Peoples Bancorp - 10-Q quarterly report FY2024 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, 2024


☐			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

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 class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, without par value

PEBO

The 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 filer

☐

Smaller 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. ☐

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: 35,493,844 common shares, without par value, at April 30, 2024.

Table of Co n tents


Table of Contents

PART I – FINANCIAL INFORMATION			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			45
FINANCIAL CONDITION			58
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			69
ITEM 4. CONTROLS AND PROCEDURES			69
PART II – OTHER INFORMATION			70
ITEM 1. LEGAL PROCEEDINGS			70
ITEM 1A. RISK FACTORS			70
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			70
ITEM 3. DEFAULTS UPON SENIOR SECURITIES			70
ITEM 4. MINE SAFETY DISCLOSURES			71
ITEM 5. OTHER INFORMATION			71
ITEM 6. EXHIBITS			72
SIGNATURES			74

Table of Co n tents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	March 31, 2024		December 31, 2023

(Dollars in thousands)	(Unaudited)
Assets
Cash and cash equivalents:
Cash and balances due from banks	$	103,784	$	111,680
Interest-bearing deposits in other banks	325,936		315,042
Total cash and cash equivalents	429,720		426,722
Available-for-sale investment securities, at fair value (amortized cost of $1,262,319 at March 31, 2024 and $1,184,288 at December 31, 2023) (a)	1,116,466		1,048,322
Held-to-maturity investment securities, at amortized cost (fair value of $602,112 at March 31, 2024 and $612,022 at December 31, 2023) (a)	679,506		683,657
Other investment securities	62,939		63,421
Total investment securities (a)	1,858,911		1,795,400
Loans and leases, net of deferred fees and costs (b)	6,202,827		6,159,196
Allowance for credit losses	(64,822)		(62,011)
Net loans and leases (c)	6,138,005		6,097,185
Loans held for sale	3,030		1,866
Bank premises and equipment, net of accumulated depreciation	107,258		103,856
Bank owned life insurance	141,568		140,554
Goodwill	362,169		362,169
Other intangible assets	47,116		50,003
Other assets	182,997		179,627
Total assets	$	9,270,774	$	9,157,382
Liabilities
Deposits:
Non-interest-bearing	$	1,468,363	$	1,567,649
Interest-bearing	5,858,193		5,584,648
Total deposits	7,326,556		7,152,297
Short-term borrowings	513,496		601,121
Long-term borrowings	236,283		216,241

Accrued expenses and other liabilities	132,437		134,189
Total liabilities	8,208,772		8,103,848
Stockholders’ equity
Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2024 or at December 31, 2023	—		—
Common shares, no par value, 50,000,000 shares authorized, 36,747,787 shares issued at March 31, 2024 and 36,736,041 shares issued at December 31, 2023, including at each date shares held in treasury	861,925		865,227
Retained earnings	343,076		327,237
Accumulated other comprehensive loss, net of deferred income taxes	(108,940)		(101,590)
Treasury stock, at cost, 1,355,337 shares at March 31, 2024 and 1,511,348 shares at December 31, 2023	(34,059)		(37,340)
Total stockholders’ equity	1,062,002		1,053,534
Total liabilities and stockholders’ equity	$	9,270,774	$	9,157,382

(a) Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $0 and $238, respectively, at March 31, 2024, and $0 and $238, respectively, at December 31, 2023.

(b) Also referred to throughout this Quarterly Report on Form 10-Q as "total loans" and "loans held for investment."

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	Three Months Ended
	March 31,
(Dollars in thousands, except per share data)		2024		2023
Interest income:
Interest and fees on loans and leases		$	110,749	$	71,762
Interest and dividends on taxable investment securities		13,919		11,003
Interest on tax-exempt investment securities		1,003		996
Other interest income		1,922		388
Total interest income		127,593		84,149
Interest expense:
Interest on deposits		33,304		5,661
Interest on short-term borrowings		4,184		4,457
Interest on long-term borrowings		3,465		1,153

Total interest expense		40,953		11,271
Net interest income		86,640		72,878
Provision for credit losses		6,102		1,853
Net interest income after provision for credit losses		80,538		71,025



Non-interest income:
Insurance income		6,498		5,425
Electronic banking income		6,046		5,443
Trust and investment income		4,599		4,084
Deposit account service charges		4,223		3,523
Bank owned life insurance income		1,500		707
Lease income		1,236		1,077
Mortgage banking income		321		314
Net loss on investment securities		(1)		(1,935)
Net loss on asset disposals and other transactions		(341)		(246)
Other non-interest income		1,698		668
Total non-interest income		25,779		19,060
Non-interest expense:
Salaries and employee benefit costs		38,893		32,028
Net occupancy and equipment expense		6,283		4,955
Data processing and software expense		5,769		4,562
Professional fees		2,967		2,881
Amortization of other intangible assets		2,788		1,871
Electronic banking expense		1,781		1,491
Federal Deposit Insurance Corporation ("FDIC") insurance expense		1,186		801
Other loan expenses		1,076		739
Marketing expense		1,056		930
Franchise tax expense		881		1,034
Communication expense		799		613
Other non-interest expense		4,986		4,574
Total non-interest expense		68,465		56,479
Income before income taxes		37,852		33,606
Income tax expense		8,268		7,046
Net income		$	29,584	$	26,560


Earnings per common share - basic		$	0.85	$	0.95
Earnings per common share - diluted		$	0.84	$	0.94
Weighted-average number of common shares outstanding - basic		34,740,349		27,891,760
Weighted-average number of common shares outstanding - diluted		35,051,810		28,021,879
Cash dividends declared		$	13,745	$	10,725
Cash dividends declared per common share		$	0.39	$	0.38

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)


	Three Months Ended
	March 31,
(Dollars in thousands)	2024		2023
Net income	$	29,584	$	26,560
Other comprehensive (loss) income:
Available-for-sale investment securities:
Gross unrealized holding (loss) gain arising during the period	(9,887)		20,362
Related tax benefit (expense)	2,340		(4,647)
Reclassification adjustment for net loss included in net income	1		1,935
Related tax expense	—		(452)


Net effect on other comprehensive (loss) income	(7,546)		17,198
Defined benefit plan:


Amortization of unrecognized loss and service cost on benefit plans	—		2



Net effect on other comprehensive (loss) income	—		2
Cash flow hedges:
Net gain (loss) arising during the period	256		(1,356)
Related tax (expense) benefit	(60)		313
Net effect on other comprehensive (loss) income	196		(1,043)
Total other comprehensive (loss) income, net of tax	(7,350)		16,157
Total comprehensive income	$	22,234	$	42,717

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)


					Accumulated Other Comprehensive Loss				Total Stockholders' Equity
	Common Shares		Retained Earnings				Treasury Stock
(Dollars in thousands)
Balance, December 31, 2023	$	865,227	$	327,237	$	(101,590)	$	(37,340)	$	1,053,534

Net income	—		29,584		—		—		29,584
Other comprehensive loss, net of tax	—		—		(7,350)		—		(7,350)



Cash dividends declared	—		(13,745)		—		—		(13,745)

Reissuance of treasury stock for common share awards	(6,862)		—		—		6,862		—


Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors	—		—		—		(869)		(869)
Common shares repurchased under share repurchase program	—		—		—		(3,000)		(3,000)
Common shares issued under dividend reinvestment plan	455		—		—		—		455
Common shares issued under compensation plan for Boards of Directors	21		—		—		117		138

Common shares issued under employee stock purchase plan	60		—		—		171		231
Stock-based compensation	3,024		—		—		—		3,024



Balance, March 31, 2024	$	861,925	$	343,076	$	(108,940)	$	(34,059)	$	1,062,002


					Accumulated Other Comprehensive Loss				Total Stockholders' Equity
	Common Shares		Retained Earnings				Treasury 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 income, 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 plan	402		—		—		—		402
Common shares issued under compensation plan for Boards of Directors	8		—		—		128		136

Common shares issued under employee stock purchase plan	42		—		—		413		455
Stock-based compensation	2,150		—		—		—		2,150



Balance, March 31, 2023	$	684,367	$	281,771	$	(110,979)	$	(35,616)	$	819,543

See Notes to the Unaudited Condensed Consolidated Financial Statements

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PEOPLES BANCORP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Three Months Ended
	March 31,
(Dollars in thousands)	2024		2023
Net cash provided by operating activities	$	37,009	$	47,997
Investing activities:
Available-for-sale investment securities:
Purchases	(105,652)		(22,873)
Proceeds from sales	—		95,362
Proceeds from principal payments, calls and prepayments	26,976		27,922
Held-to-maturity investment securities:
Purchases	(5,114)		(167,169)
Proceeds from principal payments	9,268		33,324
Other investment securities:
Purchases	(7,302)		(4,792)
Proceeds from sales	8,028		3,746

Net increase in loans held for investment	(43,339)		(52,386)
Net expenditures for premises and equipment	(3,870)		(2,757)
Proceeds from sales of other real estate owned	—		107
Business acquisitions, net of cash received	—		(200)

Proceeds from bank owned life insurance contracts	486		—

Investment in limited partnership and tax credit funds	(2,566)		(267)
Net cash used in investing activities	(123,085)		(89,983)
Financing activities:
Net decrease in non-interest-bearing deposits	(99,286)		(34,338)
Net increase in interest-bearing deposits	273,573		105,991
Net decrease in short-term borrowings	(87,625)		(9,468)
Proceeds from long-term borrowings	26,770		2,899
Payments on long-term borrowings	(7,047)		(8,450)


Cash dividends paid	(13,893)		(10,993)
Purchase of treasury stock under share repurchase program	(3,000)		—
Purchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock	(869)		(920)
Proceeds from issuance of common shares	451		397


Net cash provided by financing activities	89,074		45,118
Net increase in cash and cash equivalents	2,998		3,132
Cash and cash equivalents at beginning of period	426,722		154,022
Cash and cash equivalents at end of period	$	429,720	$	157,154

Supplemental cash flow information:
Interest paid	$	37,614	$	9,675
Income taxes paid	70		105
Supplemental noncash disclosures:
Transfers from total loans to other real estate owned	64		—
Noncash recognition of new leases	509		336

See Notes to the Unaudited Condensed Consolidated Financial Statements

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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, 2023 ("Peoples' 2023 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’ 2023 Form 10-K, as updated by the information contained in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 (this "Form 10-Q"). Management has evaluated all significant events and transactions that occurred after March 31, 2024 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, 2023, contained herein, has been derived from the audited Consolidated Balance Sheet included in Peoples’ 2023 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. Refer to "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2023 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.

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' 2023 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.

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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, 2024				December 31, 2023
(Dollars in thousands)	Level 1		Level 2			Level 1		Level 2

Assets:
Available-for-sale investment securities:
Obligations of:
U.S. Treasury and government agencies	$	28,773	$	—		$	30,296	$	—
U.S. government sponsored agencies	—		200,460			—		118,607
States and political subdivisions	—		208,750			—		213,296
Residential mortgage-backed securities	—		621,691			—		628,924
Commercial mortgage-backed securities	—		50,791			—		51,234
Bank-issued trust preferred securities	—		6,001			—		5,965

Total available-for-sale securities	$	28,773	$	1,087,693		$	30,296	$	1,018,026
Equity investment securities (a)	197		236			191		237
Derivative assets (b)	—		25,149			—		22,304
Liabilities:
Derivative liabilities (c)	$	—	$	21,684		$	—	$	19,122

(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, secured overnight funding rate ("SOFR") (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 or broker 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.

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).

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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, 2024 and December 31, 2023.


	Non-Recurring Fair Value Measurements at Reporting Date
	March 31, 2024				December 31, 2023
(Dollars in thousands)	Level 2		Level 3		Level 2		Level 3

Assets:
Collateral dependent loans	$	—	$	1,928	$	—	$	501
Loans held for sale (a)	2,123		—		1,663		—
Other real estate owned	—		63		—		7,118

(a) Loans held for sale are presented gross of a valuation allowance of $138 and $163 at March 31, 2024 and at December 31, 2023, 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"): 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).

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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 Level	March 31, 2024				December 31, 2023
		Carrying Amount		Fair Value		Carrying Amount		Fair Value

Assets:
Cash and cash equivalents	1	$	429,720	$	429,720	$	426,722	$	426,722




Held-to-maturity investment securities:
Obligations of:
U.S. government sponsored agencies	2	188,423		179,645		188,475		180,825
States and political subdivisions (a)	2	144,315		113,075		144,496		114,288
Residential mortgage-backed securities	2	246,579		225,621		248,559		231,620
Commercial mortgage-backed securities	2	100,427		83,771		102,365		85,289

Total held-to-maturity securities		679,744		602,112		683,895		612,022


Other investment securities:
Other investment securities at cost:
Federal Home Loan Bank ("FHLB") stock	N/A	28,426		28,426		29,949		29,949
Federal Reserve Bank ("FRB") stock	N/A	27,114		27,114		26,896		26,896

Total other investment securities at cost		55,540		55,540		56,845		56,845
Other investment securities at fair value:
Nonqualified deferred compensation (b)	1	3,890		3,890		3,162		3,162
Other investment securities (c)	2	3,076		3,076		2,985		2,985
Total other investment securities		62,506		62,506		62,992		62,992

Loans and leases, net of deferred fees and costs (d)	3	6,202,827		6,059,878		6,159,196		6,064,999
Bank owned life insurance	2	141,568		141,568		140,554		140,554
Liabilities:
Deposits	2	$	7,326,556	$	6,410,812	$	7,152,297	$	6,319,885
Short-term borrowings	2	513,496		527,408		601,121		619,999
Long-term borrowings	2	236,283		242,685		216,241		222,743

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $238 at both March 31, 2024 and December 31, 2023.

(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, 2024

and at December 31, 2023, 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 $64.8 million and $62.0 million at March 31, 2024 and at December 31, 2023, 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 methodology and quality controls utilized by the pricing services in management's overall assessment

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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 financial 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 Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2024
Obligations of:
U.S. Treasury and government agencies	$	29,807	$	113	$	(1,147)	$	28,773
U.S. government sponsored agencies	210,871		597		(11,008)		200,460
States and political subdivisions	237,207		92		(28,549)		208,750
Residential mortgage-backed securities	717,657		1,366		(97,332)		621,691
Commercial mortgage-backed securities	60,277		1		(9,487)		50,791
Bank-issued trust preferred securities	6,500		—		(499)		6,001

Total available-for-sale securities	$	1,262,319	$	2,169	$	(148,022)	$	1,116,466
December 31, 2023
Obligations of:
U.S. Treasury and government agencies	$	30,999	$	292	$	(995)	$	30,296
U.S. government sponsored agencies	128,500		639		(10,532)		118,607
States and political subdivisions	239,906		485		(27,095)		213,296
Residential mortgage-backed securities	717,772		1,819		(90,667)		628,924
Commercial mortgage-backed securities	60,611		5		(9,382)		51,234
Bank-issued trust preferred securities	6,500		—		(535)		5,965

Total available-for-sale securities	$	1,184,288	$	3,240	$	(139,206)	$	1,048,322

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)		2024		2023
Gross gains realized		$	—	$	78
Gross losses realized		1		2,013
Net (loss) gain realized		$	(1)	$	(1,935)

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 have been in a continuous unrealized loss position for the periods identified:


	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
March 31, 2024
Obligations of:
U.S. Treasury and government agencies	$	12,003	$	173	23	$	11,565	$	974	5	$	23,568	$	1,147
U.S. government sponsored agencies	63,921		114		10	77,014		10,894		15	140,935		11,008
States and political subdivisions	26,352		439		66	171,591		28,110		144	197,943		28,549
Residential mortgage-backed securities	70,006		1,833		75	517,070		95,499		239	587,076		97,332
Commercial mortgage-backed securities	6,380		152		8	44,290		9,335		21	50,670		9,487
Bank-issued trust preferred securities	1,988		12		1	4,013		487		3	6,001		499

Total	$	180,650	$	2,723	183	$	825,543	$	145,299	427	$	1,006,193	$	148,022
December 31, 2023
Obligations of:
U.S. Treasury and government agencies	$	8,568	$	83	22	$	11,631	$	912	5	$	20,199	$	995
U.S. government sponsored agencies	14,439		35		4	74,211		10,497		15	88,650		10,532
States and political subdivisions	18,268		136		32	167,346		26,959		138	185,614		27,095
Residential mortgage-backed securities	58,671		1,150		66	529,895		89,517		238	588,566		90,667
Commercial mortgage-backed securities	6,000		112		7	44,656		9,270		21	50,656		9,382
Bank-issued trust preferred securities	1,984		16		1	3,981		519		3	5,965		535

Total	$	107,930	$	1,532	132	$	831,720	$	137,674	420	$	939,650	$	139,206

Management evaluates available-for-sale investment securities for an allowance for credit losses on a quarterly basis. At March 31, 2024, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses. At March 31, 2024, 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, 2024 and December 31, 2023 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 $9.8 million at March 31, 2024 and $8.8 million at December 31, 2023.

The unrealized loss with respect to the three bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at March 31, 2024 was attributable to the subordinated nature of the trust preferred securities.

Table of Co n tents

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, 2024. 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 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
U.S. Treasury and government agencies	$	985		$	15,661		$	7,272		$	5,889		$	29,807
U.S. government sponsored agencies	—			62,046			64,074			84,751			210,871
States and political subdivisions	10,319			45,388			59,362			122,138			237,207
Residential mortgage-backed securities	1			3,330			59,060			655,266			717,657
Commercial mortgage-backed securities	—			12,392			27,108			20,777			60,277
Bank-issued trust preferred securities	2,000			1,000			3,500			—			6,500

Total available-for-sale securities	$	13,305		$	139,817		$	220,376		$	888,821		$	1,262,319
Fair value
Obligations of:
U.S. Treasury and government agencies	$	978		$	14,619		$	7,303		$	5,873		$	28,773
U.S. government sponsored agencies	—			57,082			60,078			83,300			200,460
States and political subdivisions	10,264			42,516			50,785			105,185			208,750
Residential mortgage-backed securities	1			3,208			53,811			564,671			621,691
Commercial mortgage-backed securities	—			11,223			22,783			16,785			50,791
Bank-issued trust preferred securities	1,988			942			3,071			—			6,001

Total available-for-sale securities	$	13,231		$	129,590		$	197,831		$	775,814		$	1,116,466
Total weighted-average yield	3.59		%	2.31		%	2.77		%	2.73		%	2.70		%

Held-to-maturity

The following table summarizes Peoples’ held-to-maturity investment securities:


(Dollars in thousands)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2024
Obligations of:
U.S. government sponsored agencies	$	188,423	$	—	$	309	$	(9,087)	$	179,645
States and political subdivisions	144,315		(238)		73		(31,075)		113,075
Residential mortgage-backed securities	246,579		—		672		(21,630)		225,621
Commercial mortgage-backed securities	100,427		—		—		(16,656)		83,771
Total held-to-maturity investment securities	$	679,744	$	(238)	$	1,054	$	(78,448)	$	602,112
December 31, 2023
Obligations of:
U.S. government sponsored agencies	$	188,475	$	—	$	489	$	(8,139)	$	180,825
States and political subdivisions	144,496		(238)		134		(30,104)		114,288
Residential mortgage-backed securities	248,559		—		1,643		(18,582)		231,620
Commercial mortgage-backed securities	102,365		—		—		(17,076)		85,289
Total held-to-maturity investment securities	$	683,895	$	(238)	$	2,266	$	(73,901)	$	612,022

There were no sales of held-to-maturity investment securities during either of the three months ended March 31, 2024 or 2023.

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 agencies 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 reported $0.2 million of allowance for credit losses for held-to-maturity securities at both March 31, 2024, and December 31, 2023.

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:

Table of Co n tents


	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
March 31, 2024
Obligations of:
U.S. government sponsored agencies	$	35,986	$	537	12	118,531		8,550		21	$	154,517	$	9,087
States and political subdivisions	—		—		—	109,887		31,075		67	109,887		31,075
Residential mortgage-backed securities	51,550		1,274		17	133,314		20,356		39	184,864		21,630
Commercial mortgage-backed securities	8,575		1,297		5	73,196		15,359		30	81,771		16,656
Total	$	96,111	$	3,108	34	$	434,928	$	75,340	157	$	531,039	$	78,448
December 31, 2023
Obligations of:
U.S. government sponsored agencies	$	64,487	$	356	14	$	86,071	$	7,783	18	$	150,558	$	8,139
States and political subdivisions	—		—		—	111,040		30,104		67	111,040		30,104
Residential mortgage-backed securities	44,379		1,105		14	117,654		17,477		34	162,033		18,582
Commercial mortgage-backed securities	13,919		1,845		6	71,370		15,231		31	85,289		17,076
Total	$	122,785	$	3,306	34	$	386,135	$	70,595	150	$	508,920	$	73,901

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity investment securities by contractual maturity at March 31, 2024. 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 23.2% at March 31, 2024. 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 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
U.S. government sponsored agencies	10,500			$	10,643		$	67,056		$	100,224		$	188,423
States and political subdivisions	—			6,422			11,419			126,474			144,315
Residential mortgage-backed securities	—			451			4,241			241,887			246,579
Commercial mortgage-backed securities	1,490			9,371			38,821			50,745			100,427
Total held-to-maturity investment securities	$	11,990		$	26,887		$	121,537		$	519,330		$	679,744
Fair value
Obligations of:
U.S. government sponsored agencies	10,419			$	10,144		$	66,436		$	92,646		$	179,645
States and political subdivisions	—			6,249			9,813			97,013			113,075
Residential mortgage-backed securities	—			441			3,696			221,484			225,621
Commercial mortgage-backed securities	1,478			8,719			32,914			40,660			83,771
Total held-to-maturity investment securities	$	11,897		$	25,553		$	112,859		$	451,803		$	602,112
Total weighted-average yield	3.85		%	2.51		%	4.00		%	3.51		%	3.57		%

Other Investment Securities

Peoples' other investment securities on the Unaudited Consolidated Balance Sheets consist largely of shares of FHLB stock and of FRB stock.

Table of Co n tents

The following table summarizes the carrying value of Peoples' other investment securities:


(Dollars in thousands)	March 31, 2024		December 31, 2023
FHLB stock	$	28,426	$	29,949
FRB stock	27,114		26,896
Nonqualified deferred compensation	3,890		3,162
Equity investment securities	2,640		2,545
Other investment securities	869		869
Total other investment securities	$	62,939	$	63,421

During the three months ended March 31, 2024, Peoples redeemed $8.0 million of FHLB stock in order to be in compliance with the requirements of the FHLB. Peoples purchased $6.5 million of additional FHLB stock during the three months ended March 31, 2024, as a result of the FHLB's capital requirements on FHLB advances.

For the three months ended March 31, 2024 and 2023, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in an unrealized gains of $47,000 and $21,000, respectively.

At March 31, 2024, 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 at March 31, 2024.

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.

The following table summarizes the carrying amount of Peoples' pledged securities:


	Carrying Amount
(Dollars in thousands)	March 31, 2024		December 31, 2023

Securing public and trust department deposits, and repurchase agreements:
Available-for-sale	$	809,988	$	713,033
Held-to-maturity	568,473		559,142



Securing additional borrowing capacity at the FHLB and the FRB:
Available-for-sale	98,146		85,899
Held-to-maturity	50,046		39,607

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.

Table of Co n tents

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, 2024		December 31, 2023
Construction	$	314,687	$	364,019
Commercial real estate, other	2,243,780		2,196,957
Commercial and industrial	1,214,615		1,184,986
Premium finance	238,962		203,177
Leases	422,694		414,060
Residential real estate	781,888		791,095
Home equity lines of credit	221,079		208,675
Consumer, indirect	650,228		666,472
Consumer, direct	113,588		128,769
Deposit account overdrafts	1,306		986
Total loans, at amortized cost	$	6,202,827	$	6,159,196

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 $24.3 million at March 31, 2024 and $24.5 million at December 31, 2023.

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, 2024				December 31, 2023
(Dollars in thousands)	Nonaccrual (a)		Accruing Loans 90+ Days Past Due		Nonaccrual (a)		Accruing Loans 90+ Days Past Due
Construction	$	—	$	—	$	—	$	—
Commercial real estate, other	3,773		231		2,816		78
Commercial and industrial	6,205		10		2,758		316
Premium finance	—		2,208		—		1,355
Leases	10,136		4,070		8,436		3,826
Residential real estate	7,450		780		7,921		877
Home equity lines of credit	1,134		181		1,022		171
Consumer, indirect	2,506		134		2,412		68
Consumer, direct	157		48		112		25
Total loans, at amortized cost	$	31,361	$	7,662	$	25,477	$	6,716

(a) There were $3.8 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2024 and $1.2 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2023.

During the first three months of 2024, nonaccrual loans increased compared to at December 31, 2023, which was primarily due to one large commercial and industrial loan of approximately $1.9 million that went on nonaccrual status during the first quarter of 2024. Further, two leases went on nonaccrual status during the quarter which increased the amount reported by $1.4 million. The increase in accruing loans 90+ days past due at March 31, 2024 when compared to at December 31, 2023, was primarily due to an increase in premium finance loans of approximately $0.9 million which was partially offset by a decrease in commercial and industrial loans.

The amount of interest income recognized on accruing loans 90+ days past due during the three months ended March 31, 2024 was $0.5 million.

The following table presents the aging of the amortized cost of past due loans:

Table of Co n tents


	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
March 31, 2024
Construction	$	—	$	15	$	—	$	15	$	314,672	$	314,687
Commercial real estate, other	2,369		1,332		2,315		6,016		2,237,764		2,243,780
Commercial and industrial	2,482		850		3,772		7,104		1,207,511		1,214,615
Premium finance	1,436		889		2,208		4,533		234,429		238,962
Leases	15,567		2,496		13,902		31,965		390,729		422,694
Residential real estate	11,726		1,179		4,177		17,082		764,806		781,888
Home equity lines of credit	1,386		731		870		2,987		218,092		221,079
Consumer, indirect	5,448		569		1,421		7,438		642,790		650,228
Consumer, direct	553		129		105		787		112,801		113,588
Deposit account overdrafts	—		—		—		—		1,306		1,306
Total loans, at amortized cost	$	40,967	$	8,190	$	28,770	$	77,927	$	6,124,900	$	6,202,827
December 31, 2023
Construction	$	13	$	52	$	—	$	65	$	363,954	$	364,019
Commercial real estate, other	2,728		4,556		1,572		8,856		2,188,101		2,196,957
Commercial and industrial	1,717		1,491		3,052		6,260		1,178,726		1,184,986
Premium finance	1,288		867		1,355		3,510		199,667		203,177
Leases	12,743		4,932		12,014		29,689		384,371		414,060
Residential real estate	14,021		2,733		4,481		21,235		769,860		791,095
Home equity lines of credit	1,561		691		683		2,935		205,740		208,675
Consumer, indirect	7,488		1,550		1,230		10,268		656,204		666,472
Consumer, direct	536		282		43		861		127,908		128,769
Deposit account overdrafts	—		—		—		—		986		986
Total loans, at amortized cost	$	42,095	$	17,154	$	24,430	$	83,679	$	6,075,517	$	6,159,196

Delinquency trends improved slightly, as 98.7% of Peoples' loan portfolio was considered “current” at March 31, 2024, compared to 98.6% at December 31, 2023.

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, 2024		December 31, 2023
Loans pledged to FHLB	$	1,173,512	$	1,206,134
Loans pledged to FRB	445,922		419,245

Credit Quality Indicators

As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2023 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 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 category 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.

Table of Co n tents

“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, 2024:



	Term Loans at Amortized Cost by Origination Year														Revolving Loans Converted to Term
(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans				Total Loans
Construction
Pass	$	13,704	$	94,507	$	124,789	$	56,375	$	3,724	$	17,756	$	—	$	—	$	310,855
Special mention	—		—		918		—		—		121		—		—		1,039
Substandard	—		1,192		1,573		—		—		28		—		—		2,793


Total	13,704		95,699		127,280		56,375		3,724		17,905		—		—		314,687
Current period gross charge-offs	—		—		—		—		—		—						—
Commercial real estate, other
Pass	36,998		206,459		356,061		380,773		224,446		873,082		44,060		186		2,121,879
Special mention	—		751		16,484		3,660		7,038		21,538		394		38		49,865
Substandard	—		441		2,197		14,316		8,509		46,271		292		—		72,026
Doubtful	—		—		—		—		—		10		—		—		10

Total	36,998		207,651		374,742		398,749		239,993		940,901		44,746		224		2,243,780
Current period gross charge-offs	—		—		212		—		—		—						212
Commercial and industrial
Pass	60,989		224,493		168,480		164,175		78,926		186,985		228,165		1,137		1,112,213
Special mention	—		3,474		11,329		1,562		9,340		5,517		23,638		5,500		54,860
Substandard	—		93		2,868		30,387		4,595		5,685		1,829		778		45,457
Doubtful	—		—		1,911		—		—		174		—		—		2,085

Total	60,989		228,060		184,588		196,124		92,861		198,361		253,632		7,415		1,214,615

Table of Co n tents



	Term Loans at Amortized Cost by Origination Year							Revolving Loans Converted to Term
(Dollars in thousands)	2024	2023	2022	2021	2020	Prior	Revolving Loans		Total Loans
Current period gross charge-offs	—	—	—	15	57	163			235
Premium Finance
Pass	134,052	104,528	382	—	—	—	—	—	238,962




Total	134,052	104,528	382	—	—	—	—	—	238,962
Current period gross charge-offs	—	31	23	—	—	—			54
Leases
Pass	74,212	177,358	100,634	44,614	10,630	2,054	—	—	409,502
Special mention	—	1,575	1,179	295	105	—	—	—	3,154
Substandard	—	2,378	4,555	2,364	328	413	—	—	10,038
Total	74,212	181,311	106,368	47,273	11,063	2,467	—	—	422,694
Current period gross charge-offs	—	596	454	169	28	23			1,270
Residential real estate
Pass	13,458	73,850	89,518	137,348	57,315	400,297	—	—	771,786

Substandard	—	119	188	453	178	9,082	—	—	10,020

Loss	—	—	—	—	—	82	—	—	82
Total	13,458	73,969	89,706	137,801	57,493	409,461	—	—	781,888
Current period gross charge-offs	—	—	—	5	—	75			80
Home equity lines of credit
Pass	18,738	40,864	41,076	31,757	18,917	68,214	26	1,066	219,592

Substandard	—	40	58	95	34	1,252	—	—	1,479
Loss	—	—	—	—	—	8	—	—	8
Total	18,738	40,904	41,134	31,852	18,951	69,474	26	1,066	221,079
Current period gross charge-offs	—	—	—	—	—	—			—
Consumer, indirect
Pass	42,573	232,913	204,737	85,796	50,864	29,835	—	—	646,718

Substandard	—	760	934	756	568	412	—	—	3,430

Loss	—	30	45	3	—	2	—	—	80
Total	42,573	233,703	205,716	86,555	51,432	30,249	—	—	650,228
Current period gross charge-offs	—	564	550	219	75	53			1,461
Consumer, direct
Pass	16,228	35,984	32,493	15,127	7,061	6,405	—	—	113,298

Substandard	—	52	93	48	16	75	—	—	284

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	Term Loans at Amortized Cost by Origination Year													Revolving Loans Converted to Term
(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans
Loss	—		—		—		—		—		6		—	—	6
Total	16,228		36,036		32,586		15,175		7,077		6,486		—	—	113,588
Current period gross charge-offs	—		48		82		11		7		78				226
Deposit account overdrafts	1,306		—		—		—		—		—		—	—	1,306
Current period gross charge-offs	336		—		—		—		—		—				336
Total loans, at amortized cost	412,258		1,201,861		1,162,502		969,904		482,594		1,675,304		298,404	8,705	6,202,827
Total current period gross charge-offs	$	336	$	1,239	$	1,321	$	419	$	167	$	392			$	3,874

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, 2023:



	Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Construction
Pass	$	80,273	$	141,245	$	85,913	$	27,169	$	9,995	$	12,723	$	—	$	—	$	357,318
Special mention	—		3,757		—		—		—		123		—		—		3,880
Substandard	1,200		1,590		—		—		—		31		—		—		2,821


Total	81,473		146,592		85,913		27,169		9,995		12,877		—		—		364,019
Current period gross charge-offs	—		—		9		—		—		—						9
Commercial real estate, other
Pass	199,565		327,762		366,752		227,604		262,099		650,265		37,177		189		2,071,224
Special mention	999		12,975		4,850		10,324		7,074		22,186		408		41		58,816
Substandard	287		2,421		5,878		8,679		1,972		47,213		457		—		66,907
Doubtful	—		—		—		—		—		10		—		—		10

Total	200,851		343,158		377,480		246,607		271,145		719,674		38,042		230		2,196,957
Current period gross charge-offs	—		—		—		39		—		575						614
Commercial and industrial
Pass	225,894		180,068		212,938		86,934		55,434		132,675		213,714		38		1,107,657
Special mention	540		12,051		533		9,723		4,722		6,336		16,236		8,614		50,141
Substandard	78		6,441		5,104		5,617		1,602		6,278		1,889		779		27,009
Doubtful	—		—		—		—		—		179		—		—		179

Total	226,512		198,560		218,575		102,274		61,758		145,468		231,839		9,431		1,184,986
Current period gross charge-offs	—		36		202		25		173		415						851
Premium finance
Pass	201,659		1,517		1		—		—		—		—		—		203,177
Total	201,659		1,517		1		—		—		—		—		—		203,177
Current period gross charge-offs	25		97		—		—		—		—						122
Leases

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	Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Pass	216,559		114,327		51,307		14,061		4,883		1,501		—		—		402,638
Special mention	363		1,529		476		81		1		5		—		—		2,455
Substandard	1,937		3,006		2,944		448		321		311		—		—		8,967
Total	218,859		118,862		54,727		14,590		5,205		1,817		—		—		414,060
Current period gross charge-offs	963		1,328		1,173		233		165		135						3,997
Residential real estate
Pass	75,957		91,506		140,157		58,144		45,507		369,552		—		—		780,823

Substandard	43		243		585		182		529		8,604		—		—		10,186

Loss	—		—		—		—		—		86		—		—		86
Total	76,000		91,749		140,742		58,326		46,036		378,242		—		—		791,095
Current period gross charge-offs	—		—		—		—		—		170						170
Home equity lines of credit
Pass	39,706		42,565		33,406		19,838		14,297		57,482		27		1,346		207,321

Substandard	19		—		61		34		123		1,109		—		—		1,346

Loss	—		—		—		—		—		8		—		—		8
Total	39,725		42,565		33,467		19,872		14,420		58,599		27		1,346		208,675
Current period gross charge-offs	—		—		—		—		—		110						110
Consumer, indirect
Pass	247,829		225,225		96,698		59,044		18,644		15,977		—		—		663,417

Substandard	333		934		789		558		190		206		—		—		3,010

Loss	7		34		2		—		2		—		—		—		45
Total	248,169		226,193		97,489		59,602		18,836		16,183		—		—		666,472
Current period gross charge-offs	609		2,091		865		255		63		147						4,030
Consumer, direct
Pass	58,445		37,050		17,434		8,282		3,185		4,081		—		—		128,477

Substandard	55		79		47		28		30		27		—		—		266

Loss	—		—		—		—		—		26		—		—		26
Total	58,500		37,129		17,481		8,310		3,215		4,134		—		—		128,769
Current period gross charge-offs	36		154		77		100		14		35						416
Deposit account overdrafts	986		—		—		—		—		—		—		—		986
Current period gross charge-offs	1,161																1,161
Total loans, at amortized cost	$	1,352,734	$	1,206,325	$	1,025,875	$	536,750	$	430,610	$	1,336,994	$	269,908	$	11,007	$	6,159,196
Current period gross charge-offs	$	2,794	$	3,706	$	2,326	$	652	$	415	$	1,587					$	11,480

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,

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and other commercial and industrial properties that are in process of construction. Non-owner occupied commercial construction loans are generally secured by multi-family complexes, warehouse buildings, industrial buildings, land under development, and other commercial 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 multifamily complexes, retail facilities, office buildings and complexes, warehouses, industrial buildings, land under development, as well as other commercial 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, on residential real estate property.

•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.

•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, 2024		December 31, 2023


Commercial real estate, other	$	689		$	—
Leases	738			—

Residential real estate	501			501



Total collateral dependent loans	$	1,928		$	501

The increase in collateral dependent loans at March 31, 2024, compared to December 31, 2023, was primarily due to the addition of a commercial real estate loan and a lease as collateral dependent loans during the three months ended March 31, 2024.

Modifications for Borrowers Experiencing Financial Difficulty

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 tables display the amortized cost of loans that were restructured during the three months ended March 31, 2024 and March 31, 2023, presented by loan classification.

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	Payment Delay (Only)
(Dollars in thousands)	Forbearance Plan		Payment Deferral		Term Extension		Forbearance Plan and Term Extension		Total		Percentage of Total by Loan Category(a)(b)


During the Three Months Ended March 31, 2024
Commercial real estate	—		—		$	565	$	—	$	565	0.03	%
Commercial and industrial	—		—		10,203		—		10,203		0.84	%
Leasing	—		25		—		—		25		0.01	%
Residential real estate	—		—		76		—		76		0.01	%




Total	$	—	$	25	$	10,844	$	—	$	10,869	0.18	%


During the Three Months Ended March 31, 2023
Construction	$	—	$	1,600	$	—	$	—	$	1,600	0.69	%
Commercial real estate	200		—		—		—		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) The table presented above excludes loans that were paid off or otherwise no longer included in the loan portfolio of period end.

The following table summarizes the financial impacts of loan modifications and payment deferrals made to loans during both the three months ended March 31, 2024 and March 31, 2023, presented by loan classification.


	Weighted-Average Term Extension (in months)	Average Amount Capitalized as a Result of a Payment Delay(a)
During the Three Months Ended March 31, 2024

Commercial real estate	6	$	—
Commercial and industrial	6	—
Leasing	9	—
Residential real estate	2	—




During the Three Months Ended March 31, 2023


Commercial and industrial	12	—

Residential real estate	210	8,969

Consumer, indirect	2	—


(a) Represents the average amount of delinquency-related amounts that were capitalized as part of the loan balance. Amounts are in whole dollars.

The following table displays the amortized cost of loans that received a completed modification or payment deferral within the previous 12 months and that had a payment default in the period presented. For purposes of this disclosure, Peoples defines loans that had a payment default as loans that were 90 days or more past due following a modification.

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For the Three Months Ended March 31, 2024
	Payment Delay as a Result of a Payment Deferral (Only)(a)		Total


Commercial and industrial	$	648	$	648








(a) Represents the sum of amortized cost and gross charge-off as of period end. Excludes loans that liquidated either through foreclosure, deed-in-lieu of foreclosure, or a short sale.

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 three months ended March 31, 2023.

The following table displays an aging analysis of loans that were modified during the twelve months prior to March 31, 2024, presented by classification and class of financing receivable.


As of March 31, 2024
(Dollars in thousands)	30-59 Days Delinquent		60-89 Days Delinquent		90+ Days Delinquent		Total Delinquent		Current		Total
Construction	$	—	$	—	$	—	$	—	$	70	$	70
Commercial real estate	193		—		—		193		2,443		2,636
Commercial and industrial	—		667		648		1,315		12,752		14,067
Leasing	—		—		—		—		25		25
Residential real estate	76		—		—		76		24		100
Home equity lines of credit	—		—		—		—		207		207



Total loans modified(a)	$	269	$	667	$	648	$	1,584	$	15,521	$	17,105

(a) Represents the amortized cost basis as of period end.

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 Delinquent		60-89 Days Delinquent		90+ Days Delinquent		Total Delinquent		Current		Total
Construction	$	—	$	—	$	—	$	—	$	1,600	$	1,600
Commercial real estate	0		0		0		0		200		200
Commercial and industrial	0		0		0		0		344		344

Residential real estate	0		0		0		0		221		221

Consumer, indirect	28		0		0		28		0		28


Total loans modified(a)	$	28	$	—	$	—	$	28	$	2,365	$	2,393

(a) Represents the amortized cost basis as of period end.

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' 2023 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, 2024 and March 31, 2023 are summarized below:


(Dollars in thousands)	Beginning Balance, December 31, 2023		Initial Allowance for Acquired PCD Assets		Provision for (Recovery of) Credit Losses (a)		Charge-offs		Recoveries		Ending Balance, March 31, 2024
Construction	$	699	$	—	$	2	$	—	$	—	$	701
Commercial real estate, other	20,915		—		1,002		(212)		83		21,788
Commercial and industrial	10,490		—		319		(235)		7		10,581
Premium finance	484		—		169		(54)		8		607
Leases	10,850		—		3,097		(1,270)		212		12,889
Residential real estate	5,937		—		(74)		(80)		83		5,866
Home equity lines of credit	1,588		—		94		—		7		1,689
Consumer, indirect	8,590		—		1,101		(1,461)		71		8,301
Consumer, direct	2,343		—		153		(226)		9		2,279
Deposit account overdrafts	115		—		268		(336)		74		121
Total	$	62,011	$	—	$	6,131	$	(3,874)	$	554	$	64,822

(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments.



(Dollars in thousands)	Beginning Balance, December 31, 2022		Initial Allowance for Acquired PCD Assets (a)		Provision for (Recovery of) Credit Losses (b)		Charge-offs		Recoveries		Ending Balance, March 31, 2023
Construction	$	1,250	$	—	$	32	$	(9)	$	—	$	1,273
Commercial real estate, other	17,710		—		(1,230)		(33)		27		16,474
Commercial and industrial	8,229		—		79		(1)		—		8,307
Premium finance	344		—		103		(23)		9		433
Leases	8,495		—		1,003		(469)		80		9,109
Residential real estate	6,357		—		159		(41)		29		6,504
Home equity lines of credit	1,693		—		43		(19)		—		1,717
Consumer, indirect	7,448		—		1,183		(929)		79		7,781
Consumer, direct	1,575		—		133		(104)		15		1,619
Deposit account overdrafts	61		—		180		(227)		72		86
Total	$	53,162	$	—	$	1,685	$	(1,855)	$	311	$	53,303

(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.

During the first quarter of 2024, Peoples recorded a total provision for credit losses of $6.1 million, which was driven by (i) a deterioration in macro-economic conditions used within the current expected credit loss ("CECL") model, (ii) an increase of reserves on individually analyzed loans, (iii) and loan growth. The increase in the allowance for credit losses at March 31, 2024 when compared to prior periods was driven by the establishment of an allowance for credit losses for loans acquired in the Limestone Merger.

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During the first quarter of 2023, Peoples recorded a provision for credit losses of $1.7 million, largely attributable to a deterioration of macro-economic conditions, partially offset by a reduction in reserves for 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.

Peoples had recorded an allowance for unfunded commitments of $1.7 million and $1.8 million as of March 31, 2024 and December 31, 2023, respectively. 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, 2024		December 31, 2023
Goodwill, beginning of year	$	362,169	$	292,397
Goodwill recorded from acquisitions	—		69,772
Goodwill, end of period	$	362,169	$	362,169

As of the close of business on April 30, 2023, Peoples completed its merger with Limestone Bancorp, Inc. ("Limestone") pursuant to an Agreement and Plan of Merger dated October 24, 2022, at which point Limestone merged with and into Peoples, and immediately thereafter, Limestone Bank, Inc., the subsidiary bank of Limestone, merged with and into Peoples Bank (collectively, the “Limestone Merger”).

As of March 31, 2024, Peoples recorded $68.8 million of Goodwill related to the Limestone Merger.

Other Intangible Assets

Other intangible assets were comprised of the following at March 31, 2024, and at December 31, 2023:


(Dollars in thousands)	Core Deposits		Customer Relationships		Indefinite-Lived Trade Names		Total
March 31, 2024
Gross intangibles	$	54,186	$	37,920	$	2,491	$	94,597
Intangibles recorded from acquisitions	—		—		—		—
Accumulated amortization	(27,138)		(21,938)		—		(49,076)
Total acquisition-related intangibles	$	27,048	$	15,982	$	2,491	$	45,521
Servicing rights							1,285
Non-compete agreements							310
Total other intangibles							$	47,116

December 31, 2023
Gross intangibles	$	26,464	$	37,920	$	2,491	$	66,875
Intangibles recorded from acquisitions	27,722		—		—		27,722
Accumulated amortization	(25,670)		(20,680)		—		(46,350)
Total acquisition-related intangibles	$	28,516	$	17,240	$	2,491	$	48,247
Servicing rights							1,385
Non-compete agreements							371
Total other intangibles							$	50,003

As of March 31, 2024, Peoples recorded $27.7 million of core deposit intangibles related to the Limestone Merger. Refer to "Note 13 Acquisitions" for additional information.

The following table details estimated aggregate future amortization of other intangible assets at March 31, 2024:

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(Dollars in thousands)	Core Deposits		Customer Relationships		Non-Compete Agreements		Total
Remaining nine months of 2024	$	4,406	$	3,770	$	182	$	8,358
2025	4,609		4,038		112		$	8,759
2026	3,736		2,954		16		$	6,706
2027	3,043		2,112		—		$	5,155
2028	2,608		1,392		—		$	4,000
Thereafter	8,646		1,716		—		$	10,362
Total	$	27,048	$	15,982	$	310	$	43,340

The weighted average amortization period of other intangible assets is 8.5 years.

Note 6 Deposits

Peoples’ deposit balances were comprised of the following:


(Dollars in thousands)	March 31, 2024		December 31, 2023
Retail certificates of deposits ("CDs"):
$100 or more	$	956,845	$	815,300
Less than $100	723,569		628,117
Total Retail CDs	1,680,414		1,443,417
Interest-bearing deposit accounts	1,107,711		1,144,357
Savings accounts	901,493		919,244
Money market deposit accounts	859,961		775,488
Governmental deposit accounts	825,170		726,713

Brokered CDs	483,444		575,429
Total interest-bearing deposits	5,858,193		5,584,648
Non-interest-bearing deposits	$	1,468,363	1,567,649
Total deposits	$	7,326,556	$	7,152,297

Uninsured deposits were $2.1 billion and $2.0 billion at March 31, 2024 and at December 31, 2023, respectively. Uninsured amounts are estimated based on the portion of the respective customer account balances that exceeded the FDIC limit of $250,000. Peoples pledges investment securities against certain governmental deposit accounts, which covered over $865.6 million of the uninsured deposit balances at March 31, 2024.

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Uninsured time deposits are broken out below by time remaining until maturity.


(Dollars in thousands)	March 31, 2024		December 31, 2023
3 months or less	$	99,470	$	58,708
Over 3 to 6 months	127,433		99,928
Over 6 to 12 months	148,528		131,263
Over 12 months	21,465		37,180
Total	$	396,896	$	327,079

The contractual maturities of CDs for each of the next five years, including the remainder of 2024, and thereafter are as follows:


(Dollars in thousands)	Retail		Brokered		Total
Remaining nine months ending December 31, 2024	$	1,407,331	$	483,444	$	1,890,775
Year ending December 31, 2025	221,303		—		221,303
Year ending December 31, 2026	17,753		—		17,753
Year ending December 31, 2027	24,770		—		24,770
Year ending December 31, 2028	7,544		—		7,544
Thereafter	1,713		—		1,713
Total CDs	$	1,680,414	$	483,444	$	2,163,858

At March 31, 2024, Peoples had 11 effective interest rate swaps, with an aggregate notional value of $105.0 million, all of which 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, 2024:


	Common Shares	Treasury Stock
Shares at December 31, 2023	36,736,041	1,511,348
Changes related to stock-based compensation awards:

Release of restricted common shares	—	25,458
Cancellation of restricted common shares	—	16,972

Grant of restricted common shares	—	(291,480)

Changes related to deferred compensation plan for Boards of Directors:
Purchase of treasury stock	—	4,643
Disbursed out of treasury stock	—	(911)
Common shares repurchased under share repurchase program	—	100,905
Common shares issued under dividend reinvestment plan	11,746	—
Common shares issued under compensation plan for Boards of Directors	—	(4,680)

Common shares issued under employee stock purchase plan	—	(6,918)


Shares at March 31, 2024	36,747,787	1,355,337

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. As of March 31, 2024, Peoples had repurchased 471,307 common shares totaling $13.4 million under the share repurchase program. There were 100,905 common shares totaling $3.0 million repurchased during the first three months of 2024.

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 designated by Peoples' Board of Directors. At March 31, 2024, Peoples had no preferred shares issued or outstanding.

On January 22, 2024, Peoples' Board of Directors declared a quarterly cash dividend of $0.39 per common share, payable on February 20, 2024, to shareholders of record on February 5, 2024. On April 22, 2024, Peoples' Board of Directors declared a quarterly cash dividend of $0.40 per common share, payable on May 20, 2024, to shareholders of record on May 6, 2024. The following table details the cash dividends declared per common share during the first two quarters of 2024 and the comparable periods of 2023:


	2024		2023
First quarter	$	0.39	$	0.38
Second quarter	0.40		0.39


Total dividends declared	$	0.79	$	0.77

Accumulated Other Comprehensive (Loss) Income

The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income during the three months ended March 31, 2024:


(Dollars in thousands)	Unrealized (Loss) Gain on Securities		Unrealized Gain on Cash Flow Hedges		Accumulated Other Comprehensive (Loss) Income
Balance, December 31, 2023	$	(104,222)	$	2,632	$	(101,590)
Reclassification adjustments to net income:
Realized loss on sale of securities, net of tax	1		—		1

Other comprehensive (loss) income, net of reclassifications and tax	(7,547)		196		(7,351)
Balance, March 31, 2024	$	(111,768)	$	2,828	$	(108,940)

Note 8 Employee Benefit Plans

Peoples sponsored a noncontributory defined benefit pension plan that covered substantially all employees hired before January 1, 2010. The plan provided retirement benefits based on an employee’s years of service and compensation. For employees hired before January 1, 2003, the amount of post-retirement benefit was 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 post-retirement benefit was based on 2% of the employee’s annual compensation during the years 2003 through 2009, plus accrued interest. During the third quarter of 2023, Peoples terminated its pension plan by settling the remaining benefit obligation of $7.7 million. The pension plan had been closed to new entrants since January 1, 2010. Peoples recorded a settlement charge of $2.4 million in the third quarter of 2023 in relation to the termination of the pension plan. Peoples does not anticipate further expenses related to the termination.

Retirement Savings Plan

Peoples also maintains a retirement savings plan, or 401(k) plan, which covers substantially all employees. The plan provides participants with the opportunity to save for retirement on a tax-deferred basis. As of January 1, 2021, Peoples matches 100% of participants’ contributions up to 6% of the participants’ compensation. Matching contributions made by Peoples during the first quarter of 2024 totaled $1.5 million. Matching contributions totaled $5.4 million in 2023 and $4.4 million in 2022.

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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)		2024		2023
Net income available to common shareholders		$	29,584	$	26,560
Less: Dividends paid on unvested common shares		(143)		(102)
Less: Undistributed income allocated to unvested common shares		(64)		(34)
Net earnings allocated to common shareholders		$	29,377	$	26,424

Weighted-average common shares outstanding		34,740,349		27,891,760
Effect of potentially dilutive common shares		311,461		130,119
Total weighted-average diluted common shares outstanding		35,051,810		28,021,879

Earnings per common share:
Basic		$	0.85	$	0.95
Diluted		$	0.84	$	0.94
Anti-dilutive common shares excluded from calculation:
Restricted common shares		3,180		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.

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, 2024, Peoples had entered into 11 interest rate swap contracts with an aggregate notional value of $105.0 million. Peoples will pay a fixed rate of interest for up to ten years while receiving a floating rate component of interest equal to term SOFR. 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 interest rate swaps. At both March 31, 2024 and at December 31, 2023, the interest rate swaps were designated as cash flow hedges of $105.0 million, in brokered CDs, which are expected to be extended every 90 days through the maturity dates of the interest rate swaps.

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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 term SOFR rate (or the three-month LIBOR floating portion prior to June 30, 2023) of the swaps to ensure effectiveness of the cash flow hedge. During the three months ended March 31, 2024, and 2023, Peoples recorded reclassifications of losses to earnings of $0.9 million and $0.1 million, respectively. During the next twelve months, Peoples estimates that $1.4 million of AOCI will be reclassified as an addition to interest expense.

The following table summarizes information about the interest rate swaps designated as cash flow hedges:


(Dollars in thousands)	March 31, 2024			December 31, 2023
Notional amount	$	105,000		$	105,000
Weighted average pay rates	2.22		%	2.22		%
Weighted average receive rates	5.02		%	4.63		%
Weighted average maturity	1.7 years			2.0 years
Pre-tax changes in fair value included in AOCI	$	3,689		$	3,434

The following table presents changes in fair value recorded in AOCI and in the Consolidated Statements of Operations related to the cash flow hedges:


	Three Months Ended
	March 31,
(Dollars in thousands)		2024		2023
Amount of losses (gains) recorded in AOCI, pre-tax		$	(1,872)	$	1,356

The following table reflects the cash flow hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:


	March 31, 2024				December 31, 2023
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in "Other assets":
Interest rate swaps related to debt	$	105,000	$	3,574	$	105,000	$	3,314

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 interest rate 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 interest rate 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, 2024 and at or for the year ended December 31, 2023.

The following table reflects the non-designated hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:


	March 31, 2024				December 31, 2023
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in "Other assets":
Interest rate swaps related to commercial loans	$	399,071	$	21,575	$	416,106	$	18,990

Included in "Accrued expenses and other liabilities":
Interest rate swaps related to commercial loans	$	399,071	$	21,688	$	416,106	$	19,122

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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, 2024 and at December 31, 2023, Peoples had no cash pledged, while counterparties had $15.5 million of cash pledged at March 31, 2024 and $12.8 million of cash pledged at December 31, 2023. Peoples had no pledged investment securities at March 31, 2024 or at December 31, 2023, while the counterparties had pledged investment securities in the amounts of $2.1 million at March 31, 2024 and $2.2 million at December 31, 2023.

Note 11 Stock-Based Compensation

Under the Peoples Bancorp Inc. Fourth 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 1,493,297. The maximum number of common shares that can be issued for incentive stock options is 750,000 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.

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 officers and key 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 2024, Peoples granted an aggregate of 283,712 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, 2024:


	Time-Based Vesting			Performance-Based Vesting
	Number of Common Shares	Weighted-Average Grant Date Fair Value		Number of Common Shares	Weighted-Average Grant Date Fair Value
Oustanding at January 1, 2024	142,419	$	28.78	403,970	$	31.21
Awarded	7,768	28.95		283,712	27.92
Released	(5,316)	31.35		(72,550)	31.48
Forfeited	(5,938)	31.99		(11,034)	29.48
Outstanding at March 31, 2024	138,933	$	28.56	604,098	$	29.66

For the three months ended March 31, 2024, the intrinsic value for restricted common shares released was $2.2 million compared to $2.3 million for the three months ended March 31, 2023.

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:

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	Three Months Ended
	March 31,
(Dollars in thousands)		2024		2023
Employee stock-based compensation expense:
Stock grant expense		$	3,024	$	2,150
Employee stock purchase plan expense		66		39

Total employee stock-based compensation expense		$	3,090	$	2,189
Non-employee director stock-based compensation expense		$	138	$	136
Total stock-based compensation expense		$	3,228	$	2,325
Recognized tax benefit		(752)		(543)
Net stock-based compensation expense		$	2,476	$	1,782

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 $9.4 million at March 31, 2024, which will be recognized over a weighted-average period of 2.3 years.

Note 12 Revenue

The following table details Peoples' revenue from contracts with customers:


	Three Months Ended
	March 31,
(Dollars in thousands)		2024		2023
Insurance income:
Commission and fees from sale of insurance policies (a)		$	4,199	$	3,816
Fees related to third-party administration services (a)		86		82
Performance-based commissions (b)		2,213		1,527
Trust and investment income:
Fiduciary income (a)		2,757		2,457
Brokerage income (a)		1,842		1,627
Electronic banking income:
Interchange income (a)		4,797		4,181
Promotional and usage income (a)		1,249		1,262
Deposit account service charges:
Ongoing maintenance fees for deposit accounts (a)		1,718		1,461
Transaction-based fees (b)		2,505		2,062
Commercial loan swap fees (b)		52		—
Other non-interest income transaction-based fees (b)		504		430
Total revenue from contracts with customers		$	21,922	$	18,905
Timing of revenue recognition:
Services transferred over time		$	16,648	$	14,886
Services transferred at a point in time		5,274		4,019
Total revenue from contracts with customers		$	21,922	$	18,905

(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

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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, 2024:


	Contract Assets		Contract Liabilities
(Dollars in thousands)
Balance, January 1, 2024	$	753	$	5,776
Additional income receivable	37		—
Additional deferred income	—		26
Receipt of income previously receivable	(50)		—
Recognition of income previously deferred	—		(529)
Balance, March 31, 2024	$	740	$	5,273

Note 13 Acquisitions

Limestone Bancorp, Inc.

As of the close of business on April 30, 2023, Peoples completed the Limestone Merger. In connection with the Limestone Merger, Limestone Bank, Inc., which operated 20 branches in Kentucky, merged into Peoples Bank. As consideration in the Limestone Merger, Limestone shareholders were paid 0.90 common shares of Peoples for each full share of Limestone that was owned at the merger date, resulting in the issuance of 6,827,668 common shares by Peoples, or aggregate consideration of $177.9 million. Peoples accounted for this transaction as a business combination under the acquisition method.

Peoples recorded acquisition-related expenses primarily related to the Limestone Merger, which included $(0.1) million in non-interest expense for the three months ended March 31, 2024. Peoples recorded acquisition-related expenses related to the Limestone Merger, which included $16.9 million in non-interest expense for the year ended December 31, 2023.

The following table provides the preliminary purchase price calculation as of the date of the Limestone Merger, and the assets acquired and liabilities assumed at their estimated fair values. The estimated fair values below are subject to adjustment for up to one year after April 30, 2023, which include, but are not limited to, loans, including the designation of PCD loans, deferred tax assets and liabilities, long-term borrowings, and certain other assets and other liabilities.


(Dollars in thousands)	Fair Value
Total purchase price	$	177,931










Assets
Cash and balances due from banks	6,422
Interest-bearing deposits in other banks	87,115
Total cash and cash equivalents	93,537
Available-for-sale investment securities, at fair value	166,944

Other investment securities	5,716

Total investment securities	172,660
Loans	1,077,929

Allowance for credit losses (on PCD loans)	(2,051)
Net loans	1,075,878












Bank premises and equipment, net of accumulated depreciation	17,690

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(Dollars in thousands)	Fair Value
Bank owned life insurance	31,343



Other intangible assets	27,722
Other assets	36,874
Total assets	1,455,704
Liabilities
Deposits:

Non-interest-bearing	262,727
Interest-bearing	971,457
Total deposits	1,234,184
Short-term borrowings	60,000
Long-term borrowings	39,453
Accrued expenses and other liabilities	12,967
Total liabilities	1,346,604


Net assets	109,100
Goodwill	$	68,831

The goodwill recorded in connection with the Limestone Merger is related to expected synergies to be gained from the combination of Limestone with Peoples' operations. The employees retained from the Limestone Merger and the geographic locations of Limestone should allow Peoples to continue to grow the loan and deposit portfolios while also increasing Peoples' ability to penetrate the new markets, which 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 a core deposit asset in other intangible assets related to the Limestone Merger.

There were no changes in the estimated fair value that impacted goodwill for the three months ended March 31, 2024.

Loans acquired by Peoples in a business combination that have evidence of more than insignificant credit deterioration, which includes loans as to which Peoples believes it is probable that Peoples will be unable to collect all contractually required payments, are considered "purchased credit deteriorated" (or "PCD") loans. Acquired PCD loans are reported net of the unamortized fair value adjustment. These loans are recorded at the purchase price, and an allowance for credit losses is determined based upon discrete credit marks, along with discounted cash flow models based upon similar pools of loans, using a similar methodology as for other loans. The following table details the fair value adjustment for acquired PCD loans as of the acquisition date:



(Dollars in thousands)	Par Value		Allowance for Credit Losses		Non-Credit (Discount) Premium		Fair Value
PCD loans

Commercial real estate, other	30,907		(1,340)		(2,160)		27,407
Commercial and industrial	16,466		(379)		(610)		15,477

Residential real estate	6,328		(228)		(770)		5,330
Home equity lines of credit	774		(18)		11		767

Consumer	1,029		(86)		78		1,021
Fair value	$	55,504	$	(2,051)	$	(3,451)	$	50,002

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.

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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 in 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, a lease is typically charged down to the net realizable value, with the residual balance placed on nonaccrual status. Leases 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 originates sales-type leases through its NSL division, as these leases are structured as dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment. 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. Peoples also originates leases through its Vantage subsidiary, which are classified as 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 relate to automotive, construction, health care, manufacturing, office, restaurant, information technology and other equipment. Finance leases include an estimated residual value, which is assessed for impairment as part of the allowance for credit losses. Lease (loss) income noted in the table below includes (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. 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, 2024		March 31, 2023
Interest and fees on leases (a)		$	12,067	$	9,643
Lease income		1,236		1,077
Other non-interest income		785		—
Total lease income		$	14,088	$	10,720

(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 fees and costs" on the Unaudited Consolidated Balance Sheets:


(Dollars in thousands)	March 31, 2024		December 31, 2023
Lease payments receivable, at amortized cost	$	473,987	$	463,742
Estimated residual values	34,157		33,448
Initial direct costs	7,334		7,114
Deferred revenue	(92,784)		(90,244)
Net investment in leases	422,694		414,060
Allowance for credit losses - leases	(12,889)		(10,850)
Net investment in leases, after allowance for credit losses	$	409,805	$	403,210

The following table summarizes the contractual maturities of leases:


(Dollars in thousands)	Balance
Remaining nine months ending December 31, 2024	$	103,408
Year ending December 31, 2025	109,429
Year ending December 31, 2026	100,493
Year ending December 31, 2027	82,587
Year ending December 31, 2028	55,038
Thereafter	23,032
Lease payments receivable, at amortized cost	$	473,987

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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, 2024, 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 make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at the commencement or the 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 an 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, 2024		March 31, 2023
Operating lease expense		735		695
Short-term lease expense		305		95
Total lease expense		$	1,040	$	790

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, 2024			December 31, 2023
ROU assets:
Other assets	$	11,682		$	11,689
Lease liabilities:
Accrued expenses and other liabilities	$	12,062		$	12,080
Other information:
Weighted-average remaining lease term	9.2 years			9.5 years
Weighted-average discount rate	3.92		%	3.34		%
Additions for ROU assets obtained during the year	$	509		$	4,428

During both the three months ended March 31, 2024 and 2023, Peoples paid cash of $0.7 million for operating leases.

The following table summarizes the maturity of remaining lease liabilities:


(Dollars in thousands)	Balance
Remaining nine months ending December 31, 2024	$	2,280
Year ending December 31, 2025	2,210
Year ending December 31, 2026	1,950
Year ending December 31, 2027	1,762
Year ending December 31, 2028	1,338
Thereafter	5,412
Total undiscounted lease payments	$	14,952
Imputed interest	$	(2,890)
Total lease liabilities	$	12,062

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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 at and for the three months ended March 31, 2024 and March 31, 2023. This MD&A should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the Notes thereto.

Certain statements in this Form 10-Q, which are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate," "estimate," "may," "feel," "expect," "believe," "plan," "will," "will likely," "would," "should," "could," "project," "goal," "target," "potential," "seek," "intend," "continue," "remain," and similar expressions.

These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to:

(1)the effects of interest rate policies, changes in the interest rate environment due to economic conditions and/or the fiscal and monetary policy measures undertaken by the U.S. government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity;

(2)the effects of inflationary pressures and the impact of rising interest rates on borrowers’ liquidity and ability to repay;

(3)the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the ongoing increasing interest rate policies of the Federal Reserve Board, the completion and successful integration of planned acquisitions, including the Limestone Merger that closed in April 2023, and the expansion of commercial and consumer lending activities;

(4)competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, which can in turn impact Peoples' credit spreads, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals;

(5)uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies in the State of Ohio, the FDIC, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements;

(6)the effects of easing restrictions on participants in the financial services industry;

(7)current and future local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, supply-demand imbalances affecting local real estate prices, high unemployment rates in the local or regional economies in which Peoples operates and/or the U.S. economy generally, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, 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;

(8)Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;

(9)changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties' performance and creditworthiness generally, which may be less favorable than expected in light of recent inflationary pressures and continued elevated interest rates, and may adversely impact the amount of interest income generated;

(10)Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;

(11)future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses;

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(12)changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations;

(13)the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model;

(14)adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;

(15)the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;

(16)Peoples' ability to receive dividends from Peoples' subsidiaries;

(17)Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;

(18)the impact of larger or similar-sized financial institutions encountering problems, such as the closures in 2023 of Silicon Valley Bank in California, Signature Bank in New York, First Republic Bank in California, and Heartland Tri-State Bank in Kansas, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity, including potential increased regulatory requirements, and increased reputational risk and potential impacts to macroeconomic conditions;

(19)Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;

(20)any misappropriation of the confidential information which Peoples possesses could have an adverse impact on Peoples' business and could result in regulatory actions, litigation and other adverse effects;

(21)Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples' primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands;

(22)operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and Peoples' subsidiaries are highly dependent;

(23)changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;

(24)the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business;

(25)the impact on Peoples' businesses, personnel, facilities, or systems, of losses related to acts of fraud, theft, misappropriation or violence;

(26)the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including Russia’s war in Ukraine and the ongoing conflicts in the Middle East);

(27)the potential deterioration of the U.S. economy due to financial, political or other shocks;

(28)the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;

(29)the impact on Peoples' businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples' intellectual property;

(30)risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets;

(31)Peoples' ability to integrate the Limestone Merger, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;

(32)the risk that expected revenue synergies and cost savings from the Limestone Merger, may not be fully realized or realized within the expected time frame;

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(33)changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases;

(34)the vulnerability of Peoples' network and online banking portals, and the systems of parties with whom Peoples contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches;

(35)Peoples' business may be adversely affected by increased political and regulatory scrutiny of corporate environmental, social and governance ("ESG") practices;

(36)the effect of a fall in stock market prices on the asset and wealth management business; 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' 2023 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 to the Audited Consolidated Financial Statements, contained in Peoples’ 2023 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, automated teller machines ("ATMs"), interactive teller machines ("ITMs"), mobile banking, telephone and internet-based banking. Peoples offers a complete array of insurance products through Peoples Insurance, a subsidiary of Peoples Bank. Brokerage services are offered by Peoples exclusively through an unaffiliated registered broker-dealer located at Peoples Bank's offices. Peoples Bank offers insurance premium finance lending nationwide through its Peoples Premium Finance division. Peoples also offers lease financing through its North Star Leasing division and through Vantage, a subsidiary of Peoples Bank. As of March 31, 2024, Peoples had 152 locations, including 133 full-service bank branches in Ohio, Kentucky, West Virginia, Virginia, Washington D.C. and Maryland. Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the "ODFI"), the FRB of Cleveland and the FDIC. Peoples Bank must also follow the regulations promulgated by the Consumer Financial Protection Bureau (the "CFPB"), which regulates consumer financial products and services and certain financial services providers. Peoples Insurance is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states in which Peoples Insurance may do business.

Critical Accounting Policies

The accounting and reporting policies of Peoples conform to US GAAP. The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Note 1 of the Notes to the Unaudited Condensed Consolidated Financial Statements describes Peoples' significant accounting policies. Management has identified the accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to understanding Peoples’ Unaudited Condensed Consolidated Financial Statements, and MD&A at March 31, 2024, which have been disclosed in Peoples' 2023 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’ 2023 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:

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◦For the first quarter of 2024, Peoples incurred $(0.1) million of acquisition-related expenses, compared to $1.3 million for the fourth quarter of 2023 and $0.6 million for the first quarter of 2023.The acquisition-related expenses in 2024 and 2023 were primarily related to the Limestone Merger.

◦During the first quarter of 2024, Peoples recorded a provision for credit losses of $6.1 million, compared to a provision for credit losses of $1.3 million in the linked quarter and a provision for credit losses of $1.9 million in the first quarter of 2023. The provision for credit losses for the first quarter of 2024 was driven by (i) a deterioration in macro-economic conditions used within the CECL model, (ii) an increase of reserves on individually analyzed loans and (iii) loan growth. The provision for credit losses in the linked quarter was largely attributable to higher net charge-offs, offset by an improvement of macro-economic conditions and the release of reserves on individually analyzed loans. The provision for credit losses in the first quarter of 2023 was largely attributable to a deterioration of macro-economic conditions, 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 Credit Losses" found later in this discussion.

◦During the third quarter of 2023, Peoples terminated its pension plan by settling the remaining benefit obligation of $7.7 million. The pension plan had been closed to new entrants since January 1, 2010. Peoples recorded a settlement charge of $2.4 million in the third quarter of 2023 in relation to the termination of the pension plan. Peoples does not anticipate further expenses related to the termination.

◦On October 25, 2022, Peoples announced the Limestone Merger, a transaction valued at $177.9 million. The Limestone Merger closed as of the close of business on April 30, 2023. Peoples acquired Limestone's loan portfolio totaling $1.1 billion, $1.2 billion of deposits, $172.7 million of total investment securities, an aggregate of $99.5 million of short-term and long term borrowings, and $93.5 million of total cash and cash equivalents. Peoples also recorded preliminary goodwill in the amount of $68.8 million and other intangible assets of $27.7 million, which consisted of core deposit intangibles.

◦To combat the effects of ongoing inflationary pressures, the Federal Reserve Board increased the Federal Funds Target Rate range to 0.25% to 0.50% beginning on March 16, 2022, and continued to raise rates up to 5.50% on July 27, 2023. The Federal Reserve Board has kept rates unchanged since July 2023 but has signaled that it expects to begin reducing rates sometime in 2024.

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 $29.6 million for the first quarter of 2024, representing earnings per diluted common share of $0.84. In comparison, Peoples reported net income of $33.8 million, representing earnings per diluted common share of $0.96, for the fourth quarter of 2023, and net income of $26.6 million, representing earnings per diluted common share of $0.94, for the first quarter of 2023. Non-core items negatively impacted earnings per diluted common share by $0.01 for the first quarter of 2024, $0.08 for the fourth quarter of 2023, and $0.05 for the first quarter of 2023.

Net interest income was $86.6 million for the first quarter of 2024, a decrease of $1.7 million, or 2.0%, compared to the linked quarter. Net interest margin was 4.27% for the first quarter of 2024, compared to 4.44% for the linked quarter. The decreases in net interest income and net interest margin were primarily driven by a decrease in accretion income, net of amortization, from our acquisitions. The linked quarter was impacted by a true-up of $1.3 million to the preliminary Limestone-related accretion, which added to net interest income. The small remaining decline in net interest margin, compared to the linked quarter, was mostly due to excess cash on-hand during the quarter for liquidity purposes. Net interest income for the first quarter of 2024 increased $13.8 million, or 18.9%, compared to the first quarter of 2023. Net interest margin for the first quarter of 2024 decreased 26 basis points compared to 4.53% for the first quarter of 2023, driven primarily by an increase in interest expense on deposits.

Accretion income, net of amortization expense, from acquisitions was $6.6 million for the first quarter of 2024, $9.0 million for the fourth quarter of 2023 and $2.0 million for the first quarter of 2023, which added 32 basis points, 45 basis points and 13 basis points, respectively, to net interest margin. The decrease in accretion income for the first quarter of 2024 when compared to the linked quarter was driven by a fourth quarter 2023 true-up to the preliminary Limestone-related accretion. The increase in accretion income for the current quarter compared to the first quarter of 2023 was a result of the accretion from the Limestone Merger.

The provision for credit losses was $6.1 million for the first quarter of 2024, compared to a provision for credit losses of $1.3 million for the linked quarter and a provision for credit losses of $1.9 million for the first quarter of 2023. The provision for credit losses for the first quarter of 2024 was driven by (i) a deterioration in macro-economic conditions used within the CECL model, (ii) an increase of reserves on individually analyzed loans and (iii) loan growth. The provision for credit losses for the fourth quarter of 2023 was largely attributable to higher net charge-offs, offset by an improvement of macro-economic conditions and the release of reserves on individually analyzed loans. Net charge-offs for the first quarter of 2024 were $3.3 million, or 0.22% of average total loans annualized, compared to net charge-offs of $3.5 million, or 0.23% of average total loans annualized, for the linked quarter and net charge-offs of $1.5 million, or 0.13% of average total loans annualized, for the first quarter of 2023. For additional information on credit trends and the allowance for credit losses, see the "FINANCIAL CONDITION - Allowance for Credit Losses" section below.

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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 2024 was $0.3 million, compared to a net loss of $2.2 million for each of the linked quarter and the first quarter of 2023. The net loss for the first quarter of 2024 was due to $0.3 million of net losses on repossessed assets. The net loss for the linked quarter was primarily due to the sales of $36.5 million of lower yielding available-for-sale investment securities for a pre-tax loss of $1.7 million. The net loss for the first quarter of 2023 was primarily due to a pre-tax net loss of $2.0 million on the sale of $96.7 million of its lower yielding available-for-sale securities.

Total non-interest income, excluding net gains and losses, for the first quarter of 2024 decreased $0.2 million compared to the linked quarter. The decrease in non-interest income, excluding net gains and losses, was primarily due to decreases of $1.6 million in lease income and $0.8 million in electronic banking income. The decrease in lease income was due to a large lease buyout in the fourth quarter of 2023, while the decrease in electronic banking income was due to a decline in customer activity. Partially offsetting the decreases was a $2.2 million increase in insurance income due to seasonal performance-based commissions being paid in the first quarter of the year. Compared to the first quarter of 2023, total non-interest income, excluding net gains and losses, increased $4.9 million, primarily due to (i) a $1.1 million increase in insurance income, (ii) a $1.0 million increase in other non-interest income, (iii) a $0.8 million increase in bank owned life insurance income, (iv) a $0.7 million increase in deposit account service charges, (v) a $0.6 million increase in electronic banking income. Insurance income increased due to higher contingency income, new business, and market increases for premiums. Bank owned life insurance increased due to a $0.5 million death benefit in the first quarter of 2024 and additional income from policies acquired in the Limestone Merger. The other increases for the first quarter of 2024, when compared to the first quarter of 2023, were primarily due to the additional customers brought in from the Limestone Merger.

Total non-interest expenses for the first three months ended March 31, 2024 were impacted by anticipated annual expenses that occur in the first quarter of each year including annual merit increases, stock-based compensation expenses attributable to retirement-eligible employees and health savings account ("HSA") contributions. Total non-interest expense for the prior periods were impacted by the Limestone Merger and acquisition-related non-interest expense.

The table below summarizes the amount of acquisition-related expenses for each line item that is a component of non-interest expense. This information is used by Peoples to provide information useful to investors in understanding Peoples' operating performance and trends.

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	Three Months Ended
	March 31,		December 31,		March 31,
(Dollars in thousands)	2024		2023		2023
Non-interest expense:
Salaries and employee benefit costs	$	38,893	$	37,370	$	32,028
Net occupancy and equipment expense	6,283		5,532		4,955
Professional fees	2,967		3,266		2,881
Data processing and software expense	5,769		6,029		4,562
Amortization of other intangible assets	2,788		3,271		1,871
Electronic banking expense	1,781		1,991		1,491
Marketing expense	1,056		1,463		930
FDIC insurance premiums	1,186		1,260		801
Franchise tax expense	881		862		1,034
Communication expense	799		745		613
Other loan expenses	1,076		726		739
Other non-interest expense	4,986		5,174		4,574
Total non-interest expense	68,465		67,689		56,479
Acquisition-related non-interest expense:
Salaries and employee benefit costs	16		119		21
Net occupancy and equipment expense	—		78		9
Professional fees	(38)		530		291
Data processing and software expense	(18)		560		—

Electronic banking expense	(100)		—		—
Marketing expense	10		20		10



Other loan expenses	—		1		—
Other non-interest expense	46		(32)		220
Total acquisition-related non-interest expense	(84)		1,276		551
Non-interest expense excluding acquisition-related expense:
Salaries and employee benefit costs	38,877		37,251		32,007
Net occupancy and equipment expense	6,283		5,454		4,946
Professional fees	3,005		2,736		2,590
Data processing and software expense	5,787		5,469		4,562
Amortization of other intangible assets	2,788		3,271		1,871
Electronic banking expense	1,881		1,991		1,491
Marketing expense	1,046		1,443		920
FDIC insurance premiums	1,186		1,260		801
Franchise tax expense	881		862		1,034
Communication expense	799		745		613
Other loan expenses	1,076		725		739
Other non-interest expense	4,940		5,206		4,354
Total non-interest expense excluding acquisition-related expense	$	68,549	$	66,413	$	55,928

Total non-interest expense increased $0.8 million, or 1%, for the three months ended March 31, 2024, compared to the linked quarter. Excluding acquisition-related expense, total non-interest expense increased $2.1 million, or 3%, primarily due to increases of $1.6 million in salaries and employee benefit costs. The increase in salaries and employee benefit costs was due to anticipated annual expenses that occur in the first quarter of each year including annual merit increases, stock-based compensation expenses attributable to retirement-eligible employees and HSA contributions.

Compared to the first quarter of 2023, total non-interest expense increased $12.0 million, or 21%. Excluding acquisition-related expenses, non-interest expenses increased $12.6 million, or 23%, primarily due to a increases of $6.9 million in salaries and employee

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benefits costs due to additional employees added in the Limestone Merger and $1.3 million and $1.2 million in net occupancy and equipment expense and data processing and software expense, respectively, due to the recent growth, including through acquisitions.

The efficiency ratio for the first quarter of 2024 was 58.0%, compared to 56.0% for the linked quarter, and 57.8% for the first quarter of 2023. The increase in the efficiency ratio compared to the linked quarter was largely a result of an increase in interest expense on deposits. The efficiency ratio compared to the prior year quarter was relatively flat. The efficiency ratio, adjusted for non-core items, was 58.1% for the first quarter of 2024, compared to 54.8% for the linked quarter and 57.19% for the first quarter of 2023. Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business.

Peoples recorded income tax expense of $8.3 million with an effective tax rate of 21.8% for the first quarter of 2024, compared to income tax expense of $9.7 million with an effective tax rate of 22.3% for the linked quarter, and income tax expense of $7.0 million with an effective tax rate of 21.0% for the first quarter of 2023. Income tax expense for the first quarter of 2024 compared to the linked quarter decreased due to lower pre-tax income. The increase for the first quarter of 2024 compared to the first quarter of 2023, was driven by higher pre-tax income.

At March 31, 2024, total assets were $9.27 billion, compared to $9.16 billion at December 31, 2023 and $7.31 billion at March 31, 2023. Total assets at March 31, 2024 increased when compared to at December 31, 2023 primarily due to increases in investment securities and period-end total loan and lease balances. The period-end total loan and lease balances at March 31, 2024 increased $43.6 million, or 3% annualized, compared to at December 31, 2023. The increase in the period-end loan and lease balance was primarily driven by increases of (i) $46.8 million in other commercial real estate loans, (ii)$35.8 million in premium finance loans, and (iii) $29.6 million in commercial and industrial loans, partially offset by reductions of (a) $49.3 million in construction loans, (b) $16.2 million in indirect consumer loans, and (c) $15.2 million in direct consumer loans. Total assets at March 31, 2024 increased compared to March 31, 2023 due to $1.46 billion of assets, primarily loans, acquired in the Limestone Merger. Excluding the loans acquired in the Limestone Merger, the period-end loan and lease balance at March 31, 2024 increased $499.3 million, or 10%, driven by increases of $198.1 million, $100.6 million, $80.7 million, $68.1 million, $37.3 million, and $23.5 million in other commercial real estate loans, commercial and industrial loans, premium finance loans, leases, construction loans, and home equity lines of credit, respectively.

Total liabilities were $8.21 billion at March 31, 2024, up from $8.10 billion at December 31, 2023 and $6.49 billion at March 31, 2023. The increase in total liabilities when compared to at December 31, 2023 was primarily due to an increase of $174.3 million in period-end total deposits, partially offset by a decrease of $87.6 million in short-term borrowings. The increase in period-end total deposits when compared to at December 31, 2023 was primarily driven by increases of (i) $237.0 million in retail CDs, (ii) $98.5 million in governmental deposits and (iii) $84.5 million in money market deposit accounts, partially offset by decreases of (a) $99.3 million in non-interest bearing deposit accounts, (b) $41.8 million in brokered CDs, (c) $36.6 million in interest-bearing demand deposit accounts, and (d) $17.8 million in savings accounts. The increase in governmental deposit accounts was due to the seasonality of the balances, which are typically higher in the first quarter each year. The increase in total liabilities when compared to at March 31, 2023 was primarily due to $1.35 billion of liabilities, primarily deposits, acquired in the Limestone Merger. Excluding deposits acquired in the Limestone Merger, period-end total deposits at March 31, 2024 increased $784.8 million, or 14%, compared to at March 31, 2023. The increase was primarily driven by increases of $956.9 million in retail CDs, $210.3 million in brokered CDs, and $191.2 million in money market deposit accounts, partially offset by decreases of $270.9 million, $191.8 million, and $158.4 million in non-interest-bearing deposit accounts, savings accounts, and interest-bearing demand deposit accounts, respectively.

Total stockholders' equity at March 31, 2024 increased by $8.5 million compared to at December 31, 2023, which was primarily due to net income for the first quarter of 2024 of $29.6 million, partially offset by dividends paid of $13.7 million and a $7.4 million increase in accumulated other comprehensive loss. The change in accumulated other comprehensive loss was primarily 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 $111.8 million and $104.2 million at March 31, 2024 and at December 31, 2023, respectively. The increase in total stockholders' equity at March 31, 2024 when compared to at March 31, 2023 was also impacted by net income of $116.4 million in the last twelve months and a decrease in accumulated other comprehensive loss of $2.0 million, partially offset by dividends paid of $55.1 million and share repurchases of $6.0 million.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income, the amount by which interest income exceeds interest expense, remains Peoples' largest source of revenue. The amount of net interest income earned by Peoples each quarter is affected by various factors, including changes in market interest rates due to the Federal Reserve’s monetary policy, the level and degree of pricing competition for loans and deposits in Peoples’ markets, and the amount and composition of Peoples' earning assets and interest-bearing liabilities.

Net interest margin, which is calculated by dividing fully tax-equivalent ("FTE") net interest income by average interest-earning assets, serves as an important measurement of the net revenue stream generated by the volume, mix and pricing of interest-earning assets and interest-bearing liabilities. FTE net interest income is calculated by increasing interest income to convert tax-exempt income earned on obligations of states and political subdivisions and tax-exempt loans to the pre-tax equivalent of taxable income

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using a blended corporate income tax rate of 23.2% for the three months ended March 31, 2024, and 23.3% for the three months ended December 31, 2023 and March 31, 2023.

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


	Three Months Ended
	March 31, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Net interest income	$	86,640	$	88,369	$	72,878
Taxable equivalent adjustment	400		414		399
FTE net interest income	$	87,040	$	88,783	$	73,277

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The following tables detail Peoples’ average balance sheets for the periods presented:


	For the Three Months Ended
	March 31, 2024						December 31, 2023						March 31, 2023
(Dollars in thousands)	Average Balance		Income/ Expense		Yield/Cost		Average Balance		Income/ Expense		Yield/Cost		Average Balance		Income/ Expense		Yield/Cost
Short-term investments	$	142,381	$	1,922	5.44	%	$	58,037	$	901	6.16	%	$	35,223	$	388	4.47	%

Investment securities (a)(b):
Taxable	1,657,967		13,967		3.37	%	1,589,980		12,921		3.25	%	1,597,688		11,049		2.77	%
Nontaxable	174,632		1,308		3.00	%	178,053		1,388		3.12	%	190,566		1,298		2.72	%
Total investment securities	1,832,599		15,275		3.33	%	1,768,033		14,309		3.24	%	1,788,254		12,347		2.76	%
Loans (b)(c):
Construction	339,448		6,404		7.48	%	387,147		7,396		7.48	%	239,492		3,963		6.62	%
Commercial real estate, other	2,076,219		37,242		7.12	%	2,014,824		38,076		7.39	%	1,333,062		19,794		5.94	%
Commercial and industrial	1,203,196		23,521		7.75	%	1,144,857		22,728		7.77	%	877,391		14,610		6.66	%
Premium finance	210,405		4,564		8.60	%	189,882		3,781		7.79	%	147,895		2,150		5.81	%
Leases	409,870		12,067		11.68	%	400,258		11,505		11.25	%	342,583		9,643		11.26	%
Residential real estate (d)	930,989		11,322		4.86	%	941,102		11,233		4.77	%	839,822		9,717		4.63	%
Home equity lines of credit	216,743		4,297		8.00	%	206,847		4,088		7.84	%	176,327		2,966		6.82	%
Consumer, indirect	656,244		9,281		5.70	%	672,042		9,316		5.50	%	640,359		7,231		4.58	%
Consumer, direct	124,091		2,098		6.82	%	137,258		2,325		6.72	%	108,488		1,739		6.50	%
Total loans	6,167,205		110,796		7.15	%	6,094,217		110,448		7.12	%	4,705,419		71,813		6.12	%
Allowance for credit losses	(61,236)						(62,241)						(52,669)
Net loans	6,105,969		110,796		7.22	%	6,031,976		110,448		7.20	%	4,652,750		71,813		6.19	%
Total earning assets	8,080,949		127,993		6.31	%	7,858,046		125,658		6.30	%	6,476,227		84,548		5.23	%
Goodwill and other intangible assets	410,719						411,616						325,545
Other assets	529,983						556,993						420,692
Total assets	$	9,021,651					$	8,826,655					$	7,222,464
Interest-bearing deposits:
Savings accounts	$	905,713	$	226	0.10	%	$	939,549	$	228	0.10	%	$	1,044,392	$	136	0.05	%
Governmental deposit accounts	763,899		5,084		2.68	%	750,030		4,844		2.56	%	637,959		1,066		0.68	%
Interest-bearing demand accounts	1,109,033		452		0.16	%	1,145,841		373		0.13	%	1,103,966		180		0.07	%
Money market accounts	784,759		4,888		2.51	%	751,503		4,212		2.22	%	583,574		825		0.57	%
Retail CDs	1,582,426		15,900		4.05	%	1,336,440		12,079		3.59	%	576,645		1,750		1.23	%
Brokered CDs (e)	568,996		6,753		4.79	%	575,203		7,865		5.42	%	224,325		1,704		3.08	%
Total interest-bearing deposits	5,714,826		33,303		2.35	%	5,498,566		29,601		2.14	%	4,170,861		5,661		0.55	%
Borrowed funds:
Short-term FHLB advances (e)	135,072		1,826		5.45	%	294,859		4,089		5.50	%	377,578		4,314		4.63	%
Repurchase agreements and other	253,758		2,358		3.72	%	126,357		692		2.19	%	93,848		143		0.61	%
Total short-term borrowings	388,830		4,184		4.32	%	421,216		4,781		4.51	%	471,426		4,457		3.83	%
Long-term FHLB advances	125,931		1,241		3.97	%	88,840		849		3.79	%	34,015		204		2.43	%

Long-term notes payable	50,407		862		6.84	%	45,441		724		6.37	%	50,656		653		5.16	%
Other long-term borrowings (f)	53,936		1,363		10.02	%	51,984		920		6.93	%	13,806		296		8.58	%
Total long-term borrowings	230,274		3,466		6.04	%	186,265		2,493		5.34	%	98,477		1,153		4.69	%
Total borrowed funds	619,104		7,650		4.93	%	607,481		7,274		4.76	%	569,903		5,610		3.98	%
Total interest-bearing liabilities	6,333,930		40,953		2.60	%	6,106,047		36,875		2.40	%	4,740,764		11,271		0.96	%
Non-interest-bearing deposits	1,501,738						1,570,110						1,556,636
Other liabilities	133,202						147,983						123,599
Total liabilities	7,968,870						7,824,140						6,420,999


Total stockholders’ equity	1,052,781						1,002,515						801,465
Total liabilities and stockholders’ equity	$	9,021,651					$	8,826,655					$	7,222,464
Interest rate spread (b)			$	87,040	3.71	%			$	88,783	3.90	%			$	73,277	4.27	%
Net interest margin (b)					4.27	%					4.44	%					4.53	%

Table of Co n tents

(a)Average balances are based on carrying value.

(b)Interest income and yields are presented on an FTE basis, using a 23.2% blended corporate income tax rate for the three months ended March 31, 2024, and 23.3% for the three months ended December 31, 2023 and March 31, 2023.

(c)Average balances include nonaccrual and impaired loans. Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status. Loan fees included in interest income were immaterial for all periods presented.

(d)Loans held for sale are included in the average loan balance listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income.

(e)Interest related to interest rate swap transactions is included, as appropriate to the transaction, in interest expense on short-term FHLB advances and interest expense on brokered CDs for the periods presented in which FHLB advances and brokered CDs were being utilized.

(f)Included in other long-term borrowings are trust preferred securities held for investments and floating rate junior subordinated deferrable interest debentures.

Peoples' average balances compared to prior periods have been impacted by recent acquisitions, including the Limestone Merger as of the close of business on April 30, 2023, which added to average loan, deposit and borrowed funds balances. Peoples' cash balances have increased primarily due to an increase in interest-bearing deposits in other banks, mostly with the FRB. The increases in market interest rates have increased asset yields and deposit outflows (which have increased borrowings).

The following table provides an analysis of the changes in FTE net interest income:




	Three Months Ended March 31, 2024 Compared to
(Dollars in thousands)	December 31, 2023						March 31, 2023
Increase (decrease) in:	Rate		Volume		Total (a)		Rate		Volume		Total (a)
INTEREST INCOME:
Short-term investments	$	(1,202)	$	2,223	$	1,021	$	105	$	1,429	$	1,534

Investment Securities (b):
Taxable	488		558		1,046		2,489		429		2,918
Nontaxable	(54)		(26)		(80)		477		(467)		10
Total investment income	434		532		966		2,966		(38)		2,928
Loans (b):
Construction	50		(1,042)		(992)		582		1,859		2,441
Commercial real estate, other	(5,485)		4,651		(834)		4,573		12,875		17,448
Commercial and industrial	(267)		1,060		793		2,733		6,178		8,911
Premium finance	385		398		783		1,283		1,131		2,414
Leases	346		216		562		387		2,037		2,424
Residential real estate	672		(583)		89		514		1,091		1,605
Home equity lines of credit	61		148		209		571		760		1,331
Consumer, indirect	1,042		(1,077)		(35)		1,862		188		2,050
Consumer, direct	204		(431)		(227)		91		268		359
Total loan income	(2,992)		3,340		348		12,596		26,387		38,983
Total interest income	$	(3,760)	$	6,095	$	2,335	$	15,667	$	27,778	$	43,445
INTEREST EXPENSE:
Deposits:
Savings accounts	$	35	$	(37)	$	(2)	$	206	$	(116)	$	90
Interest-bearing demand accounts	156		(77)		79		271		1		272
Money market accounts	504		172		676		3,687		376		4,063
Governmental deposit accounts	173		67		240		3,767		251		4,018
Retail CDs	1,583		2,238		3,821		8,036		6,114		14,150
Brokered CDs	(1,019)		(93)		(1,112)		1,338		3,711		5,049
Total deposit cost	1,432		2,270		3,702		17,305		10,337		27,642
Borrowed funds:
Short-term borrowings	525		(1,122)		(597)		5,971		(6,244)		(273)
Long-term borrowings	768		205		973		78		2,235		2,313
Total borrowed funds cost	1,293		(917)		376		6,049		(4,009)		2,040
Total interest expense	2,725		1,353		4,078		23,354		6,328		29,682
FTE net interest income	$	(6,485)	$	4,742	$	(1,743)	$	(7,687)	$	21,450	$	13,763

Table of Co n tents

(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.

Compared to the linked quarter, net interest income decreased $1.7 million, or 2.0%. Net interest margin was 4.27% for the first quarter of 2024, compared to 4.44% for the linked quarter. The decreases in net interest income and net interest margin were primarily due to a decrease in accretion income, net of amortization, from our acquisitions as well as excess cash on hand during the first quarter of 2024 for liquidity purposes.

Net interest income for the first quarter of 2024 grew 18.9% over the prior year quarter and net interest margin decreased by 26 basis points. The increase in net interest income compared to the first quarter of 2023 was driven by increases in market interest rates, the Limestone Merger, and organic growth. The decrease in net interest margin for the first quarter of 2024 compared to the first quarter of 2023, was driven primarily by an increase in interest expense on deposits.

Accretion income, net of amortization expense, from acquisitions was $6.6 million for the first quarter of 2024, $9.0 million for the linked quarter and $2.0 million for the first quarter of 2023, which added 32 basis points, 45 basis points and 13 basis points, respectively, to net interest margin. The decrease in accretion income for the first quarter of 2024, when compared to the linked quarter was driven by a fourth quarter 2023 true-up to the preliminary Limestone-related accretion. The increase in accretion income for the first quarter of 2024 compared to the first quarter of 2023 was a result of accretion from the Limestone Merger.

Additional information regarding changes in the Unaudited Consolidated Balance Sheets can be found under appropriate captions of the “FINANCIAL CONDITION” section of this MD&A. Additional information regarding Peoples' interest rate risk and the potential impact of interest rate changes on Peoples' results of operations and financial condition can be found later in this MD&A under the caption "FINANCIAL CONDITION - Interest Rate Sensitivity and Liquidity."

Provision for Credit Losses

The following table details Peoples’ provision for credit losses:


	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
(Dollars in thousands)
Provision for other credit losses	$	5,834		$	1,048		$	1,673
Provision for checking account overdraft credit losses	268			237			180
Provision for credit losses	$	6,102		$	1,285		$	1,853
As a percentage of average total loans (a)	0.40		%	0.08		%	0.16		%
(a) Presented on an annualized basis.

The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management’s quarterly estimates. The provision for credit losses for the first quarter of 2024 was driven by (i) a deterioration in macro-economic conditions used within the CECL model, (ii) an increase of reserves on individually analyzed loans and (iii) loan growth. The provision for credit losses for 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.

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.”

Table of Co n tents

Net Loss Included in Total Non-Interest Income

Net loss includes net losses on investment securities, asset disposals and other transactions, which are recognized in total non-interest income. The following table details Peoples’ net losses for the periods presented:


	Three Months Ended
	March 31, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Net loss on investment securities	$	(1)	$	(1,592)	$	(1,935)

Net loss on asset disposals and other transactions:
Net loss on other assets	(309)		(586)		(229)
Net loss on OREO	—		—		(10)

Net loss on other transactions	(32)		(33)		(7)
Net loss on asset disposals and other transactions	$	(341)	$	(619)	$	(246)

During the fourth quarter of 2023, Peoples executed the sale of $36.5 million of lower yielding available-for-sale investment securities. Proceeds from the sales were used to purchase higher yielding agency investment securities. During the first quarter of 2023, Peoples executed sales of $96.7 million of its lower yielding available-for-sale securities which were used to pay down overnight borrowings. The loss on the sales of the available-for-sale investment securities had a nominal impact on tangible book value as such loss was previously reflected in capital through accumulated other comprehensive loss.

The net loss on asset disposals and other transactions for the first quarter of 2024 and the linked quarter was due to $0.3 million of net losses on repossessed assets.

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 2024, for the linked quarter, and the for first quarter of 2023.

For the first quarter of 2024, insurance income comprised the largest portion of Peoples' total non-interest income, excluding net gains and losses. The following table details Peoples' insurance income:


	Three Months Ended
	March 31, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)


Property and casualty insurance commissions	$	3,585	$	3,655	$	3,252


Performance-based commissions	2,213		32		1,527
Life and health insurance commissions	614		582		564
Other fees and charges	86		68		82
Insurance income	$	6,498	$	4,337	$	5,425

Peoples' insurance income for the first quarter of 2024 increased $2.2 million when compared to linked quarter. This increase in insurance income was due to seasonal performance-based commissions being paid, which are annual in nature and typically occur in the first quarter of each year. Insurance income for the first quarter of 2024 increased $1.1 million when compared to first quarter of 2023, primarily due to new business and market increases for premiums.

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, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)


E-banking income	$	6,046	$	6,835	$	5,443

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 decreased for the first quarter of 2024 compared to the linked quarter primarily driven by a decrease in customer activity.

Table of Co n tents

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, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Fiduciary income	$	2,001	$	1,851	$	1,805
Brokerage income	1,842		1,789		1,627
Employee benefit fees	756		734		652
Trust and investment income	$	4,599	$	4,374	$	4,084

Fiduciary income and brokerage income increased in the first quarter of 2024 relative to the linked quarter due to market volatility. When compared to the first quarter of 2023, fiduciary income and brokerage income increased, which was driven by an increase in fiduciary income due to an increase in assets under administration and management.

The following table details Peoples' assets under administration and management:


	March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023
(Dollars in thousands)	March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023

Trust	$	2,061,402	$	2,021,249	$	1,900,488	$	1,931,789	$	1,803,887
Brokerage	$	1,530,954	$	1,473,814	1,364,372		1,379,309		1,318,300
Total	$	3,592,356	$	3,495,063	$	3,264,860	$	3,311,098	$	3,122,187
Quarterly average	$	3,521,188	$	3,341,868	$	3,319,655	$	3,205,186	$	3,076,285

The increases in assets under administration and management at March 31, 2024 compared to at December 31, 2023 were driven by market value fluctuations. The increases in assets under administration and management at March 31, 2024 when compared to at March 31, 2023 were primarily due to increases in brokerage income, as Peoples added new accounts and the underlying market values of assets under management grew.

Deposit account service charges are based on the recovery of costs associated with services provided. The following table details Peoples' deposit account service charges:


	Three Months Ended
	March 31, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Overdraft and non-sufficient funds fees	$	2,255	$	2,437	$	1,842
Account maintenance fees	1,718		1,764		1,461
Other fees and charges	250		289		220
Deposit account service charges	$	4,223	$	4,490	$	3,523

The amount of deposit account service charges, particularly fees for overdrafts and non-sufficient funds, is largely dependent on the timing and volume of customer activity. Management periodically evaluates its cost recovery fees to ensure they are reasonable based on operational costs and similar to fees charged in Peoples' markets by competitors. Deposit account service charges decreased for the first quarter of 2024 compared to the linked quarter due to seasonality of customer activity. Deposit account service charges increased when comparing the first quarter of 2024 to the first quarter of 2023 due to the Limestone Merger and increased maintenance fee rates.

The following table details the other items included within Peoples' total non-interest income:


	Three Months Ended
	March 31, 2024	December 31, 2023	March 31, 2023
(Dollars in thousands)

Other non-interest income	1,698	1,922	668
Bank owned life insurance income	1,500	1,227	707
Lease income	1,236	2,822	1,077
Mortgage banking income	321	338	314

Table of Co n tents

The decrease in other non-interest income when comparing the three months ended March 31, 2024 to the linked quarter was primarily due to an excess recovery of a previously charged-off loan. The increase in other non-interest income for the first quarter of 2024 when compared to the first quarter of 2023 was driven by increased operating lease income.

Bank owned life insurance income for the first quarter of 2024 increased compared to the linked quarter primarily due to a $0.5 million death benefit. Bank owned life insurance income for the first quarter of 2024 increased when compared to the first quarter of 2023, due to the additional insurance policies acquired in the Limestone Merger.

Lease income is primarily comprised of (i) gains on the early termination of leases, net of any associated purchase accounting adjustments, (ii) month-to-month lease payments in excess of net investment in the lease, net of any associated purchase accounting adjustment (iii) fees received for referrals, (iv) gains and losses recognized on the sales of residual assets and (v) syndication income. The first quarter of 2024 decrease in lease income when compared to the linked quarter was due to a large lease buyout in the fourth quarter of 2023.

Mortgage banking income is comprised mostly of net gains from the origination and sale of real estate loans in the secondary market, and, to a lesser extent, servicing income for loans sold with servicing retained. As a result, the amount of income recognized by Peoples is largely dependent on customer demand and long-term interest rates for residential real estate loans offered in the secondary market. Mortgage banking income for the first quarter of 2024 was relatively flat when compared to each of the prior periods.

In the first quarter of 2024, Peoples sold $0.2 million in loans into the secondary market with servicing retained and $6.9 million in loans with servicing released, compared to $26,000 and $7.9 million, respectively, in the fourth quarter of 2023, and $0.8 million and $7.4 million, respectively, in the first quarter of 2023.

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, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Base salaries and wages	$	24,797	$	23,713	$	20,332
Sales-based and incentive compensation	5,254		7,158		3,945
Employee benefits	3,938		4,205		4,115
Payroll taxes and other employment costs	2,836		2,280		2,370
Stock-based compensation	3,090		1,137		2,189
Deferred personnel costs	(1,022)		(1,123)		(923)
Salaries and employee benefit costs	$	38,893	$	37,370	$	32,028
Full-time equivalent employees:
Actual at end of period	1,498		1,478		1,286
Average during the period	1,492		1,483		1,283

Base salaries and wages for the first quarter of 2024 increased compared to the linked quarter primarily due to annual merit increases. The current quarter increase compared to the first quarter of 2023 was primarily driven by the additional employees added in the Limestone Merger as well as annual merit increases.

The decrease in sales-based and incentive compensation for the first quarter of 2024 compared to the linked quarter was primarily due to $1.3 million of Vantage-related sales-based incentive compensation. Sales-based and incentive compensation increased in the first quarter of 2024 when compared to the prior year quarter due to overall company performance measures used in calculating incentive awards.

The decrease in employee benefits for the first quarter of 2024 compared to the linked quarter and the first quarter of 2023 was primarily due to decreased medical costs.

Payroll taxes and other employment costs for the first quarter of 2024 increased compared to the linked quarter and the first quarter of 2024 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 first quarter of 2023 were the additional employees added in the Limestone Merger.

Stock-based compensation is generally recognized over the vesting period, which generally ranges from immediate vesting to vesting at the end of three years. An adjustment is made at the vesting date to reverse expense relating to forfeitures for performance awards, and at the date of forfeiture to reverse expense for non-vested restricted common share awards. Stock grants to retirement

Table of Co n tents

eligible grantees are expensed either immediately or over a shorter period than three years. The majority of Peoples' stock-based compensation is attributable to annual equity-based incentive awards to employees, which are awarded in the first quarter of each year based upon Peoples achieving certain performance goals during the prior year, and are generally contingent on employment through the vesting period. Stock-based compensation for the first quarter of 2024 increased when compared to the fourth quarter of 2023 and the first three months of 2023 due to additional employees, including the ones added in the Limestone Merger.

Deferred personnel costs represent the portion of current period salaries and employee benefit costs considered to be direct loan origination costs. These costs are capitalized and recognized over the life of the loan as a yield adjustment in interest income. As a result, the amount of deferred personnel costs for each period corresponds directly with the volume of loan originations, coupled with the average deferred costs per loan that are updated annually at the beginning of each year. Deferred personnel costs for the first quarter of 2024 remained relatively flat when compared to both the fourth quarter of 2023 and the first quarter of 2023.

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


	Three Months Ended
	March 31, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Depreciation	$	2,170	$	2,040	$	1,790
Repairs and maintenance costs	1,821		1,596		1,261
Property taxes, utilities and other costs	1,293		1,330		1,157
Net rent expense	999		566		747
Net occupancy and equipment expense	$	6,283	$	5,532	$	4,955

The first quarter of 2024 net occupancy and equipment expense increased when compared to the linked quarter due to a prior period one time benefit to rent expense. The first quarter of 2024 net occupancy and equipment expense increased when compared to the first quarter of 2023 due to additional net occupancy and equipment expense from the Limestone Merger.

The following table details the other items included in total non-interest expense:


	Three Months Ended
	March 31, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Data processing and software expense	$	5,769	$	6,029	$	4,562
Professional fees	2,967		3,266		2,881
Amortization of other intangible assets	2,788		3,271		1,871
E-banking expense	1,781		1,991		1,491
FDIC insurance premiums	1,186		1,260		801
Other loan expenses	1,076		726		739
Marketing expense	1,056		1,463		930
Franchise tax expense	881		862		1,034
Communication expense	799		745		613
Other non-interest expense	4,986		5,174		4,574

Data processing and software expenses for the first quarter 2024 decreased compared to the linked quarter due to $0.6 million of acquisition-related expense in the linked quarter. The increase for the first quarter 2024 when compared to the first quarter 2023 was driven by software upgrades and implementation of new systems, coupled with the increased size of Peoples' organization.

Professional fees for the first quarter of 2024 decreased when compared to the linked quarter due to less acquisition-related expenses. Professional fees for the first quarter of 2024 was relatively flat when compared to the first quarter of 2023.

Amortization of other intangible assets for the first quarter of 2024 decreased when compared to the linked quarter due to additional expenses attributable to the Limestone Merger during the fourth quarter of 2023. Amortization of other intangible assets for the current quarter increased when compared to the first quarter of 2023 due to amortization of intangible assets recognized in the Limestone Merger during the first quarter of 2023.

Peoples' e-banking expense is comprised of costs associated with debit and ATM cards. The decrease in electronic banking income compared to the linked quarter was due to a decline in customer activity. E-banking expense increased for the first quarter of 2024 when compared to the first quarter of 2023 due to additional customers brought in from the Limestone Merger.

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Peoples' FDIC insurance premiums for the first quarter of 2024 were relatively flat when compared to the linked quarter. FDIC insurance premiums for the first quarter of 2024 increased when compared to the first quarter of 2023 due to organic and acquisitive growth and an increase in rates assessed by the FDIC.

Other loan expenses during the first quarter of 2024 increased when compared to the respective prior comparative periods primarily due to increases in miscellaneous loan and collection expenses.

Marketing expense for the first quarter of 2024 decreased when compared to the linked quarter due to lower advertising expense. Marketing expense for the first quarter of 2024 increased when compared to the first quarter of 2023 due to higher donations.

Peoples is subject to state franchise taxes, which are based largely on Peoples' equity, in the states where Peoples has a physical presence. Franchise tax expense also includes the Ohio Financial Institution Tax ("FIT"), which is a business privilege tax that is imposed on financial institutions organized for profit and doing business in Ohio. The Ohio FIT is based on the total equity capital in proportion to the taxpayer's gross receipts in Ohio as of the most recent year-end. The decrease in franchise tax expense for the first quarter of 2024 when compared to the first quarter of 2023 was driven by a lower apportionment in Ohio.

Other non-interest expense for the first quarter of 2024 decreased when compared to the linked quarter due to a decrease in postage expense. The increase for the first quarter of 2024 when compared to the first quarter of 2023 was driven by the increase in depreciation expense for operating leases.

Income Tax Expense

Peoples recorded income tax expense of $8.3 million with an effective tax rate of 21.8% for the first quarter of 2024, compared to income tax expense of $9.7 million with an effective tax rate of 22.3% for the linked quarter and income tax expense of $7.0 million with an effective tax rate of 21.0% for the first quarter of 2023. The decrease in income tax expense when compared to the fourth quarter of 2023 was primarily due to lower pre-tax income.

Additional information regarding income taxes can be found in "Note 13. Income Taxes" of the Notes to the Consolidated Financial Statements included in Peoples' 2023 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.

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, 2024			December 31, 2023			March 31, 2023
(Dollars in thousands)
Pre-provision net revenue:
Income before income taxes	$	37,852		$	43,529		$	33,606
Add: provision for credit losses	6,102			1,285			1,853

Add: loss on OREO	—			—			10
Add: loss on investment securities	1			1,592			1,935
Add: loss on other assets	309			586			229
Add: loss on other transactions	32			33			7





Pre-provision net revenue	$	44,296		$	47,025		$	37,640

Total average assets	$9,021,651			$8,826,655			$7,222,464

Pre-provision net revenue to total average assets (annualized)	1.97		%	2.11		%	2.11		%
Weighted-average common shares outstanding - diluted	35,051,810			35,089,825			28,021,879
Pre-provision net revenue per common share - diluted	$	1.26		$	1.34		$	1.34

The decrease in the PPNR for the first quarter of 2024 compared to the fourth quarter of 2023 was driven by decreased net interest income and lower accretion income. The increase in PPNR for the first quarter of 2024 when compared to the first quarter of 2023 was

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due to increased net interest income reflecting the positive impact of the additional net interest income from Limestone customers after the Limestone Merger.

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.

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, 2024		December 31, 2023		March 31, 2023
(Dollars in thousands)
Core non-interest expense:
Total non-interest expense	$	68,465	$	67,689	$	56,479

Less: acquisition-related expenses	(84)		1,276		551







Core non-interest expense	$	68,549	$	66,413	$	55,928

Efficiency Ratio (Non-US GAAP)

The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of FTE net interest income plus total non-interest income excluding net gains and losses. This measure is Non-US GAAP since it excludes amortization of other intangible assets and all gains and losses included in earnings, and uses FTE net interest income.


	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
(Dollars in thousands)

Efficiency ratio:
Total non-interest expense	$	68,465		$	67,689		$	56,479
Less: amortization of other intangible assets	2,788			3,271			1,871
Adjusted total non-interest expense	65,677			64,418			54,608

Total non-interest income	25,779			24,134			19,060

Less: net loss on investment securities	(1)			(1,592)			(1,935)
Less: net loss on asset disposals and other transactions	(341)			(619)			(246)
Total non-interest income excluding net losses	26,121			26,345			21,241

Net interest income	86,640			88,369			72,878
Add: FTE adjustment (a)	400			414			399
Net interest income on an FTE basis	87,040			88,783			73,277
Adjusted revenue	$	113,161		$	115,128		$	94,518
Efficiency ratio	58.04		%	55.95		%	57.78		%

Efficiency ratio adjusted for non-core items:
Core non-interest expense	$	68,549		$	66,413		$	55,928
Less: amortization of other intangible assets	2,788			3,271			1,871
Adjusted core non-interest expense	65,761			63,142			54,057
Non-interest income excluding net losses	26,121			26,345			21,241
Net interest income on an FTE basis	87,040			88,783			73,277
Adjusted revenue	$	113,161		$	115,128		$	94,518
Efficiency ratio adjusted for non-core items	58.11		%	54.85		%	57.19		%

(a) Tax effect is calculated using a 23.2% blended corporate income tax rate for the three months ended March 31, 2024, and a 23.3% blended corporate income tax rate for the three months ended December 31, 2023 and March 31, 2023.

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The efficiency ratio increased compared to the linked quarter mainly as the result of an increase of interest expense on deposits. The efficiency ratio compared to the prior year quarter was relatively flat. The efficiency ratio, adjusted for non-core items, was 58.1% for the first quarter of 2024, compared to 54.9% for the linked quarter, and 57.2% for the first quarter of 2023. Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business.

Return on Average Assets Adjusted for Non-Core Items Ratio (Non-US GAAP)

In addition to return on average assets, management uses return on average assets adjusted for non-core items to monitor performance. The return on average assets adjusted for non-core items ratio represents a Non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses and acquisition-related expenses..


	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
(Dollars in thousands)

Annualized net income adjusted for non-core items:
Net income	$	29,584		$	33,825		$	26,560

Add: net loss on investment securities	1			1,592			1,935
Less: tax effect of net loss on investment securities (a)	—			334			406


Add: net loss on asset disposals and other transactions	341			619			246
Less: tax effect of net loss on asset disposals and other transactions (a)	72			130			52



Add: acquisition-related expenses	(84)			1,276			551
Less: tax effect of acquisition-related expenses (a)	(18)			268			116


















Net income adjusted for non-core items (after tax)	$	29,788		$	36,580		$	28,718
Days in the period	91			92			90
Days in the year	366			365			365
Annualized net income	$	118,986		$	134,197		$	107,716
Annualized net income adjusted for non-core items (after tax)	$	119,807		$	145,127		$	116,467
Return on average assets:
Annualized net income	$	118,986		$	134,197		$	107,716
Total average assets	9,021,651			8,826,655			7,222,464
Return on average assets	1.32		%	1.52		%	1.49		%
Return on average assets adjusted for non-core items:
Annualized net income adjusted for non-core items (after tax)	$	119,807		$	145,127		$	116,467
Total average assets	9,021,651			8,826,655			7,222,464
Return on average assets adjusted for non-core items (after tax)	1.33		%	1.64		%	1.61		%

(a) Based on a 21% statutory federal corporate income tax rate.

The return on average assets adjusted for non-core items for the first quarter of 2024 decreased when compared to the linked quarter, due to a decrease in annualized net income resulting from lower net interest income, partially offset by an increase in average assets resulting from the excess cash held on balance sheet as well as increases in non-interest expenses. The decrease in the return on average assets adjusted for non-core items for the first quarter of 2024, compared to the first quarter of 2023, was attributable to an increase in annualized net income primarily due to an increase in net interest income, partially offset by the assets acquired in the Limestone Merger and an increase in expenses.

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, 2024			December 31, 2023			March 31, 2023
(Dollars in thousands)
Annualized net income excluding amortization of other intangible assets:
Net income	$	29,584		$	33,825		$	26,560
Add: amortization of other intangible assets	2,788			3,271			1,871
Less: tax effect of amortization of other intangible assets (a)	585			687			393
Net income excluding amortization of other intangible assets	$	31,787		$	36,409		$	28,038
Days in the period	91			92			90
Days in the year	366			365			365
Annualized net income	$	118,986		$	134,197		$	107,716
Annualized net income excluding amortization of other intangible assets	$	127,847		$	144,449		$	113,710
Average tangible equity:
Total average stockholders' equity	$	1,052,781		$	1,002,515		$	801,465
Less: average goodwill and other intangible assets	410,719			411,616			325,545
Average tangible equity	$	642,062		$	590,899		$	475,920
Return on total average stockholders' equity ratio:
Annualized net income	$	118,986		$	134,197		$	107,716
Total average stockholders' equity	$	1,052,781		$	1,002,515		$	801,465
Return on total average stockholders' equity	11.30		%	13.39		%	13.44		%
Return on average tangible equity ratio:
Annualized net income excluding amortization of other intangible assets	$	127,847		$	144,449		$	113,710
Average tangible equity	$	642,062		$	590,899		$	475,920
Return on average tangible equity	19.91		%	24.45		%	23.89		%

(a) Based on a 21% statutory federal corporate income tax rate.

The return on total average stockholders' equity and average tangible equity ratios decreased when compared to the linked quarter due to a decrease in annualized net income mainly attributable to a decrease in net interest income and an increase in non-interest expense. The decreases in the return on total average stockholders' equity and average tangible equity ratios in the first quarter of 2024 when compared to the same period of 2023 were due to the issuance of 6.8 million common shares as consideration in the Limestone Merger, an increase in acquisition-related expenses, partially offset by an increase in total net interest income driven by the 2023 increases in market interest rates and additional net interest income from Limestone following the Limestone Merger.

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FINANCIAL CONDITION

Cash and Cash Equivalents

At March 31, 2024, Peoples' interest-bearing deposits in other banks had increased $10.9 million from December 31, 2023. The total cash and cash equivalents balance included $318.5 million of excess cash reserves being maintained at the FRB of Cleveland at March 31, 2024, compared to $309.8 million at December 31, 2023. 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 2024, Peoples' total cash and cash equivalents increased $3.0 million, which reflected cash inflows of $37.0 million of cash provided by operating activities and $89.1 million of cash provided by financing activities, mostly offset by cash outflows of $123.1 million of cash used in investing activities. The cash provided by financing activities was largely driven by a $273.6 million net increase in interest-bearing deposits and $26.8 million of proceeds from long-term borrowings, partially offset by a net decrease in non-interest bearing deposits of $99.3 million and a net decrease in short-term borrowings of $87.6 million. Peoples' use of cash in investing activities reflected a net cash outflow from available-for-sale investment securities of $78.7 million and a $43.3 million net increase in loans held for investment.

Further information regarding the management of Peoples' liquidity position can be found later in this discussion under “Interest Rate Sensitivity and Liquidity.”

Investment Securities

The following table provides information regarding Peoples’ investment portfolio:


(Dollars in thousands)	Weighted Average Yield		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023
Available-for-sale securities, at fair value:
Obligations of:
U.S. Treasury and government agencies	3.10	%	$	28,773	$	30,296	$	42,466	$	75,255	$	58,438
U.S. government sponsored agencies	4.14	%	200,460		118,607		103,932		98,324		98,311
States and political subdivisions	2.85	%	208,750		213,296		220,460		248,271		224,996
Residential mortgage-backed securities	2.72	%	621,691		628,924		593,104		635,487		605,270
Commercial mortgage-backed securities	1.86	%	50,791		51,234		50,840		52,830		52,153
Bank-issued trust preferred securities	12.44	%	6,001		5,965		7,779		23,272		10,329



Total fair value			$	1,116,466	$	1,048,322	$	1,018,581	$	1,133,439	$	1,049,497
Total amortized cost			$	1,262,319	$	1,184,288	$	1,211,794	$	1,292,331	$	1,196,521
Net unrealized loss			$	(145,853)	$	(135,966)	$	(193,213)	$	(158,892)	$	(147,024)
Held-to-maturity securities, at amortized cost:
Obligations of:
U.S. government sponsored agencies	4.80	%	$	188,423	$	188,475	$	174,699	$	176,027	$	194,184
States and political subdivisions (a)	2.90	%	144,315		144,258		144,490		144,668		144,844
Residential mortgage-backed securities	3.36	%	246,579		248,559		248,627		243,807		245,294
Commercial mortgage-backed securities	2.53	%	100,427		102,365		107,593		109,423		109,750
Total amortized cost			$	679,744	$	683,657	$	675,409	$	673,925	$	694,072
Other investment securities			$	62,939	$	63,421	$	66,332	$	63,579	$	52,763
Total investment securities:
Amortized cost			$	2,005,002	$	1,931,366	$	1,953,535	$	2,029,835	$	1,943,356
Carrying value			$	1,859,149	$	1,795,400	$	1,760,322	$	1,870,943	$	1,796,332

(a)Amortized cost is presented net of the allowance for credit losses of $238 at March 31, 2024 and at December 31, 2023, and $241 at March 31, 2023.

For the first quarter of 2024, total investment securities increased compared to the linked quarter, largely due to purchases of higher yielding government sponsored agency securities which were used to collateralize certain government deposits. During the fourth quarter of 2023, Peoples executed the sales of $36.5 million of lower yielding available-for-sale investment securities for an after-tax loss of $1.3 million. Proceeds from the sales were used to purchase higher yielding agency investment securities. During the first quarter of 2023, Peoples executed the sales of $96.7 million of its lower yielding available-for-sale securities for an after-tax loss of $1.6 million. Proceeds from the sales were used to pay down overnight borrowings. The realized losses recognized due to the first

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quarter of 2023 transactions were earned back within the 2023 fiscal year, and the realized losses recognized due to the fourth quarter of 2023 transactions are expected to be earned back within 14 months of the transaction dates.

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 and Leases

The following table provides information regarding outstanding loan balances:


(Dollars in thousands)	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Originated loans and leases:
Construction	$	262,209		$	279,335		$	289,657		$	297,051		$	222,915
Commercial real estate, other	1,263,577			1,209,204			1,161,064			1,035,473			995,176
Commercial real estate	1,525,786			1,488,539			1,450,721			1,332,524			1,218,091
Commercial and industrial	972,191			938,659			860,407			873,386			840,194
Premium finance	238,962			203,177			189,251			162,357			158,263
Leases	373,626			357,217			328,365			287,948			251,711
Residential real estate	420,518			418,570			405,917			396,667			386,964
Home equity lines of credit	164,019			148,155			140,787			132,222			132,531
Consumer, indirect	650,228			666,472			668,371			654,371			647,177
Consumer, direct	99,022			112,292			114,160			101,786			99,299
Consumer	749,250			778,764			782,531			756,157			746,476
Deposit account overdrafts	1,306			986			857			830			749
Total originated loans and leases	$	4,445,658		$	4,334,067		$	4,158,836		$	3,942,091		$	3,734,979
Acquired loans and leases (a):
Construction	$	52,478		$	84,684		$	84,359		$	121,690		$	9,381
Commercial real estate, other	980,203			987,753			1,028,920			1,036,041			485,886
Commercial real estate	1,032,681			1,072,437			1,113,279			1,157,731			495,267
Commercial and industrial	242,424			246,327			268,402			286,924			50,945

Leases	49,068			56,843			74,270			89,843			102,930
Residential real estate	361,370			372,525			386,048			394,775			325,638
Home equity lines of credit	57,060			60,520			63,153			66,999			41,852

Consumer, direct	14,566			16,477			20,402			36,233			8,107

Total acquired loans and leases	$	1,757,169		$	1,825,129		$	1,925,554		$	2,032,505		$	1,024,739
Total loans and leases	$	6,202,827		$	6,159,196		$	6,084,390		$	5,974,596		$	4,759,718



Percent of loans and leases to total loans and leases:
Construction	5.1		%	5.9		%	6.1		%	7.0		%	4.9		%
Commercial real estate, other	36.2		%	35.7		%	36.0		%	34.8		%	31.1		%
Commercial real estate	41.3		%	41.6		%	42.1		%	41.8		%	36.0		%
Commercial and industrial	19.6		%	19.2		%	18.6		%	19.4		%	18.7		%
Premium finance	3.8		%	3.3		%	3.1		%	2.7		%	3.3		%
Leases	6.8		%	6.7		%	6.6		%	6.3		%	7.4		%
Residential real estate	12.6		%	12.9		%	13.0		%	13.2		%	15.0		%
Home equity lines of credit	3.6		%	3.4		%	3.4		%	3.3		%	3.7		%
Consumer, indirect	10.5		%	10.8		%	11.0		%	11.0		%	13.6		%
Consumer, direct	1.8		%	2.1		%	2.2		%	2.3		%	2.3		%
Consumer	12.3		%	12.9		%	13.2		%	13.3		%	15.9		%

Total percentage	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%
Residential real estate loans being serviced for others	$	348,937		$	356,784		$	366,996		$	375,882		$	384,005

(a) Includes all loans acquired, and related loan discount recorded as part of acquisition accounting, in 2012 or thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals and increases in lines of credit).

The period-end total loan and lease balances at March 31, 2024 increased $43.6 million, or 3% annualized, compared to at December 31, 2023. The increase in the period-end loan and lease balance at March 31, 2024 compared to December 31, 2023 was primarily driven by increases of (i) $46.8 million in other commercial real estate loans, (ii) $35.8 million in premium finance loans and

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(iii) $29.6 million in commercial and industrial loans, partially offset by decreases of (a) $49.3 million in construction loans, (b) $16.2 million in indirect consumer loans and (c) $15.2 million in direct consumer loans. The increase in the period-end loan and lease balances at March 31, 2024 compared to at March 31, 2023 was primarily driven by loans acquired in the Limestone Merger totaling $1.1 billion. Excluding the loans acquired in the Limestone Merger, the period-end loan and lease balance increased $499.3 million, or 10%, driven by increases of $198.1 million, $100.6 million, $80.7 million, $68.1 million, $37.3 million, and $23.5 million in other commercial real estate loans, commercial and industrial loans, premium finance loans, leases, construction loans, and home equity lines of credit, respectively.

Loan Concentration

Peoples categorizes its commercial loans according to standard industry classifications and monitors for concentrations in a single industry or multiple industries that could be impacted by changes in economic conditions in a similar manner. Peoples' commercial lending activities continue to be spread over a diverse range of businesses from all sectors of the economy, with no single industry comprising over 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, 2024:


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



































Construction:
Apartment complexes	$	180,949	$	202,623	$	383,572	59.8	%
Residential property	19,607		32,085		51,692		8.1	%
Land development	36,985		14,583		51,568		8.0	%
Land only	24,612		7,674		32,286		5.0	%
Assisted living facilities and nursing homes	1,408		19,672		21,080		3.3	%


Lodging and lodging related	3,578		16,456		20,034		3.1	%
Industrial	10,619		5,287		15,906		2.5	%

Student housing	10,107		4,893		15,000		2.4	%




Other (a)	26,822		23,223		50,045		7.8	%
Total construction	$	314,687	$	326,496	$	641,183	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 Balance		Loan Commitments		Total Exposure		% of Total
Commercial real estate, other:
Apartment complexes	$	345,711	$	3,495	$	349,206	15.1	%
Retail facilities:
Owner occupied	$	56,251	$	1,399	$	57,650	2.5	%
Non-owner occupied	243,285		905		244,190		10.6	%
Total retail facilities	$	299,536	$	2,304	$	301,840	13.1	%
Light industrial facilities:
Owner occupied	$	144,172	$	2,927	$	147,099	6.4	%
Non-owner occupied	97,301		4,594		101,895		4.4	%
Total light industrial facilities	$	241,473	$	7,521	$	248,994	10.8	%
Office buildings and complexes:
Owner occupied	$	84,118	$	3,598	$	87,716	3.8	%
Non-owner occupied	132,981		8,292		141,273		6.1	%
Total office buildings and complexes	$	217,099	$	11,890	$	228,989	9.9	%
Lodging and lodging related:
Owner occupied	$	30,235	$	—	$	30,235	1.3	%
Non-owner occupied	124,559		—		124,559		5.4	%
Total lodging and lodging related	$	154,794	$	—	$	154,794	6.7	%
Assisted living facilities and nursing homes	$	140,712	$	5,167	$	145,879	6.3	%
Warehouse facilities:
Owner occupied	$	41,361	$	592	$	41,953	1.8	%
Non-owner occupied	44,530		128		44,658		1.9	%
Total warehouse facilities	$	85,891	$	720	$	86,611	3.7	%
Restaurant/bar facilities:
Owner occupied	$	40,747	$	20	$	40,767	1.8	%
Non-owner occupied	35,427		—		35,427		1.5	%
Total restaurant/bar facilities	$	76,174	$	20	$	76,194	3.3	%
Mixed-use facilities:
Owner occupied	$	37,696	$	1,233	$	38,929	1.7	%
Non-owner occupied	27,130		1,586		28,716		1.2	%
Total mixed-use facilities	$	64,826	$	2,819	$	67,645	2.9	%
Education services:
Owner occupied	$	16,279	$	—	$	16,279	0.7	%
Non-owner occupied	29,749		4,000		33,749		1.5	%
Total education services	$	46,028	$	4,000	$	50,028	2.2	%
















Other (a)	571,536		31,808		603,344		26.0	%
Total commercial real estate, other	$	2,243,780	$	69,744	$	2,313,524	100.0	%

(a) All other total exposures by industry are less than 2% of the Total Exposure.

Peoples' commercial lending activities continue to focus on lending opportunities within Ohio, Kentucky, West Virginia, Virginia, Washington, D.C. and Maryland. For all other states, the aggregate outstanding balances of commercial loans in each state were less than 3% of total loans at both March 31, 2024 and December 31, 2023. 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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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, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Construction	$	701		$	699		$	1,241		$	1,496		$	1,273
Commercial real estate, other	21,788			20,915			21,257			19,731			16,474
Commercial and industrial	10,581			10,490			10,205			11,028			8,307
Premium finance	607			484			476			431			433
Leases	12,889			10,850			11,692			10,377			9,109

Residential real estate	5,866			5,937			6,251			6,112			6,504
Home equity lines of credit	1,689			1,588			1,640			1,676			1,717
Consumer, indirect	8,301			8,590			7,516			7,610			7,781
Consumer, direct	2,279			2,343			2,519			2,642			1,619

Deposit account overdrafts	121			115			127			108			86
Allowance for credit losses	$	64,822		$	62,011		$	62,924		$	61,211		$	53,303
As a percent of total loans	1.05		%	1.01		%	1.03		%	1.02		%	1.12		%

The increase in the allowance for credit losses at March 31, 2024 compared to December 31, 2023 was largely attributable to (i) a deterioration in macro-economic conditions used within the CECL model, (ii) an increase of reserves on individually analyzed loans and (iii) loan growth. The increase in the allowance for credit losses at September 30, 2023 and at June 30, 2023, when compared to the prior periods presented was driven by the establishment of an allowance for credit losses for loans acquired in the Limestone Merger.

Additional information regarding Peoples' allowance for credit losses can be found in "Note 1 Summary of Significant Accounting Policies" in Peoples' 2023 Form 10-K and "Note 4 Loans and Leases" of the Notes to the Unaudited Condensed Consolidated Financial Statements in this Form 10-Q.

The following table summarizes Peoples’ net charge-offs and recoveries:


	Three Months Ended
(Dollars in thousands)	March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023
Gross charge-offs:
Construction	$	—	$	—	$	—	$	—	$	9
Commercial real estate, other	212		296		278		7		33
Commercial and industrial	235		640		199		11		1
Premium finance	54		43		33		23		23
Leases	1,270		2,019		905		604		469
Residential real estate	80		20		50		59		41
Home equity lines of credit	—		4		32		55		19
Consumer, indirect	1,461		1,234		926		941		929
Consumer, direct	226		142		92		78		104
Consumer	1,687		1,376		1,018		1,019		1,033
Deposit account overdrafts	336		352		319		263		227
Total gross charge-offs	$	3,874	$	4,750	$	2,834	$	2,041	$	1,855
Recoveries:

Commercial real estate, other	$	83	$	825	$	97	$	16	$	27
Commercial and industrial	7		98		3		451		—
Premium finance	8		—		12		3		9
Leases	212		25		168		89		80
Residential real estate	83		67		27		69		29
Home equity lines of credit	7		1		—		—		—
Consumer, indirect	71		130		149		129		79
Consumer, direct	9		12		11		35		15

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	Three Months Ended
(Dollars in thousands)	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Consumer	80			142			160			164			94
Deposit account overdrafts	74			103			49			53			72
Total recoveries	$	554		$	1,261		$	516		$	845		$	311
Net charge-offs (recoveries):
Construction	$	—		$	—		$	—		$	—		$	9
Commercial real estate, other	129			(529)			181			(9)			6
Commercial and industrial	228			542			196			(440)			1
Premium finance	46			43			21			20			14
Leases	1,058			1,994			737			515			389
Residential real estate	(3)			(47)			23			(10)			12
Home equity lines of credit	(7)			3			32			55			19
Consumer, indirect	1,390			1,104			777			812			850
Consumer, direct	217			130			81			43			89
Consumer	1,607			1,234			858			855			939
Deposit account overdrafts	262			249			270			210			155
Total net charge-offs	$	3,320		$	3,489		$	2,318		$	1,196		$	1,544
Ratio of net charge-offs (recoveries) to average total loans (annualized):
Construction	—		%	—		%	—		%	—		%	—		%
Commercial real estate, other	0.01		%	(0.03)		%	0.01		%	—		%	—		%
Commercial and industrial	0.02		%	0.03		%	0.01		%	(0.03)		%	—		%
Premium finance	—		%	—		%	—		%	—		%	—		%
Leases	0.07		%	0.13		%	0.05		%	0.04		%	0.04		%
Residential real estate	—		%	—		%	—		%	—		%	—		%
Home equity lines of credit	—		%	—		%	—		%	—		%	—		%
Consumer, indirect	0.09		%	0.07		%	0.05		%	0.06		%	0.07		%
Consumer, direct	0.01		%	0.01		%	0.01		%	—		%	0.01		%
Consumer	0.10		%	0.08		%	0.06		%	0.06		%	0.08		%
Deposit account overdrafts	0.02		%	0.02		%	0.02		%	0.02		%	0.01		%
Total	0.22		%	0.23		%	0.15		%	0.09		%	0.13		%

Each with "--%" not meaningful.

Total net charge-offs during the first quarter of 2024 were $3.3 million, or 0.22% of average total loans on an annualized basis, compared to $3.5 million, or 0.23% of average total loans on an annualized basis, during the fourth quarter of 2023 and $1.5 million, or 0.13% of average total loans on an annualized basis, during the first quarter of 2023. The decrease for the first quarter of 2024 when compared to the linked quarter was driven by a decrease in net charge-offs on leases and commercial and industrial loans during the first quarter of 2024. The increase in net charge-offs during the first quarter of 2024 versus the prior year first quarter was primarily attributable to an increase in charge-offs on (i) leases, (ii) indirect consumer loans, (iii) commercial industrial loans, and (iv) other commercial real estate loans, partially offset by an increase in recoveries on leases during the first quarter of 2024.

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The following table details Peoples’ nonperforming assets:


(Dollars in thousands)	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Loans 90+ days past due and accruing:

Commercial real estate, other	$	231		$	78		$	487		$	15		$	150
Commercial and industrial	10			316			67			—			228
Premium finance	2,208			1,355			1,581			987			764
Leases	4,070			3,826			6,007			3,847			2,491
Residential real estate	780			877			736			856			238
Home equity lines of credit	181			171			177			148			127
Consumer, indirect	134			68			47			40			13
Consumer, direct	48			25			15			31			3
Consumer	182			93			62			71			16
Total loans 90+ days past due and accruing	$	7,662		$	6,716		$	9,117		$	5,924		$	4,014
Nonaccrual loans:
Construction	$	—		$	—		$	—		$	—		$	1
Commercial real estate, other	3,773			2,816			3,661			8,987			11,345
Commercial and industrial	6,205			2,758			3,116			3,438			3,064
Leases	10,136			8,436			7,929			4,800			3,884
Residential real estate	7,450			7,921			8,454			8,393			8,641
Home equity lines of credit	1,134			1,022			1,026			841			793
Consumer, indirect	2,506			2,412			1,904			1,982			2,147
Consumer, direct	157			112			97			355			105
Consumer	2,663			2,524			2,001			2,337			2,252
Total nonaccrual loans	$	31,361		$	25,477		$	26,187		$	28,796		$	29,980










Total nonperforming loans ("NPLs")	$	39,023		$	32,193		$	35,304		$	34,720		$	33,994
OREO:
Commercial	$	7,118		$	7,118		$	7,118		$	7,118		$	8,730
Residential	120			56			56			48			48
Total OREO	$	7,238		$	7,174		$	7,174		$	7,166		$	8,778
Total nonperforming assets ("NPAs")	$	46,261		$	39,367		$	42,478		$	41,886		$	42,772
Criticized loans (a)	$	256,565		$	235,239		$	213,156		$	219,885		$	198,812
Classified loans (b)	$	147,518		$	120,027		$	124,836		$	110,972		$	93,168
Asset Quality Ratios (c):
Nonaccrual loans as a percent of total loans (d)	0.51		%	0.41		%	0.43		%	0.48		%	0.63		%
NPLs as a percent of total loans (d)	0.63		%	0.52		%	0.58		%	0.58		%	0.71		%
NPAs as a percent of total assets (d)	0.50		%	0.43		%	0.48		%	0.48		%	0.58		%
NPAs as a percent of total loans and OREO (d)	0.74		%	0.64		%	0.70		%	0.70		%	0.90		%
Allowance for credit losses as a percent of nonaccrual loans	206.70		%	245.79		%	240.29		%	212.57		%	177.80		%
Allowance for credit losses as a percent of NPLs (d)	166.11		%	194.38		%	178.23		%	176.30		%	156.80		%
Criticized loans as a percent of total loans (a)	4.14		%	3.82		%	3.50		%	3.68		%	4.18		%
Classified loans as a percent of total loans (b)	2.38		%	1.95		%	2.05		%	1.86		%	1.96		%

(a) Includes loans categorized as special mention, substandard or doubtful.

(b) Includes loans categorized as substandard or doubtful.

(d) NPLs include loans 90+ days past due and accruing and nonaccrual loans. NPAs include nonperforming loans and OREO.

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Compared to at December 31, 2023, Peoples' NPAs increased from 0.43% of total assets to 0.50% at March 31, 2024. Total loans 90+ days past due and accruing increased at March 31, 2024 compared to at December 31, 2023, mostly due to increases in nonperforming premium finance loans. Total nonaccrual loans increased at March 31, 2024 compared to at December 31, 2023, mostly due to increases in nonaccrual commercial and industrial loans and leases. During the first quarter of 2024, criticized loans increased $21.3 million, while classified loans increased $27.5 million when compared to at December 31, 2023. The increase in the amounts of criticized loans compared to at December 31, 2023 was primarily driven by loan downgrades, partially offset by loan upgrades and criticized loan pay-offs. The increase in the amount of classified loans compared to at December 31, 2023 was primarily driven by loan downgrades, partially offset by loan upgrades and classified loan pay-offs.

Deposits

The following table details Peoples’ deposit balances:


(Dollars in thousands)	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Non-interest-bearing deposits (a)	$	1,468,363		$	1,567,649		$	1,569,095		$	1,682,634		$	1,555,064
Interest-bearing deposits:
Interest-bearing demand accounts (a)	1,107,712			1,144,357			1,181,079			1,225,646			1,085,169
Savings accounts	901,493			919,244			987,170			1,116,622			1,024,638
Retail CDs	1,680,413			1,443,417			1,198,733			950,783			622,091
Money market deposit accounts	859,961			775,488			730,902			718,633			579,106
Governmental deposit accounts	825,170			726,713			761,625			705,596			649,303
Brokered CDs	483,444			575,429			608,914			559,955			273,156
Total interest-bearing deposits	5,858,193			5,584,648			5,468,423			5,277,235			4,233,463
Total deposits	$	7,326,556		$	7,152,297		$	7,037,518		$	6,959,869		$	5,788,527
Demand deposits as a percent of total deposits	35		%	38		%	39		%	42		%	46		%

(a)The sum of amounts presented is considered total demand deposits.

At March 31, 2024, period-end total deposits increased $174.3 million, or 2%, compared to at December 31, 2023, primarily driven by increases of (i) $237.0 million in retail CDs, (ii) $98.5 million in governmental deposits, partially offset by decreases of (a) $99.3 million in non-interest-bearing demand deposit accounts, (b) $92.0 million in brokered CDs, (c) $36.6 million in interest-bearing demand deposit accounts, and (d) $17.8 million in savings accounts. The increase in governmental deposit accounts was due to the seasonality of those balances, which are typically higher in the first quarter and third quarter of each year.

At March 31, 2024, period-end total deposits increased $1.5 billion, or 27%, compared to at March 31, 2023, primarily driven by deposits acquired in the Limestone Merger. Excluding Limestone deposit balances, total deposits at March 31, 2024 increased $784.8 million, or 14%, compared to at March 31,2023, primarily due to increases of $956.9 million in retail CDs, $210.3 million in brokered CDs, and $191.2 million in money market deposit accounts, partially offset by decreases of $270.9 million, $191.8 million, and $158.4 million in non-interest bearing deposits, savings accounts, and interest-bearing demand deposit accounts, respectively.

As part of its funding strategy, Peoples hedges 90-day brokered CDs with interest rate swaps. The interest rate swaps pay a fixed rate of interest while receiving a floating rate component of interest tied to term SOFR, which offsets the rate on the brokered CDs. As of March 31, 2024, Peoples had 11 effective interest rate swaps, with an aggregate notional value of $105.0 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 interest rate 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 borrowings and long-term borrowings:


(Dollars in thousands)	March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023
Short-term borrowings:
FHLB Overnight borrowings	$	260,192	$	369,000	$	484,000	$	444,000	$	390,000


Retail repurchase agreements	90,304		99,121		101,437		125,935		100,670
Bank Term Funding Program ("BTFP")	163,000		133,000		—		—		—

Total short-term borrowings	$	513,496	$	601,121	$	585,437	$	569,935	$	490,670
Long-term borrowings:
FHLB advances	$	132,683	$	112,865	$	83,247	$	33,755	$	33,941


Vantage non-recourse debt	49,529		49,572		41,783		41,963		47,864
Other long-term borrowings	54,071		53,804		48,282		47,861		13,824
Total long-term borrowings	$	236,283	$	216,241	$	173,312	$	123,579	$	95,629
Total borrowed funds	$	749,779	$	817,362	$	758,749	$	693,514	$	586,299

Total borrowed funds, which include overnight borrowings, are mainly a function of loan growth and changes in total deposit balances. Other long-term borrowings include trust preferred securities held for investments and floating rate junior subordinated deferrable interest debentures. Total borrowed funds at March 31, 2024 decreased compared to at December 31, 2023, primarily due to lower overnight borrowings. Total long-term borrowings at March 31, 2024 increased when compared to at March 31, 2023 due to an increase in FHLB advances and other long-term borrowings assumed in the Limestone Merger as well as additional borrowings under the BTFP.

Capital/Stockholders’ Equity

At March 31, 2024, 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, 2024, Peoples had a capital conservation buffer of 5.60%.

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


(Dollars in thousands)	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Capital Amounts:
Common Equity Tier 1	$	780,017		$	766,691		$	752,728		$	728,892		$	624,292
Tier 1	834,089			820,495			801,010			776,753			638,116
Total (Tier 1 and Tier 2)	894,662			873,225			855,054			828,910			682,477
Net risk-weighted assets	$	6,674,114		$	6,524,577		$	6,505,779		$	6,417,511		$	5,110,318
Capital Ratios:
Common Equity Tier 1	11.69		%	11.75		%	11.57		%	11.36		%	12.22		%
Tier 1	12.50		%	12.58		%	12.31		%	12.10		%	12.49		%
Total (Tier 1 and Tier 2)	13.40		%	13.38		%	13.14		%	12.92		%	13.35		%
Tier 1 leverage ratio	9.43		%	9.57		%	9.34		%	9.64		%	9.02		%

Peoples' risk-risk based capital ratios at March 31, 2024 decreased slightly when compared to December 31, 2023, due to lower net income, partially offset by an increase in expenses from the Limestone Merger. Compared to at March 31, 2023, the tier 1 risk-based capital and the total risk-based capital ratios improved due to higher net income, partially offset by the impact of the Limestone Merger and dividends paid. The common equity tier 1 risk-based capital ratio at March 31, 2024 decreased compared to at March 31, 2023 due to the common shares issued in the Limestone Merger.

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,

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financial condition and trends to peers, especially those without a similar level of intangible assets to that of Peoples. Further, intangible assets generally are difficult to convert into cash, especially during a financial crisis, and could decrease substantially in 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, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Tangible equity:
Total stockholders' equity	$	1,062,002		$	1,053,534		$	993,219		$	998,907		$	819,543
Less: goodwill and other intangible assets	409,285			412,172			408,494			413,172			324,562
Tangible equity	$	652,717		$	641,362		$	584,725		$	585,735		$	494,981






Tangible assets:
Total assets	$	9,270,774		$	9,157,382		$	8,942,534		$	8,786,635		$	7,311,520
Less: goodwill and other intangible assets	409,285			412,172			408,494			413,172			324,562
Tangible assets	$	8,861,489		$	8,745,210		$	8,534,040		$	8,373,463		$	6,986,958

Tangible book value per common share:
Tangible equity	$	652,717		$	641,362		$	584,725		$	585,735		$	494,981
Common shares outstanding	35,486,234			35,314,745			35,395,990			35,374,916			28,488,158

Tangible book value per common share	$	18.39		$	18.16		$	16.52		$	16.56		$	17.37

Tangible equity to tangible assets ratio:
Tangible equity	$	652,717		$	641,362		$	584,725		$	585,735		$	494,981
Tangible assets	$	8,861,489		$	8,745,210		$	8,534,040		$	8,373,463		$	6,986,958

Tangible equity to tangible assets	7.37		%	7.33		%	6.85		%	7.00		%	7.08		%

Tangible book value per common share increased to $18.39 at March 31, 2024 compared to $18.16 at December 31, 2023. The change in tangible book value per common share was due to tangible equity increasing during the first quarter of 2024 primarily due to net income over the last three months, which was partially offset by an increase in other comprehensive losses recognized on available-for-sale securities. Tangible book value per common share at March 31, 2024 increased compared to at March 31, 2023 primarily due to net income over the last twelve months, which was partially offset by an increase in accumulated other comprehensive loss as well as the impact of the common shares issued in the Limestone Merger.

Interest Rate Sensitivity and Liquidity

While Peoples is exposed to various business risks, the risks relating to interest rate sensitivity and liquidity are major risks that can materially impact future results of operations and financial condition due to their complexity and dynamic nature. The objective of Peoples' asset-liability management function is to measure and manage these risks in order to optimize net interest income within the constraints of prudent capital adequacy, liquidity and safety. This objective requires Peoples to focus on interest rate risk exposure and adequate liquidity through its management of the mix of assets and liabilities, their related cash flows and the rates earned and paid on those assets and liabilities. Ultimately, the asset-liability management function is intended to guide management in the acquisition and disposition of earning assets and selection of appropriate funding sources.

Interest Rate Risk

Interest rate risk ("IRR") is one of the most significant risks arising in the normal course of business of financial services companies like Peoples. IRR is the potential for economic loss due to future interest rate changes that can impact the earnings stream, as well as market values, of financial assets and financial liabilities. Peoples' exposure to IRR is due primarily to differences in the maturity or repricing of earning assets and interest-bearing liabilities. In addition, other factors, such as prepayments of loans and investment securities, or early withdrawal of deposits, can affect Peoples' exposure to IRR and impact interest costs or revenue streams.

Peoples has assigned overall management of IRR to its Asset-Liability Committee (the “ALCO”), which has established an IRR management policy that sets minimum requirements and guidelines for monitoring and managing the level of IRR, including the review of assumptions used in modeling IRR.

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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) Increase in Economic Value of Equity
(in Basis Points)	March 31, 2024				December 31, 2023				March 31, 2024				December 31, 2023
300	$	14,508	4.3	%	$	15,063	4.6	%	$	(164,796)	(9.5)	%	$	(157,625)	(9.4)	%
200	9,732		2.9	%	10,282		3.1	%	(112,780)		(6.5)	%	(107,620)		(6.4)	%
100	4,932		1.5	%	5,468		1.7	%	(56,684)		(3.3)	%	(53,585)		(3.2)	%
(100)	(7,892)		(2.3)	%	(7,427)		(2.3)	%	34,400		2.0	%	31,722		1.9	%
(200)	(16,888)		(5.0)	%	(15,446)		(4.7)	%	47,397		2.7	%	46,537		2.8	%
(300)	(20,705)		(6.1)	%	(16,822)		(5.1)	%	47,323		2.7	%	47,198		2.8	%

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, 2024, 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, 2024, the bear steepener scenario produced an increase in net interest income of 0.7% and a decline in the economic value of equity of 0.7%.

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, 2024, the bear flattener scenario produced an increase of 3.0% to net interest income and a decline in the economic value of equity of 1.0%.

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, 2024, Peoples had entered into 11 interest rate swap contracts with an aggregate notional value of $105.0 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, 2024, 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 increase in the rising interest rate scenarios.

Liquidity

In addition to IRR management, another major objective of the ALCO is to maintain a sufficient level of liquidity. In light of the bank failures in 2023, Peoples revisited the model assumptions, and determined the methods used by the ALCO to monitor

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and evaluate the adequacy of Peoples Bank's liquidity position remain appropriate and are largely unchanged from those disclosed in Peoples' 2023 Form 10-K.

At March 31, 2024, Peoples Bank had liquid assets of $565.4 million, which represented 5.4% of total assets and unfunded loan commitments. Peoples also had an additional $158.7 million of unpledged investment securities not included in the measurement of liquid assets.

Management believes the current mix of short-term liquidity sources, loan and security portfolio cash flows, and availability of other funding sources will allow Peoples to meet anticipated cash obligations, as well as special needs and off-balance sheet commitments.

Off-Balance Sheet Activities and Contractual Obligations

In the normal course of business, Peoples is a party to financial instruments with off-balance sheet risk necessary to meet the financing needs of Peoples' customers. These financial instruments include commitments to extend credit and standby letters of credit. The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Unaudited Consolidated Balance Sheets. The 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, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023
Home equity lines of credit	$	246,035	$	244,367	$	245,764	$	208,805	$	201,692
Unadvanced construction loans	349,850		349,850		351,473		293,662		241,225
Other loan commitments	714,513		769,759		768,788		597,285		717,149
Loan commitments	$	1,310,398	$	1,363,976	$	1,366,025	$	1,099,752	$	1,160,066
Standby letters of credit	$	13,131	$	14,318	$	15,452	$	14,760	$	15,046

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.

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, 2024. 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;

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(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, 2024, 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

There have been no other material changes from those risk factors previously disclosed under “ITEM 1A. RISK FACTORS” of Part I of Peoples’ 2023 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.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)Not applicable.

(b)Not applicable.

(c)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, 2024:


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 (1)	Maximum Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 1 – 31, 2024	63,322	(1)(2)	$	30.28	(2)(3)	61,367	$	17,755,053
February 1 – 29, 2024	64,802	(1)(3)	$	28.67	(2)	39,538	$	16,616,711
March 1 – 31, 2024	1,514	(2)(3)	$	27.97		—	$	16,616,711
Total	129,638		$	29.45		100,905	$	16,616,711

(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 61,367 and 39,538 common shares repurchased under the share repurchase program during January and February 2024, respectively.

(2)Information reported includes 1,955 common shares and 1,320 common shares purchased in open market transactions during January 2024 and March 2024, 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 25,264 common shares and 194 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 (now known as the Peoples Bancorp Inc. Fourth Amended and Restated 2006 Equity Plan) and vested during February and March 2024, respectively.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a)None.

(b)Not applicable.

(c) The following details the activity in respect of the adoption, modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” (as each term is defined in Item 408(a) of Regulation S-K) by any director or any officer (as defined in Rule 16a-1(f) under the Exchange Act) of Peoples during the three months ending March 31, 2024:

Trading Arrangement

Action

Date

Rule 10b5-1*

Total Common Shares to be Sold

Expiration Date

David F. Dierker (Director)

Adopt

February 2, 2024

11,000

December 26, 2024

*Intended to satisfy the affirmative defense of Rule 10b5-1(c)

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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 accepted on May 28, 2021 with a filing date of 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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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, 2018

Incorporated 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

Consulting Agreement dated March 20, 2024, among Charles W. Sulerzyski, Peoples Bancorp Inc. and Peoples Bank++

Incorporated herein by reference to Peoples' Current Report on Form 8-K dated and filed on March 21, 2024 (File No. 0-16772)

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

Section 1350 Certifications

Furnished herewith

101.INS

Inline XBRL Instance Document ##