has not been filed with the SEC in electronic format.


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Table of Contents
Exhibit
Number
 
Description
 
Exhibit Location
3.2(c)
 Certificate regarding adoption of amendments to Sections 3.01, 3.03, 3.04, 3.05, 3.06, 3.07, 3.08 and 3.11 of the Code of Regulations of Peoples Bancorp Inc. by shareholders on April 8, 2004 Incorporated herein by reference to Exhibit 3(a) to Peoples’ Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 (File No. 0-16772)
3.2(d)
 Certificate regarding adoption of amendments to Sections 2.06, 2.07, 3.01 and 3.04 of Peoples Bancorp Inc.’s Code of Regulations by the shareholders on April 13, 2006 Incorporated herein by reference to Exhibit 3.1 to Peoples’ Current Report on Form 8-K dated and filed on April 14, 2006 (File No. 0-16772)
3.2(e)
 Certificate regarding adoption of an amendment to Section 2.01 of Peoples Bancorp Inc.’s Code of Regulations by the shareholders on April 22, 2010 Incorporated herein by reference to Exhibit 3.2(e) to Peoples’ Quarterly Report on Form 10-Q/A (Amendment No. 1) for the quarterly period ended June 30, 2010 (File No. 0-16772)
3.2(f)
Certificate regarding Adoption of Amendment to Division (D) of Section 2.02 of the Code of Regulations of Peoples Bancorp Inc. by the Shareholders at the Annual Meeting of Shareholders on April 26, 2018Incorporated herein by reference to Exhibit 3.1 to Peoples' Current Report on Form 8-K dated and filed on June 28, 2018 (File No. 0-16772) ("Peoples' June 28, 2018 Form 8-K")
3.2(g)
 Code of Regulations of Peoples Bancorp Inc. (This document represents the Code of Regulations of Peoples Bancorp Inc. in compiled form incorporating all amendments.)  Incorporated herein by reference to Exhibit 3.2 to Peoples' June 28, 2018 Form 8-K
10.1
Summary of Peoples Bancorp Inc. Annual Incentive Plan for Executive Officers and other employees of Peoples Bancorp Inc. [Effective beginning with the fiscal year beginning January 1, 2023Incorporated herein by reference to Exhibit 10.4 to Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (File No. 0-16772) ("Peoples' 2022 Form 10-K")
10.2
Summary of Perquisites for Executive Officers of Peoples Bancorp Inc.Incorporated herein by reference to Exhibit 10.5 to Peoples' 2022 Form 10-K
10.3
Summary of Base Salaries for Executive Officers of Peoples Bancorp Inc.Filed herewith
10.4
Summary of Compensation for Directors of Peoples Bancorp Inc.Incorporated herein by reference to Exhibit 10.7 to Peoples' 2022 Form 10-K
10.5
First Amendment to the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan (adopted and approved by the Board of Directors of Peoples Bancorp Inc. on January 26, 2023)Incorporated herein by reference to Exhibit 10.8(b) to Peoples' 2022 Form 10-K
31.1
 Rule 13a-14(a)/15d-14(a) Certifications [President and Chief Executive Officer] Filed herewith
     
31.2
 Rule 13a-14(a)/15d-14(a) Certifications [Executive Vice President, Chief Financial Officer and Treasurer] Filed herewith
     
32
 Section 1350 Certifications Furnished herewith
101.INSInline XBRL Instance Document ##Submitted electronically herewith #
101.SCHInline XBRL Taxonomy Extension Schema DocumentSubmitted electronically herewith #
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentSubmitted electronically herewith #
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentSubmitted electronically herewith #
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentSubmitted electronically herewith #
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentSubmitted electronically herewith #
104Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)Submitted electronically herewith

72
Table of Contents
# Attached as Exhibit 101 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 of Peoples Bancorp Inc. are the following documents formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2023 (Unaudited) and December 31, 2022; (ii) Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2023 and 2022; (iii) Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three months ended March 31, 2023 and 2022; (iv) Consolidated Statements of Stockholders' Equity (Unaudited) for the three months ended March 31, 2023 and 2022; (v) Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2023 and 2022; and (vi) Notes to the Unaudited Condensed Consolidated Financial Statements.
## The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

73
SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
  PEOPLES BANCORP INC.
   
Date:May 4, 2023By: /s/CHARLES W. SULERZYSKI
  Charles W. Sulerzyski
  President and Chief Executive Officer
Date:May 4, 2023By: /s/KATIE BAILEY
  Katie Bailey
  Executive Vice President,
  Chief Financial Officer and Treasurer


74

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