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, 20222023

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

Commission File Number: 000-16772
pebonewlogoa26.jpg
PEOPLES BANCORP INC.
(Exact name of Registrant as specified in its charter)
Ohio 31-0987416
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
138 Putnam Street, P.O. Box 738,
Marietta,Ohio 45750
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (740)373-3155
 Not Applicable 
 (Former name, former address and former fiscal year, if changed since last report) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, without par valuePEBOThe Nasdaq Stock Market

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 28,345,28128,485,213 common shares, without par value, at May 5, 2022.April 28, 2023.


Table of Contents
Table of Contents


2

Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,
2022
December 31,
2021
March 31,
2023
December 31,
2022
(Dollars in thousands)(Dollars in thousands)(Unaudited)(Dollars in thousands)(Unaudited)
AssetsAssets Assets 
Cash and cash equivalents:Cash and cash equivalents:Cash and cash equivalents:
Cash and balances due from banksCash and balances due from banks$114,073 $74,354 Cash and balances due from banks$97,101 $94,679 
Interest-bearing deposits in other banksInterest-bearing deposits in other banks291,606 341,373 Interest-bearing deposits in other banks60,053 59,343 
Total cash and cash equivalentsTotal cash and cash equivalents405,679 415,727 Total cash and cash equivalents157,154 154,022 
Available-for-sale investment securities, at fair value (amortized cost of $1,381,259 at March 31, 2022 and $1,283,146 at December 31, 2021) (a)1,301,839 1,275,493 
Held-to-maturity investment securities, at amortized cost (fair value of $347,978 at March 31, 2022 and $369,955 at December 31, 2021) (a)384,656 374,129 
Available-for-sale investment securities, at fair value (amortized cost of $1,196,521 at March 31, 2023 and $1,300,719 at December 31, 2022) (a)Available-for-sale investment securities, at fair value (amortized cost of $1,196,521 at March 31, 2023 and $1,300,719 at December 31, 2022) (a)1,049,497 1,131,399 
Held-to-maturity investment securities, at amortized cost (fair value of $624,436 at March 31, 2023 and $478,509 at December 31, 2022) (a)Held-to-maturity investment securities, at amortized cost (fair value of $624,436 at March 31, 2023 and $478,509 at December 31, 2022) (a)694,072 560,212 
Other investment securitiesOther investment securities41,840 33,987 Other investment securities52,763 51,609 
Total investment securities (a)Total investment securities (a)1,728,335 1,683,609 Total investment securities (a)1,796,332 1,743,220 
Loans and leases, net of deferred fees and costs (b)Loans and leases, net of deferred fees and costs (b)4,547,153 4,481,600 Loans and leases, net of deferred fees and costs (b)4,759,718 4,707,150 
Allowance for credit lossesAllowance for credit losses(54,768)(63,967)Allowance for credit losses(53,303)(53,162)
Net loans and leases (c)Net loans and leases (c)4,492,385 4,417,633 Net loans and leases (c)4,706,415 4,653,988 
Loans held for saleLoans held for sale1,460 3,791 Loans held for sale2,527 2,140 
Bank premises and equipment, net of accumulated depreciationBank premises and equipment, net of accumulated depreciation89,886 89,260 Bank premises and equipment, net of accumulated depreciation86,567 82,934 
Bank owned life insuranceBank owned life insurance73,789 73,358 Bank owned life insurance105,999 105,292 
GoodwillGoodwill303,651 264,193 Goodwill292,597 292,397 
Other intangible assetsOther intangible assets38,214 26,816 Other intangible assets31,965 33,932 
Other assetsOther assets105,862 89,134 Other assets131,964 139,379 
Total assetsTotal assets$7,239,261 $7,063,521 Total assets$7,311,520 $7,207,304 
LiabilitiesLiabilities Liabilities 
Deposits:Deposits:Deposits:
Non-interest-bearingNon-interest-bearing$1,666,668 $1,641,422 Non-interest-bearing$1,555,064 $1,589,402 
Interest-bearingInterest-bearing4,336,258 4,221,130 Interest-bearing4,233,463 4,127,539 
Total depositsTotal deposits6,002,926 5,862,552 Total deposits5,788,527 5,716,941 
Short-term borrowingsShort-term borrowings144,275 166,482 Short-term borrowings490,670 500,138 
Long-term borrowingsLong-term borrowings201,610 99,475 Long-term borrowings95,629 101,093 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities82,110 89,987 Accrued expenses and other liabilities117,151 103,804 
Total liabilitiesTotal liabilities6,430,921 6,218,496 Total liabilities6,491,977 6,421,976 
Stockholders’ equityStockholders’ equity Stockholders’ equity 
Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2022 and at December 31, 2021— — 
Common stock, no par value, 50,000,000 shares authorized, 29,824,684 shares issued at March 31, 2022 and 29,814,401 shares issued at December 31, 2021, including at each date shares held in treasury684,243 686,282 
Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2023 and at December 31, 2022Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2023 and at December 31, 2022— — 
Common shares, no par value, 50,000,000 shares authorized, 29,868,456 shares issued at March 31, 2023 and 29,857,920 shares issued at December 31, 2022, including at each date shares held in treasuryCommon shares, no par value, 50,000,000 shares authorized, 29,868,456 shares issued at March 31, 2023 and 29,857,920 shares issued at December 31, 2022, including at each date shares held in treasury684,367 686,450 
Retained earningsRetained earnings220,477 207,076 Retained earnings281,771 265,936 
Accumulated other comprehensive loss, net of deferred income taxesAccumulated other comprehensive loss, net of deferred income taxes(62,667)(11,619)Accumulated other comprehensive loss, net of deferred income taxes(110,979)(127,136)
Treasury stock, at cost, 1,434,441 shares at March 31, 2022 and 1,577,359 shares at December 31, 2021(33,713)(36,714)
Treasury stock, at cost, 1,457,611 shares at March 31, 2023 and 1,643,461 shares at December 31, 2022Treasury stock, at cost, 1,457,611 shares at March 31, 2023 and 1,643,461 shares at December 31, 2022(35,616)(39,922)
Total stockholders’ equityTotal stockholders’ equity808,340 845,025 Total stockholders’ equity819,543 785,328 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$7,239,261 $7,063,521 Total liabilities and stockholders’ equity$7,311,520 $7,207,304 
(a)    Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $0 and $286,$241, respectively, at March 31, 20222023 and $0 and $286, respectively, at December 31, 2021.2022.
(b)    Also referred to throughout this documentQuarterly Report on Form 10-Q as "total loans" and "loans held for investment."
(c)    Also referred to throughout this documentsQuarterly Report on Form 10-Q as "net loans"



See Notes to the Unaudited Condensed Consolidated Financial Statements

3

Table of Contents
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months EndedThree Months Ended
March 31,March 31,
(Dollars in thousands, except per share data)(Dollars in thousands, except per share data)20222021(Dollars in thousands, except per share data)20232022
Interest income:Interest income:Interest income:
Interest and fees on loans and leasesInterest and fees on loans and leases$50,200 $35,737 Interest and fees on loans and leases$71,762 $50,200 
Interest and dividends on taxable investment securitiesInterest and dividends on taxable investment securities6,050 2,574 Interest and dividends on taxable investment securities11,003 6,050 
Interest on tax-exempt investment securitiesInterest on tax-exempt investment securities1,015 611 Interest on tax-exempt investment securities996 1,015 
Other interest incomeOther interest income160 40 Other interest income388 160 
Total interest incomeTotal interest income57,425 38,962 Total interest income84,149 57,425 
Interest expense:Interest expense:Interest expense:
Interest on depositsInterest on deposits2,053 2,817 Interest on deposits5,661 2,053 
Interest on short-term borrowingsInterest on short-term borrowings338 100 Interest on short-term borrowings4,457 338 
Interest on long-term borrowingsInterest on long-term borrowings724 467 Interest on long-term borrowings1,153 724 
Total interest expenseTotal interest expense3,115 3,384 Total interest expense11,271 3,115 
Net interest incomeNet interest income54,310 35,578 Net interest income72,878 54,310 
Recovery of credit losses(6,807)(4,749)
Net interest income after recovery of credit losses61,117 40,327 
Provision for (recovery of) credit lossesProvision for (recovery of) credit losses1,853 (6,807)
Net interest income after provision for (recovery of) credit lossesNet interest income after provision for (recovery of) credit losses71,025 61,117 
Non-interest income:Non-interest income:Non-interest income:
Electronic banking incomeElectronic banking income5,253 3,911 Electronic banking income5,443 5,253 
Insurance incomeInsurance income4,731 5,221 Insurance income5,425 4,731 
Trust and investment incomeTrust and investment income4,276 3,845 Trust and investment income4,084 4,276 
Deposit account service chargesDeposit account service charges3,426 1,985 Deposit account service charges3,523 3,426 
Lease incomeLease income1,077 775 
Bank owned life insurance incomeBank owned life insurance income707 431 
Mortgage banking incomeMortgage banking income436 1,140 Mortgage banking income314 436 
Bank owned life insurance income431 446 
Commercial loan swap fees168 60 
Net loss on asset disposals and other transactionsNet loss on asset disposals and other transactions(127)(27)Net loss on asset disposals and other transactions(246)(127)
Net gain (loss) on investment securities130 (336)
Net (loss) gain on investment securitiesNet (loss) gain on investment securities(1,935)130 
Other non-interest incomeOther non-interest income1,326 658 Other non-interest income668 719 
Total non-interest incomeTotal non-interest income20,050 16,903 Total non-interest income19,060 20,050 
Non-interest expense:Non-interest expense:Non-interest expense:
Salaries and employee benefit costsSalaries and employee benefit costs27,729 20,759 Salaries and employee benefit costs32,028 27,729 
Net occupancy and equipment expenseNet occupancy and equipment expense5,088 3,327 Net occupancy and equipment expense4,955 5,088 
Data processing and software expenseData processing and software expense4,562 2,916 
Professional feesProfessional fees3,672 3,468 Professional fees2,881 3,672 
Data processing and software expense2,916 2,454 
Amortization of other intangible assetsAmortization of other intangible assets1,871 1,708 
Electronic banking expenseElectronic banking expense2,759 1,894 Electronic banking expense1,491 2,759 
Amortization of other intangible assets1,708 620 
FDIC insurance premiums1,194 463 
Franchise tax expenseFranchise tax expense1,034 764 
Marketing expenseMarketing expense995 911 Marketing expense930 995 
FDIC insurance expenseFDIC insurance expense801 1,194 
Other loan expensesOther loan expenses832 462 Other loan expenses739 832 
Franchise tax expense764 855 
Communication expenseCommunication expense625 282 Communication expense613 625 
Other non-interest expenseOther non-interest expense3,347 2,492 Other non-interest expense4,574 3,347 
Total non-interest expenseTotal non-interest expense51,629 37,987 Total non-interest expense56,479 51,629 
Income before income taxesIncome before income taxes29,538 19,243 Income before income taxes33,606 29,538 
Income tax expenseIncome tax expense5,961 3,780 Income tax expense7,046 5,961 
Net incomeNet income$23,577 $15,463 Net income$26,560 $23,577 
Earnings per common share - basicEarnings per common share - basic$0.84 $0.80 Earnings per common share - basic$0.95 $0.84 
Earnings per common share - dilutedEarnings per common share - diluted$0.84 $0.79 Earnings per common share - diluted$0.94 $0.84 
Weighted-average number of common shares outstanding - basicWeighted-average number of common shares outstanding - basic28,006,165 19,282,665 Weighted-average number of common shares outstanding - basic27,891,760 28,006,165 
Weighted-average number of common shares outstanding - dilutedWeighted-average number of common shares outstanding - diluted28,129,131 19,436,311 Weighted-average number of common shares outstanding - diluted28,021,879 28,129,131 
Cash dividends declaredCash dividends declared$10,176 $6,833 Cash dividends declared$10,725 $10,176 
Cash dividends declared per common shareCash dividends declared per common share$0.36 $0.35 Cash dividends declared per common share$0.38 $0.36 

See Notes to the Unaudited Condensed Consolidated Financial Statements

4

Table of Contents
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) INCOME (Unaudited)
Three Months Ended
March 31,
(Dollars in thousands)20222021
Net income$23,577 $15,463 
Other comprehensive (loss) income:
Available-for-sale investment securities:
Gross unrealized holding loss arising during the period(71,637)(12,578)
Related tax benefit16,448 2,642 
Reclassification adjustment for net (loss) gain included in net income(130)336 
Related tax benefit (expense)30 (71)
Net effect on other comprehensive loss(55,289)(9,671)
Defined benefit plan:
Net (loss) gain arising during the period(14)
  Related tax benefit (expense)(1)
Amortization of unrecognized gain and service cost on benefit plans21 30 
Related tax expense(5)(7)
Net effect on other comprehensive income27 
Cash flow hedges:
Net gain arising during the period5,456 4,236 
  Related tax expense(1,220)(890)
Net effect on other comprehensive income4,236 3,346 
Total other comprehensive loss, net of tax(51,048)(6,298)
Total comprehensive (loss) income$(27,471)$9,165 
Three Months Ended
March 31,
(Dollars in thousands)20232022
Net income$26,560 $23,577 
Other comprehensive income (loss):
Available-for-sale investment securities:
Gross unrealized holding gain (loss) arising during the period20,362 (71,637)
Related tax (expense) benefit(4,647)16,448 
Reclassification adjustment for net loss (gain) included in net income1,935 (130)
Related tax (expense) benefit(452)30 
Net effect on other comprehensive income (loss)17,198 (55,289)
Defined benefit plan:
Net loss arising during the period— (14)
  Related tax benefit— 
Amortization of unrecognized loss and service cost on benefit plans21 
Related tax benefit— (5)
Net effect on other comprehensive income (loss)
Cash flow hedges:
Net (loss) gain arising during the period(1,356)5,456 
  Related tax benefit (expense)313 (1,220)
Net effect on other comprehensive income (loss)(1,043)4,236 
Total other comprehensive gain (loss), net of tax16,157 (51,048)
Total comprehensive income (loss)$42,717 $(27,471)

See Notes to the Unaudited Condensed Consolidated Financial Statements


5

Table of Contents
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
Accumulated Other Comprehensive LossTotal Stockholders' EquityAccumulated Other Comprehensive LossTotal Stockholders' Equity
Common SharesRetained EarningsTreasury StockCommon SharesRetained EarningsTreasury Stock
(Dollars in thousands)(Dollars in thousands)(Dollars in thousands)
Balance, December 31, 2021$686,282 $207,076 $(11,619)$(36,714)$845,025 
Balance, December 31, 2022Balance, December 31, 2022$686,450 $265,936 $(127,136)$(39,922)$785,328 
Net incomeNet income— 23,577 — — 23,577 Net income— 26,560 — — 26,560 
Other comprehensive loss, net of tax— — (51,048)— (51,048)
Other comprehensive gain, net of taxOther comprehensive gain, net of tax— — 16,157 — 16,157 
Cash dividends declaredCash dividends declared— (10,176)— — (10,176)Cash dividends declared— (10,725)— — (10,725)
Reissuance of treasury stock for common share awardsReissuance of treasury stock for common share awards(3,998)— — 3,998 — 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 DirectorsRepurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors— — — (1,230)(1,230)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 planCommon shares issued under dividend reinvestment plan305 — — — 305 Common shares issued under dividend reinvestment plan402 — — — 402 
Common shares issued under compensation plan for Boards of DirectorsCommon shares issued under compensation plan for Boards of Directors31 — — 93 124 Common shares issued under compensation plan for Boards of Directors— — 128 136 
Common shares issued under employee stock purchase planCommon shares issued under employee stock purchase plan46 — — 140 186 Common shares issued under employee stock purchase plan42 — — 413 455 
Stock-based compensationStock-based compensation1,577 — — — 1,577 Stock-based compensation2,150 — — — 2,150 
Balance, March 31, 2022$684,243 $220,477 $(62,667)$(33,713)$808,340 
Balance, March 31, 2023Balance, March 31, 2023$684,367 $281,771 $(110,979)$(35,616)$819,543 
Accumulated Other Comprehensive (Loss) IncomeTotal Stockholders' EquityAccumulated Other Comprehensive LossTotal Stockholders' Equity
Common SharesRetained EarningsTreasury StockCommon SharesRetained EarningsTreasury Stock
(Dollars in thousands)(Dollars in thousands)(Dollars in thousands)
Balance, December 31, 2020$422,536 $190,691 $1,336 $(38,890)$575,673 
Balance, December 31, 2021Balance, December 31, 2021$686,282 $207,076 $(11,619)$(36,714)$845,025 
Net incomeNet income— 15,463 — — 15,463 Net income— 23,577 — — 23,577 
Other comprehensive loss, net of taxOther comprehensive loss, net of tax— — (6,298)— (6,298)Other comprehensive loss, net of tax— — (51,048)— (51,048)
Cash dividends declaredCash dividends declared— (6,833)— — (6,833)Cash dividends declared— (10,176)— — (10,176)
Reissuance of treasury stock for common share awardsReissuance of treasury stock for common share awards(1,740)— — 1,740 — Reissuance of treasury stock for common share awards(3,998)— — 3,998 — 
Reissuance of treasury stock for deferred compensation plan for Boards of Directors— — — 
Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of DirectorsRepurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors— — — (911)(911)Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors— — — (1,230)(1,230)
Common shares issued under dividend reinvestment planCommon shares issued under dividend reinvestment plan288 — — — 288 Common shares issued under dividend reinvestment plan305 — — — 305 
Common shares issued under compensation plan for Boards of DirectorsCommon shares issued under compensation plan for Boards of Directors53 — — 141 194 Common shares issued under compensation plan for Boards of Directors31 — — 93 124 
Common shares issued under employee stock purchase planCommon shares issued under employee stock purchase plan35 — — 82 117 Common shares issued under employee stock purchase plan46 — — 140 186 
Stock-based compensationStock-based compensation1,198 — — — 1,198 Stock-based compensation1,577 — — — 1,577 
Balance, March 31, 2021$422,370 $199,321 $(4,962)$(37,836)$578,893 
Balance, March 31, 2022Balance, March 31, 2022$684,243 $220,477 $(62,667)$(33,713)$808,340 

See Notes to the Unaudited Condensed Consolidated Financial Statements

6

Table of Contents
PEOPLES BANCORP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
(Dollars in thousands)20222021
Net cash provided by operating activities$15,710 $18,322 
Investing activities:
Available-for-sale investment securities:
Purchases(165,305)(228,162)
Proceeds from sales4,218 25,015 
Proceeds from principal payments, calls and prepayments60,520 74,377 
Held-to-maturity investment securities:
Purchases(15,463)(101,177)
Proceeds from principal payments4,512 1,115 
Other investment securities:
Purchases(8,208)(282)
Proceeds from sales237 3,878 
Net decrease (increase) in loans held for investment75,740 (7,749)
Net expenditures for premises and equipment(2,053)(311)
Proceeds from sales of other real estate owned124 — 
Business acquisitions, net of cash received(80,532)(117,000)
(Investment in) proceeds from limited partnership and tax credit funds(1,151)
Net cash used in investing activities(127,361)(350,292)
Financing activities:  
Net increase in non-interest-bearing deposits25,246 208,711 
Net increase in interest-bearing deposits115,255 185,059 
Net decrease in short-term borrowings(27,252)(5,393)
Payments on long-term borrowings(260)(311)
Cash dividends paid(10,438)(7,080)
Purchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock(1,230)(911)
Proceeds from issuance of common shares282 286 
Contingent consideration payments made after a business acquisition— (116)
Net cash provided by financing activities101,603 380,245 
Net (decrease) increase in cash and cash equivalents(10,048)48,275 
Cash and cash equivalents at beginning of period415,727 152,100 
Cash and cash equivalents at end of period$405,679 $200,375 
Supplemental cash flow information:
     Interest paid$2,656 $4,199 
Supplemental noncash disclosures:
     Transfers from loans to other real estate owned36 — 
Lease right-of-use assets obtained in exchange for lessee operating lease liabilities726 53 
Three Months Ended
March 31,
(Dollars in thousands)20232022
Net cash provided by operating activities$47,997 $15,710 
Investing activities:
Available-for-sale investment securities:
Purchases(22,873)(165,305)
Proceeds from sales95,362 4,218 
Proceeds from principal payments, calls and prepayments27,922 60,520 
Held-to-maturity investment securities:
Purchases(167,169)(15,463)
Proceeds from principal payments33,324 4,512 
Other investment securities:
Purchases(4,792)(8,208)
Proceeds from sales3,746 237 
Net (increase) decrease in loans held for investment(52,386)75,740 
Net expenditures for premises and equipment(2,757)(2,053)
Proceeds from sales of other real estate owned107 124 
Business acquisitions, net of cash received(200)(80,532)
Investment in limited partnership and tax credit funds(267)(1,151)
Net cash used in investing activities(89,983)(127,361)
Financing activities:  
Net (decrease) increase in non-interest-bearing deposits(34,338)25,246 
Net increase in interest-bearing deposits105,991 115,255 
Net decrease in short-term borrowings(9,468)(27,252)
Proceeds from long-term borrowings2,899 — 
Payments on long-term borrowings(8,450)(260)
Cash dividends paid(10,993)(10,438)
Purchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock(920)(1,230)
Proceeds from issuance of common shares397 282 
Net cash provided by financing activities45,118 101,603 
Net increase (decrease) in cash and cash equivalents3,132 (10,048)
Cash and cash equivalents at beginning of period154,022 415,727 
Cash and cash equivalents at end of period$157,154 $405,679 
Supplemental cash flow information:
     Interest paid$9,675 $2,656 
     Income taxes paid105 — 
Supplemental noncash disclosures:
     Transfers from total loans to other real estate owned— 36 
Noncash recognition of new leases336 726 
 See Notes to the Unaudited Condensed Consolidated Financial Statements


7

Table of Contents
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, 20212022 ("Peoples' 20212022 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’ 20212022 Form 10-K, as updated by the information contained in this quarterly reportQuarterly Report on Form 10-Q for the quarterly period ended March 31, 20222023 (this "Form 10-Q"). Management has evaluated all significant events and transactions that occurred after March 31, 20222023 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, 2021,2022, contained herein, has been derived from the audited Consolidated Balance Sheet included in Peoples’ 20212022 Form 10-K. 
The preparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.  Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year, due in part to seasonal variations and unusual or infrequently occurring items.
New Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by Peoples as of the required effective dates. The following paragraphs related to new pronouncements should be read in conjunction with "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 20212022 Form 10-K. Unless otherwise discussed, management believes the impact of any recently issued standards, including those issued but not yet effective, will not have a material impact on Peoples' financial statements taken as a whole.
Accounting Standards Update ("ASU") 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This guidance was further updated by ASU 2022-01 - Fair Value Hedging - Portfolio Layer Method - Derivatives and Hedging (Topic 815).2021-01. This ASU clarifiesupdate was effective as of March 12, 2020 through December 31, 2022. The FASB further updated the guidance inwith ASU 2022-06, which deferred the sunset date of ASC 815Topic 848, Reference Rate Reform (Topic 848) from December 31, 2022 to December 31, 2024. ASU 2020-04 was early adopted by Peoples as of September 30, 2021, and did not have a significant impact on fair value hedgePeoples' Consolidated Financial Statements, but is expected to reduce the accounting burden of assessing contracts impacted by reference rate reform. Peoples established a working group, consisting of key stakeholders from throughout the company, to monitor developments relating to LIBOR changes and to guide the transition. This team has worked to successfully ensure that technology systems are prepared for the transition, loan documents that reference LIBOR-based rates have been appropriately amended to reference other methods of interest rate risk for portfolios of financial assets. The update expandsdeterminations and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layerinternal and multiple-layer hedges. For entities thatexternal stakeholders have already adopted ASU 2017-12, as Peoples has, the amendments in ASU 2022-01 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments in the ASU may also be early adopted, including adoption in any interim period. Peoples is currently evaluating the impactbeen apprised of the amendments intransition. Based on the ASU on Peoples' consolidated financial statements.transition progress to date, Peoples ceased originating LIBOR-based products and began originating SOFR-indexed products. Peoples will continue to transition all remaining LIBOR-based products to SOFR-indexed products. Peoples will also continue to evaluate the transition process and align its trajectory with regulatory guidelines regarding the cessation of LIBOR as well as monitor new developments for transitioning to alternative reference rates, if necessary and as needed.
ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings ("TDRs") and Vintage Disclosures. This ASU eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors and amends the guidance on disclosures to include current-period gross write-offs by year of origination. TheThis ASU also updates the requirements related to accounting for credit losses under ASCAccounting Standards Codification ("ASC") 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. For entities that have already adopted ASU 2016-13, as Peoples has, the amendments in ASU 2022-02 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments in the ASU may also be early
Effective January 1, 2023, Peoples adopted including adoption in any interim period. Peoples is currently evaluating the impact of the amendments inwithin ASU 2022-02, using the ASUprospective transition method. The adoption of this guidance did not have a material impact on Peoples' consolidated financial statements.

8

Table of Contents
Pursuant to the guidance in ASU 2022-02, when a loan is restructured, Peoples continues to measure the allowance for credit losses on the loan using a discounted cash flow approach that utilizes a prepayment-adjusted discount rate based on the loan’s restructured terms. Under the TDR accounting model, Peoples modeled a 12-month extension of the contractual terms for TDRs that were to mature within the next 12 months. As Peoples has elected a prospective transition, the extension on a loan that was previously restructured and accounted for as a TDR will continue to be measured as it had been historically in Peoples' allowance for credit losses until the loan is paid off, sold, liquidated, or subsequently restructured. Refer to "Note 4 Loans and Leases" for additional information.
Note 2 Fair Value of Assets and Liabilities
Fair value represents the amount expected to be received to sell an asset or paid to transfer a liability in its principal or most advantageous market in an orderly transaction between market participants at the measurement date. In accordance with fair value accounting guidance, Peoples measures, records and reports various types of assets and liabilities at fair value on either a recurring or a non-recurring basis in the Unaudited Condensed Consolidated Financial Statements. Those assets and liabilities are presented below in the sections entitled “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis” and “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis.”

8

Table of Contents
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' 20212022 Form 10-K.
Assets and liabilities are assigned to a level within the fair value hierarchy based on the lowest level of significant input used to measure fair value. Assets and liabilities may change levels within the fair value hierarchy due to market conditions or other circumstances. Those transfers are recognized on the date of the event that prompted the transfer. There were no transfers of assets or liabilities required to be measured at fair value on a recurring basis between levels of the fair value hierarchy during the periods presented.
Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis
The following table provides the fair value for assets and liabilities required to be measured and reported at fair value on a recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy.
 Recurring Fair Value Measurements at Reporting Date
March 31, 2022December 31, 2021
(Dollars in thousands)Level 1Level 2Level 3Level 1Level 2Level 3
Assets:   
Available-for-sale investment securities:
Obligations of:   
U.S. Treasury and government agencies$167,406 $— $— $35,604 $— $— 
 U.S. government sponsored agencies— 80,654 — — 81,739 — 
States and political subdivisions— 231,644 — — 259,319 — 
Residential mortgage-backed securities— 753,353 — — 828,517 — 
Commercial mortgage-backed securities— 58,112 — — 63,519 — 
Bank-issued trust preferred securities— 10,670 — — 6,795 — 
Total available-for-sale securities$167,406 $1,134,433 $— $35,604 $1,239,889 $— 
Equity investment securities (a)145 192 — 160 184 — 
Derivative assets (b)— 11,588 — — 12,163 — 
Liabilities:
Derivative liabilities (c)$— $11,150 $— $— $17,183 $— 
 Recurring Fair Value Measurements at Reporting Date
March 31, 2023December 31, 2022
(Dollars in thousands)Level 1Level 2Level 3Level 1Level 2Level 3
Assets:   
Available-for-sale investment securities:
Obligations of:   
U.S. Treasury and government agencies$58,438 $— $— $152,422 $— $— 
 U.S. government sponsored agencies— 98,311 — — 88,115 — 
States and political subdivisions— 224,996 — — 225,882 — 
Residential mortgage-backed securities— 605,270 — — 604,653 — 
Commercial mortgage-backed securities— 52,153 — — 50,049 — 
Bank-issued trust preferred securities— 10,329 — — 10,278 — 
Total available-for-sale securities$58,438 $991,059 $— $152,422 $978,977 $— 
Equity investment securities (a)168 199 — 147 199 — 
Derivative assets (b)— 27,339 — — 34,123 — 
Liabilities:
Derivative liabilities (c)$— $23,100 $— $— $28,529 $— 
(a)    Included in "Other investment securities" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 3 Investment Securities" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
(b)    Included in "Other assets""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"Accrued expenses and other liabilities"liabilities" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 10 Derivative Financial Instruments" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
Available-for-Sale Investment Securities: The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, LIBOR (or other relevant) yield curves, credit spreads and prices from market makers and live trading systems (Level 2). Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

9

Table of Contents
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,"Other assets" and accrued"Accrued expenses and other liabilities,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).

9

Table of Contents
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, 20222023 and December 31, 2021.2022.
Non-Recurring Fair Value Measurements at Reporting Date Non-Recurring Fair Value Measurements at Reporting Date
March 31, 2022December 31, 2021March 31, 2023December 31, 2022
(Dollars in thousands)(Dollars in thousands)Level 2Level 3Level 2Level 3(Dollars in thousands)Level 2Level 3Level 2Level 3
Level 2Level 3Level 2Level 3
Assets:Assets:Assets:
Collateral Dependent Loans$— $9,395 $— $430 
Collateral dependent loansCollateral dependent loans$— $8,860 $— $10,354 
Loans held for sale (a)Loans held for sale (a)$1,291 $— $418 $— Loans held for sale (a)$1,251 $— $1,254 $— 
Other real estate owned ("OREO")$— $35 $— $87 
Servicing rights (b)(c)$— $20 $— $22 
Other real estate ownedOther real estate owned$— $— $— $55 
(a) Loans held for sale are presented gross of allowance for credit losses of $24 and $0 as of March 31,2022 and December 31,2021, respectively.
(b) Included in "Other intangible assets" on the Unaudited Consolidated Balance Sheets. Servicing rights are carried at the lower of cost or market value.
(c) As of March 31, 2022, Peoples recorded a minimal addition to the valuation allowance related to changes in the fair value of servicing rights. Peoples established a valuation allowance on servicing rights of $12$99 and $105 at March 31, 20222023 and at December 31, 2021. The2022, 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 of the servicing rights was less than the carrying value on 10 year fixed rate loans.

(Level 3).
Loans Held for Sale: Loans originated and intended to be sold in the secondary market, generally 1-4one-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: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).
Servicing Rights: Servicing rights are included in "Other intangible assets" on the Unaudited Consolidated Balance Sheets. The fair value of servicing rights is determined by using a discounted cash flow model, which estimates the present value of the future net cash flows of the servicing portfolio based on various factors, such as servicing costs, expected prepayment speeds and discount rates (Level 3). The carrying value of servicing rights is not re-measured to fair value on a recurring basis. Peoples assesses the carrying value of servicing rights quarterly for impairment.


10

Table of Contents
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 Fair Value Measurements of Other Financial Instruments
(Dollars in thousands)(Dollars in thousands)Fair Value Hierarchy LevelMarch 31, 2022December 31, 2021(Dollars in thousands)Fair Value Hierarchy LevelMarch 31, 2023December 31, 2022
Carrying AmountFair ValueCarrying AmountFair ValueCarrying AmountFair ValueCarrying AmountFair Value
Assets:Assets:Assets:
Cash and cash equivalentsCash and cash equivalents1$405,679 $405,679 $415,727 $415,727 Cash and cash equivalents1$157,154 $157,154 $154,022 $154,022 
Held-to-maturity investment securities:Held-to-maturity investment securities:Held-to-maturity investment securities:
Obligations of: Obligations of: Obligations of:
U.S. government sponsored agenciesU.S. government sponsored agencies238,486 34,281 36,431 35,513 U.S. government sponsored agencies2194,184 186,446 132,366 123,020 
States and political subdivisions (a)States and political subdivisions (a)2151,503 133,694 151,688 150,138 States and political subdivisions (a)2145,085 114,192 145,263 108,776 
Residential mortgage-backed securitiesResidential mortgage-backed securities2115,613 108,199 110,708 110,159 Residential mortgage-backed securities2245,294 230,377 176,215 157,998 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities279,340 71,804 75,588 74,145 Commercial mortgage-backed securities2105,002 89,919 101,861 85,354 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities34,748 3,502 4,748 3,361 
Total held-to-maturity securities Total held-to-maturity securities384,942 347,978 374,415 369,955  Total held-to-maturity securities694,313 624,436 560,453 478,509 
Other investment securities:Other investment securities:Other investment securities:
Other investment securities at cost:Other investment securities at cost:Other investment securities at cost:
Federal Home Loan Bank ("FHLB") stockFederal Home Loan Bank ("FHLB") stockN/A17,308 17,308 17,308 17,308 Federal Home Loan Bank ("FHLB") stockN/A27,381 27,381 26,605 26,605 
Federal Reserve Bank ("FRB") stockFederal Reserve Bank ("FRB") stockN/A21,189 21,189 13,311 13,311 Federal Reserve Bank ("FRB") stockN/A21,231 21,231 21,231 21,231 
Banker's Bank of Kentucky ("BBKY") stockBanker's Bank of Kentucky ("BBKY") stockN/A355 355 355 355 
Total other investment securities at costTotal other investment securities at cost38,497 38,497 30,619 30,619 Total other investment securities at cost48,967 48,967 48,191 48,191 
Other investment securities at fair value:Other investment securities at fair value:Other investment securities at fair value:
Nonqualified deferred compensation (b)Nonqualified deferred compensation (b)12,222 2,222 2,240 2,240 Nonqualified deferred compensation (b)12,405 2,405 2,048 2,048 
Other investment securities (c)Other investment securities (c)2784 784 784 784 Other investment securities (c)21,024 1,024 1,024 1,024 
Total other investment securitiesTotal other investment securities41,503 41,503 33,643 33,643 Total other investment securities52,396 52,396 51,263 51,263 
Loans and leases, net of deferred fees and costs (d)Loans and leases, net of deferred fees and costs (d)34,547,153 4,361,994 4,481,600 4,510,605 Loans and leases, net of deferred fees and costs (d)34,759,718 4,522,720 4,707,150 4,516,695 
Bank owned life insuranceBank owned life insurance273,789 73,789 73,358 73,358 Bank owned life insurance2105,999 105,999 105,292 105,292 
Liabilities:Liabilities:Liabilities:
DepositsDeposits2$6,002,926 $5,297,652 $5,862,552 $5,546,552 Deposits2$5,788,527 $4,924,296 $5,716,941 $4,682,491 
Short-term borrowingsShort-term borrowings2144,275 145,091 166,482 164,990 Short-term borrowings2490,670 496,786 500,138 504,584 
Long-term borrowingsLong-term borrowings2201,610 206,652 99,475 101,664 Long-term borrowings295,629 96,822 101,093 101,992 
(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $286 as of$241 at both March 31, 20222023 and December 31, 2021.2022.
(b) Nonqualified deferred compensation includes mutual funds as part of the investment.
(c)     "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at March 31, 20222023
and at December 31, 2021,2022, which are reported in the Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis
table above and not included in this table.
(d) Loans and leases, net of deferred fees and costcosts, are presented gross of an allowance for credit losses of $54.8$53.3 million and $64.0$53.2 million as ofat March 31, 20222023 and at December 31, 2021,2022, respectively.

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

11

Table of Contents
methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

11

Table of Contents
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.held to maturity. Peoples consideredconsiders 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 (Level 2).maturities. Demand and other non-fixed-maturity deposits are estimated using a discounted cash flow calculation based on maturity, attrition and re-pricing assumptions.assumptions (Level 2).
Short-term Borrowings:The fair value of short-term borrowings is estimated using a discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 
Long-term Borrowings:The fair value of long-term borrowings is estimated using a discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 
Certain financial assets and financial liabilities that are not required to be measured or reported at fair value can be subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). These financial assets and liabilities include the following: customer relationships, the deposit base, and other information required to compute Peoples’ aggregate fair value, which are not included in the above information. Accordingly, the above fair values described above are not intended to represent the aggregate fair value of Peoples.

12

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

(Dollars in thousands)(Dollars in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value(Dollars in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
March 31, 2022 
March 31, 2023March 31, 2023 
Obligations of:Obligations of: Obligations of: 
U.S. Treasury and government agenciesU.S. Treasury and government agencies$169,331 $$(1,926)$167,406 U.S. Treasury and government agencies$61,584 $— $(3,146)$58,438 
U.S. government sponsored agenciesU.S. government sponsored agencies87,219 12 (6,577)80,654 U.S. government sponsored agencies109,927 22 (11,638)98,311 
States and political subdivisionsStates and political subdivisions249,884 508 (18,748)231,644 States and political subdivisions254,523 32 (29,559)224,996 
Residential mortgage-backed securitiesResidential mortgage-backed securities800,014 2,192 (48,853)753,353 Residential mortgage-backed securities697,452 1,070 (93,252)605,270 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities64,086 (5,975)58,112 Commercial mortgage-backed securities62,256 — (10,103)52,153 
Bank-issued trust preferred securitiesBank-issued trust preferred securities10,725 170 (225)10,670 Bank-issued trust preferred securities10,779 40 (490)10,329 
Total available-for-sale securitiesTotal available-for-sale securities$1,381,259 $2,884 $(82,304)$1,301,839 Total available-for-sale securities$1,196,521 $1,164 $(148,188)$1,049,497 
December 31, 2021 
December 31, 2022December 31, 2022 
Obligations of:Obligations of: Obligations of: 
U.S. Treasury and government agenciesU.S. Treasury and government agencies$35,609 $12 $(17)$35,604 U.S. Treasury and government agencies$158,473 $— $(6,051)$152,422 
U.S. government sponsored agenciesU.S. government sponsored agencies83,019 58 (1,338)81,739 U.S. government sponsored agencies101,753 18 (13,656)88,115 
States and political subdivisionsStates and political subdivisions259,508 3,187 (3,376)259,319 States and political subdivisions261,612 12 (35,742)225,882 
Residential mortgage-backed securitiesResidential mortgage-backed securities833,328 6,565 (11,376)828,517 Residential mortgage-backed securities707,025 1,017 (103,389)604,653 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities64,971 42 (1,494)63,519 Commercial mortgage-backed securities61,091 — (11,042)50,049 
Bank-issued trust preferred securitiesBank-issued trust preferred securities6,711 215 (131)6,795 Bank-issued trust preferred securities10,765 57 (544)10,278 
Total available-for-sale securitiesTotal available-for-sale securities$1,283,146 $10,079 $(17,732)$1,275,493 Total available-for-sale securities$1,300,719 $1,104 $(170,424)$1,131,399 


12

Table of Contents
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 EndedThree Months Ended
March 31,March 31,
(Dollars in thousands)(Dollars in thousands)20222021(Dollars in thousands)20232022
Gross gains realizedGross gains realized$146 $339 Gross gains realized$78 $146 
Gross losses realizedGross losses realized(16)(675)Gross losses realized(2,013)(16)
Net gain (loss) realized$130 $(336)
Net (loss) gain realizedNet (loss) gain realized$(1,935)$130 
The cost of investment securities sold, and any resulting gain or loss, were based on the specific identification method and recognized as of the trade date.

13

Table of Contents
The following table presents a summary of available-for-sale investment securities that had been in a continuous unrealized loss position:position for the periods identified:
Less than 12 Months12 Months or MoreTotal Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)(Dollars in thousands)
Fair
Value
Unrealized LossNo. of Securities
Fair
Value
Unrealized LossNo. of Securities
Fair
Value
Unrealized Loss(Dollars in thousands)
Fair
Value
Unrealized LossNo. of Securities
Fair
Value
Unrealized LossNo. of Securities
Fair
Value
Unrealized Loss
March 31, 2022   
March 31, 2023March 31, 2023   
Obligations of:Obligations of:Obligations of:
U.S. Treasury and government agenciesU.S. Treasury and government agencies$107,070 $1,926 24 $— $— — $107,070 $1,926 U.S. Treasury and government agencies$— $— — $58,438 $3,146 18 $58,438 $3,146 
U.S. government sponsored agenciesU.S. government sponsored agencies71,303 5,610 18 7,343 967 78,646 6,577 U.S. government sponsored agencies24,093 222 18 71,220 11,416 14 95,313 11,638 
States and political subdivisionsStates and political subdivisions129,520 11,628 102 48,104 7,120 19 177,624 18,748 States and political subdivisions52,634 355 96 161,939 29,204 117 214,573 29,559 
Residential mortgage-backed securitiesResidential mortgage-backed securities632,616 40,240 198 79,024 8,613 20 711,640 48,853 Residential mortgage-backed securities22,648 486 32 572,090 92,766 212 594,738 93,252 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities39,447 3,665 18 17,882 2,310 57,329 5,975 Commercial mortgage-backed securities1,627 50,526 10,095 23 52,153 10,103 
Bank-issued trust preferred securitiesBank-issued trust preferred securities4,852 147 922 78 5,774 225 Bank-issued trust preferred securities478 22 7,533 468 8,011 490 
TotalTotal$984,808 $63,216 362 $153,275 $19,088 48 $1,138,083 $82,304 Total$101,480 $1,093 148 $921,746 $147,095 388 $1,023,226 $148,188 
December 31, 2021   
December 31, 2022December 31, 2022   
Obligations of:Obligations of:Obligations of:
U.S. Treasury and government agenciesU.S. Treasury and government agencies$16,914 $17 $— $— — $16,914 $17 U.S. Treasury and government agencies$112,730 $2,772 13 $39,692 $3,279 11 $152,422 $6,051 
U.S. government sponsored agenciesU.S. government sponsored agencies72,406 1,192 13 4,854 146 77,260 1,338 U.S. government sponsored agencies15,166 249 17 66,706 13,407 18 81,872 13,656 
States and political subdivisionsStates and political subdivisions101,397 2,075 71 30,853 1,301 11 132,250 3,376 States and political subdivisions60,324 714 114 156,900 35,028 117 217,224 35,742 
Residential mortgage-backed securitiesResidential mortgage-backed securities573,139 9,051 113 51,103 2,325 14 624,242 11,376 Residential mortgage-backed securities104,959 8,087 105 488,452 95,302 139 593,411 103,389 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities60,134 1,494 21 — — — 60,134 1,494 Commercial mortgage-backed securities1,874 129 48,175 10,913 21 50,049 11,042 
Bank-issued trust preferred securitiesBank-issued trust preferred securities2,991 878 122 3,869 131 Bank-issued trust preferred securities4,400 100 3,556 444 7,956 544 
TotalTotal$826,981 $13,838 225 $87,688 $3,894 27 $914,669 $17,732 Total$299,453 $12,051 254 $803,481 $158,373 308 $1,102,934 $170,424 
Management evaluates available-for-sale investment securities for an allowance for credit losses on a quarterly basis. At March 31, 2022,2023, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses. At March 31, 2022,2023, Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery. Further, the unrealized losses at both March 31, 20222023 and December 31, 20212022 were largely attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit relatedcredit-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 $7.0$6.7 million at March 31, 20222023 and $5.5$7.8 million at December 31, 2021.2022.
At March 31, 2022,2023, approximately 99% of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S. government sponsored agencies. The remaining 1%, or 3four positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004. All 3Of the four positions, three positions had a fair value of less than 90% of itstheir book value.values. Management analyzed the underlying credit quality of these mortgage-

13

Table of Contents
backedmortgage-backed securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities. Obligations of the U.S. treasury and government agencies, obligations of U.S. government sponsored agencies, and obligations of states and political subdivisions were issued by the U.S. Treasury Department or Federal government-sponsored entities. The decline in fair values was attributable to changes in interest rates and not credit quality. Therefore, management does not consider these to be impaired securities.
The unrealized loss with respect to the 1four bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at March 31, 2022 were2023 was attributable to the subordinated nature of the debt.

14

Table of Contents
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, 2022.2023. The weighted-average yields are based on the amortized cost. In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.
 
(Dollars in thousands)(Dollars in thousands)Within 1 Year1 to 5 Years5 to 10 YearsOver 10 YearsTotal(Dollars in thousands)Within 1 Year1 to 5 Years5 to 10 YearsOver 10 YearsTotal
Amortized costAmortized cost Amortized cost 
Obligations of:Obligations of: Obligations of: 
U.S. Treasury and government agenciesU.S. Treasury and government agencies$— $169,331 $— $— $169,331 U.S. Treasury and government agencies$12,495 $49,089 $— $— $61,584 
U.S. government sponsored agenciesU.S. government sponsored agencies2,404 9,704 66,801 8,310 87,219 U.S. government sponsored agencies9,309 47,321 45,042 8,255 109,927 
States and political subdivisionsStates and political subdivisions4,827 33,985 69,174 141,898 249,884 States and political subdivisions25,699 47,241 67,302 114,281 254,523 
Residential mortgage-backed securitiesResidential mortgage-backed securities45 3,113 63,424 733,432 800,014 Residential mortgage-backed securities1,415 56,175 639,861 697,452 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities1,043 916 36,333 25,794 64,086 Commercial mortgage-backed securities1,635 7,463 29,862 23,296 62,256 
Bank-issued trust preferred securitiesBank-issued trust preferred securities— 4,225 6,500 — 10,725 Bank-issued trust preferred securities— 6,279 4,500 — 10,779 
Total available-for-sale securitiesTotal available-for-sale securities$8,319 $221,274 $242,232 $909,434 $1,381,259 Total available-for-sale securities$49,139 $158,808 $202,881 $785,693 $1,196,521 
Fair valueFair value Fair value 
Obligations of:Obligations of: Obligations of: 
U.S. Treasury and government agenciesU.S. Treasury and government agencies$— $167,406 $— $— $167,406 U.S. Treasury and government agencies$12,195 $46,243 $— $— $58,438 
U.S. government sponsored agenciesU.S. government sponsored agencies2,407 9,386 61,518 7,343 80,654 U.S. government sponsored agencies9,154 44,088 38,785 6,284 98,311 
States and political subdivisionsStates and political subdivisions4,841 33,447 65,666 127,690 231,644 States and political subdivisions25,637 45,497 57,761 96,101 224,996 
Residential mortgage-backed securitiesResidential mortgage-backed securities45 3,084 60,633 689,591 753,353 Residential mortgage-backed securities1,358 51,295 552,616 605,270 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities1,043 893 33,214 22,962 58,112 Commercial mortgage-backed securities1,627 6,771 24,990 18,765 52,153 
Bank-issued trust preferred securitiesBank-issued trust preferred securities— 4,388 6,282 — 10,670 Bank-issued trust preferred securities— 6,284 4,045 — 10,329 
Total available-for-sale securitiesTotal available-for-sale securities$8,336 $218,604 $227,313 $847,586 $1,301,839 Total available-for-sale securities$48,614 $150,241 $176,876 $673,766 $1,049,497 
Total weighted-average yieldTotal weighted-average yield2.07 %1.91 %1.52 %1.75 %1.74 %Total weighted-average yield2.58 %2.27 %1.69 %1.89 %1.93 %
Held-to-maturity
The following table summarizes Peoples’ held-to-maturity investment securities:
(Dollars in thousands)(Dollars in thousands)Amortized CostAllowance for Credit LossesGross Unrealized GainsGross Unrealized LossesFair Value(Dollars in thousands)Amortized CostAllowance for Credit LossesGross Unrealized GainsGross Unrealized LossesFair Value
March 31, 2022  
March 31, 2023March 31, 2023  
Obligations of:Obligations of:  Obligations of:  
U.S. government sponsored agencies U.S. government sponsored agencies$38,486 $— $— $(4,205)$34,281  U.S. government sponsored agencies$194,184 $— $385 $(8,123)$186,446 
States and political subdivisionsStates and political subdivisions151,503 (286)228 (17,751)133,694 States and political subdivisions145,085 (241)199 (30,851)114,192 
Residential mortgage-backed securitiesResidential mortgage-backed securities115,613 — 13 (7,427)108,199 Residential mortgage-backed securities245,294 — 1,321 (16,345)230,377 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities79,340 — 10 (7,546)71,804 Commercial mortgage-backed securities109,750 — 49 (16,378)93,421 
Total held-to-maturity securitiesTotal held-to-maturity securities$384,942 $(286)$251 $(36,929)$347,978 Total held-to-maturity securities$694,313 $(241)$1,954 $(71,697)$624,436 
December 31, 2021  
December 31, 2022December 31, 2022  
Obligations of:Obligations of:  Obligations of:  
U.S. government sponsored agenciesU.S. government sponsored agencies$36,431 $— $86 $(1,004)$35,513 U.S. government sponsored agencies$132,366 $— $130 $(9,476)$123,020 
States and political subdivisionsStates and political subdivisions151,688 (286)1,006 (2,270)150,138 States and political subdivisions145,263 (241)162 (36,408)108,776 
Residential mortgage-backed securitiesResidential mortgage-backed securities110,708 — 370 (919)110,159 Residential mortgage-backed securities176,215 — 244 (18,461)157,998 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities75,588 — 182 (1,625)74,145 Commercial mortgage-backed securities106,609 — — (17,894)88,715 
Total held-to-maturity securitiesTotal held-to-maturity securities$374,415 $(286)$1,644 $(5,818)$369,955 Total held-to-maturity securities$560,453 $(241)$536 $(82,239)$478,509 
There were no sales of held-to-maturity securities for either of the three months ended March 31, 20222023 or 2021.2022.
Management evaluates held-to-maturity investment securities for an allowance for credit losses on a quarterly basis. The majority of Peoples' held-to-maturity investment securities are obligations of states and political subdivisions withPeoples has determined that the remaining securities issued byloss given default for U.S. government sponsored agencies. Peoples analyzed theseenterprise investment securities using cumulative default rate averagesis 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 grade municipal securities. Peoples recorded $286,000$241,000 of allowance for credit losses for held-to-maturity securities at each ofboth March 31, 2022,2023, and December 31, 2021.

14

Table of Contents

2022.
The following table presents a summary of held-to-maturity investment securities that had been in a continuous unrealized loss position:position for the periods identified:
 Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair
Value
Unrealized LossNo. of SecuritiesFair
Value
Unrealized LossNo. of SecuritiesFair
Value
Unrealized Loss
March 31, 2022        
Obligations of:
U.S. government sponsored agencies$11,406 $757 22,875 3,448 $34,281 $4,205 
States and political subdivisions100,780 12,979 62 29,521 4,772 130,301 17,751 
Residential mortgage-backed securities104,302 7,427 22 — — — 104,302 7,427 
Commercial mortgage-backed securities58,933 6,128 25 6,976 1,418 65,909 7,546 
Total$275,421 $27,291 113 $59,372 $9,638 15 $334,793 $36,929 
December 31, 2021        
Obligations of:
U.S. government sponsored agencies$17,328 $504 14,635 500 $31,963 $1,004 
States and political subdivisions61,954 1,041 34 27,328 1,229 89,282 2,270 
Residential mortgage-backed securities88,937 919 17 — — — 88,937 919 
Commercial mortgage-backed securities67,338 1,625 21 — — — 67,338 1,625 
Total$235,557 $4,089 78 $41,963 $1,729 8 $277,520 $5,818 

15

Table of Contents
 Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair
Value
Unrealized LossNo. of SecuritiesFair
Value
Unrealized LossNo. of SecuritiesFair
Value
Unrealized Loss
March 31, 2023        
Obligations of:
U.S. government sponsored agencies$81,988 $413 14 30,303 7,710 $112,291 $8,123 
States and political subdivisions— — — 110,831 30,851 67 110,831 30,851 
Residential mortgage-backed securities67,554 884 20 87,045 15,461 23 154,599 16,345 
Commercial mortgage-backed securities22,008 462 65,621 15,916 31 87,629 16,378 
Total$171,550 $1,759 39 $293,800 $69,938 130 $465,350 $71,697 
December 31, 2022        
Obligations of:
U.S. government sponsored agencies$59,905 $651 17 29,306 8,825 $89,211 $9,476 
States and political subdivisions3,590 1,072 101,863 35,336 64 105,453 36,408 
Residential mortgage-backed securities71,582 2,904 21 72,862 15,557 18 144,444 18,461 
Commercial mortgage-backed securities26,869 650 61,846 17,244 29 88,715 17,894 
Total$161,946 $5,277 49 $265,877 $76,962 120 $427,823 $82,239 
The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at March 31, 2022.2023. The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a blended federal and state corporate income tax rate of 22.9%23.3% and 22.3%23.3% for the periods endingthree months ended March 31, 20222023 and December 31, 2021,2022, respectively. In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.
(Dollars in thousands)(Dollars in thousands)Within 1 Year1 to 5 Years5 to 10 YearsOver 10 YearsTotal(Dollars in thousands)Within 1 Year1 to 5 Years5 to 10 YearsOver 10 YearsTotal
Amortized costAmortized cost Amortized cost 
Obligations of:Obligations of:  Obligations of:  
U.S. government sponsored agenciesU.S. government sponsored agencies$— $6,537 $2,173 $29,776 $38,486 U.S. government sponsored agencies2,126 $24,178 $71,008 $96,872 $194,184 
States and political subdivisionsStates and political subdivisions— 5,204 6,104 140,195 151,503 States and political subdivisions— 5,214 9,402 130,469 145,085 
Residential mortgage-backed securitiesResidential mortgage-backed securities— 1,550 — 114,063 115,613 Residential mortgage-backed securities— 890 — 244,404 245,294 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities342 3,138 20,504 55,356 79,340 Commercial mortgage-backed securities5,004 6,129 34,744 63,873 109,750 
Total held-to-maturity securitiesTotal held-to-maturity securities$342 $16,429 $28,781 $339,390 $384,942 Total held-to-maturity securities$7,130 $36,411 $115,154 $535,618 $694,313 
Fair valueFair value   Fair value   
Obligations of:Obligations of:   Obligations of:   
U.S. government sponsored agenciesU.S. government sponsored agencies$— $6,194 $2,026 $26,061 $34,281 U.S. government sponsored agencies2,102 $23,398 $70,844 $90,102 $186,446 
States and political subdivisionsStates and political subdivisions— 5,158 5,589 122,947 133,694 States and political subdivisions— 4,944 8,165 101,083 114,192 
Residential mortgage-backed securitiesResidential mortgage-backed securities— 1,561 — 106,638 108,199 Residential mortgage-backed securities— 866 — 229,511 230,377 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities342 3,147 19,035 49,280 71,804 Commercial mortgage-backed securities4,899 5,471 30,996 52,055 93,421 
Total held-to-maturity securitiesTotal held-to-maturity securities$342 $16,060 $26,650 $304,926 $347,978 Total held-to-maturity securities$7,001 $34,679 $110,005 $472,751 $624,436 
Total weighted-average yieldTotal weighted-average yield2.16 %1.80 %1.87 %2.02 %2.00 %Total weighted-average yield2.01 %2.01 %4.29 %3.45 %3.50 %
Other Investment Securities
Peoples' other investment securities on the Unaudited Consolidated Balance Sheets consist largely of shares of FHLB stock and of FRB stock.

16

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

15

Table of Contents
(Dollars in thousands)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)March 31, 2023December 31, 2022
FHLB stockFHLB stock$17,308 $17,308 FHLB stock$27,381 $26,605 
FRB stockFRB stock21,189 13,311 FRB stock21,231 21,231 
Nonqualified deferred compensationNonqualified deferred compensation2,222 2,240 Nonqualified deferred compensation2,405 2,048 
Equity investment securitiesEquity investment securities337 344 Equity investment securities367 346 
Other investment securitiesOther investment securities784 784 Other investment securities1,379 1,379 
Total other investment securitiesTotal other investment securities$41,840 $33,987 Total other investment securities$52,763 $51,609 
During the three months ended March 31, 2022,2023, Peoples redeemed $3.7 million of FHLB stock in order to be in compliance with the requirements of the FHLB. Peoples purchased $7.9$4.5 million of FRBadditional FHLB stock as requested byduring the FRBthree months ended March 31, 2023, as a result of the Premier acquisition.FHLB's capital requirements on FHLB advances during the first quarter.
During the three months ended March 31, 2023 and 2022, Peoples recognized a gain of $21,000 and 2021, Peoples recordeda loss of $7,000, respectively, for the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in an unrealized loss of $7,000 and an unrealized gain of $31,000..
At March 31, 2022,2023, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies. There were no equity investment securities of a single issuer that exceeded 10% of Peoples' stockholders' equity.
Pledged Securities
Peoples has pledged available-for-sale investment securities and held-to-maturity investment securities to secure public and trust department deposits, and repurchase agreements in accordance with federal and state requirements. Peoples has also pledged available-for-sale investment securities to secure additional borrowing capacity at the FHLB and the FRB as well as to derivative counterparties as collateral on unrealized interest rate swaps.
The following table summarizes the carrying valueamount of Peoples' pledged securities:
Carrying Amount Carrying Amount
(Dollars in thousands)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)March 31, 2023December 31, 2022
Securing public and trust department deposits, and repurchase agreements:Securing public and trust department deposits, and repurchase agreements:Securing public and trust department deposits, and repurchase agreements:
Available-for-sale Available-for-sale$835,391 $795,496  Available-for-sale$704,074 $779,244 
Held-to-maturity Held-to-maturity275,525 160,643  Held-to-maturity372,372 312,921 
Securing collateral for cash flow hedge swaps:
Available-for-sale5,711 18,208 
Held-to-maturity— 9,936 
Securing additional borrowing capacity at the FHLB and the FRB:Securing additional borrowing capacity at the FHLB and the FRB:Securing additional borrowing capacity at the FHLB and the FRB:
Available-for-sale Available-for-sale5,686 6,504  Available-for-sale3,949 3,972 
Held-to-maturity Held-to-maturity543 549  Held-to-maturity145,867 128,870 


16

Table of Contents
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 and leases nationwide through its Peoples Premium Finance division, and originates leases nationwide through its North Star Leasing divisions,("NSL") division and its Vantage Financial, LLC ("Vantage") subsidiary, respectively. Loanssubsidiary. Throughout this Form 10-Q, loans and leases throughout this document are referred to as "total loans" and "loans held for investment".

17

Table of Contents
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,
2022
December 31, 2021
Construction$238,305 $210,232 
Commercial real estate, other1,457,232 1,550,081 
Commercial and industrial887,151 891,392 
Premium finance145,813 136,136 
Leases267,068 122,508 
Residential real estate756,429 771,718 
Home equity lines of credit162,288 163,593 
Consumer, indirect524,778 530,532 
Consumer, direct107,390 104,652 
Deposit account overdrafts699 756 
Total loans, at amortized cost$4,547,153 $4,481,600 
On March 7, 2022, Peoples completed the acquisition of Vantage, which included $140.3 million of leases. During the first quarter of 2022, Peoples experienced elevated levels of payoffs and amortization of previously-acquired loans, which partially offset loan growth.
Peoples is a Small Business Administration ("SBA") Paycheck Protection Program ("PPP") lender. At March 31, 2022, the PPP loans had an amortized cost of $41.9 million, and were included in the commercial and industrial loan balances. As of March 31, 2022, deferred loan origination fees, net of deferred origination costs, totaled $1.0 million for PPP loans. During the first quarter of 2022, Peoples recorded amortization of net deferred loan origination fees of $1.2 million on PPP loans compared to $4.7 million for the first quarter of 2021. The remaining net deferred loan origination fees will be amortized over the life of the respective loans, or until forgiven by the SBA, and will be recognized in "Net interest income".
(Dollars in thousands)March 31,
2023
December 31, 2022
Construction$232,296 $246,941 
Commercial real estate, other1,481,062 1,423,518 
Commercial and industrial891,139 892,634 
Premium finance158,263 159,197 
Leases354,641 345,131 
Residential real estate712,602 723,360 
Home equity lines of credit174,383 177,858 
Consumer, indirect647,177 629,426 
Consumer, direct107,406 108,363 
Deposit account overdrafts749 722 
Total loans, at amortized cost$4,759,718 $4,707,150 
Accrued interest receivable is not included within the loan balances, but is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses. Total interest receivable on loans was $11.2$15.4 million at March 31, 20222023 and $12.0 million at December 31, 2021.2022.

17

Table of Contents
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 werewas as follows:
March 31, 2022December 31, 2021March 31, 2023December 31, 2022
(Dollars in thousands)(Dollars in thousands)
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Nonaccrual (a)
Accruing Loans 90+ Days Past Due(Dollars in thousands)
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
ConstructionConstruction$$— $$90 Construction$$— $12 $— 
Commercial real estate, otherCommercial real estate, other14,942 603 17,067 689 Commercial real estate, other11,345 150 12,121 167 
Commercial and industrialCommercial and industrial3,393 53 3,572 1,139 Commercial and industrial3,064 228 3,462 130 
Premium financePremium finance— 613 — 865 Premium finance— 764 — 504 
LeasesLeases1,731 3,921 1,581 — Leases3,884 2,491 3,178 3,041 
Residential real estateResidential real estate9,135 677 9,647 805 Residential real estate8,641 238 9,496 917 
Home equity lines of creditHome equity lines of credit937 75 1,039 50 Home equity lines of credit793 127 820 58 
Consumer, indirectConsumer, indirect1,628 17 1,574 — Consumer, indirect2,147 13 2,176 — 
Consumer, directConsumer, direct231 — 279 85 Consumer, direct105 208 25 
Total loans, at amortized costTotal loans, at amortized cost$32,003 $5,959 $34,765 $3,723 Total loans, at amortized cost$29,980 $4,014 $31,473 $4,842 
(a) There were $3.0$3.4 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 20222023 and $2.6$1.4 million at December 31, 2021.2022.
During the first three months of 2022,2023, nonaccrual loans declined compared to at December 31, 2021,2022, which was primarily due to the payoff$0.9 million of 1 commercial relationship, coupled with other smaller reductions. The increase in accruingresidential real estate being loans 90+ days past due, compared toon nonaccrual status as of December 31, 2021, was the result of the additional leases acquired from Vantage, the majority of which related to in-process renewals. As2022 that were accruing as of March 31, 2022, the short-term modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays2023. The decrease in payment for current borrowers, Peoples had made were insignificant. Under the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), borrowers that are considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. As such, these modifications made in accordance with the CARES Act were not included in Peoples' nonaccrual or accruing loans 90+ days past due at March 31, 2022.2023 when compared to at December 31, 2022, was primarily due to reductions of $0.7 million and $0.6 million in residential real estate loans and leases, respectively.
The amount of interest income recognized on loans past due 90 days or more and accruing during the three months ended March 31, 20222023 was $0.3$0.5 million.
The following table presents the aging of the amortized cost of past due loans:
Loans Past Due
Current
Loans
Total
Loans
(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal
March 31, 2022
Construction$— $50 $— $50 $238,255 $238,305 
Commercial real estate, other1,348 402 11,607 13,357 1,443,875 1,457,232 
Commercial and industrial2,195 344 2,528 5,067 882,084 887,151 
Premium finance488 396 613 1,497 144,316 145,813 
Leases691 2,097 4,318 7,106 259,962 267,068 
Residential real estate7,594 1,408 4,827 13,829 742,600 756,429 
Home equity lines of credit1,305 178 576 2,059 160,229 162,288 
Consumer, indirect3,432 648 537 4,617 520,161 524,778 
Consumer, direct243 27 110 380 107,010 107,390 
Deposit account overdrafts— — — — 699 699 
Total loans, at amortized cost$17,296 $5,550 $25,116 $47,962 $4,499,191 $4,547,153 
Loans Past Due
Current
Loans
Total
Loans
(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal
March 31, 2023

18

Table of Contents
Loans Past Due
Current
Loans
Total
Loans
Loans Past Due
Current
Loans
Total
Loans
(Dollars in thousands)(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal
December 31, 2021
ConstructionConstruction$658 $— $90 $748 $209,484 $210,232 Construction$— $— $$$232,295 $232,296 
Commercial real estate, otherCommercial real estate, other2,891 1,600 12,561 17,052 1,533,029 1,550,081 Commercial real estate, other2,382 36 10,475 12,893 1,468,169 1,481,062 
Commercial and industrialCommercial and industrial1,132 1,278 3,595 6,005 885,387 891,392 Commercial and industrial641 863 2,928 4,432 886,707 891,139 
Premium financePremium finance751 266 865 1,882 134,254 136,136 Premium finance886 307 764 1,957 156,306 158,263 
LeasesLeases426 247 1,581 2,254 120,254 122,508 Leases7,054 2,908 6,310 16,272 338,369 354,641 
Residential real estateResidential real estate8,276 2,241 5,188 15,705 756,013 771,718 Residential real estate7,921 1,240 4,521 13,682 698,920 712,602 
Home equity lines of creditHome equity lines of credit1,137 619 625 2,381 161,212 163,593 Home equity lines of credit520 351 594 1,465 172,918 174,383 
Consumer, indirectConsumer, indirect4,220 895 615 5,730 524,802 530,532 Consumer, indirect3,541 769 811 5,121 642,056 647,177 
Consumer, directConsumer, direct457 135 200 792 103,860 104,652 Consumer, direct402 44 454 106,952 107,406 
Deposit account overdraftsDeposit account overdrafts— — — — 756 756 Deposit account overdrafts— — — — 749 749 
Total loans, at amortized costTotal loans, at amortized cost$19,948 $7,281 $25,320 $52,549 $4,429,051 $4,481,600 Total loans, at amortized cost$23,347 $6,482 $26,448 $56,277 $4,703,441 $4,759,718 
December 31, 2022December 31, 2022
ConstructionConstruction$196 $161 $$366 $246,575 $246,941 
Commercial real estate, otherCommercial real estate, other2,279 1,051 10,370 13,700 1,409,818 1,423,518 
Commercial and industrialCommercial and industrial2,522 289 3,449 6,260 886,374 892,634 
Premium financePremium finance646 816 504 1,966 157,231 159,197 
LeasesLeases6,074 1,921 6,218 14,213 330,918 345,131 
Residential real estateResidential real estate10,113 2,128 5,519 17,760 705,600 723,360 
Home equity lines of creditHome equity lines of credit987 149 552 1,688 176,170 177,858 
Consumer, indirectConsumer, indirect5,866 1,048 921 7,835 621,591 629,426 
Consumer, directConsumer, direct703 70 108 881 107,482 108,363 
Deposit account overdraftsDeposit account overdrafts— — — — 722 722 
Total loans, at amortized costTotal loans, at amortized cost$29,386 $7,633 $27,650 $64,669 $4,642,481 $4,707,150 
Delinquency trends remained stable, as 98.9%98.8% of Peoples' loan portfolio was considered “current” at March 31, 2022,2023, compared to 98.8%98.6% at December 31, 2021.2022.
Pledged Loans
Peoples has pledged certain loans secured by one-to-four family and multifamily residential mortgages, home equity lines of credit and commercial real estate loans under a blanket collateral agreement to secure borrowings from the FHLB. Peoples also has pledged eligible commercial and industrial loans to secure borrowings with the FRB. Loans pledged are summarized as follows:
(Dollars in thousands)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)March 31, 2023December 31, 2022
Loans pledged to FHLBLoans pledged to FHLB$778,724 $769,863 Loans pledged to FHLB$918,075 $783,843 
Loans pledged to FRBLoans pledged to FRB354,788 294,728 Loans pledged to FRB332,521 339,005 
Credit Quality Indicators
As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 20212022 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. LoansCommercial 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. LoanCommercial leases, as well as loan relationships whose aggregate credit exposure to Peoples is equal to or less than $1.0 million are reviewed at least on an event driven basis. Triggers for review include knowledge of adverse events affecting the borrower's business, receipt of financial statements indicating deteriorating credit quality or other similar events. Adversely classified loans are reviewed on a quarterly basis. A description of the general characteristics of the risk grades used by Peoples, including loans acquired from Premier Financial Bancorp, Inc. ("Premier"), is as follows:
“Pass” (grades 1 through 4): Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations. Loans in this risk grade would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the loan if required, for any weakness that may exist.

19

Table of Contents
“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

19

Table of Contents
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,”"substandard," "doubtful" or “loss”"loss" based upon the regulatory definition of these classes and consistent with the regulatory definitions and requirements of these classes.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 “pass" for disclosure purposes.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, 2022:2023:
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to TermTerm Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)(Dollars in thousands)20222021202020192018PriorRevolving Loans
Total
Loans
(Dollars in thousands)20232022202120202019PriorRevolving Loans
Total
Loans
ConstructionConstruction

Construction

Pass Pass$10,938 $103,230 $82,437 $28,828 $1,505 $3,778 $2,230 $8,303 $232,946  Pass$4,420 $101,719 $87,280 $23,208 $3,241 $9,692 $— $— $229,560 
Special mention Special mention— 290 — — 735 2,088 — — 3,113  Special mention968 1,600 — — — 128 — — 2,696 
Substandard Substandard— — — 936 74 1,236 — — 2,246  Substandard— — — — — 40 — — 40 
Total Total10,938 103,520 82,437 29,764 2,314 7,102 2,230 8,303 238,305  Total5,388 103,319 87,280 23,208 3,241 9,860 — — 232,296 
Current period gross charge-offsCurrent period gross charge-offs— — — — — 
Commercial real estate, otherCommercial real estate, other

Commercial real estate, other

Pass Pass41,514 233,605 237,601 211,205 123,682 474,266 22,142 5,788 1,344,015  Pass76,569 173,133 219,202 223,034 214,534 458,817 25,537 — 1,390,826 
Special mention Special mention— 369 2,990 7,204 3,803 29,427 — 47 43,793  Special mention— — 184 1,200 5,128 17,998 50 — 24,560 
Substandard Substandard— 685 1,790 1,548 692 64,160 363 34 69,238  Substandard— — 10,027 2,523 1,580 51,290 216 — 65,636 
Doubtful Doubtful— — — — — 170 — — 170  Doubtful— — — — — 40 — — 40 
Loss— — — — — 16 — — 16 
Total Total41,514 234,659 242,381 219,957 128,177 568,039 22,505 5,869 1,457,232  Total76,569 173,133 229,413 226,757 221,242 528,145 25,803 — 1,481,062 
Current period gross charge-offsCurrent period gross charge-offs— — — — — 33 33 
Commercial and industrialCommercial and industrialCommercial and industrial
Pass Pass42,086 244,652 102,825 83,851 51,733 123,134 185,861 14,262 834,142  Pass31,958 157,317 135,973 60,760 70,506 124,255 208,303 — 789,072 
Special mention Special mention— 80 11,521 2,765 2,135 5,348 11,783 33,632  Special mention— 8,794 14,375 20,441 2,021 7,579 25,116 — 78,326 
Substandard Substandard50 452 1,757 2,357 1,303 8,431 3,646 354 17,996  Substandard317 10,065 3,217 2,154 3,038 4,744 — 23,539 
Doubtful Doubtful— — — — — 1,120 261 100 1,381  Doubtful— — — — — 202 — — 202 
Total Total42,136 245,184 116,103 88,973 55,171 138,033 201,551 14,724 887,151  Total31,962 166,428 160,413 84,418 74,681 135,074 238,163 — 891,139 
Premium finance
Pass78,071 67,706 — 36 — — — — 145,813 
Total78,071 67,706 — 36 — — — — 145,813 
Leases
Pass37,400 120,040 57,017 31,453 8,625 2,978 0— 257,513 
Special mention29 5,084 143 191 92 — 05,539 
Substandard249 2,154 475 597 536 04,016 
Total37,678 127,278 57,635 32,241 9,253 2,983 — — 267,068 

20

Table of Contents
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to TermTerm Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)(Dollars in thousands)20222021202020192018PriorRevolving Loans
Total
Loans
(Dollars in thousands)20232022202120202019PriorRevolving Loans
Total
Loans
Current period gross charge-offsCurrent period gross charge-offs— — — — — 
Premium financePremium finance
PassPass79,103 79,160 — — — — — — 158,263 
Total Total79,103 79,160 — — — — — — 158,263 
Current period gross charge-offsCurrent period gross charge-offs23 — — — — — 23 
LeasesLeases
Pass Pass68,756 151,048 79,901 29,306 13,233 3,398 — — 345,642 
Special mention Special mention16 1,212 2,087 371 21 — — 3,714 
Substandard Substandard127 1,691 2,091 512 410 454 — — 5,285 
Total Total68,899 153,951 84,079 30,189 13,650 3,873 — — 354,641 
Current period gross charge-offsCurrent period gross charge-offs— 108 189 100 58 14 469 
Residential real estateResidential real estateResidential real estate
Pass Pass25,271 143,964 67,907 48,501 32,489 421,537 — — 739,669  Pass10,786 77,494 136,027 57,950 42,022 377,777 — — 702,056 
Substandard Substandard— — — — — 16,569 — — 16,569  Substandard— — 280 146 560 9,488 — — 10,474 
Loss Loss— — — — — 191 — — 191  Loss— — — — — 72 — — 72 
Total Total25,271 143,964 67,907 48,501 32,489 438,297 — — 756,429  Total10,786 77,494 136,307 58,096 42,582 387,337 — — 712,602 
Current period gross charge-offsCurrent period gross charge-offs— — — — — 41 41 
Home equity lines of creditHome equity lines of creditHome equity lines of credit
Pass Pass7,216 36,184 21,568 17,212 15,275 63,211 1,622 3,705 162,288  Pass4,830 43,159 34,111 18,852 13,774 58,278 114 635 173,118 
Substandard Substandard— — 72 21 63 1,105 — — 1,261 
Loss Loss— — — — — — — 
Total Total7,216 36,184 21,568 17,212 15,275 63,211 1,622 3,705 162,288  Total4,830 43,159 34,183 18,873 13,837 59,387 114 635 174,383 
Current period gross charge-offsCurrent period gross charge-offs— — — — — 19 19 
Consumer, indirectConsumer, indirectConsumer, indirect
Pass Pass54,119 206,803 144,551 55,214 39,004 25,087 — — 524,778  Pass67,265 293,761 135,301 88,220 31,003 28,840 — — 644,390 
Substandard Substandard— 566 849 590 315 423 — — 2,743 
Loss Loss— 33 10 — — — — 44 
Total Total54,119 206,803 144,551 55,214 39,004 25,087 — — 524,778  Total67,265 294,360 136,160 88,811 31,318 29,263 — — 647,177 
Current period gross charge-offsCurrent period gross charge-offs18 471 279 90 21 50 929 
Consumer, directConsumer, directConsumer, direct
Pass Pass16,378 42,203 23,228 11,259 6,952 7,370 — — 107,390  Pass11,420 46,431 24,731 12,561 5,345 6,566 — — 107,054 
Total16,378 42,203 23,228 11,259 6,952 7,370 — — 107,390 
Deposit account overdrafts699 — — — — — — — 699 
Total loans, at amortized cost$314,020 $1,207,501 $755,810 $503,157 $288,635 $1,250,122 $227,908 $32,601 $4,547,153 

21

Table of Contents
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20232022202120202019PriorRevolving Loans
Total
Loans
  Substandard— 12 35 91 32 167 — — 337 
   Loss— — — — — 15 — — 15 
     Total11,420 46,443 24,766 12,652 5,377 6,748 — — 107,406 
Current period gross charge-offs— 40 12 34 10 104 
Deposit account overdrafts749 — — — — — — — 749 
Current period gross charge-offs227 — — — — — 227 
Total loans, at amortized cost356,971 1,137,447 892,601 543,004 405,928 1,159,687 264,080 635 4,759,718 
Total current period gross charge-offs$268 $619 $489 $224 $89 $166 $1,855 
The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the then most recent analysis performed at December 31, 2021:2022:
Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20212020201920182017PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Construction

  Pass$85,276 $78,026 $29,514 $3,498 $1,233 $2,982 $2,411 $6,948 $202,940 
  Special mention290 — — 735 3,850 137 — — 5,012 
  Substandard— — 947 77 153 1,103 — — 2,280 
     Total85,566 78,026 30,461 4,310 5,236 4,222 2,411 6,948 210,232 
Commercial real estate, other

  Pass253,259 259,113 217,938 143,094 143,975 392,212 21,320 11,940 1,430,911 
  Special mention157 2,716 7,875 3,839 6,292 31,626 — 49 52,505 
  Substandard— 1,675 824 691 3,124 59,415 371 37 66,100 
  Doubtful— — — — — 542 — — 542 
  Loss— — — — — 23 — — 23 
     Total253,416 263,504 226,637 147,624 153,391 483,818 21,691 12,026 1,550,081 
Commercial and industrial
  Pass299,117 105,646 84,144 56,361 22,182 100,030 174,848 15,888 842,328 
  Special mention82 11,745 2,559 2,179 132 5,445 7,563 29,705 
  Substandard465 2,059 2,691 812 4,995 3,342 3,085 367 17,449 
  Doubtful— — — — — 1,648 262 100 1,910 
     Total299,664 119,450 89,394 59,352 27,309 110,465 185,758 16,364 891,392 
Premium finance
  Pass135,896 240 — — — — — — 136,136 
Total135,896 240 — — — — — — 136,136 

21

Table of Contents
Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20212020201920182017PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Leases
Pass78,048 25,954 13,368 2,972 337 — 0— 120,679 
Special mention34 29 22 159 — 00248 
Substandard196 438 462 479 — 001,581 
Total78,278 26,421 13,852 3,610 347 — — — 122,508 
Residential real estate
  Pass141,845 74,169 53,434 33,690 44,377 407,541 — — 755,056 
  Substandard— — — — — 16,302 — — 16,302 
   Loss— — — — — 360 — — 360 
     Total141,845 74,169 53,434 33,690 44,377 424,203 — — 771,718 
Home equity lines of credit
  Pass35,898 23,276 18,035 16,124 14,991 53,302 1,967 3,287 163,593 
     Total35,898 23,276 18,035 16,124 14,991 53,302 1,967 3,287 163,593 
Consumer, indirect
  Pass226,287 163,830 63,353 45,672 21,754 9,636 — — 530,532 
     Total226,287 163,830 63,353 45,672 21,754 9,636 — — 530,532 
Consumer, direct
  Pass47,308 26,792 13,293 8,411 3,218 5,630 — — 104,652 
     Total47,308 26,792 13,293 8,411 3,218 5,630 — — 104,652 
Deposit account overdrafts756 — — — — — — — 756 
Total loans, at amortized cost$1,304,914 $775,708 $508,459 $318,793 $270,623 $1,091,276 $211,827 $38,625 $4,481,600 


Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20222021202020192018PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Construction

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

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

22

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

23

Table of Contents
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)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)March 31, 2023December 31, 2022
Construction$1,279 $1,291 
Commercial real estate, otherCommercial real estate, other12,333 37,220 Commercial real estate, other7,862 8,362 
Commercial and industrialCommercial and industrial3,139 8,340 Commercial and industrial470 1,456 
Residential real estateResidential real estate2,007 2,877 Residential real estate528 536 
Home equity lines of credit388 391 
Total collateral dependent loansTotal collateral dependent loans$19,146 $50,119 Total collateral dependent loans$8,860 $10,354 
The decrease in collateral dependent loans at March 31, 2022,2023, compared to December 31, 2021,2022, was primarily due to 3two large commercial relationships that were no longer considered collateral dependent atpaid in full during the three months ended March 31, 2022.2023.
Modifications for Borrowers Experiencing Financial Difficulty Subsequent to the Adoption of ASU 2022-02
As part of Peoples' loss mitigation activities, Peoples may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty. The most common modifications to the contractual terms of a loan to a borrower experiencing financial difficulty include an extension of the maturity date, a reduction in the interest rate for the remaining life of the loan, a temporary period of interest-only payments, and a reduction in the contractual payment amount for either a short period or the remaining term of the loan.
In addition to loan modifications, Peoples also provides other loss mitigation options, such as forbearance and repayment plans, to assist borrowers who experience financial difficulties. In assessing whether or not a borrower is experiencing financial difficulty, Peoples considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (1) the borrower is currently in payment default on any of the borrower's debt; (2) a payment default is probable in the foreseeable future without the modification; (3) the borrower has declared or is in the process of declaring bankruptcy; and (4) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification.

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

2324

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

25

Table of Contents
The following table summarizes the loans that were modified as TDRs during the three months ended March 31:31, 2022:
Three Months Ended
Recorded Investment (a)
(Dollars in thousands)Number of ContractsPre-ModificationPost-ModificationRemaining Recorded Investment
March 31, 2022
Construction$344 $344 $343 
Commercial real estate, other102 102 102 
Commercial and industrial
Residential real estate10 493 502 501 
Home equity lines of credit22 22 21 
Consumer, indirect10 106 106 105 
Consumer, direct14 14 14 
   Consumer12 120 120 119 
Total26 $1,085 $1,094 $1,090 
March 31, 2021
Construction$344 $344 $344 
Residential real estate170 174 172 
Home equity lines of credit46 46 46 
Consumer, indirect78 78 78 
Consumer, direct18 18 18 
   Consumer96 96 96 
Total12 $656 $660 $658 
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Three Months Ended
Three Months Ended
Recorded Investment (a)
(Dollars in thousands)Number of ContractsPre-ModificationPost-ModificationRemaining Recorded Investment
March 31, 2022
Construction$344 $344 $343 
Commercial real estate, other102 102 102 
Commercial and industrial
Residential real estate10 493 502 501 
Home equity lines of credit22 22 21 
Consumer, indirect10 106 106 105 
Consumer, direct14 14 14 
   Consumer12 120 120 119 
Total26 $1,085 $1,094 $1,090 
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.
On March 22, 2020, federal and state government banking regulators issued a joint statement, with which the FASB concurred as to the approach, regarding accounting for loan modifications for borrowers affected by COVID-19. In this guidance, short-term modifications, made on a good faith basis in response to COVID-19, to borrowers who were current prior to any relief, are not considered TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment which are insignificant. Under the guidance, the borrowers that are considered to be current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. In addition, modification or deferral programs mandated by the U.S. federal government or any state government related to COVID-19 are not in the scope of accounting for TDRs, as defined in ASC 310-40.
Allowance for Credit Losses
As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2022 Form 10-K, Peoples' estimates the allowance for credit losses using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In management's estimation of expected credit losses, Peoples did not have any loans that were modified asuses a TDR duringone year reasonable and supportable period across all segments. Following the first three months ended March 31, 2022 or March 31, 2021 that subsequently defaulted (i.e., 90 days or more past due followingreasonable and supportable period, Peoples reverts the macroeconomic variables to their long run average over a modification during the year).
Peoples had no commitments to lend additional funds to borrowers whose loan terms have been modified in a TDR.four quarter reversion period.

2426

Table of Contents
Allowance for Credit Losses
Changes in the allowance for credit losses for the three months ended March 31, 20222023 and March 31, 20212022 are summarized below:
(Dollars in thousands)(Dollars in thousands)Beginning Balance, December 31, 2021Initial Allowance for Acquired Purchased Credit Deteriorated Assets(Recovery of) Provision for Credit Losses (a)Charge-offsRecoveriesEnding Balance, March 31, 2022(Dollars in thousands)Beginning Balance, December 31, 2022Initial Allowance for Acquired PCD AssetsProvision for (Recovery of) Credit Losses (a)Charge-offsRecoveriesEnding Balance, March 31, 2023
ConstructionConstruction$2,999 $— $(268)$— $— $2,731 Construction$1,250 $— $32 $(9)$— $1,273 
Commercial real estate, otherCommercial real estate, other29,147 (217)(7,646)(278)49 21,055 Commercial real estate, other17,710 — (1,230)(33)27 16,474 
Commercial and industrialCommercial and industrial11,063 (165)(325)(463)10,114 Commercial and industrial8,229 — 79 (1)— 8,307 
Premium financePremium finance379 — (20)(14)— 345 Premium finance344 — 103 (23)433 
LeasesLeases4,797 132 1,243 (473)176 5,875 Leases8,495 — 1,003 (469)80 9,109 
Residential real estateResidential real estate7,233 (521)78 (309)14 6,495 Residential real estate6,357 — 159 (41)29 6,504 
Home equity lines of creditHome equity lines of credit2,005 (11)(113)(16)29 1,894 Home equity lines of credit1,693 — 43 (19)— 1,717 
Consumer, indirectConsumer, indirect5,326 (41)186 (385)86 5,172 Consumer, indirect7,448 — 1,183 (929)79 7,781 
Consumer, directConsumer, direct961 — 200 (136)11 1,036 Consumer, direct1,575 — 133 (104)15 1,619 
Deposit account overdraftsDeposit account overdrafts57 — 199 (259)54 51 Deposit account overdrafts61 — 180 (227)72 86 
TotalTotal$63,967 $(823)$(6,466)$(2,333)$423 $54,768 Total$53,162 $ $1,685 $(1,855)$311 $53,303 
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.
(Dollars in thousands)Beginning Balance,
December 31, 2020
 (Recovery of) Provision for Credit Losses (a)Charge-offsRecoveriesEnding Balance, March 31, 2021
Construction$1,887 $(1,058)$— $— $829 
Commercial real estate, other17,536 455 (157)— 17,834 
Commercial and industrial12,763 (2,362)(293)— 10,108 
Premium finance1,095 81 (16)— 1,160 
Residential real estate6,044 (991)(133)15 4,935 
Home equity lines of credit1,860 (358)(12)1,494 
Consumer, indirect8,030 (108)(505)105 7,522 
Consumer, direct1,081 (101)(36)26 970 
Deposit account overdrafts63 31 (103)54 45 
Total$50,359 $(4,411)$(1,255)$204 $44,897 
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.
(Dollars in thousands)
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.

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

(a)Peoples adopted ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326) on January 1, 2020.Includes purchase price adjustments related to acquisitions previously completed but were within the 12-month measurement period.
(b)Amount does not include the provision for the allowance for credit losses on unfunded commitments.s adopted ASU 2016-13 - Financial Instruments
(c)
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments
During the first quarter of 2023, Peoples recorded a provision for credit losses for loans of $1.7 million, largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for

27

Table of Contents
individually analyzed loans. Net charge-offs for the first quarter of 2023 were $1.5 million, primarily due to net charge-offs of indirect consumer loans of $0.9 million.
During the first quarter of 2022, Peoples recorded a recovery of credit losses of $6.8 million driven by a continued improvement in economic factors and changes in loss drivers used in the CECL model. Leases designated as purchased-credit deteriorated ("PCD") acquired from Vantage increased the allowance for credit losses by $132,000. Net charge-offs for the first quarter of 2022 were $1.9 million, and included charge-offs of 2two commercial and industrial loans aggregating $0.7 million.
At March 31, 2022, Peoples had recorded an allowance for unfunded commitments of $2.2$2.1 million a decreaseas of March 31, 2023, an increase compared to $2.5$2.0 million at December 31, 2021.2022. The allowance for unfunded commitments (also referred to as "unfunded commitment liability") is presented in the “Accrued expenses and other liabilities” line of the Unaudited Consolidated Balance Sheets. The change in the allowance for unfunded commitments is also reflected in the "Recovery of"Provision for (recovery of) credit losses" line of the Unaudited Consolidated Statements of Operations.


25

Table of Contents
Note 5 Goodwill and Other Intangible Assets
Goodwill
The following table details changes in the recorded amount of goodwill:
(Dollars in thousands)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)March 31, 2023December 31, 2022
Goodwill, beginning of yearGoodwill, beginning of year$264,193 $171,260 Goodwill, beginning of year$292,397 $264,193 
Goodwill recorded from acquisitionsGoodwill recorded from acquisitions39,458 92,933 Goodwill recorded from acquisitions200 28,204 
Goodwill, end of periodGoodwill, end of period$303,651 $264,193 Goodwill, end of period$292,597 $292,397 
On January 3, 2023, Peoples acquired a trust and investment business, for which it recognized $200,000 in goodwill.
On March 7, 2022, Peoples Bank entered intopurchased 100% of the equity of Vantage pursuant to an AssetEquity Purchase Agreement, dated March 7,February 16, 2022, with Vantage, at which point Vantage became a legal subsidiary of Peoples Bank. In the current quarter,2022, Peoples preliminarily recorded $40.4$27.2 million of goodwill related to this acquisition, which was offset partially by adjustmentsan adjustment of $1.3 million to Premier'sthe goodwill balance during the measurement period. On April 1, 2021, Peoples recorded $24.7 million of goodwill related to the acquisition of NS Leasing, LLC ("NSL"). On May 4, 2021, Peoples Insurance recorded $46,000 of goodwill from the acquisition of an insurance agency. On September 17, 2021, Peoples completed the merger with Premier for which Peoples preliminarily recorded $67.2 million of goodwill. For additional information on these acquisitions, refer to "Note 13 Acquisitions."Financial Bancorp, Inc. (“Premier” and the "Premier Merger").
Other Intangible Assets
Other intangible assets were comprised of the following at end of period, March 31, 2022,2023, and end of year,at December 31, 2021:2022:
(Dollars in thousands)Core DepositsCustomer RelationshipsTotal
March 31, 2022
Gross intangibles$26,467 $25,174 $51,641 
Intangibles recorded from acquisitions (a)— 11,990 11,990 
Accumulated amortization(19,464)(10,561)(30,025)
Total acquisition-related intangibles$7,003 $26,603 $33,606 
Servicing rights2,117 
Indefinite-lived intangibles (b)2,491 
Total other intangibles$38,214 
December 31, 2021
Gross intangibles$22,233 $12,495 $34,728 
Intangibles recorded from acquisitions (c)4,233 13,014 17,247 
Accumulated amortization(19,048)(9,603)(28,651)
Total acquisition-related intangibles$7,418 $15,906 $23,324 
Servicing rights2,218 
Indefinite-lived intangibles (d)1,274 
Total other intangibles$26,816 
(a) Customer Relationship intangible assets included $1.2 million of non-compete intangible assets related to the Vantage acquisition.
(b) Included $1.2 million of trade name intangible assets related to the Vantage acquisition and $1.3 million of trade name
intangible assets related to the NSL acquisition.
(c) Customer Relationship intangible assets consisted of $0.3 million of non-compete intangible assets related to the NSL acquisition.
(d) Included $1.3 million of trade name intangible assets related to the NSL acquisition.
(Dollars in thousands)Core DepositsCustomer RelationshipsIndefinite-Lived Trade NamesTotal
March 31, 2023
Gross intangibles$26,464 $39,241 $2,491 $68,196 
Accumulated amortization(20,983)(16,968)— (37,951)
Total acquisition-related intangibles$5,481 $22,273 $2,491 $30,245 
Servicing rights1,720 
Total other intangibles$31,965 
December 31, 2022
Gross intangibles$26,464 $25,173 $1,274 $52,911 
Intangibles recorded from acquisitions— 14,067 1,217 15,284 
Accumulated amortization(20,667)(15,412)— (36,079)
Total acquisition-related intangibles$5,797 $23,828 $2,491 $32,116 
Servicing rights1,816 
Total other intangibles$33,932 

OtherPeoples recorded no other intangible assets preliminarily recorded for the three months ended March 31, 2023.
Other intangible assets recorded from the above-mentioned acquisitions in 2022 includedwere $10.8 million of customer relationship intangible assets, $1.2 million of non-compete intangible assets, and $1.2 million of indefinite-lived trade name intangible assets related to the Vantage acquisition. Peoples also recorded $2.0 million of customer relationship intangible assets and $1.2$0.1 million of non-compete intangible assets related to the Vantage acquisition.
Other intangible assets recorded in 2021 included $12.7 millionacquisition of customer relationship intangible assets related to the NSL acquisition, $4.2 million of core deposit intangible assets related to the Premier merger, and $0.3 million of non-compete intangible assets, and $1.3 million of trade name intangible assets, both related to the NSL acquisition.Elite. Refer to "Note 13 Acquisitions" for additional information.
The following table details estimated aggregate future amortization of other intangible assets at March 31, 2022:2023:

2628

Table of Contents
(Dollars in thousands)(Dollars in thousands)Core DepositsCustomer RelationshipsTotal(Dollars in thousands)Core DepositsCustomer RelationshipsTotal
2022$1,204 $4,558 $5,762 
20231,257 5,888 7,145 
Remaining nine months of 2023Remaining nine months of 2023$942 $4,705 $5,647 
202420241,058 5,014 6,072 20241,058 5,325 6,383 
20252025891 3,944 4,835 2025891 4,255 5,146 
20262026731 2,803 3,534 2026731 3,114 3,845 
20272027572 2,289 2,861 
ThereafterThereafter1,862 4,396 6,258 Thereafter1,287 2,585 3,872 
TotalTotal$7,003 $26,603 $33,606 Total$5,481 $22,273 $27,754 
The weighted average amortization period of other intangible assets is 9.87.2 years.
Servicing Rights
The following is an analysis of activity of servicing rights for the periods ended March 31, 2022 and December 31, 2021:
(Dollars in thousands)March 31, 2022December 31, 2021
Balance, beginning of year$2,218 $2,486 
Amortization(167)(775)
Servicing rights originated66 519 
Valuation allowance— (12)
Balance, end of period$2,117 $2,218 
Peoples accounts for its servicing rights under the amortization method, recognizing a valuation allowance when amortized cost exceeds fair value. As of March 31, 2022, Peoples recorded a minimal addition to the valuation allowance related to changes in the fair value of servicing rights. During 2021, Peoples recorded a valuation allowance of $12,000 related to the decrease in the fair value of servicing rights.
The following is the breakdown of the discount rates and prepayment speeds of servicing rights for the periods ended March 31, 2022 and December 31, 2021:
March 31, 2022December 31, 2021
MinimumMaximumMinimumMaximum
Discount rates8.5 %11.0 %8.3 %10.8 %
Prepayment speeds12.6 %22.7 %8.9 %27.1 %
The fair value of servicing rights was $3.0 million and $2.6 million at March 31, 2022 and December 31, 2021, respectively.

27

Table of Contents
Note 6 Deposits
Peoples’ deposit balances were comprised of the following:

(Dollars in thousands)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)March 31, 2023December 31, 2022
Retail CDs:Retail CDs: Retail CDs: 
$100 or more$100 or more$305,357 $320,574 $100 or more$331,912 $263,341 
Less than $100Less than $100307,579 323,185 Less than $100290,179 266,895 
Retail CDsRetail CDs612,936 643,759 Retail CDs622,091 530,236 
Interest-bearing deposit accountsInterest-bearing deposit accounts1,179,199 1,167,460 Interest-bearing deposit accounts1,085,169 1,160,182 
Savings accountsSavings accounts1,065,678 1,036,738 Savings accounts1,024,638 1,068,547 
Money market deposit accountsMoney market deposit accounts656,266 651,169 Money market deposit accounts579,106 617,029 
Governmental deposit accountsGovernmental deposit accounts734,784 617,259 Governmental deposit accounts649,303 625,965 
Brokered deposit accounts (a)87,395 104,745 
Brokered CDsBrokered CDs273,156 125,580 
Total interest-bearing depositsTotal interest-bearing deposits4,336,258 4,221,130 Total interest-bearing deposits4,233,463 4,127,539 
Non-interest-bearing depositsNon-interest-bearing deposits1,666,668 1,641,422 Non-interest-bearing deposits$1,555,064 1,589,402 
Total depositsTotal deposits$6,002,926 $5,862,552 Total deposits$5,788,527 $5,716,941 


Uninsured deposits were
Time deposits$1.7 billion and $1.6 billion at March 31, 2023 and December 31, 2022, respectively. Uninsured amounts are estimated based on the portion of the respective customer account balances that met or exceeded the Federal Deposit Insurance Corporation ("FDIC")FDIC limit of $250,000 were $118.1 $250,000. Peoples pledges investment securities against certain governmental deposit accounts, which covered over $698.9 million and $121.3 millionof the uninsured deposit balances at March 31, 2022 and December 31, 2021, respectively.2023.

29

Table of Contents
Uninsured time deposits are broken out below by time remaining until maturity.
(Dollars in thousands)March 31, 2023December 31, 2022
3 months or less$16,476 $19,282 
Over 3 to 6 months18,190 14,871 
Over 6 to 12 months32,554 14,383 
Over 12 months64,405 52,216 
Total$131,625 $100,752 
The contractual maturities of retail CDs brokered CDs and demand deposits for each of the next five years, including the remainder of 2023, and thereafter are as follows:
(Dollars in thousands)RetailBrokeredTotal
Remaining nine months ending December 31, 2022 (a)$366,748 $86,901 $453,649 
Year ending December 31, 2023121,358 494 121,852 
Year ending December 31, 202469,069 — 69,069 
Year ending December 31, 202525,252 — 25,252 
Year ending December 31, 202626,079 — 26,079 
Thereafter4,430 — 4,430 
Total CDs$612,936 $87,395 $700,331 
(a) Brokered deposit accounts include $85.0 million of brokered demand deposits.
(Dollars in thousands)RetailBrokeredTotal
Remaining nine months ending December 31, 2023$270,212 $273,156 $543,368 
Year ending December 31, 2024271,410 — 271,410 
Year ending December 31, 202531,984 — 31,984 
Year ending December 31, 202619,269 — 19,269 
Year ending December 31, 202726,482 — 26,482 
Thereafter2,734 — 2,734 
Total CDs$622,091 $273,156 $895,247 
At March 31, 2022,2023, Peoples had 13thirteen effective interest rate swaps, with an aggregate notional value of $125.0 million, of which $85.0$125.0 million were funded by brokered demand and savings deposits.CDs. Brokered demand deposits hedged byCDs 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."

28

Table of Contents
Note 7 Stockholders’ Equity
The following table details the progression in Peoples’ common shares and treasury stock during the three months ended March 31, 2022:2023:
Common SharesTreasury
Stock
Common SharesTreasury
Stock
Shares at December 31, 202129,814,401 1,577,359 
Shares at December 31, 2022Shares at December 31, 202229,857,920 1,643,461 
Changes related to stock-based compensation awards:Changes related to stock-based compensation awards: Changes related to stock-based compensation awards: 
Release of restricted common sharesRelease of restricted common shares— 35,474 Release of restricted common shares— 25,977 
Cancellation of restricted common sharesCancellation of restricted common shares— 1,377 Cancellation of restricted common shares— 4,557 
Grant of restricted common sharesGrant of restricted common shares— (171,499)Grant of restricted common shares— (196,713)
Grant of unrestricted common sharesGrant of unrestricted common shares— (700)Grant of unrestricted common shares— (1,300)
Changes related to deferred compensation plan for Boards of Directors:Changes related to deferred compensation plan for Boards of Directors:Changes related to deferred compensation plan for Boards of Directors:
Purchase of treasury stockPurchase of treasury stock— 2,203 Purchase of treasury stock— 4,665 
Disbursed out of treasury stockDisbursed out of treasury stock— (730)
Common shares issued under dividend reinvestment planCommon shares issued under dividend reinvestment plan10,283 — Common shares issued under dividend reinvestment plan10,536 — 
Common shares issued under compensation plan for Boards of DirectorsCommon shares issued under compensation plan for Boards of Directors— (3,964)Common shares issued under compensation plan for Boards of Directors— (5,272)
Common shares issued under employee stock purchase planCommon shares issued under employee stock purchase plan— (5,809)Common shares issued under employee stock purchase plan— (17,034)
Shares at March 31, 202229,824,684 1,434,441 
Shares at March 31, 2023Shares at March 31, 202329,868,456 1,457,611 
On January 28, 2021, Peoples' Board of Directors approved a share repurchase program authorizing Peoples to purchase up to an aggregate of $30.0 million of Peoples' outstanding common shares. At March 31, 2022,2023, Peoples had not repurchased any263,183 common shares totaling $7.4 million under the share repurchase program authorized on January 28, 2021.program. There were no common shares repurchased during the first three months of 2023.
Under Peoples' Amended Articles of Incorporation, Peoples is authorized to issue up to 50,000 preferred shares, in one or more series, having such voting powers, designations, preferences, rights, qualifications, limitations and restrictions as determined by Peoples' Board of Directors. At March 31, 2022,2023, Peoples had no preferred shares issued or outstanding.
On April 25, 2022,January 23, 2023, Peoples' Board of Directors declared a quarterly cash dividend of $0.38 per common share, payable on February 21, 2023, to shareholders of record on February 6, 2023. On April 24, 2023, Peoples' Board of Directors declared a quarterly cash dividend of $0.39 per common share, payable on May 23, 2022,22, 2023, to shareholders of record on May 9, 2022.8, 2023. The following table details the cash dividends declared per common share during the first two quarters of 20222023 and the comparable periods of 2021:2022:
2022202120232022
First quarterFirst quarter$0.36 $0.35 First quarter$0.38 $0.36 
Second quarterSecond quarter0.38 0.36 Second quarter0.39 0.38 
Total dividends declaredTotal dividends declared$0.74 $0.71 Total dividends declared$0.77 $0.74 
Accumulated Other Comprehensive (Loss) Income
The following table details the change in the components of Peoples’ accumulated other comprehensive (loss) income for the three months ended March 31, 2022:2023:
(Dollars in thousands)Unrealized Loss on SecuritiesUnrecognized Net Pension and Postretirement CostsUnrealized (Loss) Gain on Cash Flow HedgeAccumulated Other Comprehensive (Loss) Income
Balance, December 31, 2021$(5,946)$(1,881)$(3,792)$(11,619)
Reclassification adjustments to net income:
  Realized gain on sale of securities, net of tax(100)— — (100)
Other comprehensive (loss) income, net of reclassifications and tax(55,189)4,236 (50,948)
Balance, March 31, 2022$(61,235)$(1,876)$444 $(62,667)
(Dollars in thousands)Unrealized (Loss) Gain on SecuritiesUnrecognized Net Pension and Postretirement CostsUnrealized Gain (Loss) on Cash Flow HedgesAccumulated Other Comprehensive (Loss) Income
Balance, December 31, 2022$(129,896)$(1,633)$4,393 $(127,136)
Reclassification adjustments to net income:
  Realized loss on sale of securities, net of tax1,483 — — 1,483 
Other comprehensive income (loss), net of reclassifications and tax15,715 (1,043)14,674 
Balance, March 31, 2023$(112,698)$(1,631)$3,350 $(110,979)




29

Table of Contents
Note 8 Employee Benefit Plans
Peoples sponsors a noncontributory defined benefit pension plan that covers substantially all employees hired before January 1, 2010. The plan provides retirement benefits based on an employee’s years of service and compensation. For employees hired before January 1, 2003, the amount of postretirement benefit is based on the employee’s average monthly compensation over the highest five consecutive years out of the employee’s last ten years with Peoples while an eligible employee. For employees hired on or after January 1, 2003, the amount of postretirement benefit is based on 2% of the employee’s annual compensation during the years 2003 through 2009, plus accrued interest. Effective January 1, 2010, the pension plan was closed to new entrants. Effective March 1, 2011, the accrual of pension plan benefits for all participants was frozen. Peoples recognized this freeze as a curtailment as of December 31, 2010 and March 1, 2011, under the terms of the pension plan. Effective July 1, 2013, a participant in the pension plan who is employed by Peoples may elect to receive or to commence receiving such person's retirement benefits as of the later of such person's normal retirement date or the first day of the month first following the date such person makes an election to receive his or her retirement benefits.
Peoples also provides post-retirement health and life insurance benefits to certain former employees and directors. Only those individuals who retired before January 27, 2012 were eligible for life insurance benefits. As of January 1, 2011, all retirees who desire to participate in the Peoples Bank medical plan do so by electing COBRA, which provides up to 18 months of coverage; retirees over the age of 65 also have the option to pay to participate in a group Medicare supplemental plan. Peoples only pays 100% of the cost of health benefits for those individuals who retired before January 1, 1993. For all others, the retiree is responsible for most, if not all, of the cost of the health benefits. Peoples’ policy is to fund the cost of the benefits as they arise.

30

Table of Contents
The expected long-term rate of return on plan assets, which was determined as of January 1, 2022,2023, is 7.0%. The following table details the components of the net periodic cost for the noncontributory defined benefit pension plan described above, which is included in salaries and employee benefit costs on the Unaudited Consolidated Statements of Operations:
Pension BenefitsPension Benefits
Three Months Ended Three Months Ended
March 31, March 31,
(Dollars in thousands)(Dollars in thousands)20222021(Dollars in thousands)20232022
Interest costInterest cost$66 $67 Interest cost$88 $66 
Expected return on plan assetsExpected return on plan assets(168)(174)Expected return on plan assets(166)(168)
Amortization of net lossAmortization of net loss20 31 Amortization of net loss20 
Settlement of benefit obligationSettlement of benefit obligation— — Settlement of benefit obligation— — 
Net periodic income$(82)$(76)
Net periodic lossNet periodic loss$(76)$(82)
Under US GAAP, Peoples is required to recognize a settlement gain or loss when the aggregate amount of lump-sum distributions to participants equals or exceeds the sum of the service and interest cost components of the net periodic pension cost. The amount of settlement gain or loss recognized is the pro rata amount of the unrealized gain or loss existing immediately prior to the settlement. In general, both the projected benefit obligation and the fair value of plan assets are required to be remeasured in order to determine the settlement gain or loss.
Peoples did not record a settlement charge forduring the three months ended March 31, 20222023 or March 31, 20212022 under the noncontributory defined benefit pension plan.


30

Table of Contents
Note 9 Earnings Per Common Share
The calculations of basic and diluted earnings per common share were as follows:
Three Months EndedThree Months Ended
March 31,March 31,
(Dollars in thousands, except per common share data)(Dollars in thousands, except per common share data)20222021(Dollars in thousands, except per common share data)20232022
Net income available to common shareholdersNet income available to common shareholders$23,577 $15,463 Net income available to common shareholders$26,560 $23,577 
Less: Dividends paid on unvested common sharesLess: Dividends paid on unvested common shares(48)(54)Less: Dividends paid on unvested common shares(102)(48)
Add: Undistributed loss allocated to unvested common sharesAdd: Undistributed loss allocated to unvested common shares(21)(15)Add: Undistributed loss allocated to unvested common shares(34)(21)
Net earnings allocated to common shareholdersNet earnings allocated to common shareholders$23,508 $15,394 Net earnings allocated to common shareholders$26,424 $23,508 
Weighted-average common shares outstandingWeighted-average common shares outstanding28,006,165 19,282,665 Weighted-average common shares outstanding27,891,760 28,006,165 
Effect of potentially dilutive common sharesEffect of potentially dilutive common shares122,966 153,646 Effect of potentially dilutive common shares130,119 122,966 
Total weighted-average diluted common shares outstandingTotal weighted-average diluted common shares outstanding28,129,131 19,436,311 Total weighted-average diluted common shares outstanding28,021,879 28,129,131 
Earnings per common share:Earnings per common share:Earnings per common share:
BasicBasic$0.84 $0.80 Basic$0.95 $0.84 
DilutedDiluted$0.84 $0.79 Diluted$0.94 $0.84 
Anti-dilutive common shares excluded from calculation:Anti-dilutive common shares excluded from calculation:Anti-dilutive common shares excluded from calculation:
Restricted common sharesRestricted common shares— — Restricted common shares155,018 — 
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 derivativesderivative financial instruments is included in the activity in "Net cash provided by operating activities" in the Unaudited Condensed Consolidated Statements of Cash Flows.

31

Table of Contents
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, 2022,2023, Peoples had entered into 13thirteen interest rate swap contracts with an aggregate notional value of $125.0 million. Peoples will pay a fixed rate of interest for up to ten years while receiving a floating rate component of interest equal to the three-month LIBOR rate. The interest received on the floating rate component is intended to offset the interest paid on rolling three-month brokered CDs, and 90-day FHLB Advances, which will continue to be rolled through the life of the swaps. At March 31, 2023 and at December 31, 2022, the interest rate swaps were designated as cash flow hedges of $85.0$125.0 million in brokered demand deposits,CDs, which are expected to be extended every 90 days through the maturity dates of the swaps. The remaining $40.0 million of interest rate swaps were designated as cash flow hedges of 90-day FHLB Advances.

31

Table of Contents
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 90-day advances or brokered CDs are matched to the reset dates and payment dates on the receipt of the three-month LIBOR floating portion of the swaps to ensure effectiveness of the cash flow hedge. During the three months ended March 31, 2022,2023, and March 31, 2021,2022, Peoples had recorded reclassifications of gains to earnings of $0.1 million and reclassifications of losses to earnings of $0.6 million, and $0.8 million, respectively. During the next twelve months, based on interest rates, yield curves, and notional amounts, Peoples estimates that approximately $1.0$1.3 million of AOCI will be reclassified as a reduction to interest expense.
The following table summarizes information about the interest rate swaps designated as cash flow hedges:
(Dollars in thousands)(Dollars in thousands)March 31,
2022
December 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
Notional amountNotional amount$125,000 $125,000 Notional amount$125,000 $125,000 
Weighted average pay ratesWeighted average pay rates2.26 %2.26 %Weighted average pay rates2.26 %2.26 %
Weighted average receive ratesWeighted average receive rates2.35 %1.1 %Weighted average receive rates4.31 %4.44 %
Weighted average maturityWeighted average maturity3.3 years3.6 yearsWeighted average maturity2.3 years2.6 years
Pre-tax unrealized gain (losses) included in AOCI$577 $(4,879)
Pre-tax changes in fair value included in AOCIPre-tax changes in fair value included in AOCI$4,370 $5,727 

32

Table of Contents
The following table presents net gainschanges in fair value recorded in AOCI and in the Unaudited Consolidated Statements of Operations related to the cash flow hedges:hedges for three months ended March 31, 2023, and 2022:
Three Months EndedThree Months Ended
March 31,March 31,
(Dollars in thousands)(Dollars in thousands)20222021(Dollars in thousands)20232022
Amount of gains recognized in AOCI, pre-tax$5,456 $4,236 
Amount of (losses) gains recorded in AOCI, pre-taxAmount of (losses) gains recorded in AOCI, pre-tax$(1,356)$5,456 
The following table reflects the cash flow hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:
March 31,
2022
December 31,
2021
March 31,
2023
December 31,
2022
(Dollars in thousands)(Dollars in thousands)Notional AmountFair ValueNotional AmountFair Value(Dollars in thousands)Notional AmountFair ValueNotional AmountFair Value
Included in "Other assets":Included in "Other assets":Included in "Other assets":
Interest rate swaps related to debtInterest rate swaps related to debt$75,000 $1,319 $— $— Interest rate swaps related to debt$125,000 $4,239 $125,000 $5,594 
Included in "Accrued expenses and other liabilities":
Interest rate swaps related to debt$50,000 $881 $125,000 $5,020 
Non-Designated Hedges
Peoples maintains an interest rate protection program for commercial loan customers, which was established in 2010. Under this program, Peoples originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples on terms that match the terms of the loan. By entering into the interest rate swap with the customer, Peoples Bank effectively provides the customer with a fixed rate loan while creating a variable rate asset for Peoples Bank. Peoples Bank offsets its exposure in the swap by entering into an offsetting interest rate swap with an unaffiliated institution. These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative financial instrument. These interest rate swaps did not have a material impact on Peoples' results of operations or financial condition at or for the three months ended March 31, 20222023 and as of or for the year ended December 31, 2021.2022.
The following table reflects the non-designated hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

32

Table of Contents
:

33

Table of Contents
March 31,
2022
December 31,
2021
March 31,
2023
December 31,
2022
(Dollars in thousands)(Dollars in thousands)Notional AmountFair ValueNotional AmountFair Value(Dollars in thousands)Notional AmountFair ValueNotional AmountFair Value
Included in "Other assets":Included in "Other assets":Included in "Other assets":
Interest rate swaps related to commercial loansInterest rate swaps related to commercial loans$422,015 $10,269 $419,733 $12,163 Interest rate swaps related to commercial loans$381,196 $23,100 $390,126 $28,529 
Included in "Accrued expenses and other liabilities":Included in "Accrued expenses and other liabilities":Included in "Accrued expenses and other liabilities":
Interest rate swaps related to commercial loansInterest rate swaps related to commercial loans$422,015 $10,269 $419,733 $12,163 Interest rate swaps related to commercial loans$381,196 $23,100 $390,126 $28,529 
Pledged Collateral
Peoples pledges or receives collateral for all interest rate swaps. When the fair value of Peoples' interest rate swaps is in a net liability position, Peoples must pledge collateral, and, when the fair value of Peoples' interest rate swaps is in a net asset position, the respective counterparties must pledge collateral. At March 31, 20222023 and December 31, 2021,2022, Peoples had zerono cash pledged, while the counterparties had no amount$16.7 million of cash pledged at either date.March 31, 2023 and $20.9 million of cash pledged at December 31, 2022. Peoples had no pledged $5.7 million and $28.1 million in investment securities at March 31, 2022 and2023 or at December 31, 2021, respectively.2022, while the counterparties had pledged investment securities in the amounts of $2.4 million at March 31, 2023 and $2.5 million at December 31, 2022.
Note 11 Stock-Based Compensation
Under the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan (the "2006 Equity Plan"), Peoples may grant, among other awards, nonqualified stock options, incentive stock options, restricted common share awards, stock appreciation rights, performance units and unrestricted common share awards to employees and non-employee directors. The total number of common shares available under the 2006 Equity Plan is 891,340. The maximum number of common shares that can be issued for incentive stock options is 500,000 common shares. Since February 2009, Peoples has granted restricted common shares to employees, and periodically to non-employee directors, subject to the terms and conditions prescribed by the 2006 Equity Plan. Additionally, in 2021, Peoples granted unrestricted common shares to non-employee directors (in addition to their directors' fees paid in common shares). 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.

33

Table of Contents
Restricted Common Shares
 Under the 2006 Equity Plan, Peoples may award restricted common shares to officers, key employees and non-employee directors. In general, the restrictions on the restricted common shares awarded to employees expire after periods ranging from one to five years. Since 2018, common shares awarded to non-employee directors have vested immediately upon grant with no restrictions. In the first three months of 2022,2023, Peoples granted an aggregate of 154,645188,372 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date; provided that in order for the restricted common shares to vest in full, Peoples must have reported positive net income and maintained a well-capitalized status by regulatory standards for each of the three fiscal years preceding the vesting date.
The following table summarizes the changes to Peoples’ restricted common shares for the three months ended March 31, 2022:2023:
Time-Based VestingPerformance-Based VestingTime-Based VestingPerformance-Based Vesting
Number of Common SharesWeighted-Average Grant Date Fair ValueNumber of Common SharesWeighted-Average Grant Date Fair Value Number of Common SharesWeighted-Average Grant Date Fair ValueNumber of Common SharesWeighted-Average Grant Date Fair Value
Outstanding at January 1, 202288,922 $25.44 247,346 $32.19 
Oustanding at January 1, 2023Oustanding at January 1, 2023138,522 $27.25 295,875 $32.20 
AwardedAwarded16,854 31.44 154,645 32.21 Awarded8,341 28.70 188,372 30.30 
ReleasedReleased— — (100,091)32.20 Released(5,316)31.35 (70,458)32.91 
ForfeitedForfeited— — (1,377)32.28 Forfeited— — (4,557)31.46 
Outstanding at March 31, 2022105,776 $26.39 300,523 $32.19 
Outstanding at March 31, 2023Outstanding at March 31, 2023141,547 $27.18 409,232 $31.21 
For the three months ended March 31, 2022,2023, the total intrinsic value for restricted common shares released was $3.3$2.3 million compared to $2.4$3.3 million for the three months ended March 31, 2021.2022.
Stock-Based Compensation
Peoples recognizes stock-based compensation, which is included as a component of Peoples’ salaries and employee benefit costs, for restricted and unrestricted common shares, as well as purchases made by participants in the employee stock purchase plan. For restricted common shares, Peoples recognizes stock-based compensation based on the estimated fair value of the awards expected to vest on the grant date. The estimated fair value is then expensed over the vesting period, which is normally three years. For performance unit awards, Peoples recognizes stock-based compensation over the performance period, based on the portion of the awards that was expected to vest based on the expected level of achievement of the two performance goals. Peoples also has an

34

Table of Contents
employee stock purchase plan whereby employees can purchase Peoples' common shares at a discount of 15%. The following table summarizes the amount of stock-based compensation expense and related tax benefit recognized for each period:
Three Months EndedThree Months Ended
March 31,March 31,
(Dollars in thousands)(Dollars in thousands)20222021(Dollars in thousands)20232022
Employee stock-based compensation expense:Employee stock-based compensation expense:Employee stock-based compensation expense:
Stock grant expenseStock grant expense$1,577 $1,198 Stock grant expense$2,150 $1,577 
Employee stock purchase plan expenseEmployee stock purchase plan expense28 17 Employee stock purchase plan expense39 28 
Total employee stock-based compensation expenseTotal employee stock-based compensation expense1,605 1,215 Total employee stock-based compensation expense2,189 1,605 
Non-employee director stock-based compensation expenseNon-employee director stock-based compensation expense124 195 Non-employee director stock-based compensation expense136 124 
Total stock-based compensation expenseTotal stock-based compensation expense1,729 1,410 Total stock-based compensation expense2,325 1,729 
Recognized tax benefitRecognized tax benefit(396)(296)Recognized tax benefit(543)(396)
Net stock-based compensation expenseNet stock-based compensation expense$1,333 $1,114 Net stock-based compensation expense$1,782 $1,333 
Restricted common shares were the primary form of stock-based compensation awards granted by Peoples in the three months ended March 31, 2022 and 2021. 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 $5.3$7.0 million at March 31, 2022,2023, which will be recognized over a weighted-average period of 2.32.2 years.


35

Table of Contents
Note 12 Revenue
The following table details Peoples' revenue from contracts with customers:
 Three Months Ended
March 31,
(Dollars in thousands)20222021
Insurance income:
Commission and fees from sale of insurance policies (a)$3,313 $3,177 
Fees related to third-party administration services (a)72 94 
Performance-based commissions (b)1,346 1,950 
Trust and investment income (a)4,276 3,845 
Electronic banking income:
Interchange income (a)4,113 3,046 
Promotional and usage income (a)1,140 865 
Deposit account service charges:
Ongoing maintenance fees for deposit accounts (a)1,311 810 
Transactional-based fees (b)2,115 1,175 
Commercial loan swap fees (b)168 60 
Other non-interest income transactional-based fees (b)257 144 
Total revenue from contracts with customers$18,111 $15,166 
Timing of revenue recognition:
Services transferred over time$14,225 $11,837 
Services transferred at a point in time3,886 3,329 
Total revenue from contracts with customers$18,111 $15,166 
 Three Months Ended
March 31,
(Dollars in thousands)20232022
Insurance income:
Commission and fees from sale of insurance policies (a)$3,816 $3,313 
Fees related to third-party administration services (a)82 72 

34

Table of Contents
 Three Months Ended
March 31,
(Dollars in thousands)20232022
Performance-based commissions (b)1,527 1,346 
Trust and investment income:
Fiduciary income (a)2,457 1,965 
Brokerage income (a)1,627 2,311 
Electronic banking income:
Interchange income (a)4,181 4,113 
Promotional and usage income (a)1,262 1,140 
Deposit account service charges:
Ongoing maintenance fees for deposit accounts (a)1,461 1,311 
Transaction-based fees (b)2,062 2,115 
Commercial loan swap fees (b)— 168 
Other non-interest income transaction-based fees (b)430 257 
Total revenue from contracts with customers$18,905 $18,111 
Timing of revenue recognition:
Services transferred over time$14,886 $14,225 
Services transferred at a point in time4,019 3,886 
Total revenue from contracts with customers$18,905 $18,111 
(a) Services transferred over time.
(b) Services transferred at a point in time.
Peoples records contract assets for income that has been recognized over a period of time for fulfillment of performance obligations, but has not yet been received related to electronic banking income and certain insurance income. This income typically relates to bonuses for which Peoples is eligible, but will not receive until a certain time in the future. Peoples records contract liabilities for payments received for commission income related to the sale of insurance policies, for which the performance obligations have not yet been fulfilled. The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled, which is over the insurance policy period. Peoples also records contract liabilities for bonuses received related to electronic banking income, for which the performance obligations have not yet been fulfilled. The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled related to electronic banking income.
The following table details the changes in Peoples' contract assets and contract liabilities for the three-month period ended March 31, 2022:2023:
Contract AssetsContract Liabilities Contract AssetsContract Liabilities
(Dollars in thousands)(Dollars in thousands)(Dollars in thousands)
Balance, January 1, 2022$743 $4,811 
Balance, January 1, 2023Balance, January 1, 2023$1,294 $5,634 
Additional income receivable Additional income receivable74 —  Additional income receivable50 — 
Recognition of income previously deferred Recognition of income previously deferred— (349) Recognition of income previously deferred— (70)
Balance, March 31, 2022$817 $4,462 
Balance, March 31, 2023Balance, March 31, 2023$1,344 $5,564 


36

Table of Contents
Note 13 Acquisitions
Vantage Financial, LLC
On March 7, 2022, Peoples Bank purchased 100% of the equity of Vantage, Financial, LLC (“Vantage”), a nationwide provider of equipment financing headquartered in Excelsior, Minnesota. Peoples Bank acquired assets comprising Vantage's lease business, including $140.2$154.9 million in leases and certain third-party debt in the amount of $107.4$106.9 million. Under the terms of the agreement, Peoples Bank paid cash consideration of $54.0 million, and also repaid $28.9 million in recourse debt on behalf of Vantage, for total consideration of $82.9 million. Vantage offers mid-ticket equipment leases, primarily for business essential information technology equipment across a wide-array of industries.

35

Table of Contents
Peoples recorded acquisition-related expenses during the three months ended March 31, 2023 and 2022 of $45,000 and $0.8 million, respectively, in professional fees related to the Vantage acquisition, which included $0.8 million in professional fees.acquisition.
The following table provides the preliminary purchase price calculation as of the date of the acquisition of Vantage, and the assets acquired and liabilities assumed at their estimated fair values. Peoples recorded the estimates of fair value based on initial valuations available at March 7, 2022. Due to the timing of the transaction closing date and the filing date for this Form 10-Q, these estimated fair values were considered preliminary as of March 31, 2022, and are subject to adjustment for up to one year after March 7, 2022. Valuations subject to change include leases, other intangible assets and borrowings.
(Dollars in thousands)Fair Value
Total Purchase Pricepurchase price$82,893 
Net assets at fair value
Assets
Cash and due from banks$1,444 
Leases140,346155,726 
Allowance for credit losses (on purchased credit deteriorated leases)(132)(801)
Net leases140,214154,925 
Bank premises and equipment1,926116 
Other intangible assets13,207 
Other assets1,6031,506 
    Total assets$158,394171,198 
Liabilities
Borrowings$107,409106,919 
Accrued expenses and other liabilities$8,4798,550 
Total liabilities$115,888115,469 
Net assets$42,50655,729 
Goodwill$40,38727,164 
The goodwill recorded in connection with the Vantage acquisition is related to expected synergies to be gained from the combination of Vantage with Peoples' operations. The employees retained from the Vantage acquisition should allow Peoples to continue to grow the lease portfolio, along with Peoples' resources, and should benefit Peoples in future periods. During Peoples' evaluation of intangible assets, it was determined that an assembled workforce intangible asset was not separately recognizable and was included in goodwill.
Premier Financial Bancorp, Inc.
On September 17, 2021, Peoples completed its merger with Premier. Premier merged into Peoples, and Premier’s wholly-owned subsidiaries, Premier Bank, Inc., and Citizens Deposit Bank and Trust, Inc., which combined operate 48 branches in Kentucky, Maryland, Ohio, Virginia, West Virginia and Washington, D.C., merged into Peoples’ wholly-owned subsidiary, Peoples Bank. As consideration, Premier shareholders were paid 0.58 common shares of Peoples for each full share of Premier that was owned at the acquisition date, resulting in the issuance of 8,589,685 common shares by Peoples, or $261.9 million. Peoples accounted for this transaction as a business combination under the acquisition method. Peoples completed the merger in an effort to diversify and expand its franchise, and further enhance its size and scale. Peoples believes the growth potential, and attractive market areas will benefit its future financial performance.
Peoples recorded acquisition-related expenses related to the Premier merger during the first quarter of 2022 of $137,000.
Peoples recorded the estimate of fair value based on initial valuations available at September 17, 2021, and has revised fair values of the acquiredother intangible assets, and liabilities in the periods since based on subsequent information obtained where those facts and

37

Table of Contents
circumstances existed as of the acquisition date. The estimates of fair value are subject to adjustment for up to one year after September 17, 2021. Valuations subject to change include loans and deferred tax assets and liabilities.
The following table provides the preliminary purchase price calculation as of the date of the merger with Premier, and the assets acquired and liabilities assumed at their estimated fair values.
(Dollars in thousands)Unpaid Principal BalanceFair Value
Premier common shares14,811,200 
Number of common shares of Peoples issued for each common share of Premier0.58 
Price per Peoples common share, based at closing date$30.49 
Common share consideration261,899 
Cash paid in lieu of fractional common shares25 
Total consideration$261,924 
Net assets at fair value
Assets
Cash and due from banks$248,360 
Interest-bearing deposits in other banks1,025 
Total cash and cash equivalents249,385 
Available-for-sale investment securities551,953 
Other investment securities4,159 
Total investment securities556,112 
Loans:
  Construction97,262 96,025 
  Commercial real estate, other544,950 534,850 
  Commercial and industrial132,293 132,083 
  Residential real estate332,269 331,552 
  Home equity lines of credit46,969 45,910 
  Consumer20,961 21,513 
Total loans1,174,704 1,161,933 
Allowance for credit losses (on PCD loans)(15,988)
Net loans1,145,945
Bank premises and equipment30,098 
Other intangible assets4,233 
OREO11,081 
Other assets27,067 
    Total assets$2,023,921 
Liabilities
Deposits:
Non-interest-bearing$733,157 
Interest-bearing1,018,387 
Total deposits1,751,544 
Short-term borrowings63,807 
Long-term borrowings6,070 
Accrued expenses and other liabilities7,813 
Total liabilities1,829,234 
Net assets194,687 
Goodwill$67,237 


38

Table of Contents
The estimated fair values presented in the above table reflect additional information that was obtained during the three months ended March 31, 2022, which resulted in changes to certain fair value estimates made as of the date of acquisition. Adjustments to acquisition date estimated fair values are recorded during the period in which they occur and, as a result, previously recorded results have changed. The below table reflects the changes in the estimated fair value as they impact goodwill at March 31, 2022:
(Dollars in thousands)Change in fair value
Net assets
Net loans$(1,198)
Other assets268 
Change in goodwill$(930)
Loans acquired by Peoples in a business combination that have evidence of more than insignificant credit deterioration, which includes loans that Peoples believes it is probable that Peoples will be unable to collect all contractually required payments, are considered "purchased credit deteriorated" loans. Acquired purchased credit deteriorated 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 purchased credit deteriorated loans as of the acquisition date:
(Dollars in thousands)Par ValueAllowance for Credit LossesNon-Credit (Discount) PremiumFair Value
Purchased credit deteriorated loans
Construction$20,143 $(2,005)$(214)$17,924 
Commercial real estate, other97,991 (9,286)(2,112)86,593 
Commercial and industrial11,285 (3,883)210 7,612 
Residential real estate18,001 (685)(250)17,066 
Home equity lines of credit1,291 (55)(72)1,164 
Consumer929 (74)37 892 
Fair value$149,640 $(15,988)$(2,401)$131,251 
Pikeville, Kentucky Insurance Agency
On May 4, 2021, Peoples Insurance acquired substantially all of the assets and rights of an insurance agency located in Pikeville, Kentucky and certain rights to related customer accounts, which were previously developed and maintained by Justice & Stamper Insurance Agency, Inc. Total consideration for this transaction was $325,000. Peoples accounted for this transaction as a business combination under the acquisition method.
NS Leasing, LLC
Peoples Bank entered into an Asset Purchase Agreement, dated March 24, 2021 with NS Leasing, LLC, which is headquartered in Burlington, Vermont, and does business as “North Star Leasing”. The transaction closed after the end of business on March 31, 2021 and Peoples Bank began operating the acquired business as a division of Peoples Bank on April 1, 2021. Peoples Bank acquired assets comprising NSL’s equipment finance business and assumed from NSL certain specified liabilities for total cash consideration of $116.5 million, plus a potential earnout payment to NSL of up to $3.1 million. Peoples Bank acquired $83.3 million in leases and satisfied, on behalf of NSL, certain third-party debt in the amount of $69.1 million. NSL underwrites, originates and services equipment leases and equipment financing agreements to businesses throughout the United States. Peoples recorded goodwill in the amount of $24.7 million and other intangibles of $14.0 million, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction. Peoples also recorded and paid an earn-out provision of approximately $3.0 million. As of March 31, 2022, leases had grown to $136.6 million. Peoples accounted for this transaction as a business combination under the acquisition method.
The recorded goodwill associated with the NSL acquisition is related to expected synergies and operational efficiencies to be gained from the combination of NSL with Peoples' operations. The employees retained from the NSL acquisition should allow Peoples to continue to grow the lease portfolio, along with Peoples' resources, and should benefit Peoples in future periods. During Peoples' evaluation of intangible assets, it was determined that an assembled workforce intangible asset was not separately recognizable and was included in goodwill.
The following table provides the purchase price calculation as of the date of acquisition for NSL and the assets acquired and liabilities assumed at their recorded fair values.

39

Table of Contents
(Dollars in thousands)
Total purchase price (a)$118,846
Net assets at fair value
Assets
Cash and due from banks$216 
Net leases82,833 
Bank premises and equipment, net of accumulated depreciation470 
Other intangible assets14,009 
Other assets1,225 
    Total assets$98,753 
Liabilities
Accrued expenses and other liabilities$4,627 
Total liabilities$4,627 
Net assets$94,126 
Goodwill$24,720
(a) Includes preliminary contingent consideration related to the bonus earn-out provision of $2.3 million. Peoples recorded an additional $0.7 million in non-interest expense related to an update to the estimated earn-out provision.
Leases acquired by Peoples in a business combination that have evidence of more than insignificant credit deterioration, which includes leases that Peoples believes it is probable that Peoples will be unable to collect all contractually required payments, are considered "purchased credit deteriorated" leases. These leases are recorded at the purchase price, and an allowance for credit losses is determined using the same methodology as for other leases. Acquired purchased credit deteriorated leases are reported net of the unamortized fair value adjustment.
The following table details the fair value adjustment for acquired purchased credit deteriorated leases as of the acquisition date:
(Dollars in thousands)NSL
Purchased credit deteriorated leases
Par value$5,248 
Allowance for credit losses(493)
Non-credit premium85 
Fair value$4,840
(Dollars in thousands)Par ValueAllowance for Credit LossesNon-Credit PremiumFair Value
Purchased credit deteriorated leases
Leases$3,412 $(801)$1,120 $3,731 
Fair value$3,412 $(801)$1,120 $3,731 
Peoples recorded acquisition-related expenses related to the NSL acquisition during the first quarter of 2022, which included $89,000 in professional fees.












40

Table of Contents
Note 14 Leases
Peoples has elected certain practical expedients, in accordance with Accounting Standards CodificationASC 842 - Leases ("ASC 842"). As a lessor, Peoples has made an accounting policy election to exclude from the consideration in the contract, and from variable payments not included in the consideration in the contract, all sales and other similar taxes assessed. Peoples has also made an accounting policy election to account for each separate lease component of a contract and its associated non-lease components as a single lease component for all leases subject to ASC 842.
Lessor Arrangements
Leases originated by Peoples, that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff, are reported at the net investment of the lease, net of initial direct costs, charge-offs and an allowance for credit losses. Peoples considers leases past due if any required principal or interest payments have not been received as of the date such payments were required to be made under the terms of the lease agreement. Upon detection of the reduced ability of a lessee to meet cash flow obligations, leases are typically charged down to the net realizable value, with the residual balance placed on nonaccrual status. Leases

36

Table of Contents
deemed to be uncollectable are charged against the allowance for credit losses, while recoveries of previously charged-off amounts are credited to the allowance for credit losses.
Peoples began originating leases with the acquisition of leases from NSL in the second quarter of 2021, and expanded its lease portfolio with the acquisition of Vantage in the current quarter.first quarter of 2022. The leases acquired from NSL were determined to be sales-type leases, as the premise for thethese leases is dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment. Originated leases continue to be classified as sales-type leases. These leases do not typically contain residual value guarantees; however, if a lease contains a residual value guarantee, Peoples reduces its residual asset risk by obtaining a security deposit from the lessee. The leases acquired from Vantage were determined to be either sales-type or direct financing leases based primarily on whether they included a dollar buy-out or a fair market value buy-out, respectively. As a lessor, Peoples originates commercial equipment leases either directly to the customer or indirectly through vendor programs. Equipment leases consist of automotive, construction, healthcare,health care, manufacturing, office, restaurant, information technology and other equipment. These leases include an estimated residual value, which areis assessed for impairment as part of the allowance for credit losses. Other non-interest income noted in the table below includes gain on the early termination of leases, syndicated leases, and other fees. Additional information regarding Peoples' leases can be found in "Note 4 Loans and Leases."
The table below details Peoples' lease income:
Three Months Ended
(Dollars in thousands)March 31, 2022
Interest and fees on leases (a)$6,102 
Other non-interest income775 
Total lease income$6,877
 Three Months Ended
(Dollars in thousands)March 31, 2023March 31, 2022
Interest and fees on leases (a)$9,643 $6,102 
Other non-interest income1,077 775 
Total lease income$10,720 $6,877 
(a)Included in "Interest and fees on loans and leases" onin 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.



41

Table of Contents
The following table summarizes the net investmentsinvestment in leases, which areis included in "Loans and leases, net of deferred costs" on the Unaudited Consolidated Balance Sheets:
(Dollars in thousands)March 31, 2022
Lease payments receivable, at amortized cost$290,903 
Estimated residual values21,018 
Initial direct costs1,728 
Deferred revenue(46,581)
Total leases, at amortized cost267,068
Allowance for credit losses - leases(5,875)
Net investment in leases$261,193
(Dollars in thousands)March 31, 2023December 31, 2022
Lease payments receivable, at amortized cost$381,549 $367,681 
Estimated residual values36,078 35,045 
Initial direct costs4,623 4,233 
Deferred revenue(67,609)(61,828)
Net investment in leases354,641 345,131 
Allowance for credit losses - leases(9,109)(8,495)
Net investment in leases, after allowance for credit losses$345,532 $336,636 
The following table summarizes the contractual maturities of leases:
(Dollars in thousands)Balance
Remaining nine months ending December 31, 20222023$56,604 
Year ending December 31, 202368,18368,772 
Year ending December 31, 202471,61687,814 
Year ending December 31, 202553,44398,604 
Year ending December 31, 202630,78064,769 
Year ending December 31, 202742,481 
Thereafter10,27719,109 
Lease payments receivable, at amortized cost$290,903381,549 
Lessee Arrangements
Peoples leases certain banking facilities and equipment under various agreements with original terms providing for fixed monthly payments over periods generally ranging from two to thirty years. Certain leases may include options to extend or terminate the lease. Only those renewal and termination options which Peoples is reasonably certain of exercising are included in the calculation of the lease liability. Certain leases contain rent escalation clauses calling for rent increases over the term of the lease, which are included in the calculation of the lease liability. At March 31, 2022,2023, Peoples did not have any leases that met the criteria for finance leases. Right of Use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to

37

Table of Contents
make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the remaining lease term. Operating lease ROU assets include lease payments made at or before the commencement date and initial indirect costs. Operating lease ROU assets exclude lease incentives. Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term and do not have a ROU asset or lease liability.
The table below details Peoples' lease expense, which is included in "Net occupancy and equipment expense" in the Unaudited Consolidated Statements of Operations:
Three Months Ended Three Months Ended
(Dollars in thousands)(Dollars in thousands)March 31, 2022March 31, 2021(Dollars in thousands)March 31, 2023March 31, 2022
Operating lease expenseOperating lease expense$603 $330 Operating lease expense695 603 
Short-term lease expenseShort-term lease expense168 72 Short-term lease expense95 168 
Total lease expenseTotal lease expense$771 $402 Total lease expense$790 $771 
Peoples utilizes an incremental borrowing rate to determine the present value of lease payments for each lease, as the lease agreements do not provide an implicit rate. The estimated incremental borrowing rate reflects a secured rate and is based on the term of the lease and the interest rate environment at the lease commencement or remeasurement date.


42

Table of Contents
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)(Dollars in thousands)March 31, 2022December 31, 2021(Dollars in thousands)March 31, 2023December 31, 2022
ROU assets:ROU assets:ROU assets:
Other assetsOther assets$7,606 $7,911 Other assets$7,181 $6,825 
Lease liabilities:Lease liabilities:Lease liabilities:
Accrued expenses and other liabilities Accrued expenses and other liabilities$8,363 $8,674  Accrued expenses and other liabilities$7,880 $7,551 
Other information:Other information:Other information:
Weighted-average remaining lease term Weighted-average remaining lease term8.5 years9.5 years Weighted-average remaining lease term8.5 years8.8 years
Weighted-average discount rate Weighted-average discount rate2.15 %2.36 % Weighted-average discount rate2.67 %2.70 %
During the three months ended March 31, 20222023 and March 31, 2021,2022, Peoples paid cash of $590,000$0.7 million and $320,000,$0.6 million, respectively, for operating leases.
The following table summarizes the maturity of remaining lease liabilities:
(Dollars in thousands)Balance
Remaining nine months ending December 31, 20222023$2,090 
Year ending December 31, 20231,9852,008 
Year ending December 31, 20241,1841,650 
Year ending December 31, 20257231,088 
Year ending December 31, 2026553905 
Year ending December 31, 2027747 
Thereafter3,3763,007 
Total undiscounted lease payments$9,9119,405 
Imputed interest$(1,548)(1,525)
Total lease liabilities$8,3637,880 


4338

Table of Contents


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

Management’s Discussion and Analysis (“MD&A”) represents an overview of the results of operations and financial condition of Peoples for the three months ended March 31, 20222023 and March 31, 2021.2022. This MD&A should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the Notes thereto.
Certain statements in this Form 10-Q, which are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate," "estimate," "may," "feel," "expect," "believe," "plan," "will," "will likely," "would," "should," "could," "project," "goal," "target," "potential," "seek," "intend," "continue," "remain," and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factorsrisks and uncertainties include, but are not limited to:
(1)the ever-changing effectsmagnitude and continued duration of the global COVID-19 pandemic - the duration, extent and severity of which are impossible to predict, including the possibility of further resurgence in the spread of COVID-19 or variants thereof - on economies (local, national and international), supply chains and markets, on the labor market, including the potential for a sustained reduction in labor force participation, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities torecovery from the COVID-19 pandemic including public health actions directed toward the containment of the COVID-19 pandemic (such as quarantines, shut downs and other restrictionsits ongoing impact on travel and commercial, social and other activities), the availability, effectiveness and acceptance of vaccines, and the implementation of fiscal stimulus packages, which could adversely impact sales volumes, add volatility to the global stock markets,economy and increase loan delinquenciesfinancial market conditions and defaults;Peoples’ businesses, results of operations and financial conditions;
(2)ongoing increasing interest rate policies, changes in the interest rate environment due to economic conditions related to the COVID-19 pandemic or other factors and/or the fiscal and monetary policy measures undertaken by the U.S. government and the Federal Reserve Board, of Governors ofincluding changes in the Federal Reserve System (the "Federal Reserve Board")Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity;
(3)the effects of inflationary pressures and the impact of rising interest rates on borrowers’ liquidity and ability to repay;
(4)the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the ongoing increasing interest rate policies of the Federal Reserve Board, the completion and successful integration of planned acquisitions, including the recently-completed merger with Premieracquisition of Vantage and the recently-completed acquisitions of NSL and Vantage,pending Limestone Merger, and the expansion of commercial and consumer lending activities, in light of the continuing impact of the COVID-19 pandemic on customers' operations and financial condition;activities;
(4)(5)competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, which can in turn impact Peoples' credit spreads, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals;
(5)(6)uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies in the State of Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses, including in particular the rules and regulations promulgated and to be promulgated under the CARES Act, and the follow-up legislation enacted as the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Basel III regulatory capital reform;businesses;
(6)(7)the effects of easing restrictions on participants in the financial services industry;
(7)(8)local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, ineffective management of the U.S. federal budget or debt, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, and changes in the relationship of the U.S. and itsU.S. global trading partners) and the impact these conditions may have on Peoples, itsPeoples' customers and itsPeoples' counterparties, and Peoples' assessment of the impact, which may be different than anticipated;
(8)(9)Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;

44

Table of Contents
(9)(10)changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties' performance and creditworthiness generally, which may be less favorable than expected in light of the COVID-19 pandemicrecent inflationary pressures and adversely impact the amount of interest income generated;
(10)(11)Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
(11)(12)future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses;
(12)
39

Table of Contents
(13)changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations;
(13)(14)the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model;
(14)(15)the replacement of the London Interbank Offered Rate ("LIBOR") with other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies;
(15)(16)adverse changes in the conditions and trends in the financial markets, including the impacts of the COVID-19 pandemic and the related responses by governmental and nongovernmental authorities to the pandemic,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;
(16)(17)the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
(17)(18)Peoples' ability to receive dividends from itsPeoples' subsidiaries;
(18)(19)Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
(19)(20)the impact of larger or similar-sized financial institutions encountering problems, such as the recent closures of Silicon Valley Bank in California and Signature Bank in New York, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity;liquidity, including potential increased regulatory requirements and costs, increased reputational risk and potential impacts to macroeconomic conditions;
(20)(21)Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;
(21)(22)Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples' primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands;
(22)(23)operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and itsPeoples' subsidiaries are highly dependent;
(23)(24)changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, (including as a result of the COVID-19 pandemic), legislative or regulatory initiatives, (including those in response to the COVID-19 pandemic), or other factors, which may be different than anticipated;
(24)(25)the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business;
(25)(26)the impact on Peoples' businesses, personnel, facilities, or systems, of losses related to acts of fraud, theft, misappropriation or violence;
(26)(27)the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters, pandemics, (including COVID-19), cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts;
(27)(28)the potential further deterioration of the U.S. economy due to financial, political or other shocks;
(29)the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;
(30)the impact on Peoples' businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples' intellectual property;
(28)(31)risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets;
(29)(32)Peoples' ability to integrate the NSL and Vantage acquisitions, and the merger of Premier into Peoples,pending Limestone Merger, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;
(30)(33)the risk that expected revenue synergies and cost savings from the merger of Peoples and Premierpending Limestone Merger, may not be fully realized or realized within the expected time frame;
(31)
40

Table of Contents
(34)changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases;
(32)(35)the effect of a fall in stock market prices on the asset and wealth management business;
(33)(36)Peoples' continued ability to grow deposits;
(34)the impact of future governmental and regulatory actions upon Peoples' participationdeposits or maintain adequate deposit levels in and execution of government programs related to the COVID-19 pandemic;

45

Table of Contents
(35)uncertainty regarding the impactlight of the current U.S. presidential administration and Congress on the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates and the response to and management of the COVID-19 pandemic, infrastructure spending and social programs;recent bank failures; and
(36)(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' Annual Report on2022 Form 10-K, forand under the fiscal year ended December 31, 2021.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 theseany forward-looking statements to reflect events or circumstances after the datefiling 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.

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.  Additionally, Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the filing date of this Form 10-Q or to reflect the occurrence of unanticipated events except as may be required by applicable legal requirements.  Copies of documents filed with the SEC are available free of charge at the SEC’s website at www.sec.gov and/or from Peoples' website – www.peoplesbancorp.com under the “Investor Relations” section.
This discussion and analysis should be read in conjunction with the Audited Consolidated Financial Statements, and Notes thereto, contained in Peoples’ 20212022 Form 10-K, as well as the Unaudited Condensed Consolidated Financial Statements, Notes to the Unaudited Condensed Consolidated Financial Statements, ratios, statistics and discussions contained elsewhere in this Form 10-Q.
Business Overview
The following discussion and analysis of Peoples’ Unaudited Condensed Consolidated Financial Statements is presented to provide insight into management’s assessment of the financial condition and results of operations.
Peoples is a diversified financial services holding company that makes available a complete line of banking, trust and investment, insurance, premium financing and equipment leasing solutions through its subsidiaries. Peoples provides services through traditional offices, ATMs, mobile banking and telephone and internet-based banking. Peoples Insurance Agency, LLC ("Peoples Insurance") also offers a complete array of insurance products commercial leasing and premium financing solutions, and makes available custom-tailored fiduciary, employee benefit plan and asset management services.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, anddivision. Peoples also offers lease financing through its North Star Leasing division since April 1, 2021, and as of March 7, 2022 through Vantage, a subsidiary of Peoples Bank. As of March 31, 2022,2023, Peoples has 136had 130 locations, including 119113 full-service bank branches in Ohio, West Virginia, Kentucky, Virginia, Washington D.C. and Maryland. Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the "ODFI"), the Federal Reserve Bank ("FRB")FRB of Cleveland and the Federal Deposit Insurance Corporation (the "FDIC").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 accountaccounting 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, 2022,2023, which have been disclosed in Peoples' 2022 Form 10-K and updated in "Note 1 Summary of Significant Accounting Policies" in this Form 10-Q, and10-Q. This MD&A should be read in conjunction with the policies disclosed in Peoples’ 20212022 Form 10-K.
Summary of Recent Transactions and Events
The following is a summary of recent transactions and events that have impacted or are expected to impact Peoples’ results of operations or financial condition:
On October 25, 2022, Peoples announced the Limestone Merger, a transaction valued at approximately $208.2 million at the time of the announcement. The Limestone Merger closed on April 30, 2023. As of March 31, 2023, Peoples had recognized $1.0 million in acquisition-related expenses associated with this pending transaction.
On April 1, 2022, Peoples Insurance acquired substantially all of the assets and rights of an insurance agency with five locations in eastern Kentucky and certain rights to related customer accounts, which were previously developed and

41

Table of Contents
maintained by Elite, Agency, Inc. ("Elite"), pursuant to an Asset Purchase Agreement between Peoples Insurance and Elite. Total consideration for this transaction was $3.8$4.4 million.

46

Table Peoples recognized intangibles of Contents
$2.1 million, primarily comprised of a customer relationship intangible.
On March 7, 2022, Peoples completed its acquisition of Vantage pursuant to an AssetEquity Purchase Agreement, dated February 16, 2022, in which Peoples Bank purchased 100% of the equity of Vantage. Peoples Bank acquired assets comprising Vantage's lease business, including $140.2$154.9 million in leases and certain third-party debt in the amount of $107.4$106.9 million. Peoples paid total consideration of $82.9 million. Based in Excelsior, Minnesota, Vantage offers mid-ticket equipment leases primarily for business essential information technology equipment across a wide-arraywide array of industries. Peoples recorded preliminary goodwill in the amount of $40.4$27.2 million and preliminary other intangible assets of $13.2 million, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction. .
On September 17, 2021, Peoples completed its merger with Premier, in which Peoples acquired, in an all-stock merger, a bank holding company headquartered in Huntington, West Virginia, and the parent company of Premier Bank, Inc. (“Premier Bank”) and Citizens Deposit Bank and Trust, Inc. (“Citizens”). Under the terms and subject to the conditions of the definitive Agreement and Plan of Merger dated March 26, 2021 ("Merger Agreement"), Premier merged with and into Peoples (the “Merger”), and Premier Bank and Citizens subsequently merged with and into Peoples’ wholly-owned subsidiary, Peoples Bank, in a transaction valued at $261.9 million. At the close of business on September 17, 2021, the financial services offices of each of Premier Bank and Citizens became branches of Peoples Bank. Peoples acquired $1.2 billion in loans, $1.8 billion in deposits and recorded preliminary goodwill of $67.2 million and other intangible assets of $4.2 million in connection with the Merger on September 17, 2021.
On May 4, 2021, Peoples Insurance acquired substantially all of the assets and rights of an insurance agency located in Pikeville, Kentucky and certain rights to related customer accounts, which were previously developed and maintained by Justice & Stamper Insurance Agency, Inc., pursuant to an Asset Purchase Agreement between Peoples Insurance and Justice & Stamper Insurance Agency, Inc. Total consideration for this transaction was $325,000, with $162,500 paid at closing and the second installment in the amount of $162,500 to be paid on the first anniversary of the closing date, less any adjustments pursuant to adverse claims incurred or sustained by or imposed by Peoples Insurance. Peoples recorded customer relationship intangible assets of $230,000 and goodwill of $46,000, related to this transaction.
On March 31, 2021, Peoples completed its acquisition of NS Leasing, LLC ("NSL") pursuant to an Asset Purchase Agreement, dated March 24, 2021 in which Peoples Bank acquired the equipment finance and leasing business of NSL. The transaction closed after the end of business on March 31, 2021 and Peoples Bank began operating the acquired business as North Star Leasing, a division of Peoples Bank on April 1, 2021. Peoples Bank acquired assets comprising NSL's equipment finance business, including $83.3 million in leases and satisfied, on behalf of NSL, certain third-party debt in the amount of $69.1 million. Peoples Bank paid total consideration of $116.6 million, plus a potential earn-out payment to NSL of up to $3.1 million. Based in Burlington, Vermont, the North Star Leasing division underwrites, originates and services equipment leases and equipment financing agreements to businesses throughout the United States. Peoples recorded goodwill in the amount of $24.7 million and other intangibles of $14.0 million, which included a customer relationship intangible, a trade-name intangible and non-compete agreements related to this transaction.
Peoples began originating loans during the second quarter of 2020, and continued to originate loans during the first five months of 2021 under the loan guarantee program created under the CARES Act, called the Paycheck Protection Program ("PPP"). These loans were targeted to provide small businesses with financial support to cover payroll and certain other specified types of expenses for a specified period of time. Loans made under the PPP are fully guaranteed by the Small Business Administration ("SBA"). As of March 31, 2022, Peoples had $41.9 million aggregate principal amount in PPP loans outstanding (including $15.0 million acquired in the merger with Premier), which were included in commercial and industrial loan balances, compared to $87.1 million (including $23.4 million acquired in the merger with Premier) at December 31, 2021. Peoples recognized interest income of $1.2 million for deferred loan fees/costs and $154,000 of interest income on PPP loans during the first quarter of 2022, compared to $1.8 million and $282,000, respectively, for the fourth quarter of 2021, and $4.7 million and $0.9 million, respectively, for the first quarter of 2021.
During the first quarter of 2022,2023, Peoples recorded a provision for credit losses of $1.9 million, compared to a provision for credit losses of $2.3 million in the linked quarter and a recovery of credit losses of $6.8 million compared to $6.6 million in the linked quarter and $4.7 million in the first quarter of 2021.2022. The release ofprovision for credit losses in the first quarter of 2023 was largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for these periods was driven by improvements in economic forecasts, coupled with loan payoffs and sales during certain periods.individually analyzed loans. For more information, please refer to the section titled "RESULTS OF OPERATIONS - Provision for (Recovery of) Provision for Credit Losses" found later in this discussion.
During the first quarter of 2022,2023, Peoples incurred $1.4$0.6 million of acquisition-related expenses, compared to $0.9$0.7 million in the fourth quarter of 20212022 and $1.9$1.4 million in the first quarter of 2021.2022. The acquisition-related expenses in 2023 were primarily related to the Limestone Merger, while the acquisition-related expenses in 2022 were primarily related to the Vantage acquisition, while the 2021 expenses were primarily related to the NSL acquisition and the Premier merger.acquisition.
In an effort to stimulate an economy that was being adversely impacted byTo combat the impactseffects of ongoing inflationary pressures, the COVID-19 pandemic, the Federal Reserve Board first lowered the benchmark Federal Funds Target Rate by 50 basis points on March 3, 2020, then lowered the target rate another 100 basis points at the next FOMC meeting on March 15, 2020. The Federal Funds Target Rate range was 0% - 0.25% as of March 31, 2020 and maintained this rate until March 16, 2022. The Federal Reserve Board increased the Federal Funds Target Rate range to 0.25% to 0.50% on March 16, 2022, to 0.75% to 1.00% on May 4, 2022, to 1.50% to 1.75% on June 15, 2022, to 2.25% to 2.50% on July 27, 2022, to 3.00% to 3.25% on September 21, 2022, to 3.75% to 4.00% on November 2, 2022, to 4.25% to 4.50% on December 14, 2022, to 4.50% to 4.75% on February 1, 2023, to 4.75% to 5.00% on March 23, 2023, 5.00% to 5.25% on May 3, 2023 and has stated it anticipates continuingmay continue to raise rates throughout 2022.2023.
The impact of these transactions and events, where material, is discussed in the applicable sections of this MD&A.

47

Table of Contents
EXECUTIVE SUMMARY
Peoples reported net income of $23.6$26.6 million for the first quarter of 2022,2023, representing income per diluted common share of $0.84. In comparison, Peoples recognized earnings per diluted common share of $0.98 for the fourth quarter of 2021, and$0.94. In comparison, Peoples reported earnings per diluted common share of $0.79$0.95 for the fourth quarter of 2022, and of $0.84 for the first quarter of 2021.2022. Non-core items, and the related tax effect of each, in net income primarily included acquisition-related expenses. Non-core items negatively impacted earnings per diluted common share by $0.05 for the first quarter of 2023, $0.03 for the fourth quarter of 2022, and $0.04 for the first quarter of 2022, $0.02 for the fourth quarter of 2021, and $0.13 for the first quarter of 2021.2022.
Net interest income was $54.3$72.9 million for the first quarter of 2022, a decrease2023, an increase of $0.4$2.3 million, or 1%3%, compared to the linked quarter. Net interest margin was 3.41%4.53% for the first quarter of 2022,2023, compared to 3.37%4.44% for the linked quarter. The decreaseincreases in net interest income was driven primarily by higher funding costs resulting from the Vantage acquisition, partially offset by accretion income recognized on the commercial real estate portfolio. Net interest income and net interest margin both continuewere driven by 50 basis points of improvement in loan yields due to be impacted by the excess liquidity environment presentrecent increases in market interest rates and a shift in the financial services sector since the beginningcomposition of the COVID-19 pandemic by wayloan portfolio into higher-yielding leases, and 41 basis points of increased low yielding cash reserves. The impactimprovement in investment yields when compared to the linked quarter due to purchases of the recent increase in the Federal Reserve benchmarkinvestment securities with higher interest rate was not meaningful for the current quarter given the proximityrates and sales of its timing to quarter-end.lower-yielding investment securities. Net interest income for the first quarter of 20222023 increased $18.7$18.6 million, or 53%34%, compared to the first quarter of 2021.2022. Net interest margin increased 15112 basis points compared to 3.26%3.41% for the first quarter of 2021.2022. The increase in net interest income compared to the first quarter of 20212022 was driven by lower funding costs, which were primarily attributable to deposits acquiredincreases in market interest rates and a full quarter of income from Premier.the Vantage acquisition.
Accretion income, net of amortization expense, from acquisitions was $2.0 million for the first quarter of 2023, $2.2 million for the fourth quarter of 2022 and $2.7 million for the first quarter of 2022, $1.0 million for the fourth quarter of 2021 and $0.4 million for the first quarter of 2021, which added 1713 basis points, 614 basis points and 417 basis points, respectively, to net interest margin. AccretionThe decreases in accretion income for the currentfirst quarter wasof 2023 when compared to the linked quarter and the first quarter of 2022 were driven by payoffs on several large commercial loans.less loan accretion due to lower pay-offs and less accretion from the merger with Premier Financial Bancorp, Inc. ("Premier") and the Vantage acquisition.

42

Table of Contents
The provision for credit losses was $1.9 million for the first quarter of 2023, compared to a provision for credit losses of $2.3 million for the linked quarter and a recovery of credit losses wasof $6.8 million for the first quarter of 2022, compared to $6.6 million2022. The provisions for the linked quarter and $4.7 million forcredit losses in the first quarter of 2021.2023 and the linked quarter were largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for individually analyzed loans. The changes in the recovery of credit losses comparedin the first quarter of 2022 was attributable to the linked quarter and prior year quarter were primarily due to continuedan improvement in economic factors and changes in loss drivers used inwithin the CECLcurrent expected credit loss ("CECL") model.Net charge-offs for the first quarter of 20222023 were $1.9$1.5 million, or 0.17%0.13% of average total loans annualized, compared to net charge-offs of $1.3$2.1 million, or 0.11%0.18% of average total loans annualized, for the linked quarter and net charge-offs of $1.1$1.9 million, or 0.13%0.17% of average total loans annualized, for the first quarter of 2021. Net charge-offs for the first quarter of 2022 included two commercial and industrial loans aggregating $0.7 million.2022. For additional information on credit trends and the allowance for credit losses, see the "FINANCIAL CONDITION - Allowance for Credit Losses" section below.
Net gains and losses include gains and losses on investment securities, asset disposals and other transactions, which are included in total non-interest income on the Consolidated Statements of Operations. The net loss realized during the first quarter of 2023 was $2.2 million, compared to a net loss of $0.5 million for the linked quarter, and a net gain of $3,000 for the first quarter of 2022. During the first quarter of 2023, Peoples executed the sale of $96.7 million of its lower yielding available-for-sale securities for a pre-tax net loss of $2.0 million. Proceeds from the sale were used to pay down overnight borrowings. The realized losses recognized due to these transactions are projected to be earned back within the 2023 fiscal year. The net loss for the linked quarter was primarily due to net losses on repossessed assets and net losses on sales of investment securities.
Total non-interest income, excluding net gains and losses, for the first quarter of 2022 was up $1.02023 increased $1.7 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was the result of higherdue to a $1.7 million increase in insurance income which included annualdue to seasonal performance-based insurance commissions of $1.3 million that are recognizedbeing earned in the first quarter of each year, offset partially by a decline in mortgage banking income.year. Compared to the first quarter of 2021,2022, non-interest income, excluding net gains and losses, increased $2.8 million. Deposit account service charges increased $1.4$1.2 million, and electronic banking income increased $1.3 million. Theprimarily due to a $0.7 million increase in deposit account service chargesinsurance income which was primarily attributable to overdraft and NSF fees driven higher by a larger customer base following the merger with Premier. Electronic banking income increased in the first quarter of 2022 due to an increase in interchange income earned from customers' debit card usage, driven partially by customers added in the Premier merger. property and casualty insurance commissions.
Total non-interest expense was up $3.6increased $3.1 million, or 8%6%, for the three months ended March 31, 2022,2023, compared to the linked quarter. The increase in total non-interest expense for the first quarter of 20222023 was attributable to increasesan increase in salaries and employee benefit costs, professional fees and FDIC insurance premiums.costs. The increase in salaries and employee benefit costs was driven by merit increases, employer contributionsdue to health savings accounts, stock-based compensation expense and higher payroll taxes, which are generally higher in the first quarter. Total non-interest expenseanticipated additional expenses typically recognized in the first quarter of 2022 also contained non-core expenses, including acquisition-related expenses of $1.4 million. During the fourth quarter of 2021, non-coreeach year. These expenses included acquisition-relatedannual merit increases, stock-based compensation expenses of $0.9 million.attributable to retirement-eligible employees, and employer health savings account ("HSA") contributions. Compared to the first quarter of 2021,2022, total non-interest expense increased $13.6$4.9 million, or 36%9%, primarily due to an increaseincreases in (i) salaries and employee benefit costs, of $7.0 million, an increase in net occupancy(ii) data processing and equipment costs of $1.8 million, an increase in amortization of intangible assets of $1.1 million,software expense and an increase in the FDIC insurance premiums of $1.0 million. Those(iii) other non-interest expense. The increases were primarily the result of the acquisitions of Premierdue to growth, including through acquisitions. Partially offsetting these increases were decreases in electronic banking expense and NSL. During the first quarter of 2021, non-core expenses included acquisition-related expenses of $1.9 million and a contribution to the Peoples Bank Foundation, Inc. of $0.5 million.professional fees.
The efficiency ratio for the first quarter of 20222023 was 66.8%57.8%, compared to 62.7%56.7% for the linked quarter, and 70.4%66.8% for the first quarter of 2021.2022. The changeincrease in the efficiency ratio compared to the linked quarter was primarily due to the increases in salaries and employee benefit costs, professional fees andnon-interest expenses, which were partially offset by higher net interest income due to increases in the FDIC insurance premiums mentioned above.market interest rates. The decrease in the efficiency ratio compared to the prior year quarter was primarily due to a decrease in acquisition-related expenses. The efficiency ratio, adjusted for non-core items, was 57.2% for the first quarter of 2023, compared to 55.9% for the linked quarter and 64.8% for the first quarter of 2022, compared to 61.5% for the linked quarter and 65.2% for the first quarter of 2021.2022. The efficiency ratio is typically higher in the first quarter of the year driven by the aforementioned salaries and employee benefit costs, and specifically by higher payroll taxes, employer HSA contributions to health savings accounts and stock-based compensation expenses for certain employees. Peoples continues to focus on controlling expenses, while recognizing some necessary costs in order to continue growing the business.

48

Table of Contents
Peoples recorded income tax expense of $6.0$7.0 million with an effective tax rate of 21.0% for the first quarter of 2022,2023, compared to income tax expense of $5.4$7.1 million with an effective tax rate of 21.0% for the linked quarter, and $3.8income tax expense of $6.0 million with an effective tax rate of 20.2% for the first quarter of 2021.2022. The increase in income tax expense for the first quarter of 2022,three months ended March 31, 2023, compared to the linked quarter, was due to an increase in Peoples' effective tax rate. The increase for the three months ended March 31, 2022, compared to the three months ended March 30, 2021, was largely driven by higher pre-tax income.income before income taxes.
At March 31, 2022,2023, total assets were $7.24$7.31 billion, compared to $7.06$7.21 billion at December 31, 20212022 and $5.14$7.24 billion at March 31, 2021.2022. The growth$104.2 million increase in total assets of 2% compared to at December 31, 20212022 was primarily due to increases in held-to-maturity investment securities and loans and leases, net of deferred fees and costs, partially offset by a decrease in available-for-sale investment securities. Management underwent an initiative during the first quarter of 2023 to sell lower yielding available-for-sale investment securities whose proceeds were used to pay down higher cost funding. Separately, the increase in the period-end loan and lease balances was primarily driven by increases of (i) $57.5 million in other commercial real estate loans, (ii) $17.8 million in indirect consumer loans and (iii) $9.5 million in leases, partially offset by a reductions of $14.6 million in construction loans and $10.8 million in residential real estate loans. The $72.3 million increase in total assets compared to at March 31, 2022 was largely attributable to the Vantage acquisition, which added $140.2 millionincreases in loans and leases as ofwell as the acquisition date. The 41%aforementioned net increase compared to March 31, 2021 was driven primarily by $1.1 billion of loans and $0.6 billion ofin investment securities, addedpartially offset by decreases in interest-bearing deposits at other banks. The increase in the Premier merger as of the merger date, along with leases acquired from North Starperiod-end loan and Vantage totaling $223.2 million, both as of the acquisition date. The allowance for credit losseslease balances when compared to at March 31, 2022 decreased to $54.8was primarily driven by increases of $122.4 million or 1.20%in indirect consumer loans and $87.6 million in leases, partially offset by a reduction of total loans, compared to $64.0$43.8 million and 1.43%, respectively,in residential real estate loans.
Total liabilities were $6.49 billion at March 31, 2023, up from $6.42 billion at December 31, 2021,2022 and $44.9 million and 1.32%, respectively, at March 31, 2021.
Total liabilities were $6.43 billion at March 31, 2022, up from $6.22 billion at December 31, 2021 and $4.56 billion at March 31, 2021.2022. The increase in total liabilities compared to at December 31, 20212022 was attributable to an increase in total deposits and long-term

43

Table of Contents
borrowings. The increase in total deposits when compared to at December 31, 2022 was primarily driven by an increase of $147.6 million in brokered certificates of deposits, which are primarily used as a source of funding. Excluding the increase in brokered certificates of deposits, total deposits at March 31, 2023 decreased $76.0 million when compared to at December 31, 2022, primarily due to reductions of (i) $75.0 million in interest-bearing deposit accounts (ii) $43.9 million in savings accounts, (iii) $37.9 million in money market deposit accounts, and (iv) $34.3 million in non-interest bearing deposit accounts, partially offset by an increase of $91.9 million in retail certificates of deposit. The increase in total liabilities compared to at March 31, 2022 was primarily due to seasonal growthan increase in short-term borrowings, partially offset decreases in total deposits and long-term borrowings. Deposits decreased primarily due to reductions in non-interest-bearing deposits, interest-bearing demand deposit accounts, governmental depositsdeposit accounts, and money market deposit accounts of $117.5$111.6 million, $94.0 million, $85.5 million and $107.4$77.2 million, respectively, partially offset by an increase of long-term borrowings assumed from Vantage. Also contributing to the increase compared to$185.8 million in brokered certificates of deposits.
Total stockholders' equity at March 31, 2021 was $1.75 billion in deposits acquired from Premier.
At March 31, 2022, total stockholders' equity was $808.3 million, a decrease of $36.72023 increased by $34.2 million compared to at December 31, 2021. The decrease in total stockholders' equity2022, which reflected an other comprehensive loss of $51.0 million and dividends paid during the quarter of $10.2 million, partially offset by net income for the quarter of $23.3$26.6 million and a decrease in accumulated other comprehensive loss of $16.2 million, partially offset by dividends paid of $10.7 million. The change in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period. Accumulated unrealized losses related to the available-for-sale investment securities portfolio were $112.7 million and $129.9 million at March 31, 2023 and at December 31, 2022, respectively. Total stockholders' equity at March 31, 20222023 increased $229.2by $11.2 million or 40%, compared to at March 31, 2021,2022, which was mainlyprimarily due to common shares issued for the acquisitionnet income of Premier and $55.7$104.3 million in net income during the prior twelve-month period,last twelve months partially offset by an increase in accumulated other comprehensive loss of $57.7$48.3 million. The increase in accumulated other comprehensive loss was the result of an increase of $51.5 million and dividends paid of $34.5 million.in unrealized losses related to the available-for-sale investment securities portfolio from March 31, 2022 to March 31, 2023.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income, the amount by which interest income exceeds interest expense, remains Peoples' largest source of revenue.  The amount of net interest income earned by Peoples each quarter is affected by various factors, including changes in market interest rates due to the Federal Reserve’s monetary policy, the level and degree of pricing competition for loans and deposits in Peoples’ markets, and the amount and composition of Peoples' earning assets and interest-bearing liabilities. 
Net interest margin, which is calculated by dividing FTE net interest income by average interest-earning assets, serves as an important measurement of the net revenue stream generated by the volume, mix and pricing of interest-earning assets and interest-bearing liabilities.  FTE net interest income is calculated by increasing interest income to convert tax-exempt income earned on obligations of states and political subdivisions and tax-exempt loans to the pre-tax equivalent of taxable income using a blended federal and state corporate income tax rate of 23.3% for each of the three months ended March 31, 2023 and December 31, 2022, and a 22.9%.   blended corporate income tax rate for the three months ended March 31, 2022.
The following table details the calculation of FTE net interest income:
 Three Months Ended
 March 31,
2022
December 31,
2021
March 31,
2021
(Dollars in thousands)
Net interest income$54,310 $54,737 $35,578 
Taxable equivalent adjustment391 379 257 
Fully tax-equivalent net interest income$54,701 $55,116 $35,835 


 Three Months Ended
 March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)
Net interest income$72,878 $70,613 $54,310 
Taxable equivalent adjustment399 412 391 
Fully tax-equivalent net interest income$73,277 $71,025 $54,701 

4944

Table of Contents
The following tables detail Peoples’ average balance sheets for the periods presented:
For the Three Months Ended For the Three Months Ended
March 31, 2022December 31, 2021March 31, 2021 March 31, 2023December 31, 2022March 31, 2022
(Dollars in thousands)
(Dollars in thousands)
Average BalanceIncome/ ExpenseYield/CostAverage BalanceIncome/ ExpenseYield/CostAverage BalanceIncome/ ExpenseYield/Cost
(Dollars in thousands)
Average BalanceIncome/ ExpenseYield/CostAverage BalanceIncome/ ExpenseYield/CostAverage BalanceIncome/ ExpenseYield/Cost
Short-term investmentsShort-term investments$332,098 $160 0.20 %$350,692 $138 0.16 %$146,957 $40 0.11 %Short-term investments$35,223 $388 4.47 %$44,421 $404 3.61 %$332,098 $160 0.20 %
Investment securities (a)(b):Investment securities (a)(b): Investment securities (a)(b): 
TaxableTaxable1,465,998 6,096 1.66 %1,466,423 5,583 1.52 %833,769 2,620 1.26 %Taxable1,597,688 11,049 2.77 %1,459,879 8,376 2.29 %1,465,998 6,096 1.66 %
NontaxableNontaxable204,381 1,316 2.58 %203,034 1,291 2.54 %106,698 773 2.90 %Nontaxable190,566 1,298 2.72 %192,863 1,365 2.83 %204,381 1,316 2.58 %
Total investment securitiesTotal investment securities1,670,379 7,412 1.78 %1,669,457 6,874 1.65 %940,467 3,393 1.44 %Total investment securities1,788,254 12,347 2.76 %1,652,742 9,741 2.35 %1,670,379 7,412 1.78 %
Loans (b)(c):Loans (b)(c): Loans (b)(c): 
ConstructionConstruction225,676 2,155 3.82 %200,009 1,961 3.84 %114,204 994 3.48 %Construction239,492 3,963 6.62 %234,233 3,596 6.01 %225,676 2,155 3.82 %
Commercial real estate, otherCommercial real estate, other1,362,434 14,782 4.34 %1,450,566 15,370 4.15 %879,335 8,602 3.91 %Commercial real estate, other1,333,062 19,794 5.94 %1,293,500 18,431 5.58 %1,362,434 14,782 4.34 %
Commercial and industrialCommercial and industrial888,598 8,023 3.61 %865,519 8,548 3.86 %941,625 10,592 4.50 %Commercial and industrial877,391 14,610 6.66 %885,111 13,455 5.95 %888,598 8,023 3.61 %
Premium financePremium finance132,758 1,164 3.51 %134,023 1,735 5.07 %107,390 1,297 4.83 %Premium finance147,895 2,150 5.81 %161,382 1,898 4.60 %132,758 1,164 3.51 %
LeasesLeases162,277 6,102 15.04 %112,694 4,547 15.79 %— — — %Leases342,583 9,643 11.26 %325,113 8,448 10.17 %162,277 6,102 15.04 %
Residential real estate (d)Residential real estate (d)913,730 9,766 4.28 %925,316 9,937 4.30 %614,692 6,672 4.34 %Residential real estate (d)839,822 9,717 4.63 %853,354 9,321 4.37 %913,730 9,766 4.28 %
Home equity lines of creditHome equity lines of credit163,339 1,612 4.00 %164,851 1,772 4.26 %121,864 1,187 3.95 %Home equity lines of credit176,327 2,966 6.82 %177,778 2,723 6.08 %163,339 1,612 4.00 %
Consumer, indirectConsumer, indirect523,770 5,045 3.91 %539,176 5,455 4.01 %509,845 5,203 4.14 %Consumer, indirect640,359 7,231 4.58 %612,696 6,834 4.43 %523,770 5,045 3.91 %
Consumer, directConsumer, direct106,298 1,595 6.09 %107,780 1,605 5.91 %79,022 1,239 6.36 %Consumer, direct108,488 1,739 6.50 %113,045 1,763 6.19 %106,298 1,595 6.09 %
Total loansTotal loans4,478,880 50,244 4.50 %4,499,934 50,930 4.46 %3,367,977 35,786 4.26 %Total loans4,705,419 71,813 6.12 %4,656,212 66,469 5.62 %4,478,880 50,244 4.50 %
Allowance for credit lossesAllowance for credit losses(61,947)(75,488)(49,854)Allowance for credit losses(52,669)(52,253)(61,947)
Net loansNet loans4,416,933 50,244 4.56 %4,424,446 50,930 4.53 %3,318,123 35,786 4.33 %Net loans4,652,750 71,813 6.19 %4,603,959 66,469 5.68 %4,416,933 50,244 4.56 %
Total earning assetsTotal earning assets6,419,410 57,816 3.61 %6,444,595 57,942 3.55 %4,405,547 39,219 3.57 %Total earning assets6,476,227 84,548 5.23 %6,301,122 76,614 4.79 %6,419,410 57,816 3.61 %
Goodwill and other intangible assetsGoodwill and other intangible assets304,124  298,276 184,253 Goodwill and other intangible assets325,545  327,377 304,124 
Other assetsOther assets344,282  356,004 322,276 Other assets420,692  438,694 344,282 
Total assets
Total assets
$7,067,816  $7,098,875 $4,912,076 
Total assets
$7,222,464  $7,067,193 $7,067,816 
Interest-bearing deposits:Interest-bearing deposits:   Interest-bearing deposits:  
Savings accountsSavings accounts$1,050,813 $34 0.01 %$1,021,821 $33 0.01 %$646,750 $35 0.02 %Savings accounts$1,044,392 $136 0.05 %$1,069,646 $138 0.05 %$1,050,813 $34 0.01 %
Governmental deposit accountsGovernmental deposit accounts670,419 447 0.27 %648,013 433 0.27 %429,503 594 0.56 %Governmental deposit accounts637,959 1,066 0.68 %688,815 710 0.41 %670,419 447 0.27 %
Interest-bearing demand accountsInterest-bearing demand accounts1,171,266 92 0.03 %1,159,995 98 0.03 %700,160 65 0.04 %Interest-bearing demand accounts1,103,966 180 0.07 %1,152,709 186 0.06 %1,171,266 92 0.03 %
Money market accountsMoney market accounts650,272 97 0.06 %637,681 96 0.06 %564,836 132 0.09 %Money market accounts583,574 825 0.57 %615,460 522 0.34 %650,272 97 0.06 %
Retail certificates of deposit (e)Retail certificates of deposit (e)626,978 871 0.56 %665,513 898 0.54 %439,819 1,123 1.04 %Retail certificates of deposit (e)576,645 1,750 1.23 %534,145 717 0.53 %626,978 871 0.56 %
Brokered deposits (e)Brokered deposits (e)91,531 512 2.27 %105,364 571 2.15 %175,326 868 2.01 %Brokered deposits (e)224,325 1,704 3.08 %87,934 515 2.32 %91,531 512 2.27 %
Total interest-bearing depositsTotal interest-bearing deposits4,261,279 2,053 0.20 %4,238,387 2,129 0.20 %2,956,394 2,817 0.39 %Total interest-bearing deposits4,170,861 5,661 0.55 %4,148,709 2,788 0.27 %4,261,279 2,053 0.20 %
Borrowed funds:Borrowed funds: Borrowed funds: 
Short-term FHLB advances(e)Short-term FHLB advances(e)55,000 313 2.31 %64,461 228 1.40 %20,000 88 1.78 %Short-term FHLB advances(e)377,578 4,314 4.63 %181,946 1,570 3.42 %55,000 313 2.31 %
Repurchase agreements and otherRepurchase agreements and other99,346 25 0.10 %116,887 30 0.10 %51,089 12 0.09 %Repurchase agreements and other93,848 143 0.61 %96,242 99 0.41 %99,346 25 0.10 %
Total short-term borrowingsTotal short-term borrowings154,346 338 0.89 %181,348 258 0.56 %71,089 100 0.57 %Total short-term borrowings471,426 4,457 3.83 %278,188 1,669 2.38 %154,346 338 0.89 %
Long-term FHLB advancesLong-term FHLB advances85,653 306 1.45 %85,991 314 1.45 %102,753 390 1.54 %Long-term FHLB advances34,015 204 2.43 %34,297 210 2.43 %85,653 306 1.45 %
Other borrowings43,445 418 3.85 %13,631 125 3.59 %7,631 77 4.04 %
Long-term notes payableLong-term notes payable50,656 653 5.16 %53,528 661 4.94 %29,780 298 4.02 %
Trust PreferredTrust Preferred13,806 296 8.58 %13,771 261 7.42 %13,665 120 3.51 %
Total long-term borrowingsTotal long-term borrowings129,098 724 2.26 %99,622 439 1.75 %110,384 467 1.71 %Total long-term borrowings98,477 1,153 4.69 %101,596 1,132 4.45 %129,098 724 2.26 %
Total borrowed funds Total borrowed funds283,444 1,062 1.51 %280,970 697 0.99 %181,473 567 1.26 % Total borrowed funds569,903 5,610 3.98 %379,784 2,801 2.93 %283,444 1,062 1.51 %
Total interest-bearing liabilities Total interest-bearing liabilities4,544,723 3,115 0.28 %4,519,357 2,826 0.25 %3,137,867 3,384 0.44 % Total interest-bearing liabilities4,740,764 11,271 0.96 %4,528,493 5,589 0.49 %4,544,723 3,115 0.28 %
Non-interest-bearing depositsNon-interest-bearing deposits1,606,665  1,642,577 1,110,993 Non-interest-bearing deposits1,556,636  1,639,580 1,606,665 
Other liabilitiesOther liabilities81,676   100,144 85,628 Other liabilities123,599   130,470 81,676 
Total liabilitiesTotal liabilities6,233,064  6,262,078 4,334,488 Total liabilities6,420,999  6,298,543 6,233,064 
Total stockholders’ equityTotal stockholders’ equity834,752   836,797 577,588 Total stockholders’ equity801,465   768,650 834,752 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$7,067,816   $7,098,875 $4,912,076 Total liabilities and stockholders’ equity$7,222,464   $7,067,193 $7,067,816 
Interest rate spread (b)Interest rate spread (b) $54,701 3.33 %$55,116 3.30 % $35,835 3.13 %Interest rate spread (b) $73,277 4.27 %$71,025 4.30 %$54,701 3.33 %
Net interest margin (b)Net interest margin (b)3.41 %  3.37 %  3.26 %Net interest margin (b)4.53 %4.44 %3.41 %


45

Table of Contents

(a)Average balances are based on carrying value.

50

Table of Contents
(b)Interest income and yields are presented on a fully tax-equivalent basis, using a 23.3% blended federal and state corporate income tax rate for each of the three months ended March 31, 2023 and December 31, 2022, and a 22.9%. blended corporate income tax rate for the three months ended March 31, 2022.
(c)Average balances include nonaccrual and impaired loans. Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status. Loan fees included in interest income were immaterial for all periods presented.
(d)Loans held for sale are included in the average loan balance listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income.
(e)Interest related to interest rate swap transactions is included, as appropriate to the transaction, in interest expense on short-term FHLB advances and interest expense on brokered deposits for the periods presented in which FHLB advances and brokered deposits were being utilized.
Peoples' average balances compared to prior periods have been impacted by recent acquisitions, which included; (i)including Vantage on March 7, 2022, which added to average lease and borrowed funds balances; (ii) Premier on September 17, 2021, which added to average short-term investments, average total investment securities, average total loans and average total deposits; and (iii) NSL on April 1, 2021, which added to average lease balances. Peoples has maintainedbegun to reduce cash balances after previously maintaining high cash balances in recent prior periods due to an influx of deposits, coupled with PPP proceeds.deposits.


51

Table of Contents
The following table provides an analysis of the changes in FTE net interest income:
Three Months Ended March 31, 2022 Compared toThree Months Ended March 31, 2023 Compared to
(Dollars in thousands)(Dollars in thousands)December 31, 2021March 31, 2021(Dollars in thousands)December 31, 2022March 31, 2022
Increase (decrease) in:Increase (decrease) in:RateVolume
Total (a)
RateVolume
Total (a)
Increase (decrease) in:RateVolume
Total (a)
RateVolume
Total (a)
INTEREST INCOME:INTEREST INCOME:INTEREST INCOME:
Short-term investmentsShort-term investments$60 $(38)$22 $43 $77 $120 Short-term investments$350 $(366)$(16)$1,337 $(1,109)$228 
Investment Securities (b):
Investment Securities (b):
Investment Securities (b):
TaxableTaxable521 (8)513 1,042 2,434 3,476 Taxable1,837 836 2,673 4,363 590 4,953 
NontaxableNontaxable15 10 25 (555)1,098 543 Nontaxable(42)(25)(67)320 (338)(18)
Total investment incomeTotal investment income536 538 487 3,532 4,019 Total investment income1,795 811 2,606 4,683 252 4,935 
Loans (b):
Loans (b):
  
Loans (b):
  
ConstructionConstruction(59)253 194 105 1,056 1,161 Construction300 67 367 1,669 139 1,808 
Commercial real estate, otherCommercial real estate, other2,918 (3,506)(588)1,024 5,156 6,180 Commercial real estate, other927 436 1,363 7,144 (2,132)5,012 
Commercial and industrialCommercial and industrial(1,641)1,116 (525)(1,999)(570)(2,569)Commercial and industrial1,925 (770)1,155 7,288 (701)6,587 
Premium financePremium finance(554)(17)(571)(1,388)1,255 (133)Premium finance1,134 (882)252 840 146 986 
LeasesLeases(1,369)2,924 1,555 — 6,102 6,102 Leases795 400 1,195 (9,374)12,915 3,541 
Residential real estateResidential real estate(47)(124)(171)(699)3,793 3,094 Residential real estate1,245 (849)396 3,167 (3,216)(49)
Home equity lines of creditHome equity lines of credit(139)(21)(160)16 409 425 Home equity lines of credit393 (150)243 1,217 137 1,354 
Consumer, indirectConsumer, indirect(198)(212)(410)(882)724 (158)Consumer, indirect173 224 397 954 1,232 2,186 
Consumer, directConsumer, direct114 (124)(10)(345)701 356 Consumer, direct301 (325)(24)111 33 144 
Total loan incomeTotal loan income(975)289 (686)(4,168)18,626 14,458 Total loan income7,193 (1,849)5,344 13,016 8,553 21,569 
Total interest incomeTotal interest income$(379)$253 $(126)$(3,638)$22,235 $18,597 Total interest income$9,338 $(1,404)$7,934 $19,036 $7,696 $26,732 
INTEREST EXPENSE:INTEREST EXPENSE:  INTEREST EXPENSE:  
Deposits:Deposits:  Deposits:  
Savings accountsSavings accounts$(2)$$$(70)$69 $(1)Savings accounts$14 $(16)$(2)$104 $(2)$102 
Governmental deposit accountsGovernmental deposit accounts14 (1,368)1,221 (147)Governmental deposit accounts694 (338)356 770 (151)619 
Interest-bearing demand accountsInterest-bearing demand accounts(12)(6)(62)89 27 Interest-bearing demand accounts24 (30)(6)124 (36)88 
Money market accountsMoney market accounts— (139)104 (35)Money market accounts482 (179)303 798 (70)728 
Retail certificates of depositRetail certificates of deposit183 (210)(27)(2,135)1,883 (252)Retail certificates of deposit974 59 1,033 1,355 (476)879 
Brokered depositsBrokered deposits158 (217)(59)643 (999)(356)Brokered deposits206 983 1,189 236 956 1,192 
Total deposit costTotal deposit cost332 (408)(76)(3,131)2,367 (764)Total deposit cost2,394 479 2,873 3,387 221 3,608 
Borrowed funds:Borrowed funds:  Borrowed funds:  
Short-term borrowingsShort-term borrowings289 (209)80 33 205 238 Short-term borrowings738 2,050 2,788 715 3,404 4,119 
Long-term borrowingsLong-term borrowings278 285 (46)303 257 Long-term borrowings217 (196)21 1,047 (618)429 
Total borrowed funds costTotal borrowed funds cost296 69 365 (13)508 495 Total borrowed funds cost955 1,854 2,809 1,762 2,786 4,548 
Total interest expenseTotal interest expense628 (339)289 (3,144)2,875 (269)Total interest expense3,349 2,333 5,682 5,149 3,007 8,156 
Fully tax-equivalent net interest incomeFully tax-equivalent net interest income$(1,007)$592 $(415)$(494)$19,360 $18,866 Fully tax-equivalent net interest income$5,989 $(3,737)$2,252 $13,887 $4,689 $18,576 

46

Table of Contents
(a)The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the
relationship of the dollar amounts of the change in each.
(b)Interest income and yields are presented on a fully tax-equivalent basis using a 23.3% blended federal and state corporate income tax rate for each of the three months ended March 31, 2023 and December 31, 2022, and a 22.9%. blended corporate income tax rate for the three months ended March 31, 2022.
NetCompared to the linked quarter, net interest income declinedincreased 3% and net interest margin expanded by 1%9 basis points. Both increases were primarily driven by 50 basis points of improvement in loan yields due to recent increases in market interest rates and a shift in the composition of the loan portfolio into higher-yielding leases, which resulted in 41 basis points of improvement in investment yields when compared to the linked quarter and was driven lower by higher funding costs, which were due to purchases of investment securities with higher interest rates and sales of lower-yielding investment securities. Borrowing costs increased 105 basis points as a result of increase in short-term borrowings due to utilizing overnight FHLB advances and brokered certificates of deposits in recent quarters.
Net interest income grew 34% over the borrowings associated with the Vantage acquisition, which were partially offset by accretion income recognized on the commercial real estate loan portfolio. Netprior year quarter and net interest margin increased 4by 112 basis points forpoints. The increase in net interest income compared to the first quarter of 2022 compared to the fourth quarter of 2021, and was driven by higher investment securitiesincreases in market interest rates and a full quarter of income from the Vantage acquisition. Compared to the prior year quarter, loan yields which were tempered bygrew 162 basis points due to the rising interest rate environment and both acquisitive and organic growth, while borrowing costs increased funding costs. Net interest income and net interest margin both have been negatively impacted by247 basis points as a result of increase in short-term borrowings due to the excess liquidity environment present in the financial services sector since the beginningutilization of the COVID-19 pandemic by way of increased low yielding cash reserves. FHLB overnight advances mentioned above.
Peoples recognized interest income on deferred loan fees/costs associated with PPP loans of $1.2 million, $1.8 million and $4.7 million during the first quarter of 2022 and the fourth and first quarters of 2021, respectively, along with $154,000 $282,000, and $0.8 million of interest earned on PPP loans, respectively.loans. The recent increase in the Federal Reserve benchmark interest rate did not have a meaningful impact during the first quarter of 2021, given the proximity of its timing to quarter-end.

52

Table of Contents
Compared to the first quarter of 2021, net interest income increased 53%, and was driven by the Vantage and NSL acquisitions, and the Premier merger coupled with organic growth. Net interest margin expanded by 15 basis points and was primarily due to the leasing portfolio, whichrecognized on PPP loans added 245 basis points to net interest margin coupledfor the first quarter of 2022. The deferred loan fees/costs associated with lower funding costs.PPP loans and interest earned on PPP loans were minimal for the first quarter of 2023 and the linked quarter.
Accretion income, net of amortization expense, from acquisitions was $2.0 million for the first quarter of 2023, $2.2 million for the linked quarter and $2.7 million for the first quarter of 2022, $1.0 million for the linked quarter and $0.4 million for the first quarter of 2021, which added 1713 basis points, 614 basis points and 417 basis points, respectively, to net interest margin. PPPThe decreases in accretion income added $1.4 million for the first quarter of 2022, $2.1 million for2023 when compared to the linked quarter and $5.6 million for the first quarter of 2021, which added 5 basis points, 6 basis points2022 were driven by less loan accretion due to lower pay-offs and 28 basis points, respectively, to net interest margin.less accretion from the merger with Premier and the Vantage acquisition.
Additional information regarding changes in the Unaudited Consolidated Balance Sheets can be found under appropriate captions of the “FINANCIAL CONDITION” section of this MD&A. Additional information regarding Peoples' interest rate risk and the potential impact of interest rate changes on Peoples' results of operations and financial condition can be found later in this MD&A under the caption "FINANCIAL CONDITION - Interest Rate Sensitivity and Liquidity."
Recovery ofProvision for (Recovery of) Credit Losses
The following table details Peoples’ provision for (recovery of) provision for credit losses:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Recovery of other credit losses$(7,006)$(6,786)$(4,780)
Provision for (recovery of) other credit lossesProvision for (recovery of) other credit losses$1,673 $2,023 $(7,006)
Provision for checking account overdraft credit lossesProvision for checking account overdraft credit losses199 184 31 Provision for checking account overdraft credit losses180 278 199 
Recovery of credit losses$(6,807)$(6,602)$(4,749)
Provision for (recovery of) credit lossesProvision for (recovery of) credit losses$1,853 $2,301 $(6,807)
As a percentage of average total loans (a)As a percentage of average total loans (a)(0.62)%(0.58)%(0.57)%As a percentage of average total loans (a)0.16 %0.20 %(0.62)%
(a) Presented on an annualized basis.(a) Presented on an annualized basis.(a) Presented on an annualized basis.
The provision for (recovery of) 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. ForThe provisions for credit losses in the first quarter of 2023 and the linked quarter were largely attributable to a deterioration of macro-economic conditions and an increase in charge-off activity, partially offset by a reduction in reserves for individually analyzed loans.
During the first quarter of 2022, thePeoples recorded a recovery of credit losses was relatedof $6.8 million due to an improvement in the economic forecast, along with payoffs of several loans during the quarter, which were partially offset by $387,000$0.4 million for the establishment of an allowance for credit losses for the non-purchased credit deteriorated leases from the Vantage acquisition.
The recovery of credit losses during the fourth quarter of 2021 was a result of the sale of acquired Premier loans, which reduced the required allowance for credit losses, coupled with improvements in the economic forecast. The recovery of credit losses during the first quarter of 2021 was also driven by improvements in the economic forecast compared to the prior period.
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.”

47

Table of Contents
Net (Loss) Gain (Loss) Included in Total Non-Interest Income
Net (loss) gain (loss) includes gainsnet losses and lossesnet gains on investment securities, asset disposals and other transactions, which are recognized in total non-interest income. The following table details Peoples’ net losses and net gains for the periods presented:
 Three Months Ended
 March 31,
2022
December 31,
2021
March 31,
2021
(Dollars in thousands)
Net gain (loss) on investment securities$130 $(158)$(336)
Net (loss) gain on asset disposals and other transactions:
Net loss on other assets$(22)$(31)$(27)
Net (loss) gain on OREO(1)80 — 
Net (loss) gain on other transactions(104)903 — 
Net (loss) gain on asset disposals and other transactions$(127)$952 $(27)
 Three Months Ended
 March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)
Net (loss) gain on investment securities$(1,935)$(168)$130 
Net loss on asset disposals and other transactions:
Net loss on other assets$(229)$(278)$(22)
Net loss on OREO(10)— (1)
Net loss on other transactions(7)(23)(104)
Net loss on asset disposals and other transactions$(246)$(301)$(127)
ForThe net loss on investment securities in the first quarter of 2023 due to a $2.0 million pre-tax net loss on the sale of the available-for-sale investment securities. During the first quarter of 2023, Peoples executed the sale of $96.7 million of its lower yielding available-for-sale securities which were used to pay down overnight borrowings. The loss on the sale of the securities had a nominal impact on tangible book value as such loss was previously reflected in capital through accumulated other comprehensive loss. The realized losses recognized due to these transactions are projected to be earned back within the 2023 fiscal year.
The net loss on asset disposals and other transactions decreased slightly in the first quarter of 2023 when compared to the linked quarter and increased when compared to the prior year quarter. The net loss for the first quarter of 2023 was primarily due to net losses on furniture and fixture disposals. The net loss for the linked quarter was primarily due to net losses on other assets, which was mainly due to net losses on repossessed assets.
During the first three months of 2022, Peoples sold several investment securities, resulting in a net gain on investment securities, which was offset by a net loss on other transactions primarily driven by an adjustment to the gain on sale of loans recognized in the fourth quarter of 2022, and was driven by changes to the acquisition-date fair value of Premier loans acquired in the merger with Premier that were subsequently sold.
During the first and fourth quarters of 2021, Peoples recognized net losses on investment securities in order to reinvest proceeds into higher yielding investment securities. During the fourth quarter of 2021, the net gain on other transactions was driven by the sale of $59.8 million of predominantly purchased credit deteriorated loans acquired in the Premier merger ($52.9 million of which were

53

Table of Contents
criticized or classified) primarily in the hospitality industry. Peoples recognized a gain of $897,000 related to the discount recorded on those loans when they were acquired from Premier.
Total Non-Interest Income, Excluding Net Gains and Losses
Total non-interest income, excluding net gains and losses, comprised 27%23% of Peoples' total revenues (defined as net interest income plus total non-interest income excluding net gains and losses) for the three months ended March 31, 2022,first quarter of 2023, compared to 26%22% for the linked quarter and 33%27% for the prior year quarter. The increase in this ratio compared to the linked quarter was due to an increase in insurance income due to seasonal performance-based commissions being earned in the first quarter of 2021.each year. The decline in this ratio compared to the firstprior year quarter was primarily due to higher net interest income associated with a full quarter of 2021 was driven byincome from the recent merger with Premier and acquisition of NSL, which increased netVantage coupled with the increases in the market interest income.rates.
For the first quarter of 2022,2023, electronic banking income comprised the largest portion of Peoples' total non-interest income, excluding net gains and losses. Peoples' electronic banking ("e-banking") services include ATM and debit cards, direct deposit services, internet and mobile banking, and remote deposit capture, and serve as alternative delivery channels to traditional sales offices for providing services to clients.customers. The following table details Peoples' e-banking income:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
E-banking incomeE-banking income$5,253 $5,355 $3,911 E-banking income$5,443 $5,161 $5,253 
Peoples' e-banking income is derived largely from ATM and debit cards, as other services are mainly provided at no charge to customers. The amount of e-banking income is largely dependent on the timing and volume of customer activity. E-banking income declined slightly fromincreased compared to each of the linked quarter driven by a seasonal decrease typically experienced inand the firstprior year quarter comparedprimarily due to the fourth quarter; however, it grew 34% compared to the first quarter more customer activity.

48

Table of 2021. This increase was driven by the addition of the Premier customers during the third quarter of 2021, coupled with increased usage of debit cards by customers. Contents
The following table details Peoples' insurance income:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Property and casualty insurance commissionsProperty and casualty insurance commissions$2,862 $2,836 $2,755 Property and casualty insurance commissions$3,252 $3,127 $2,862 
Performance-based commissionsPerformance-based commissions1,346 — 1,950 Performance-based commissions1,527 1,346 
Life and health insurance commissionsLife and health insurance commissions452 379 421 Life and health insurance commissions564 511 452 
Other fees and chargesOther fees and charges72 114 95 Other fees and charges82 90 71 
Insurance incomeInsurance income$4,732 $3,329 $5,221 Insurance income$5,425 $3,732 $4,731 
During the first quarter of 2022,2023, Peoples' insurance income grew 42%.45% when compared to the linked quarter. This increase in insurance income was mostly due to the recognition of $1.3 million ofseasonal performance-based insurance commissions being earned, which are annual in nature and typically occur in the first quarter of each year. Compared to the first quarter of 2021,2022, insurance income declined 9%increased 15% and was driven by lowerhigher performance-based commissions, which are unpredictable,property and are related to how much loss is incurred within underlying policies and the overall performance of thecasualty insurance carriers.commissions.
Peoples' fiduciary income and brokerage income continued to be based primarily upon the value of assets under administration and management, with additional income generated from transaction commissions, cross-selling of products and additional retirement plan services business. The following tables detailtable details Peoples’ trust and investment income and related assets under administration and management:income:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Fiduciary incomeFiduciary income$1,965 $1,989 $1,902 Fiduciary income$1,805 $1,792 
Brokerage incomeBrokerage income1,649 1,559 1,337 Brokerage income1,627 1,485 1,649 
Employee benefit feesEmployee benefit fees662 686 606 Employee benefit fees652 638 662 
Trust and investment incomeTrust and investment income$4,276 $4,234 $3,845 Trust and investment income$4,084 $3,915 $4,276 
Fiduciary income and brokerage income are mostly driven byincreased slightly in the values ofcurrent quarter relative to the linked quarter, due to an increase in assets under administration and management, which were relatively stable compared to the linked quarter. An improvement in the values of assets under administration and management, coupled with new accounts added, contributed to the growth in trust and investment incomemanagement. When compared to the first quarter of 2021.2022, trust and investment income declined due to less fiduciary income, primarily due to market volatility.
The following table details Peoples' assets under administration and management:

54

Table of Contents
March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)(Dollars in thousands)
TrustTrust$1,927,828 $2,009.871 $1,937.123 $1,963,884 $1,916,892 Trust$1,803,887 $1,764,639 $1,682,334 $1,731,454 $1,927,828 
BrokerageBrokerage1,152,530 1,183.927 1,133.668 1,119,247 1,071,126 Brokerage1,318,300 1,211,868 1,127,831 1,068,261 1,152,530 
TotalTotal$3,080,358 $3,193.798 $3,070,791 $3,083,131 $2,988,018 Total$3,122,187 $2,976,507 $2,810,165 $2,799,715 $3,080,358 
Quarterly averageQuarterly average$3,106,021 $3,126.398 $3,077.554 $3,051,027 $2,927,458 Quarterly average$3,076,285 $2,965,985 $2,844,181 $2,927,405 $3,106,021 
The slight declineincreases in assets under administration and management at March 31, 2022,2023, compared to year-end, wasat December 31, 2022 and March 31, 2022 were driven by market value fluctuations and a decrease$30 million increase in market values during the first quarter of 2022 as the market became more volatile. The improvement compared to March 31, 2021 was mostlybrokerage assets due to new accounts added, as well as a recoveryan acquisition of an independent financial advisor in market values from earlier in the COVID-19 pandemic.January of 2023.
Deposit account service charges are based on the recovery of costs associated with services provided. The following table details Peoples' deposit account service charges:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Overdraft and non-sufficient funds feesOverdraft and non-sufficient funds fees$1,902 $2,099 $997 Overdraft and non-sufficient funds fees$1,842 $2,170 
Account maintenance feesAccount maintenance fees1,311 1,210 810 Account maintenance fees1,461 1,352 1,311 
Other fees and chargesOther fees and charges213 256 178 Other fees and charges220 244 213 
Deposit account service chargesDeposit account service charges$3,426 $3,565 $1,985 Deposit account service charges$3,523 $3,766 $3,426 
The amount of deposit account service charges, particularly fees for overdrafts and non-sufficient funds, is largely dependent on the timing and volume of customer activity. Management periodically evaluates its cost recovery fees to ensure they are reasonable based on operational costs and similar to fees charged in Peoples' markets by competitors. Deposit account service charges decreased 4%

49

Table of Contents
for the current quarter compared to the linked quarter as increases in account maintenance fees were more than offset by reductionsdue to a decline in overdraft and non-sufficient funds fees. Compared to the first quarter of 2021, depositDeposit account service charges increased 73%, resulting fromslightly for the additional customers associated with the Premier acquisition, coupled with increased customer activity in recent quarters,current quarter compared to the very low levels of early 2021 associated with fiscal stimulus payments and PPP loan proceeds provided to customers, along with changed customer spending habitsprior year quarter due to the COVID-19 pandemic.increased maintenance fee rates.
The following table details the other items included within Peoples' total non-interest income:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Lease incomeLease income1,077 1,336 775 
Bank owned life insurance incomeBank owned life insurance income707 702 431 
Mortgage banking incomeMortgage banking income436 713 1,140 Mortgage banking income314 281 436 
Bank owned life insurance income431 438 446 
Commercial loan swap fees168 349 60 
Other non-interest incomeOther non-interest income1,326 1,039 658 Other non-interest income668 611 719 
Lease income is primarily comprised of (i) gains on the early termination of leases, (ii) fees received for referrals, (iii) gains and losses recognized on the sales of residual assets and (iv) syndication income. The first quarter of 2023 decrease in lease income when compared to the linked quarter was due to seasonal fluctuations in syndication income, as the fourth quarter of each year typically has a higher volume of originations. The first quarter of 2023 increase in lease income when compared to the first quarter of 2022 was due to a full quarter of income from the Vantage acquisition in 2023 versus only a month of income in 2022.
Bank owned life insurance income for the current quarter was relatively flat compared to the linked quarter and increased when compared to the same 2022 period. The first quarter of 2023 increase in bank owned life insurance income when compared to the first quarter of 2022 was due to an additional $30.0 million of investments in bank owned life insurance policies during the second quarter of 2022.
Mortgage banking income is comprised mostly of net gains from the origination and sale of real estate loans in the secondary market, and, to a lesser extent, servicing income for loans sold with servicing retained. As a result, the amount of income recognized by Peoples is largely dependent on customer demand and long-term interest rates for residential real estate loans offered in the secondary market. Mortgage banking income declined duringfor the firstcurrent quarter of 2022,was relatively flat when compared to the linked quarter. Mortgage banking income declined for the current year quarter andcompared to the firstprior year quarter of 2021, as refinancing activity sloweddue to the increased market interest rate environment in recent quarters and there was a lower volume of new loan originations due to the lack of inventory of homes for sale.originations.
In the first quarter of 2022,2023, Peoples sold $7.2$0.8 million in loans to the secondary market with servicing retained and $7.9$7.4 million in loans with servicing released, compared to $13.7$2.5 million and $9.7$9.5 million, respectively, forin the fourth quarter of 2021,2022, and $17.2$7.2 million and $9.6$7.9 million, respectively, forin the first quarter of 2021.
Bank owned life insurance income was relatively flat for the first quarter of 2022, fourth quarter of 2021 and first quarter of 2021, as there had been no changes to the underlying assets compared to prior periods.
Commercial loan swap fees are largely dependent on timing, interest rates, and the volume of customer activity. Commercial loan swap fees declined compared to the fourth quarter of 2021, mainly due to one large swap entered into during the fourth quarter of 2021. Commercial loan swap fees were higher during the first quarter of 2022, compared to the first quarter of 2021, and was the result of increased volume of customer activity.

55

Table of Contents
Other non-interest income increased 28% compared to the linked quarter, and was driven by higher fee income associated with the leasing division, which grew $198,000. Compared to the first quarter of 2021, other non-interest income doubled, and was related to $775,000 of fee income from the leasing division.2022.
Non-Interest Expense
Salaries and employee benefit costs remain Peoples' largest non-interest expense, accounting for over one-half of total non-interest expense.  The following table details Peoples' salaries and employee benefit costs:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Base salaries and wagesBase salaries and wages$17,676 $16,876 $12,765 Base salaries and wages$20,332 $19,747 
Employee benefitsEmployee benefits4,115 3,372 3,621 
Sales-based and incentive compensationSales-based and incentive compensation3,636 4,634 3,428 Sales-based and incentive compensation3,945 5,284 3,636 
Employee benefits3,621 2,753 2,898 
Payroll taxes and other employment costsPayroll taxes and other employment costs2,091 1,940 1,493 Payroll taxes and other employment costs2,370 1,591 2,091 
Stock-based compensationStock-based compensation1,605 1,078 1,215 Stock-based compensation2,189 832 1,605 
Deferred personnel costsDeferred personnel costs(900)(945)(1,040)Deferred personnel costs(923)(2,068)(900)
Salaries and employee benefit costsSalaries and employee benefit costs$27,729 $26,337 $20,759 Salaries and employee benefit costs$32,028 $28,758 $27,729 
Full-time equivalent employees:Full-time equivalent employees:  Full-time equivalent employees:  
Actual at end of periodActual at end of period1,245 1,188 887 Actual at end of period1,286 1,267 1,245 
Average during the periodAverage during the period1,215 1,185 891 Average during the period1,283 1,261 1,215 
Base salaries and wages for the current quarter increased 5% compared to the linked quarter and increased 38% comparedprimarily due to the first quarter of 2021. The increase for the first quarter of 2022 compared to the linked quarter was driven by the annual merit increases. The key driver of thecurrent quarter increase compared to the firstprior year quarter was primarily driven by a rise in annual merit increases as well as a full quarter of 2021wasexpenses related to the additional salaries associated with Premier and NSL.the acquisition of Vantage.
The decrease in sales-based and incentive compensation for the first quarter of 2022 compared to the linked quarter was primarily due to overall company performance measures used in calculating incentive awards.
The increaseincreases in employee benefits for firstthe current quarter of 2022, compared to the linked quarter, was primarily due to annual contributions to employee health benefitsavings accounts which resulted in expense of $620,000. These contributionsthat occur primaryprimarily in the first quarter of each year. The increase in employee

50

Table of Contents
benefits for the current quarter compared to the first quarter of 20212022 was due to higher medical costs withreflecting a full quarter of expenses in 2023 for the additionVantage employees versus a month of expenses in the Premier and NSL employees.first quarter of 2022.
The decrease in sales-based and incentive compensation for the current quarter compared to the linked quarter was primarily due to the overall company performance measures used in calculating retail incentive awards.
Payroll taxes and other employment costs increased compared to the prior quarter and the first quarter of 2022 and were primarily related to higher base salaries and wages. Also impacting the increase in payroll taxes and other employment costs when compared to the linked quarter were seasonal expenses recognized in the first quarter of 2021, was primarily related to higher base salaries and wages, coupled with the additional associates of Premier and NSL.each year.
Stock-based compensation is generally recognized over the vesting period, which generally ranges from immediate vesting to vesting at the end of three years, adjusted for an estimate of the portion of awards that will be forfeited. Atyears. An adjustment is made at the vesting date an adjustment is made to increase orreverse expense relating to forfeitures for performance awards, and at the date of forfeiture to reverse expense for the amount of actual forfeitures compared to the estimate.non-vested restricted awards. Stock grants to retirement eligible grantees are expensed either immediately or over a shorter period than three years. The majority of Peoples' stock-based compensation is attributable to annual equity-based incentive awards to employees, which are awarded in the first quarter of each year and are based upon Peoples achieving certain performance goals during the prior year.year and are generally contingent on employment through the vesting period. Stock-based compensation for the first quarterthree months of 20222023 increased $528,000when compared to the linked quarter, which included expense relatedfirst three months of 2022 due to stock grantsadditional employees, including the ones added in the acquisition of retirement eligible individuals and the annual vesting of prior stock grants.Vantage.
Deferred personnel costs represent the portion of current period salaries and employee benefit costs considered to be direct loan origination costs.  These costs are capitalized and recognized over the life of the loan as a yield adjustment in interest income.  As a result, the amount of deferred personnel costs for each period corresponds directly with the volume of loan originations, coupled with the average deferred costs per loan that are updated annually at the beginning of each year. The decrease in deferred personnel costs for the current quarter compared to the firstlinked quarter of 2021 was primarily due to a reduction in loan origination volume as Peoples originated PPP loans during the first quarterprior period adjustment of 2021.

56

Table of Contents
costs to originate leases.
Peoples' net occupancy and equipment expense was comprised of the following:
Three Months Ended Three Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
DepreciationDepreciation$1,823 $2,009 $1,371 Depreciation$1,790 $1,700 
Repairs and maintenance costsRepairs and maintenance costs1,378 1,108 943 Repairs and maintenance costs1,261 1,364 1,378 
Property taxes, utilities and other costsProperty taxes, utilities and other costs1,157 1,014 1,202 
Net rent expenseNet rent expense685 630 340 Net rent expense747 769 685 
Property taxes, utilities and other costs1,202 1,004 673 
Net occupancy and equipment expenseNet occupancy and equipment expense$5,088 $4,751 $3,327 Net occupancy and equipment expense$4,955 $4,847 $5,088 
Depreciation on capitalized assets declined compared to the linked quarter as a result of certain capitalized assets and improvements reaching the end of their depreciable lives. For theThe first quarter of 2022, compared to the fourth quarter of 2021, repairs and maintenance costs grew as Peoples' experienced increased costs across its footprint, which was partially due to higher snow removal costs. Compared to the first quarter of 2021,2023 net occupancy and equipment expense increased 53%slightly when compared to the linked quarter due to increases in depreciation and was drivenproperty taxes, utilities and other costs, partially offset by reductions in repairs and maintenance costs and net rent expense. When compared to the additionalfirst quarter of 2022, net occupancy and equipment expense decreased due to less depreciation, repairs and maintenance costs and property taxes, utilities and other costs due to having less geographic locations from recent acquisitions.as of the first quarter of 2023.
The following table details the other items included in total non-interest expense:
 Three Months Ended
 March 31,
2022
December 31,
2021
March 31,
2021
(Dollars in thousands)
Professional fees$3,672 $2,324 $3,468 
Data processing and software expense2,916 3,148 2,454 
E-banking expense2,759 2,879 1,894 
Amortization of other intangible assets1,708 1,508 620 
FDIC insurance premiums1,194 380 463 
Marketing expense995 848 911 
Other loan expenses832 558 462 
Franchise tax expense764 870 855 
Communication expense625 578 282 
Other non-interest expense3,347 3,811 2,492 
Professional fees increased $1.3 million from the linked quarter primarily due to higher exam and audit fees, coupled with investment banking fees and other acquisition-related expenses related to the purchase of Vantage. Peoples also recorded a benefit of $603,000 for a true-up of expense related to contact negotiations during the fourth quarter of 2021. Professional fees included acquisition-related expenses of $1.0 million for the first quarter of 2022, $917,000 for the fourth quarter of 2021, and $1.9 million for the first quarter of 2021.
 Three Months Ended
 March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)
Data processing and software expense$4,562 $5,013 $2,916 
Professional fees2,881 3,310 3,672 
Amortization of other intangible assets1,871 1,998 1,708 
E-banking expense1,491 1,097 2,759 
Franchise tax expense1,034 546 764 
Marketing expense930 737 995 
FDIC insurance premiums801 781 1,194 
Other loan expenses739 947 832 
Communication expense613 611 625 
Other non-interest expense4,574 4,721 3,347 
Data processing and software expense declined 7% compared to the linked quarter, and was up 19%increased when compared to the first quarter of 2021. The decline compared to the linked quarter was related to a negotiated reduction in costs from Peoples' core provider. The increase compared to the first quarter of 2021 was due to2022, driven by software upgrades and implementation of new systems, coupled with the increased size of Peoples' organization.

51

Table of Contents
Professional fees decreased for the current quarter compared to the comparative periods due to less acquisition-related expenses being reported when compared to those periods.
Amortization of other intangible assets for the current quarter decreased when compared to the linked quarter due to decreased amortization of intangible assets recognized as a result of recent acquisitions. Amortization of other intangible assets for the current quarter increased when compared to the first quarter of 2022 due to amortization of intangible assets recognized in the Vantage acquisition.
Peoples' e-banking expense is comprised of costs associated with debit and ATM cards, as well as Internet and mobile banking costs. E-banking expense declinedincreased during the current quarter compared to the linked quarter, and is directly correlated to e-banking income, which experienced a seasonal decline comparedalso increased from the linked quarter primarily due to the fourth quarter of 2021. Compared tomore customer activity. E-banking expense decreased for the first quarter of 2021, e-banking expense grew 46%, as customer activity increased and there was a higher number of accounts related to the Premier merger.
Amortization of other intangible assets is associated with acquisition-related activity, and grew 13% compared to the linked quarter, as Peoples completed the Vantage acquisition. Compared to the first quarter of 2021, amortization of other intangible assets increased $1.1 million as Peoples merged with Premier, and acquired NSL and Vantage on April 1, 2021, September 17, 2021 and March 7, 2022, respectively.
Peoples' FDIC insurance premiums increased compared to the linked quarter and first quarter of 2021, as Peoples recorded the increased premiums after the acquisition of Premier. Peoples also recorded an adjustment to FDIC insurance premiums during the first quarter of 2022 related to the fourth quarter of 2021, based on an invoice received during the first quarter of 2022.
Marketing expense grew 17% compared to the linked quarter and 9%2023 when compared to the first quarter of 2021. The increase was mainly2022 due to higher media advertising expenses and donationsa decline in customer activity compared to prior periods, which are seasonally higher in the first quarter.

57

Table of Contents
Other loan expenses increased $274,000 compared to the linked quarter and were driven by higher commercial loan expenses. Compared to the first quarter of 2021, other loan expenses grew $370,000 and were mostly related to higher residential real estate loan expenses.last year.
Peoples is subject to state franchise taxes, which are based largely on Peoples' equity, in the states where Peoples has a physical presence. Franchise tax expense also includes the Ohio Financial Institution Tax ("FIT"), which is a business privilege tax that is imposed on financial institutions organized for profit and doing business in Ohio. The Ohio FIT is based on the total equity capital in proportion to the taxpayer's gross receipts in Ohio as of the most recent year-end. The increase versus the linked quarter was driven by a refund received in the linked quarter. The increase from the first quarter of 2022 was driven by recent growth through acquisitions and organic means.
CommunicationsMarketing expense increased 8%for the first quarter of 2023 when compared to the linked quarter primarily due to higher media advertising expenses and was up $343,000donations compared to the prior period.
Peoples' FDIC insurance premiums decreased for the current quarter compared to the first quarter of 2021. The increase2022 due to an adjustment in the first quarter of 2022 relating to prior acquisitions.
Other loan expenses during the first three months of 2023 decreased when compared to the linked quarter wasprimarily due to a credit received from a communications providerlower indirect lending volume and decreased collection expense.
Other non-interest expense increased during the fourthcurrent quarter of 2021. The growthwhen compared to the first quarter of 2021 was2022 due to upgraded networking to certain branches (including new branches acquired from Premier coupled with the addition of the NSL location acquired) and increased costs comparedan increase in acquisition-related expenses related to the prior periods among certain vendors that provide communication services.
Other non-interest expense declined 12% compared to the linked quarter and was impacted by lower travel and entertainment expense, coupled with lower postage costs. Compared to the first quarter of 2021, other non-interest expense grew 34% as Peoples recognized higher ongoing costs after its recent acquisitions, mostly due to increased postage, travel and entertainment, insurance and supplies expense.Limestone Merger.
Income Tax Expense
Peoples recorded an income tax expense of $6.0$7.0 million with an effective tax rate of 21.0% for the first quarter of 2022,2023, compared to income tax expense of $5.4$7.1 million with an effective tax rate of 21.0% for the linked quarter and income tax expense of $3.8$6.0 million with an effective tax rate of 20.2% for the first quarter of 2021. The increase in income2022. Income tax expense for the first quarter of 2022,2023, compared to the linked quarter, was relatively flat due to an increase in Peoples' effective tax rate.similar income before income taxes. The increase in income tax expense for the three months ended March 31, 20222023, compared to the three months ended March 31, 2021,2022, was largely driven by a higher pre-tax income.income before income taxes.
Additional information regarding income taxes can be found in "Note 1313. Income Taxes" of the Notes to the Condensed Consolidated Financial Statements included in Peoples' 20212022 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.

5852

Table of Contents
The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented:    
Three Months EndedThree Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Pre-provision net revenue:Pre-provision net revenue:Pre-provision net revenue:
Income before income taxesIncome before income taxes$29,538 $33,163 $19,243 Income before income taxes$33,606 $33,980 $29,538 
Add: provision for credit lossesAdd: provision for credit losses1,853 2,301 — 
Add: loss on OREOAdd: loss on OREO— — Add: loss on OREO10 — 
Add: loss on investment securitiesAdd: loss on investment securities— 158 336 Add: loss on investment securities1,935 168 — 
Add: loss on other assetsAdd: loss on other assets22 31 27 Add: loss on other assets229 278 22 
Add: loss on other transactionsAdd: loss on other transactions104 — — Add: loss on other transactions23 104 
Less: gain on OREO— 80 — 
Less: recovery of credit lossesLess: recovery of credit losses6,807 6,602 4,749 Less: recovery of credit losses— — 6,807 
Less: gain on investment securitiesLess: gain on investment securities130 — — Less: gain on investment securities— — 130 
Less: gain on other transactions— 903 — 
Pre-provision net revenuePre-provision net revenue$22,728 $25,767 $14,857 Pre-provision net revenue$37,640 $36,750 $22,728 
Total average assetsTotal average assets$7,067,816$7,098,875$4,912,076Total average assets$7,222,464$7,067,193$7,067,816
Pre-provision net revenue to total average assets (annualized)Pre-provision net revenue to total average assets (annualized)1.30 %1.44 %1.23 %Pre-provision net revenue to total average assets (annualized)2.11 %2.06 %1.30 %
Weighted-average common shares outstanding - dilutedWeighted-average common shares outstanding - diluted28,129,13128,114,98019,436,311Weighted-average common shares outstanding - diluted28,021,87927,981,65628,129,131
Pre-provision net revenue per common share - dilutedPre-provision net revenue per common share - diluted$0.81 $0.92 $0.76 Pre-provision net revenue per common share - diluted$1.34 $1.31 $0.81 
The declineincrease in the PPNR compared tofor the linkedfirst quarter was driven by increased total non-interest expense from higher salaries and employee benefit costs, professional fees and FDIC insurance premiums. The PPNR grewof 2023 compared to the first quarter of 2021 and2022 was mostly due to the impact of the Premier merger and Vantage and NSL acquisitions improvingdriven by increased net interest income coupled with higher non-interest income.reflecting the positive impact of recent increases in market interest rates as well as a provision for credit losses in the first quarter of 2023 compared to the recovery of credit losses in the first quarter of 2022.
Core Non-Interest Expense (Non-US GAAP)
Core non-interest expense is a financial measure used to evaluate Peoples' recurring expense stream. This measure is Non-US GAAP since it excludes the impact of all acquisition-related expenses, contract negotiation benefits, severance expenses,pension settlement charges and COVID-19-related expenses and a Peoples Bank Foundation, Inc. contribution.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 EndedThree Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Core non-interest expense:Core non-interest expense:Core non-interest expense:
Total non-interest expenseTotal non-interest expense$51,629 $47,991 $37,987 Total non-interest expense$56,479 $53,366 $51,629 
Less: acquisition-related expensesLess: acquisition-related expenses1,373 903 1,911 Less: acquisition-related expenses551 702 1,373 
Less: pension settlement chargesLess: pension settlement charges— 46 — 
Less: severance expenses— 16 49 
Less: COVID-19-related expensesLess: COVID-19-related expenses94 565 292 Less: COVID-19-related expenses— 94 
Less: Peoples Bank Foundation, Inc. contribution— — 500 
Add: contract negotiation benefits— 603 — 
Core non-interest expenseCore non-interest expense$50,162 $47,110 $35,235 Core non-interest expense$55,928 $52,616 $50,162 
Efficiency Ratio (Non-US GAAP)
The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income excluding net gains and losses. This measure is Non-US GAAP since it excludes amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.

5953

Table of Contents
The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented:
Three Months EndedThree Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Efficiency ratio:Efficiency ratio:Efficiency ratio:
Total non-interest expenseTotal non-interest expense$51,629 $47,991 $37,987 Total non-interest expense$56,479 $53,366 $51,629 
Less: amortization of other intangible assetsLess: amortization of other intangible assets1,708 1,508 620 Less: amortization of other intangible assets1,871 1,998 1,708 
Adjusted total non-interest expenseAdjusted total non-interest expense49,921 46,483 37,367 Adjusted total non-interest expense54,608 51,368 49,921 
Total non-interest incomeTotal non-interest income20,050 19,815 16,903 Total non-interest income19,060 19,034 20,050 
Less: net gain (loss) on investment securities130 (158)(336)
Less: net (loss) gain on asset disposals and other transactions(127)952 (27)
Less: net (loss) gain on investment securitiesLess: net (loss) gain on investment securities(1,935)(168)130 
Less: net loss on asset disposals and other transactionsLess: net loss on asset disposals and other transactions(246)(302)(127)
Total non-interest income excluding net gains and lossesTotal non-interest income excluding net gains and losses20,047 19,021 17,266 Total non-interest income excluding net gains and losses21,241 19,504 20,047 
Net interest incomeNet interest income54,310 54,737 35,578 Net interest income72,878 70,613 54,310 
Add: fully tax-equivalent adjustment (a)Add: fully tax-equivalent adjustment (a)391 379 257 Add: fully tax-equivalent adjustment (a)399 412 391 
Net interest income on a fully tax-equivalent basisNet interest income on a fully tax-equivalent basis54,701 55,116 35,835 Net interest income on a fully tax-equivalent basis73,277 71,025 54,701 
Adjusted revenueAdjusted revenue$74,748 $74,137 $53,101 Adjusted revenue$94,518 $90,529 $74,748 
Efficiency ratioEfficiency ratio66.79 %62.70 %70.37 %Efficiency ratio57.78 %56.74 %66.79 %
Efficiency ratio adjusted for non-core items:Efficiency ratio adjusted for non-core items:Efficiency ratio adjusted for non-core items:
Core non-interest expenseCore non-interest expense$50,162 $47,110 $35,235 Core non-interest expense$55,928 $52,616 $50,162 
Less: amortization of other intangible assetsLess: amortization of other intangible assets1,708 1,508 620 Less: amortization of other intangible assets1,871 1,998 1,708 
Adjusted core non-interest expenseAdjusted core non-interest expense48,454 45,602 34,615 Adjusted core non-interest expense54,057 50,618 48,454 
Core non-interest income excluding net gains and losses20,047 19,021 17,266 
Non-interest income excluding net gains and lossesNon-interest income excluding net gains and losses21,241 19,504 20,047 
Net interest income on a fully tax-equivalent basisNet interest income on a fully tax-equivalent basis54,701 55,116 35,835 Net interest income on a fully tax-equivalent basis73,277 71,025 54,701 
Adjusted revenueAdjusted revenue$74,748 $74,137 $53,101 Adjusted revenue$94,518 $90,529 $74,748 
Efficiency ratio adjusted for non-core itemsEfficiency ratio adjusted for non-core items64.82 %61.51 %65.19 %Efficiency ratio adjusted for non-core items57.19 %55.91 %64.82 %
(a) Based onTax effect is calculated using a 23.3% blended corporate income tax rate for each of 22.9% for period endingthe three months ended March 31, 2022, 22.3% for period ending2023 and December 31, 2021,2022, and 21.0%a 22.9% blended corporate income tax rate for period endingthe three months ended March 31, 2021.2022.
The efficiency ratio forand the first quarter of 2022 increased compared to the linked quarter, as growth in salaries and employee benefit costs, professional fees and FDIC insurance premiums resulted in higher total non-interest expense. The efficiency ratio adjusted for non-core items also grew and was attributable to the items previously mentioned. Additionally, compared tofor the first quarter of 2021,2023 increased when compared to the linked quarter, primarily due to the increases in non-interest expenses due to seasonal first quarter expenses partially offset by higher net interest income driven by increases in the market interest rates. The improvements in the efficiency ratio and adjustedthe efficiency ratio both declined dueadjusted for non-core items compared to improvements inthe prior year quarter were driven by higher net interest income from the recent acquisitions, coupled with higher non-interest income, outpacingdue to increases in total non-interest expense.market interest rates over the last twelve months.
Return on Average Assets Adjusted for Non-Core Items Ratio (Non-US GAAP)
In addition to return on average assets, management uses return on average assets adjusted for non-core items to monitor performance. The return on average assets adjusted for non-core items ratio represents a Non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses, acquisition-related expenses, contract negotiation benefits, severance expenses,pension settlement charges and COVID-19-related expenses and a Peoples Bank Foundation, Inc. contribution.expenses.

6054

Table of Contents
The following table provides a reconciliation of this Non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Condensed Consolidated Financial Statements for the periods presented:
Three Months EndedThree Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Annualized net income adjusted for non-core items:Annualized net income adjusted for non-core items:Annualized net income adjusted for non-core items:
Net incomeNet income$23,577 $27,747 $15,463 Net income$26,560 $26,849 $23,577 
Add: net loss on investment securitiesAdd: net loss on investment securities— 158 336 Add: net loss on investment securities1,935 168 — 
Less: tax effect of net loss on investment securities (a)Less: tax effect of net loss on investment securities (a)— 33 71 Less: tax effect of net loss on investment securities (a)406 35 — 
Less: net gain on investment securitiesLess: net gain on investment securities130 — — Less: net gain on investment securities— — 130 
Add: tax effect of net gain on investment securities (a)Add: tax effect of net gain on investment securities (a)27 — — Add: tax effect of net gain on investment securities (a)— — 27 
Add: net loss on asset disposals and other transactionsAdd: net loss on asset disposals and other transactions127 — 27 Add: net loss on asset disposals and other transactions246 302 127 
Less: tax effect of net loss on asset disposals and other transactions (a)Less: tax effect of net loss on asset disposals and other transactions (a)27 — Less: tax effect of net loss on asset disposals and other transactions (a)52 63 27 
Less: net gain on asset disposals and other transactions— 953 — 
Add: tax effect of net loss on asset disposals and other transactions (a)— 200 — 
Add: acquisition-related expensesAdd: acquisition-related expenses1,373 903 1,911 Add: acquisition-related expenses551 702 1,373 
Less: tax effect of acquisition-related expenses (a)Less: tax effect of acquisition-related expenses (a)288 190 401 Less: tax effect of acquisition-related expenses (a)116 147 288 
Add: pension settlement chargesAdd: pension settlement charges— 46 — 
Less: tax effect of pension settlement charges (a)Less: tax effect of pension settlement charges (a)— 10 — 
Add: severance expenses— 16 49 
Less: tax effect of severance expenses (a)— 10 
Add: COVID-19-related expensesAdd: COVID-19-related expenses94 565 292 Add: COVID-19-related expenses— 94 
Less: tax effect of COVID-19-related expenses (a)Less: tax effect of COVID-19-related expenses (a)20 119 61 Less: tax effect of COVID-19-related expenses (a)— — 20 
Add: Peoples Bank Foundation, Inc. contribution— — 500 
Less: tax effect of Peoples Bank Foundation, Inc. contribution (a)— — 105 
Less: refund of contract negotiation benefits— 603 — 
Add: tax effect of refund of contract negotiation fees (a)— 127 — 
Net income adjusted for non-core items (after tax)Net income adjusted for non-core items (after tax)$24,733 $27,815 $17,924 Net income adjusted for non-core items (after tax)$28,718 27,814 24,733 
Days in the periodDays in the period90 92 90 Days in the period90 92 90 
Days in the yearDays in the year365 365 365 Days in the year365 365 365 
Annualized net incomeAnnualized net income$95,618 $110,083 $62,711 Annualized net income$107,716 $106,520 $95,618 
Annualized net income adjusted for non-core items (after tax)Annualized net income adjusted for non-core items (after tax)$100,306 $110,353 $72,692 Annualized net income adjusted for non-core items (after tax)$116,467 $110,349 $100,306 
Return on average assets:Return on average assets:Return on average assets:
Annualized net incomeAnnualized net income$95,618 $110,083 $62,711 Annualized net income$107,716 $106,520 $95,618 
Total average assetsTotal average assets7,067,816 7,098,875 4,912,076 Total average assets7,222,464 7,067,193 7,067,816 
Return on average assetsReturn on average assets1.35 %1.55 %1.28 %Return on average assets1.49 %1.51 %1.35 %
Return on average assets adjusted for non-core items:Return on average assets adjusted for non-core items:Return on average assets adjusted for non-core items:
Annualized net income adjusted for non-core items (after tax)Annualized net income adjusted for non-core items (after tax)$100,306 $110,353 $72,692 Annualized net income adjusted for non-core items (after tax)$116,467 $110,349 $100,306 
Total average assetsTotal average assets7,067,816 7,098,875 4,912,076 Total average assets7,222,464 7,067,193 7,067,816 
Return on average assets adjusted for non-core items1.42 %1.55 %1.48 %
Return on average assets adjusted for non-core items (after tax)Return on average assets adjusted for non-core items (after tax)1.61 %1.56 %1.42 %
(a) Based on a 21% statutory federal corporate income tax rate.
The return on average assets declinedfor the current quarter decreased slightly when compared to the linked quarter, and was primarily due to higher total non-interest expense from increased salaries and employee benefit costs, professional fees and FDIC insurance premiums.an increase in average assets. The increase in the return on

61

Table of Contents
average assets for the first quarter of 2022,2023, compared to the first quarter of 2021,2022, was attributable to higher net interest income and non-interest income, which were driven by the recent acquisitions. At the same time, the declineincreases in return on average assets, adjusted for non-core items, was due to the improvement in annualized net income, adjusted for non-core items, not outpacing the higher average total assets.market interest rates.
Return on Average Tangible Equity Ratio (Non-US GAAP)
The return on average tangible equity ratio is a key financial measure used to monitor performance. This ratio is calculated as annualized net income (less the after-tax impact of amortization of other intangible assets) divided by average tangible equity. This

55

Table of Contents
measure is Non-US GAAP since it excludes amortization of other intangible assets from earnings and the impact of goodwill and other intangible assets acquired through acquisitions on total stockholders' equity.
Three Months EndedThree Months Ended
March 31,
2022
December 31,
2021
March 31,
2021
March 31,
2023
December 31,
2022
March 31,
2022
(Dollars in thousands)(Dollars in thousands)March 31,
2022
Annualized net income excluding amortization of other intangible assets:Annualized net income excluding amortization of other intangible assets:Annualized net income excluding amortization of other intangible assets:
Net incomeNet income$23,577 $27,747 $15,463 Net income$26,560 $26,849 $23,577 
Add: amortization of other intangible assetsAdd: amortization of other intangible assets1,708 1,508 620 Add: amortization of other intangible assets1,871 1,998 1,708 
Less: tax effect of amortization of other intangible assets (a)Less: tax effect of amortization of other intangible assets (a)359 317 130 Less: tax effect of amortization of other intangible assets (a)393 420 359 
Net income excluding amortization of other intangible assetsNet income excluding amortization of other intangible assets$24,926 $28,938 $15,953 Net income excluding amortization of other intangible assets$28,038 $28,427 $24,926 
Days in the periodDays in the period90 92 90 Days in the period90 92 90 
Days in the yearDays in the year365 365 365 Days in the year365 365 365 
Annualized net incomeAnnualized net income$95,618 $110,083 $62,711 Annualized net income$107,716 $106,520 $95,618 
Annualized net income excluding amortization of other intangible assetsAnnualized net income excluding amortization of other intangible assets$101,089 $114,808 $64,698 Annualized net income excluding amortization of other intangible assets$113,710 $112,781 $101,089 
Average tangible equity:Average tangible equity:Average tangible equity:
Total average stockholders' equityTotal average stockholders' equity$834,752 $836,797 $577,588 Total average stockholders' equity$801,465 $768,650 $834,752 
Less: average goodwill and other intangible assetsLess: average goodwill and other intangible assets304,124 298,276 184,253 Less: average goodwill and other intangible assets325,545 327,377 304,124 
Average tangible equityAverage tangible equity$530,628 $538,521 $393,335 Average tangible equity$475,920 $441,273 $530,628 
Return on average stockholders' equity ratio:
Return on total average stockholders' equity ratio:Return on total average stockholders' equity ratio:
Annualized net incomeAnnualized net income$95,618 $110,083 $62,711 Annualized net income$107,716 $106,520 $95,618 
Average stockholders' equity$834,752 $836,797 $577,588 
Return on average stockholders' equity11.45 %13.16 %10.86 %
Total average stockholders' equityTotal average stockholders' equity$801,465 $768,650 $834,752 
Return on total average stockholders' equityReturn on total average stockholders' equity13.44 %13.86 %11.45 %
Return on average tangible equity ratio:Return on average tangible equity ratio:Return on average tangible equity ratio:
Annualized net income excluding amortization of other intangible assetsAnnualized net income excluding amortization of other intangible assets$101,089 $114,808 $64,698 Annualized net income excluding amortization of other intangible assets$113,710 $112,781 $101,089 
Average tangible equityAverage tangible equity$530,628 $538,521 $393,335 Average tangible equity$475,920 $441,273 $530,628 
Return on average tangible equityReturn on average tangible equity19.05 %21.32 %16.45 %Return on average tangible equity23.89 %25.56 %19.05 %
(a) Based on a 21% statutory federal corporate income tax rate.
The return on total average stockholders' equity and average tangible equity ratios were negatively impacted by higher total non-interest expense duringlower in the current quarter relative to the linked quarter, due to issuance of treasury stock for employee stock awards in the first quarter of 2022, compared to the linked quarter. Total non-interest expense is seasonally higher during the first quarter of each year due to annual stock grants resultingas well as decreases in increased stock-based compensation, health saving account employer contributions and payroll taxes. At the same time, the average tangible equity was negatively impacted by the Vantage acquisition, for which People did not issue any equity, and recorded additional goodwill and other intangible assets. Additionally, average tangible equity declined compared to the fourth quarter of 2021 due to a higher accumulated other comprehensive loss during the first quarter of 2022 as a result of the impact of the interest rate environmentlosses on the available-for-sale investment securities, portfolio. Compared topartially offset by an increase in total net interest income driven by the first quarter of 2021, therecent increases in market interest rates. The return on total average stockholders' equity and average tangible equity ratios were positively impacted byhigher in the recent acquisitions, andcurrent quarter when compared to the related increasesame 2022 period due to greater accumulated other comprehensive losses on available-for-sale investment securities in net interest income, coupled with higher non-interest income.

2023, which reduced average tangible equity.

6256

Table of Contents
FINANCIAL CONDITION
Cash and Cash Equivalents
At March 31, 2022,2023, Peoples' interest-bearing deposits in other banks decreased $49.8had increased $0.7 million from December 31, 2021.2022. The total cash and cash equivalents balance included $268.7$53.7 million of excess cash reserves being maintained at the FRB of Cleveland at March 31, 2022,2023, compared to $318.1$33.1 million at December 31, 2021. Peoples paid $82.9 million for the Vantage acquisition during the first quarter of 2022. The amount of excess cash reserves maintained is dependent upon Peoples' daily liquidity position, which is driven primarily by changes in deposit and loan balances.
Through the first three months of 2022,2023, Peoples' total cash and cash equivalents decreased $10.0increased $3.1 million as Peoples had net$48.0 million of cash provided by operating activities and $45.1 million of cash provided by financing activities, substantially offset by $90.0 million of cash used in investing activities. Peoples' cash used in investing activities reflected net cash outflows from held-to-maturity investment securities of $127.4 million, which more than offset cash provided by financing activities of $101.6$133.8 million and by operating activities of $15.7 million. Peoples' investing activities reflected purchases of available-for-sale investment securities totaling $165.3 million, cash outflows for business combinations of $80.5from a $52.4 million net of decreasesincrease in loans held for investment, of $75.7 million and proceedspartially offset by net cash inflows from principal payments, calls and prepayments of available-for-sale investment securities of $60.5$100.4 million. The cash provided by financing activities was largely driven by increasesa $106.0 million net increase in interest-bearing deposits, partially offset by net cash outflows of $115.3$34.3 million, which was driven by higher governmental$11.0 million and $9.5 million from a net decrease in non-interest-bearing deposits, which are seasonalcash dividends paid, and payments on long-term borrowings, respectively. Peoples paid $82.9 million in nature.cash for the Vantage acquisition during the first quarter of 2022.
Further information regarding the management of Peoples' liquidity position can be found later in this discussion under “Interest Rate Sensitivity and Liquidity.”
Investment Securities
The following table provides information regarding Peoples’ investment portfolio:
(Dollars in thousands)(Dollars in thousands)Weighted Average YieldMarch 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)Weighted Average YieldMarch 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Available-for-sale securities, at fair value:Available-for-sale securities, at fair value: Available-for-sale securities, at fair value: 
Obligations of:Obligations of: Obligations of: 
U.S. Treasury and government agenciesU.S. Treasury and government agencies1.86 %$167,406 $35,604 $— $— $— U.S. Treasury and government agencies1.54 %$58,438 $152,422 $172,055 $175,255 $167,406 
U.S. government sponsored agenciesU.S. government sponsored agencies0.14 %80,654 81,739 78,481 14,235 18,471 U.S. government sponsored agencies2.10 %98,311 88,115 80,915 82,465 80,654 
States and political subdivisionsStates and political subdivisions2.20 %231,644 259,319 252,919 223,853 218,484 States and political subdivisions2.19 %224,996 225,882 230,022 249,402 231,644 
Residential mortgage-backed securitiesResidential mortgage-backed securities1.62 %753,353 828,517 898,459 579,152 596,181 Residential mortgage-backed securities1.83 %605,270 604,653 624,061 691,735 753,353 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities1.39 %58,112 63,519 62,552 27,631 27,481 Commercial mortgage-backed securities1.58 %52,153 50,049 52,504 58,301 58,112 
Bank-issued trust preferred securitiesBank-issued trust preferred securities1.51 %10,670 6,795 4,679 4,766 4,730 Bank-issued trust preferred securities5.38 %10,329 10,278 10,287 10,440 10,670 
Total fair valueTotal fair value$1,301,839 $1,275,493 $1,297,090 $849,637 $865,347 Total fair value$1,049,497 $1,131,399 $1,169,844 $1,267,598 $1,301,839 
Total amortized costTotal amortized cost$1,381,259 $1,283,146 $1,294,654 $839,682 $859,120 Total amortized cost$1,196,521 $1,300,719 $1,349,800 $1,389,621 $1,381,259 
Net unrealized (loss) gain$(79,420)$(7,653)$2,436 $9,955 $6,227 
Net unrealized lossNet unrealized loss$(147,024)$(169,320)$(179,956)$(122,023)$(79,420)
Held-to-maturity securities, at amortized cost:Held-to-maturity securities, at amortized cost:Held-to-maturity securities, at amortized cost:
Obligations of:Obligations of:Obligations of:
U.S. government sponsored agenciesU.S. government sponsored agencies1.64 %$38,486 $36,431 $29,995 $30,103 $30,211 U.S. government sponsored agencies4.61 %$194,184 $132,366 $59,871 $50,990 $38,486 
States and political subdivisions (a)States and political subdivisions (a)2.24 %151,217 151,402 124,181 102,224 92,436 States and political subdivisions (a)2.23 %144,844 $145,022 145,252 151,034 151,217 
Residential mortgage-backed securitiesResidential mortgage-backed securities1.87 %115,613 110,708 41,035 24,067 24,878 Residential mortgage-backed securities3.83 %245,294 176,215 111,707 112,095 115,613 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities1.76 %79,340 75,588 47,889 23,830 18,705 Commercial mortgage-backed securities2.49 %109,750 106,609 90,971 86,601 79,340 
Total amortized costTotal amortized cost$384,656 $374,129 $243,100 $180,224 $166,230 Total amortized cost$694,072 $560,212 $407,801 $400,720 $384,656 
Other investment securitiesOther investment securities$41,840 $33,987 $34,486 $32,584 $34,026 Other investment securities$52,763 $51,609 $39,039 $41,655 $41,840 
Total investment securities:Total investment securities:Total investment securities:
Amortized costAmortized cost$1,807,755 $1,691,262 $1,572,240 $1,052,490 $1,059,376 Amortized cost$1,943,356 $1,912,540 $1,796,640 $1,831,996 $1,807,755 
Carrying valueCarrying value$1,728,335 $1,683,609 $1,574,676 $1,062,445 $1,065,603 Carrying value$1,796,332 $1,743,220 $1,616,684 $1,709,973 $1,728,335 
(a)Amortized cost is presented net of the allowance for credit losses of $241 at March 31, 2023, $241 at December 31, 2022 and $286 at March 31, 2022 and December 31, 2021; $236 at September 30, 2021; $201 at June 30, 2021 and $182 at March 31, 2021.2022.
For the first quarter of 2022,2023, total investment securities increased and wascompared to the prior quarter, largely due to investments made in held-to-maturity residential mortgage-backed securities and obligations of U.S. Treasury and government agencies' obligations late in the quarter,sponsored agencies, in an effort to deploy cash, improve investment yields and reduce risk. At the same time, unrealized losses on the available-for-sale investment securities portfolio were drivenrisk, partially offset by the increased interest rate environment, and was deemed temporaryreduction in nature.available-for-sale securities. During the thirdfirst quarter of 2021,2023, Peoples acquired investmentexecuted the sale of $96.7 million of its lower yielding available-for-sale securities infor an after-tax loss of $1.6 million. Proceeds from the Premier acquisition, drivingsale were used to pay down overnight borrowings. The realized losses recognized due to these transactions are projected to be earned back within the increase compared to June 30, 2021.2023 fiscal year.

6357

Table of Contents
Additional information regarding Peoples' investment portfolio can be found in "Note 3 Investment Securities" of the Notes to the Unaudited Condensed Consolidated Financial Statements.
Loans
The following table provides information regarding outstanding loan balances:
(Dollars in thousands)(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Originated loans:Originated loans: Originated loans: 
ConstructionConstruction$171,934 $137,437 $108,334 $97,424 $75,189 Construction$222,915 $212,869 $175,388 $144,062 $171,934 
Commercial real estate, otherCommercial real estate, other854,721 861,610 838,333 836,613 832,399 Commercial real estate, other995,176 919,531 891,576 899,774 854,721 
Commercial real estate Commercial real estate1,026,655 999,047 946,667 934,037 907,588  Commercial real estate1,218,091 1,132,400 1,066,964 1,043,836 1,026,655 
Commercial and industrialCommercial and industrial791,307 779,064 715,169 778,122 935,150 Commercial and industrial840,194 835,178 814,593 777,050 791,307 
Premium financePremium finance145,813 136,121 134,755 117,039 109,129 Premium finance158,263 159,197 167,682 152,237 145,813 
LeasesLeases97,168 69,169 49,464 24,217 — Leases251,711 226,438 178,083 149,894 97,168 
Residential real estateResidential real estate364,989 350,595 334,838 324,321 306,440 Residential real estate386,964 384,262 381,104 373,010 364,989 
Home equity lines of creditHome equity lines of credit107,414 104,176 98,806 95,376 92,540 Home equity lines of credit132,531 132,093 124,524 115,935 107,414 
Consumer, indirectConsumer, indirect524,778 530,532 543,243 537,926 519,749 Consumer, indirect647,177 629,426 592,309 563,088 524,778 
Consumer, directConsumer, direct87,994 81,330 80,746 78,736 75,998 Consumer, direct99,299 98,706 99,282 95,371 87,994 
Consumer Consumer612,772 611,862 623,989 616,662 595,747  Consumer746,476 728,132 691,591 658,459 612,772 
Deposit account overdraftsDeposit account overdrafts699 756 927 498 298 Deposit account overdrafts749 722 597 851 699 
Total originated loansTotal originated loans$3,146,817 $3,050,790 $2,904,615 $2,890,272 $2,946,892 Total originated loans$3,734,979 $3,598,422 $3,425,138 $3,271,272 $3,146,817 
Acquired loans (a):Acquired loans (a):Acquired loans (a):
ConstructionConstruction$66,371 $72,795 $66,450 $3,175 $3,510 Construction$9,381 $34,072 $40,233 $58,526 $66,371 
Commercial real estate, otherCommercial real estate, other602,511 688,471 790,783 111,647 132,850 Commercial real estate, other485,886 503,987 531,903 560,249 602,511 
Commercial real estate Commercial real estate668,882 761,266 857,233 114,822 136,360  Commercial real estate495,267 538,059 572,136 618,775 668,882 
Commercial and industrialCommercial and industrial95,844 112,328 143,369 27,629 29,611 Commercial and industrial50,945 57,456 62,879 81,402 95,844 
Premium financePremium finance— 15 — 49 1,461 Premium finance— — — — — 
LeasesLeases169,900 53,339 61,982 71,426 — Leases102,930 118,693 134,764 164,628 169,900 
Residential real estateResidential real estate391,440 421,123 433,296 242,276 267,260 Residential real estate325,638 339,098 352,257 369,995 391,440 
Home equity lines of creditHome equity lines of credit54,874 59,417 62,564 23,025 24,886 Home equity lines of credit41,852 45,765 50,001 53,400 54,874 
Consumer, indirectConsumer, indirect— — 13 — — Consumer, indirect— — — — — 
Consumer, directConsumer, direct19,396 23,322 27,956 2,700 3,206 Consumer, direct8,107 9,657 14,032 16,433 19,396 
Consumer Consumer19,396 23,322 27,969 2,700 3,206  Consumer8,107 9,657 14,032 16,433 19,396 
Total acquired loansTotal acquired loans$1,400,336 $1,430,810 $1,586,413 $481,927 $462,784 Total acquired loans$1,024,739 $1,108,728 $1,186,069 $1,304,633 $1,400,336 
Total loansTotal loans$4,547,153 $4,481,600 $4,491,028 $3,372,199 $3,409,676 Total loans$4,759,718 $4,707,150 $4,611,207 $4,575,905 $4,547,153 
Percent of loans to total loans:Percent of loans to total loans: Percent of loans to total loans: 
ConstructionConstruction5.2 %4.7 %3.9 %3.0 %2.3 %Construction4.9 %5.2 %4.7 %4.4 %5.2 %
Commercial real estate, otherCommercial real estate, other32.1 %34.7 %36.3 %28.1 %28.3 %Commercial real estate, other31.1 %30.2 %30.9 %32.0 %32.1 %
Commercial real estate Commercial real estate37.3 %39.4 %40.2 %31.1 %30.6 % Commercial real estate36.0 %35.4 %35.6 %36.4 %37.3 %
Commercial and industrialCommercial and industrial19.5 %19.9 %19.1 %23.9 %28.3 %Commercial and industrial18.7 %19.0 %19.0 %18.8 %19.5 %
Premium financePremium finance3.2 %3.0 %3.0 %3.5 %3.2 %Premium finance3.3 %3.4 %3.6 %3.3 %3.2 %
LeasesLeases5.9 %2.7 %2.5 %2.8 %— %Leases7.4 %7.3 %6.8 %6.9 %5.9 %
Residential real estateResidential real estate16.6 %17.2 %17.1 %16.8 %16.8 %Residential real estate15.0 %15.4 %15.9 %16.2 %16.6 %
Home equity lines of creditHome equity lines of credit3.6 %3.7 %3.6 %3.5 %3.5 %Home equity lines of credit3.7 %3.8 %3.8 %3.7 %3.6 %
Consumer, indirectConsumer, indirect11.5 %11.8 %12.1 %16.0 %15.3 %Consumer, indirect13.6 %13.4 %12.8 %12.3 %11.5 %
Consumer, directConsumer, direct2.4 %2.3 %2.4 %2.4 %2.3 %Consumer, direct2.3 %2.3 %2.5 %2.4 %2.4 %
Consumer Consumer13.9 %14.1 %14.5 %18.4 %17.6 % Consumer15.9 %15.7 %15.3 %14.7 %13.9 %
Total percentageTotal percentage100.0 %100.0 %100.0 %100.0 %100.0 %Total percentage100.0 %100.0 %100.0 %100.0 %100.0 %
Residential real estate loans being serviced for othersResidential real estate loans being serviced for others$420,024 $430,597 $441,085 $454,399 $469,788 Residential real estate loans being serviced for others$384,005 $392,364 $400,736 $410,007 $420,024 
(a)    Includes all loans acquired, and related loan discount recorded as part of acquisition accounting, in 2012 or thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals and increases in lines of credit).
Period-end total loan balances at March 31, 20222023 increased $65.6$52.6 million, or 4% annualized, compared to at December 31, 2021,2022. The increase in the period-end loan and lease balances was primarily driven by leases acquired from Vantage, coupled with originated growth,increases of (i) $57.5 million in other commercial real estate loans, (ii) $17.8 million in indirect consumer loans and was(iii) $9.5 million in leases, partially offset by payoffsa reductions of previously-acquired loans and PPP loan forgiveness. The originated loan growth was mostly$14.6 million in construction loans which grew $34.5and $10.8 million commercial and industrial balances, which were up $12.2in residential real estate loans. The increase of $212.6 million and premium finance loans, which increased $9.7 million.in the period-end loan

6458

Table of Contents
The increase in loans at September 30, 2021,and lease balances when compared to June 30, 2021,March 31, 2022 was primarily driven by increases of $122.4 million in indirect consumer loans and $87.6 million in leases, partially offset by a reduction of $43.8 million in residential real estate loans. The increases in the period-end loan and lease balances when compared to the prior periods was due to growth. The reduction in the Premier acquisition, which added $1.1 billion in loans.period-end residential real estate loans balance when compared to all comparative prior periods was due to a lower inventory of homes for sale.
Loan Concentration
Peoples categorizes its commercial loans according to standard industry classifications and monitors for concentrations in a single industry or multiple industries that could be impacted by changes in economic conditions in a similar manner. Peoples' commercial lending activities continue to be spread over a diverse range of businesses from all sectors of the economy, with no single industry comprising over 10% of Peoples' total loan portfolio.
Loans secured by commercial real estate, including commercial construction loans, continued to comprise the largest portion of Peoples' loan portfolio. The following tables provide information regarding the largest concentrations of commercial construction loans and commercial real estate loans within the loan portfolio at March 31, 2022:2023:
(Dollars in thousands)(Dollars in thousands)Outstanding BalanceLoan CommitmentsTotal Exposure% of Total(Dollars in thousands)Outstanding BalanceLoan CommitmentsTotal Exposure% of Total
Construction:Construction: Construction: 
Apartment complexesApartment complexes$84,783 $103,538 $188,321 43.0 %Apartment complexes$120,995 $179,179 $300,174 64.1 %
Mixed-use facilitiesMixed-use facilities34,822 26,481 61,303 14.0 %Mixed-use facilities19,478 4,787 24,265 5.2 %
Assisted living facilities and nursing homesAssisted living facilities and nursing homes23,464 21,050 44,514 10.2 %Assisted living facilities and nursing homes16,385 5,226 21,611 4.6 %
Land onlyLand only22,415 6,157 28,572 6.5 %Land only21,690 8,081 29,771 6.4 %
Office buildings and complexesOffice buildings and complexes8,587 13,013 21,600 4.9 %Office buildings and complexes12,301 4,158 16,459 3.5 %
Storage facility5,742 644 6,386 1.5 %
Lodging and lodging related12,596 1,472 14,068 3.2 %
Retail9,167 2,709 11,876 2.7 %
Residential property7,863 9,791 17,654 4.0 %
IndustrialIndustrial6,734 4,047 10,781 2.3 %
Other (a)Other (a)28,866 14,508 43,374 10.0 %Other (a)34,713 30,391 65,104 13.9 %
Total constructionTotal construction$238,305 $199,363 $437,668 100.0 %Total construction$232,296 $235,869 $468,165 100.0 %
(a) All other outstanding balancestotal exposures by industry are less than 2% of the total loan portfolio.Total Exposure.

6559

Table of Contents
(Dollars in thousands)(Dollars in thousands)Outstanding BalanceLoan CommitmentsTotal Exposure% of Total(Dollars in thousands)Outstanding BalanceLoan CommitmentsTotal Exposure% of Total
Commercial real estate, other:Commercial real estate, other: Commercial real estate, other: 
Office buildings and complexes:Office buildings and complexes: Office buildings and complexes: 
Owner occupiedOwner occupied$77,603 $3,492 $81,095 5.4 %Owner occupied$61,296 $1,943 $63,239 4.0 %
Non-owner occupiedNon-owner occupied94,634 4,822 99,456 6.6 %Non-owner occupied90,954 3,846 94,800 6.1 %
Total office buildings and complexesTotal office buildings and complexes172,237 8,314 180,551 12.0 %Total office buildings and complexes152,250 5,789 158,039 10.1 %
Retail facilities:Retail facilities:Retail facilities:
Owner occupiedOwner occupied55,513 1,965 57,478 3.8 %Owner occupied39,551 1,480 41,031 2.6 %
Non-owner occupiedNon-owner occupied134,230 1,736 135,966 9.0 %Non-owner occupied144,979 4,008 148,987 9.5 %
Total retail facilitiesTotal retail facilities189,743 3,701 193,444 12.8 %Total retail facilities184,530 5,488 190,018 12.1 %
Mixed-use facilities:Mixed-use facilities:Mixed-use facilities:
Owner occupiedOwner occupied53,673 424 54,097 3.6 %Owner occupied44,518 550 45,068 2.9 %
Non-owner occupiedNon-owner occupied58,716 4,000 62,716 4.2 %Non-owner occupied60,932 1,323 62,255 4.0 %
Total mixed-use facilitiesTotal mixed-use facilities112,389 4,424 116,813 7.8 %Total mixed-use facilities105,450 1,873 107,323 6.9 %
Apartment complexesApartment complexes93,246 3,508 96,754 6.4 %Apartment complexes112,419 37,757 150,176 9.6 %
Light industrial facilities:Light industrial facilities: Light industrial facilities: 
Owner occupiedOwner occupied91,329 1,891 93,220 6.2 %Owner occupied92,338 2,726 95,064 6.1 %
Non-owner occupiedNon-owner occupied38,666 633 39,299 2.6 %Non-owner occupied47,983 3,055 51,038 3.2 %
Total light industrial facilitiesTotal light industrial facilities129,995 2,524 132,519 8.8 %Total light industrial facilities140,321 5,781 146,102 9.3 %
Assisted living facilities and nursing homesAssisted living facilities and nursing homes81,349 750 82,099 5.4 %Assisted living facilities and nursing homes62,701 5,151 67,852 4.3 %
Warehouse facilities:Warehouse facilities:Warehouse facilities:
Owner occupiedOwner occupied40,271 2,790 43,061 2.9 %Owner occupied36,307 1,285 37,592 2.3 %
Non-owner occupiedNon-owner occupied40,176 74 40,250 2.7 %Non-owner occupied27,590 241 27,831 1.8 %
Total warehouse facilitiesTotal warehouse facilities80,447 2,864 83,311 5.6 %Total warehouse facilities63,897 1,526 65,423 4.1 %
Lodging and lodging related:Lodging and lodging related:Lodging and lodging related:
Owner occupiedOwner occupied13,941 — 13,941 0.9 %Owner occupied28,859 661 29,520 1.9 %
Non-owner occupiedNon-owner occupied85,713 150 85,863 5.7 %Non-owner occupied79,821 79,822 5.1 %
Total lodging and lodging relatedTotal lodging and lodging related99,654 150 99,804 6.6 %Total lodging and lodging related108,680 662 109,342 7.0 %
Education services:Education services:Education services:
Owner occupiedOwner occupied16,896 98 16,994 1.1 %Owner occupied18,148 — 18,148 1.2 %
Non-owner occupiedNon-owner occupied22,508 4,000 26,508 1.8 %Non-owner occupied31,734 5,523 37,257 2.4 %
Total education servicesTotal education services39,404 4,098 43,502 2.9 %Total education services49,882 5,523 55,405 3.6 %
Healthcare facilities:Healthcare facilities:Healthcare facilities:
Owner occupiedOwner occupied26,085 422 26,507 1.8 %Owner occupied21,855 300 22,155 1.4 %
Non-owner occupiedNon-owner occupied11,482 — 11,482 0.8 %Non-owner occupied9,518 — 9,518 0.6 %
Total healthcare facilitiesTotal healthcare facilities37,567 422 37,989 2.6 %Total healthcare facilities31,373 300 31,673 2.0 %
Restaurant/bar facilities:Restaurant/bar facilities:Restaurant/bar facilities:
Owner occupiedOwner occupied24,482 — 24,482 1.6 %Owner occupied28,715 28,724 1.8 %
Non-owner occupiedNon-owner occupied12,908 — 12,908 0.9 %Non-owner occupied10,464 248 10,712 0.7 %
Total restaurant/bar facilitiesTotal restaurant/bar facilities37,390 — 37,390 2.5 %Total restaurant/bar facilities39,179 257 39,436 2.5 %
Land onlyLand only
Owner occupiedOwner occupied6,143 339 6,482 0.4 %
Non-owner occupiedNon-owner occupied32,257 — 32,257 2.1 %
Total land onlyTotal land only38,400 339 38,739 2.5 %
Agriculture30,792 1,536 32,328 2.1 %
Other (a)Other (a)353,019 17,558 370,577 24.5 %Other (a)430,380 15,645 446,025 28.5 %
Total commercial real estate, otherTotal commercial real estate, other$1,457,232 $49,849 $1,507,081 100.0 %Total commercial real estate, other$1,481,062 $85,752 $1,566,814 100.0 %
(a) All other outstanding balancestotal exposures by industry are less than 2% of the total loan portfolio.Total Exposure.
Peoples' commercial lending activities continue to focus on lending opportunities within Ohio, Kentucky, West Virginia, Virginia, Washington, D.C. and Maryland. In all other states, the aggregate outstanding balances of commercial loans in each state were less than 4% of total loans at both March 31, 20222023 and December 31, 2021.2022. The repayment of premium finance loans areis secured by the underlying insurance policy prepaid premium, and therefore, havehas no geographical impact from a repayment perspective. The repayment of leases areis secured by the underlying equipment collateral and not real estate, which mitigates geographic risk.

60

Table of Contents
Small Business Administration Paycheck Protection Program ("PPP")
In March 2020, the CARESCoronavirus Aid, Relief, and Economic Security ("CARES") Act created the PPP targeted to provide small businesses with support to cover payroll and certain other specified expenses. Loans made under the PPP are fully guaranteed by the SBA. The PPP loans also afford borrowers forgiveness up to the principal amount of the PPP covered loan, plus accrued interest, if the loan proceeds are used to retain workers

66

Table of Contents
and maintain payroll and/or to make certain mortgage interest, lease and utility payments, and certain other criteria are satisfied. The SBA will reimburse PPP lenders for any amount of a PPP covered loan that is forgiven, and PPP lenders will not be held liable for any representations made by PPP borrowers in connection with their requests for loan forgiveness.
Peoples is a PPP participating lender, and the PPP loans originated are included in commercial and industrial loans. Peoples also recorded deferred loan origination fees related to the PPP loans, net of deferred loan origination costs, which will be amortized over the life of the respective loans, or until forgiven by the SBA, and will be recognized in net interest income. The following tables detailtable details Peoples' PPP loansloan balances and related income:
(Dollars in millions)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
PPP aggregate outstanding principal balancesPPP aggregate outstanding principal balances$42.9 $89.3 $139.8 $194.7 $349.9 PPP aggregate outstanding principal balances$2,184 $2,458 $3,789 $15,582 $42,871 
PPP net deferred loan origination feesPPP net deferred loan origination fees1.0 2.2 4.0 7.1 9.3 PPP net deferred loan origination fees25 27 61 421 995 
Accretion of net deferred loan origination feesAccretion of net deferred loan origination fees1.2 1.8 3.1 3.4 4.7 Accretion of net deferred loan origination fees34 360 574 1,215 
Allowance for Credit Losses
The amount of the allowance for credit losses at the end of each period represents management's estimate of expected losses from existing loans based upon its quarterly analysis of the loan portfolio. While this process involves allocations being made to specific loans and pools of loans, the entire allowance is available for all losses expected within the loan portfolio.
The following details management's allocation of the allowance for credit losses:
(Dollars in thousands)(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Commercial real estate$23,786 $32,146 $39,252 $18,147 $18,663 
ConstructionConstruction$1,273 $1,250 $1,464 $1,531 $2,731 
Commercial real estate, otherCommercial real estate, other16,474 17,710 17,695 18,708 21,055 
Commercial and industrialCommercial and industrial10,114 11,063 13,378 8,686 10,108 Commercial and industrial8,307 8,229 8,611 8,572 10,114 
Premium financePremium finance345 379 1,137 998 1,160 Premium finance433 344 553 311 345 
LeasesLeases5,875 4,797 4,505 3,715 — Leases9,109 8,495 7,890 7,585 5,875 
Residential real estateResidential real estate6,495 7,233 9,568 4,837 4,935 Residential real estate6,504 6,357 6,464 6,332 6,495 
Home equity lines of creditHome equity lines of credit1,894 2,005 2,224 1,504 1,494 Home equity lines of credit1,717 1,693 1,644 1,699 1,894 
Consumer, indirectConsumer, indirect5,172 5,326 6,160 8,841 7,522 Consumer, indirect7,781 7,448 6,912 6,234 5,172 
Consumer, directConsumer, direct1,036 961 1,079 1,161 970 Consumer, direct1,619 1,575 1,592 1,321 1,036 
Deposit account overdraftsDeposit account overdrafts51 57 79 53 45 Deposit account overdrafts86 61 41 53 51 
Allowance for credit lossesAllowance for credit losses$54,768 $63,967 $77,382 $47,942 $44,897 Allowance for credit losses$53,303 $53,162 $52,866 $52,346 $54,768 
As a percent of total loansAs a percent of total loans1.20 %1.43 %1.72 %1.42 %1.32 %As a percent of total loans1.12 %1.13 %1.15 %1.14 %1.20 %
At March 31, 2022, theThe reduction in the allowance for credit losses at March 31, 2023 compared to DecemberMarch 31, 20212022 was due to improvements in economic forecasts and loss drivers, along with reductions in loan balances from acquired loan from payoffs during the quarter. Peoples recorded $387,000 of provision for credit losses during the first quarter of 2022 to establish the allowance for credit losses for non-purchased credit deteriorated leases acquired from Vantage.
The increasedriven by decreases in the allowanceallowances for credit losses at September 30, 2021, compared to June 30, 2021, was related to the provision for credit losses recorded of $11.0 million in order to establish an allowance for credit losses for non-purchase credit deterioratedindividually analyzed loans, of $10.6 million,offset by loan growth and a liability for unfunded commitments of $0.4 million, both relating to the acquisition of Premier. Peoples also recorded a $22.3 million increasedeterioration in the allowance for credit losses during the third quarter of 2021 related to the purchase credit deteriorated loans acquired from Premier.economic forecast.
Additional information regarding Peoples' allowance for credit losses can be found in "Note 1 Summary of Significant Accounting Policies" in Peoples' 20212022 Form 10-K and "Note 4 Loans and Leases" of the Notes to the Unaudited Condensed Consolidated Financial Statements.


67

Table of Contents
The following table summarizes Peoples’ net charge-offs and recoveries:
Three Months Ended
(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
Gross charge-offs:  
Commercial real estate, other$278 $226 $— $$157 
Commercial and industrial463 105 654 293 
Premium finance14 15 16 
Leases473 478 431 525 — 
Residential real estate309 72 44 136 133 
Home equity lines of credit16 180 12 
Consumer, indirect385 566 416 269 505 
Consumer, direct136 56 29 31 36 
    Consumer521 622 445 300 541 
Deposit account overdrafts259 248 135 89 103 
Total gross charge-offs$2,333 $1,767 $1,896 $1,070 $1,255 
Recoveries: 
Commercial real estate, other$49 $196 $$$— 
Commercial and industrial18 — 
Premium finance— — — — — 
Leases176 109 120 110 — 
Residential real estate14 40 48 40 15 
Home equity lines of credit29 — 37 — 
Consumer, indirect86 42 43 63 105 
Consumer, direct11 58 17 11 26 
    Consumer97 100 60 74 131 
Deposit account overdrafts54 42 37 44 54 
Total recoveries$423 $491 $310 $290 $204 
Net charge-offs (recoveries):  
Commercial real estate, other$229 $30 $(4)$— $157 
Commercial and industrial459 101 650 (13)293 
Premium finance14 15 16 
Leases297 369 311 415 — 
Residential real estate295 32 (4)96 118 
Home equity lines of credit(13)143 
Consumer, indirect299 524 373 206 400 
Consumer, direct125 (2)12 20 10 
    Consumer424 522 385 226 410 
Deposit account overdrafts205 206 98 45 49 
Total net charge-offs$1,910 $1,276 $1,586 $780 $1,051 
Ratio of net charge-offs to average total loans (annualized):
Commercial real estate, other0.02 %— %— %— %0.02 %
Commercial and industrial0.03 %0.01 %0.08 %— %0.04 %
Leases0.03 %0.03 %0.03 %0.05 %— %
Residential real estate0.03 %— %— %0.01 %0.01 %
Home equity lines of credit— %— %0.02 %— %— %
Consumer, indirect0.03 %0.05 %0.04 %0.02 %0.05 %
Consumer, direct0.01 %— %— %— %— %
    Consumer0.04 %0.05 %0.04 %0.02 %0.05 %
Deposit account overdrafts0.02 %0.02 %0.01 %0.01 %0.01 %
Total0.17 %0.11 %0.18 %0.09 %0.13 %
Three Months Ended
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Gross charge-offs:  
Construction$$16 $— $— $— 
Commercial real estate, other$33 132 57 22 278 
Commercial and industrial24 36 420 463 
Premium finance23 42 38 30 14 

61

Table of Contents
Three Months Ended
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Leases469 888 731 493 473 
Residential real estate41 144 168 47 309 
Home equity lines of credit19 42 25 16 
Consumer, indirect929 799 600 449 385 
Consumer, direct104 86 81 60 136 
    Consumer1,033 885 681 509 521 
Deposit account overdrafts227 308 274 405 259 
Total gross charge-offs$1,855 $2,481 $1,990 $1,951 $2,333 
Recoveries: 
Commercial real estate, other$27 33 $39 $176 $49 
Commercial and industrial— 40 
Premium finance— 
Leases80 81 99 64 176 
Residential real estate29 20 36 14 14 
Home equity lines of credit— 16 — — 29 
Consumer, indirect79 88 71 83 86 
Consumer, direct15 16 11 11 
    Consumer94 104 80 94 97 
Deposit account overdrafts72 50 44 52 54 
Total recoveries$311 $348 $302 $410 $423 
Net charge-offs (recoveries): 
Construction$$16 $— $— $— 
Commercial real estate, other99 18 (154)229 
Commercial and industrial(16)33 418 459 
Premium finance14 38 37 22 14 
Leases389 807 632 429 297 
Residential real estate12 124 132 33 295 
Home equity lines of credit19 26 25 (13)
Consumer, indirect850 711 529 366 299 
Consumer, direct89 70 72 49 125 
    Consumer939 781 601 415 424 
Deposit account overdrafts155 258 230 353 205 
Total net charge-offs$1,544 $2,133 $1,688 $1,541 $1,910 
Ratio of net charge-offs to average total loans (annualized):
Construction— %— %— %— %— %
Commercial real estate, other— %0.01 %— %(0.01)%0.02 %
Commercial and industrial— %— %— %0.04 %0.03 %
Premium finance— %— %— %— %— %
Leases0.04 %0.07 %0.06 %0.04 %0.03 %
Residential real estate— %0.01 %0.01 %— %0.03 %
Home equity lines of credit— %— %— %— %— %
Consumer, indirect0.07 %0.06 %0.05 %0.03 %0.03 %
Consumer, direct0.01 %0.01 %0.01 %0.01 %0.01 %
    Consumer0.08 %0.07 %0.06 %0.04 %0.04 %
Deposit account overdrafts0.01 %0.02 %0.02 %0.03 %0.02 %
Total0.13 %0.18 %0.15 %0.14 %0.17 %
Each with "--%" not meaningful.
Net charge-offs during the first quarter of 20222023 were 0.17%0.13% of average total loans on an annualized basis. Peoples has anticipatedThe decrease for the current quarter when compared to the linked quarter was driven by a decrease in charge-offs on leases, residential real estate loans and deposit account overdrafts, partially offset by an increase in thecharge-offs on indirect consumer loans. The decrease in net charge-offs during the current quarter versus the prior year quarter was primarily attributable to average total loans, as recent periods have been below historical levels. Higher residential real estate grossdecreases in net charge-offs contributed to the increase, coupled with lower recoveries experienced onin (i) commercial real estate loans.and

6862

Table of Contents

industrial loans, (ii) residential real estate loans, and (iii) other commercial real estate loans, partially offset by an increase in net charge-offs in indirect consumer loans.
The following table details Peoples’ nonperforming assets: 
(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
Loans 90+ days past due and accruing:     
Construction$— $90 $— $— $— 
Commercial real estate, other603 689 1,912 1,361 55 
Commercial and industrial53 1,139 98 161 — 
Premium finance613 865 368 216 109 
Leases3,921 — 1,736 1,522 — 
Residential real estate677 805 1,156 342 662 
Home equity lines of credit75 50 61 60 180 
Consumer, indirect17 — — 39 24 
Consumer, direct— 85 32 40 14 
   Consumer17 85 32 79 38 
Total loans 90+ days past due and accruing$5,959 $3,723 $5,363 $3,741 $1,044 
Nonaccrual loans: 
Construction$$$— $$
Commercial real estate, other14,745 16,849 17,207 7,965 8,084 
Commercial and industrial2,394 2,505 4,133 3,938 4,067 
Leases1,731 1,581 1,411 — — 
Residential real estate7,459 8,016 8,046 5,811 6,182 
Home equity lines of credit604 687 661 572 624 
Consumer, indirect1,408 1,302 850 704 825 
Consumer, direct231 273 177 100 146 
   Consumer1,639 1,575 1,027 804 971 
Total nonaccrual loans$28,578 $31,219 $32,485 $19,094 $19,932 
Nonaccrual troubled debt restructurings ("TDRs"):
Commercial real estate, other$197 $218 $94 99 $337 
Commercial and industrial999 1,067 1,223 1,774 2,034 
Residential real estate1,676 1,631 1,689 1,784 2,064 
Home equity lines of credit333 352 315 129 156 
Consumer, indirect220 272 219 193 206 
Consumer, direct— 15 
   Consumer220 278 228 199 221 
Total nonaccrual TDRs$3,425 $3,546 $3,549 $3,985 $4,812 
Total nonperforming loans ("NPLs")$37,962 $38,488 $41,397 $26,820 $25,788 
OREO: 
Commercial$9,106 $9,105 $10,804 $— $— 
Residential301 391 464 239 134 
Total OREO$9,407 $9,496 $11,268 $239 $134 
Total nonperforming assets ("NPAs")$47,369 $47,984 $52,665 $27,059 $25,922 
Criticized loans (a)$190,315 $194,016 $234,845 $113,802 $116,424 
Classified loans (b)109,530 106,547 142,628 69,166 76,095 

69

Table of Contents
(Dollars in thousands)(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Loans 90+ days past due and accruing:Loans 90+ days past due and accruing: 
Commercial real estate, otherCommercial real estate, other150 167 1,472 330 603 
Commercial and industrialCommercial and industrial228 130 266 89 53 
Premium financePremium finance764 504 308 304 613 
LeasesLeases2,491 3,041 4,654 5,722 3,921 
Residential real estateResidential real estate238 917 1,499 1,687 677 
Home equity lines of creditHome equity lines of credit127 58 23 89 75 
Consumer, indirectConsumer, indirect13 — 195 15 17 
Consumer, directConsumer, direct25 — — 
Consumer Consumer16 25 202 15 17 
Total loans 90+ days past due and accruingTotal loans 90+ days past due and accruing$4,014 $4,842 $8,424 $8,236 $5,959 
Nonaccrual loans:Nonaccrual loans: 
ConstructionConstruction$$12 $$$
Commercial real estate, otherCommercial real estate, other11,345 12,121 11,916 14,253 14,942 
Commercial and industrialCommercial and industrial3,064 3,462 2,385 1,849 3,393 
LeasesLeases3,884 3,178 2,094 1,573 1,731 
Residential real estateResidential real estate8,641 9,496 8,728 9,194 9,135 
Home equity lines of creditHome equity lines of credit793 820 921 890 937 
Consumer, indirectConsumer, indirect2,147 2,176 1,627 1,558 1,628 
Consumer, directConsumer, direct105 208 158 166 231 
Consumer Consumer2,252 2,384 1,785 1,724 1,859 
Total nonaccrual loansTotal nonaccrual loans$29,980 $31,473 $27,831 $29,488 $32,003 
Total nonperforming loans ("NPLs")Total nonperforming loans ("NPLs")$33,994 $36,315 $36,255 $37,724 $37,962 
OREO:OREO: 
CommercialCommercial$8,730 $8,730 $8,730 $9,065 $9,106 
ResidentialResidential48 165 110 145 301 
Total OREOTotal OREO$8,778 $8,895 $8,840 $9,210 $9,407 
Total nonperforming assets ("NPAs")Total nonperforming assets ("NPAs")$42,772 $45,210 $45,095 $46,934 $47,369 
Criticized loans (a)Criticized loans (a)$198,812 $191,355 $164,775 $181,395 $190,315 
Classified loans (b)Classified loans (b)93,168 89,604 94,848 115,483 109,530 
Asset Quality Ratios (c):Asset Quality Ratios (c):Asset Quality Ratios (c):
Nonaccrual loans as a percent of total loans (d)Nonaccrual loans as a percent of total loans (d)0.70 %0.78 %0.80 %0.68 %0.73 %Nonaccrual loans as a percent of total loans (d)0.63 %0.67 %0.60 %0.64 %0.70 %
NPLs as a percent of total loans (d)NPLs as a percent of total loans (d)0.83 %0.86 %0.92 %0.79 %0.76 %NPLs as a percent of total loans (d)0.71 %0.77 %0.79 %0.82 %0.83 %
NPAs as a percent of total assets (d)NPAs as a percent of total assets (d)0.65 %0.68 %0.75 %0.53 %0.50 %NPAs as a percent of total assets (d)0.58 %0.63 %0.64 %0.64 %0.65 %
NPAs as a percent of total loans and OREO(d)1.04 %1.07 %1.17 %0.80 %0.76 %
Allowance for credit losses as a percent of nonaccrual loans (d)171.13 %184.00 %214.75 %207.73 %181.45 %
NPAs as a percent of total loans and OREO (d)NPAs as a percent of total loans and OREO (d)0.90 %0.96 %0.98 %1.02 %1.04 %
Allowance for credit losses as a percent of nonaccrual loansAllowance for credit losses as a percent of nonaccrual loans177.80 %168.91 %189.95 %177.52 %171.13 %
Allowance for credit losses as a percent of NPLs (d)Allowance for credit losses as a percent of NPLs (d)144.27 %166.20 %186.93 %178.75 %174.10 %Allowance for credit losses as a percent of NPLs (d)156.80 %146.39 %145.82 %138.76 %144.27 %
Criticized loans as a percent of total loans (a)Criticized loans as a percent of total loans (a)4.19 %4.33 %5.23 %3.37 %3.41 %Criticized loans as a percent of total loans (a)4.18 %4.07 %3.57 %3.96 %4.19 %
Classified loans as a percent of total loans (b)Classified loans as a percent of total loans (b)2.41 %2.38 %3.18 %2.05 %2.23 %Classified loans as a percent of total loans (b)1.96 %1.90 %2.06 %2.52 %2.41 %
(a)    Includes loans categorized as special mention, substandard or doubtful.
(b)    Includes loans categorized as substandard or doubtful.
(c)    Data presented as of the end of the period indicated.

63

Table of Contents
(d)    Nonperforming loansNPLs include loans 90+ days past due and accruing TDRs and nonaccrual loans. Nonperforming assetsNPLs in periods prior to March 31, 2023 also include TDRs. NPAs include nonperforming loans and OREO.
Compared to December 31, 2021,2022, Peoples' nonperforming assets declinedNPAs decreased from 0.63% to 0.65%, from 0.68%, with the reduction being driven by decreases in nonaccrual loans, which were partially due to a $1.5 million payoff0.58% of one commercial relationship.total assets. Loans 90+ days past due and accruing increaseddecreased compared to at December 31, 2021,2022, mostly due to the Vantage acquisition.declines in residential real estate loans and leases that were 90+ days past due, partially offset by an increase in premium finance loans that that were 90+ days past due. During the first quarter of 2022,2023, criticized loans which are those categorized as special mention, substandard or doubtful, declined $3.7increased $7.5 million, while classified loans which are those categorized as substandard or doubtful, grew $3.0 million.
Duringincreased $3.6 million when compared to at December 31, 2022. The increase in the third quarteramount of 2021, nonperforming assets, criticized loans compared to at December 31, 2022 was primarily related to downgrades of three commercial and industrial relationships. The increase in classified loans increased duecompared to the Premier merger.
On March 22, 2020, federal and state government banking regulators issued a joint statement, with which the FASB concurred as to the approach, regarding accounting for loan modifications for borrowers affected by COVID-19. In this guidance, short-term modifications, made on a good faith basis in response to COVID-19, to borrowers who were current prior to any relief, are not considered TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment which are insignificant. Under the guidance, borrowers that are considered to be current are those that were less than 30 days past due on their contractual payments at the time a modification program is implemented. In addition, modification or deferral programs mandatedlinked quarter was driven by the U.S. federal government or any state government related to COVID-19 are not TDRs within the scopedowngrade of ASC 310-40.one commercial and industrial relationship.
On August 3, 2020, federal and state banking regulators issued a joint statement, encouraging financial institutions to consider prudent accommodation options to mitigate losses for the borrower and financial institution beyond the initial accommodation period. In this guidance, institutions should also provide consumers with available options for repaying missed payments at the end of their accommodation to avoid delinquencies, as well as options for changes to terms to support sustainable and affordable payments for the long term. These considerations should also include prudent risk management practices at the financial institution based on the credit risk of the borrower. Peoples is actively working with its customers to address any further accommodation needs while carefully evaluating the associated credit risk of the borrowers.


70

Table of Contents
Deposits
The following table details Peoples’ deposit balances:
(Dollars in thousands)(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Non-interest-bearing deposits (a)Non-interest-bearing deposits (a)$1,666,668 $1,641,422 $1,559,993 $1,181,045 $1,206,034 Non-interest-bearing deposits (a)$1,555,064 $1,589,402 $1,635,953 $1,661,865 $1,666,668 
Interest-bearing deposits:Interest-bearing deposits: Interest-bearing deposits: 
Interest-bearing demand accounts (a)Interest-bearing demand accounts (a)1,179,199 1,167,460 1,140,639 732,478 722,470 Interest-bearing demand accounts (a)1,085,169 1,160,182 1,162,012 1,143,010 1,179,199 
Savings accountsSavings accounts1,065,678 1,036,738 1,016,755 689,086 676,345 Savings accounts1,024,638 1,068,547 1,077,383 1,080,053 1,065,678 
Retail certificates of deposit ("CDs")Retail certificates of deposit ("CDs")612,936 643,759 691,680 417,466 433,214 Retail certificates of deposit ("CDs")622,091 530,236 544,741 584,259 612,936 
Money market deposit accountsMoney market deposit accounts656,266 651,169 637,635 547,412 586,099 Money market deposit accounts579,106 617,029 624,708 645,242 656,266 
Governmental deposit accountsGovernmental deposit accounts734,784 617,259 679,305 498,390 511,937 Governmental deposit accounts649,303 625,965 734,734 728,057 734,784 
Brokered deposits87,395 104,745 106,013 166,746 168,130 
Brokered CDsBrokered CDs273,156 125,580 86,089 86,739 87,395 
Total interest-bearing depositsTotal interest-bearing deposits4,336,258 4,221,130 4,272,027 3,051,578 3,098,195 Total interest-bearing deposits4,233,463 4,127,539 4,229,667 4,267,360 4,336,258 
Total deposits Total deposits$6,002,926 $5,862,552 $5,832,020 $4,232,623 $4,304,229  Total deposits$5,788,527 $5,716,941 $5,865,620 $5,929,225 $6,002,926 
Demand deposits as a percent of total depositsDemand deposits as a percent of total deposits47 %48 %46 %45 %45 %Demand deposits as a percent of total deposits46 %48 %48 %47 %47 %
(a)The sum of amounts presented is considered total demand deposits.
At March 31, 2022,2023, period-end deposits increased $140.4$71.6 million, or 2%1%, compared to at December 31, 2021,2022. The increase when compared to at December 31, 2022 was primarily driven by an increase of $147.6 million in brokered certificates of deposits, which are primarily used as a source of funding. Excluding the increase in brokered certificates of deposits, total deposits at March 31, 2023 decreased $76.0 million, or 1%, when compared to at December 31, 2022 due to reductions of (i) $75.0 million in interest-bearing deposit accounts, (ii) $43.9 million in savings accounts, (iii) $37.9 million in money market deposit accounts, and increased $1.7 billion,(iv) $34.3 million in non-interest bearing deposit accounts, partially offset by an increase of $91.9 million in retail certificates of deposit.
Period-end deposit balances decreased $214.4 million, or 39%4%, compared to at March 31, 2021. The increase compared2022. Deposits decreased primarily due to December 31, 2021, was drivenreductions in non-interest-bearing deposits, interest-bearing deposit accounts, governmental deposit accounts, and money market deposit accounts of $111.6 million, $94.0 million, $85.5 million and $77.2 million, respectively, partially offset by seasonal growth in governmental deposits of $117.5 million, an increase in non-interest bearing checking deposits of $30.8$185.8 million and an increase in savings deposits of $28.9 million, offset partially by decreases in retail and brokered certificates of deposits. The increase in total deposits at September 30, 2021, compared to June 30, 2021, was driven by deposits acquired from Premier. Total deposits in all periods presented were higher due to customers maintaining larger balances, as a result of PPP loan proceeds, fiscal stimulus payments and changes in customer spending habits in light of the COVID-19 pandemic. In prior quarterly periods in the table above, Peoples experienced increases in most low-cost deposit categories.
Peoples reduced its reliance on brokered deposits in each quarterly period, beginning after June 30, 2020. This decline was largely due to the increase in deposit balances from customers, which allowed Peoples to reduce its position in the higher-cost brokered CDs during each period. As part of its funding strategy, Peoples hedges 90-day brokered depositsCDs with interest rate swaps. The swaps pay a fixed rate of interest while receiving three-month LIBOR, which offsets the rate on the brokered deposits.CDs. As of March 31, 2022,2023, Peoples had thirteen effective interest rate swaps, with an aggregate notional value of $125.0 million, of which $85.0 million were designated as cash flow hedges of overnight brokered deposits, whichCDs and are expected to be extended every 90 days through the maturity dates of the swaps. The remaining $40.0 million of interest rate swaps hedged 90-day FHLB advances, which are also expected to be extended every 90 days through the maturity dates of the swaps. Peoples continually evaluates the overall balance sheet position given the interest rate environment.

64

Table of Contents
Borrowed Funds
The following table details Peoples’ short-term and long-term borrowings:
(Dollars in thousands)(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Short-term borrowings:Short-term borrowings: Short-term borrowings: 
Overnight borrowingsOvernight borrowings$390,000 $400,000 $(5,000)$— $— 
FHLB 90-day advancesFHLB 90-day advances$40,000 $40,000 $50,000 $— $— FHLB 90-day advances— — 40,000 40,000 40,000 
Current portion of long-term FHLB advancesCurrent portion of long-term FHLB advances15,000 15,000 15,000 15,000 20,000 Current portion of long-term FHLB advances— — — — 15,000 
Retail repurchase agreementsRetail repurchase agreements89,275 111,482 119,693 51,496 47,868 Retail repurchase agreements100,670 100,138 98,611 286,442 89,275 
Total short-term borrowingsTotal short-term borrowings$144,275 $166,482 $184,693 $66,496 $67,868 Total short-term borrowings$490,670 $500,138 $133,611 $326,442 $144,275 
Long-term borrowings:Long-term borrowings: Long-term borrowings: 
FHLB advancesFHLB advances$85,564 $85,825 $86,483 $87,393 $102,645 FHLB advances$33,941 $34,158 $34,662 $35,348 $85,564 
Vantage non-recourse debtVantage non-recourse debt102,364 — — — — Vantage non-recourse debt47,864 53,147 55,781 74,622 102,364 
Junior subordinated debt securitiesJunior subordinated debt securities13,682 13,650 12,928 7,688 7,650 Junior subordinated debt securities13,824 13,788 13,753 13,717 13,682 
Total long-term borrowingsTotal long-term borrowings$201,610 $99,475 $99,411 $95,081 $110,295 Total long-term borrowings$95,629 $101,093 $104,196 $123,687 $201,610 
Total borrowed fundsTotal borrowed funds$345,885 $265,957 $284,104 $161,577 $178,163 Total borrowed funds$586,299 $601,231 $237,807 $450,129 $345,885 
Borrowed funds, in total, which include overnight borrowings, are mainly a function of loan growth and changes in total deposit balances. BorrowedTotal borrowed funds increaseddecreased compared to at December 31, 2021, driven by non-recourse debt assumed in the Vantage acquisition partially offset by a decline in retail repurchase agreements of $22.2 million. The increase in total borrowed funds2022, due to lower overnight borrowings. Total short-term borrowings at

71

Table of Contents
September 30, 2021, March 31, 2023 increased when compared to June 30, 2021, was primarilyat March 31, 2022 due to the additionoutstanding FHLB overnight borrowings of $63.8$390.0 million retail repurchase agreements from Premier.at March 31, 2023, while there were no FHLB overnight borrowings at March 31, 2022.
Capital/Stockholders’ Equity
At March 31, 2022,2023, capital levels for both Peoples and Peoples Bank remained substantially higher than the minimum amounts needed to be considered "well capitalized" institutions under applicable banking regulations. These higher capital levels reflect Peoples' desire to maintain a strong capital position. In order to avoid limitations on dividends, equity repurchases and compensation, Peoples must exceed the three minimum required ratios by at least the capital conservation buffer of 2.50%, which applies to the common equity tier 1 ("CET1") ratio, the tier 1 capital ratio and the total risk-based capital ratio. At March 31, 2022,2023, Peoples had a capital conservation buffer of 4.78%5.35%.
The following table details Peoples' risk-based capital levels and corresponding ratios:
(Dollars in thousands)(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Capital Amounts:Capital Amounts:  Capital Amounts:  
Common Equity Tier 1Common Equity Tier 1$547,215 $577,565 $567,172 $383,502 $418,089 Common Equity Tier 1$624,292 $604,566 $584,880 $564,708 $547,215 
Tier 1Tier 1560,897 591,215 580,100 391,190 425,739 Tier 1638,116 618,354 598,633 578,425 560,897 
Total (Tier 1 and Tier 2)Total (Tier 1 and Tier 2)607,493 648,948 637,802 431,424 463,872 Total (Tier 1 and Tier 2)682,477 662,421 643,189 622,516 607,493 
Net risk-weighted assetsNet risk-weighted assets$4,752,428 $4,614,258 $4,611,321 $3,382,736 $3,365,637 Net risk-weighted assets$5,110.318 $5,071,240 $4,955,627 $4,857,818 $4,752,428 
Capital Ratios:Capital Ratios:Capital Ratios:
Common Equity Tier 1Common Equity Tier 111.51 %12.52 %12.30 %11.34 %12.42 %Common Equity Tier 112.22 %11.92 %11.80 %11.62 %11.51 %
Tier 1Tier 111.80 %12.81 %12.58 %11.56 %12.65 %Tier 112.49 %12.19 %12.08 %11.91 %11.80 %
Total (Tier 1 and Tier 2)Total (Tier 1 and Tier 2)12.78 %14.06 %13.83 %12.75 %13.78 %Total (Tier 1 and Tier 2)13.35 %13.06 %12.98 %12.81 %12.78 %
Tier 1 leverage ratioTier 1 leverage ratio8.29 %8.67 %11.20 %7.87 %9.00 %Tier 1 leverage ratio9.02 %8.92 %8.64 %8.38 %8.29 %
Peoples' regulatory capital and related ratio levels declinedimproved during the first quarter of 2022.2023 when compared to at December 31, 2022 and at March 31, 2022 due to net income during the first quarter of 2023, partially offset by dividends paid. The ratios were negatively impacted at March 31, 2022 by the cash acquisition of Vantage, forin connection with which Peoples recorded goodwill and intangible assets, whichassets. The impact of the Vantage acquisition on Peoples' regularity capital and related ratios levels at March 31, 2022, was partially offset by net income exceeding dividends declared during the period. Peoples believes this reduction in regulatory capital and ratios is temporary, and will be recovered in future periods. As of September 30, 2021, regulatory capital ratios increased compared to June 30, 2021 due to the Premier acquisition, which included an equity issuance of $261.9 million. At June 30, 2021, regulatory capital ratios declined compared toperiod ended March 31, 2021, which was the result of the NSL acquisition, for which Peoples paid cash and recorded goodwill and intangible assets.2022.
In addition to traditional capital measurements, management uses tangible capital measures to evaluate the adequacy of Peoples' stockholders' equity. Such ratios represent Non-US GAAP financial measures since their calculation removes the impact of goodwill and other intangible assets acquired through acquisitions on amounts reported in the Unaudited Consolidated Balance Sheets. Management believes this information is useful to investors since it facilitates the comparison of Peoples' operating performance, financial condition and trends to peers, especially those without a similar level of intangible assets to that of Peoples. Further,

65

Table of Contents
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.

72

Table of Contents
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)(Dollars in thousands)March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
(Dollars in thousands)March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Tangible equity:Tangible equity: Tangible equity: 
Total stockholders' equityTotal stockholders' equity$808,340 $845,025 $831,882 $585,505 $578,893 Total stockholders' equity$819,543 $785,328 $760,511 $786,824 $808,340 
Less: goodwill and other intangible assetsLess: goodwill and other intangible assets341,865 291,009 295,415 221,576 184,007 Less: goodwill and other intangible assets324,562 326,329 328,428 328,132 341,865 
Tangible equityTangible equity$466,475 $554,016 $536,467 $363,929 $394,886 Tangible equity$494,981 $458,999 $432,083 $458,692 $466,475 
Tangible assets:Tangible assets: Tangible assets: 
Total assetsTotal assets$7,239,261 $7,063,521 $7,059,752 $5,067,634 $5,143,052 Total assets$7,311,520 $7,207,304 $7,005,854 $7,278,292 $7,239,261 
Less: goodwill and other intangible assetsLess: goodwill and other intangible assets341,865 291,009 295,415 221,576 184,007 Less: goodwill and other intangible assets324,562 326,329 328,428 328,132 341,865 
Tangible assetsTangible assets$6,897,396 $6,772,512 $6,764,337 $4,846,058 $4,959,045 Tangible assets$6,986,958 $6,880,975 $6,677,426 $6,950,160 $6,897,396 
Tangible book value per common share:Tangible book value per common share: Tangible book value per common share: 
Tangible equityTangible equity$466,475 $554,016 $536,467 $363,929 $394,886 Tangible equity$494,981 $458,999 $432,083 $458,692 $466,475 
Common shares outstandingCommon shares outstanding28,453,175 28,297,771 28,265,791 19,660,877 19,629,633 Common shares outstanding28,488,158 28,287,837 28,278,078 28,290,115 28,453,175 
Tangible book value per common shareTangible book value per common share$16.39 $19.58 $18.98 $18.51 $20.12 Tangible book value per common share$17.37 $16.23 $15.28 $16.21 $16.39 
Tangible equity to tangible assets ratio:Tangible equity to tangible assets ratio:Tangible equity to tangible assets ratio:
Tangible equityTangible equity$466,475 $554,016 $536,467 $363,929 $394,886 Tangible equity$494,981 $458,999 $432,083 $458,692 $466,475 
Tangible assetsTangible assets$6,897,396 $6,772,512 $6,764,337 $4,846,058 $4,959,045 Tangible assets$6,986,958 $6,880,975 $6,677,426 $6,950,160 $6,897,396 
Tangible equity to tangible assetsTangible equity to tangible assets6.76 %8.18 %7.93 %7.51 %7.96 %Tangible equity to tangible assets7.08 %6.67 %6.47 %6.60 %6.76 %
Tangible book value per common share declinedincreased to $16.39$17.37 at March 31, 2022,2023, compared to $19.58$16.23 at December 31, 2021.2022. The change in tangible book value per common share was due to tangible equity decliningincreasing during the first quarter of 2023 as a result of a decrease in other comprehensive losses recognized on available-for-sale investment securities, which the Vantage acquisition included no issuance of equity, coupled withdecrease was driven by sales during the addition of goodwill and other intangible assets. Also contributing to the declinequarter. Tangible book value per common share increased compared to Decemberat March 31, 2021, was a $51.0 million reduction2022 primarily due to net income over the last twelve months, partially offset by an increase in accumulated other comprehensive loss. The increase in tangible equity to tangible assets at September 30, 2021, was attributable to the Premier acquisition, and related equity issued. The decline in tangible equity to tangible assets at June 30, 2021, compared to March 31, 2021, was due to the NSL acquisition.
Interest Rate Sensitivity and Liquidity
While Peoples is exposed to various business risks, the risks relating to interest rate sensitivity and liquidity are major risks that can materially impact future results of operations and financial condition due to their complexity and dynamic nature. The objective of Peoples' asset-liability management function is to measure and manage these risks in order to optimize net interest income within the constraints of prudent capital adequacy, liquidity and safety. This objective requires Peoples to focus on interest rate risk exposure and adequate liquidity through its management of the mix of assets and liabilities, their related cash flows and the rates earned and paid on those assets and liabilities. Ultimately, the asset-liability management function is intended to guide management in the acquisition and disposition of earning assets and selection of appropriate funding sources.
Interest Rate Risk
Interest rate risk ("IRR") is one of the most significant risks arising in the normal course of business of financial services companies like Peoples. IRR is the potential for economic loss due to future interest rate changes that can impact the earnings stream, as well as market values, of financial assets and liabilities. Peoples' exposure to IRR is due primarily to differences in the maturity or repricing of earning assets and interest-bearing liabilities. In addition, other factors, such as prepayments of loans and investment securities, or early withdrawal of deposits, can affect Peoples' exposure to IRR and increase interest costs or reduce revenue streams.
Peoples has assigned overall management of IRR to its Asset-Liability Committee (the “ALCO”), which has established an IRR management policy that sets minimum requirements and guidelines for monitoring and managing the level of IRR. The methods used by the ALCO to assess IRR remain largely unchanged from those disclosed in Peoples' 20212022 Form 10-K.

7366

Table of Contents
The following table shows the estimated changes in net interest income and the economic value of equity based upon a standard, parallel shock analysis with balances held constant (dollars in thousands):
 
Increase (Decrease) in Interest RateIncrease (Decrease) in Interest Rate
Estimated Increase (Decrease) in
Net Interest Income
Estimated Decrease in Economic Value of EquityIncrease (Decrease) in Interest Rate
Estimated Increase (Decrease) in
Net Interest Income
Estimated Decrease in Economic Value of Equity
(in Basis Points)(in Basis Points)March 31, 2022December 31, 2021March 31, 2022December 31, 2021(in Basis Points)March 31, 2023December 31, 2022March 31, 2023December 31, 2022
300300$24,211 10.5 %$24,903 11.7 %$(30,884)(2.4)%$(24,232)(2.0)%300$10,891 3.7 %$13,000 4.4 %$(110,529)(7.5)%$(82,959)(5.4)%
20020015,448 6.7 %16,312 7.7 %(25,145)(1.9)%(16,541)(1.3)%2007,534 2.6 %8,716 3.0 %(72,312)(4.9)%(55,809)(3.6)%
1001007,094 3.1 %7,899 7.1 %(15,656)(1.2)%(5,308)(0.4)%1004,161 1.4 %4,380 1.5 %(35,824)(2.4)%(28,157)(1.8)%
(100)(100)(8,348)(3.6)%(8,615)(4.1)%(41,873)(3.2)%(91,568)(7.4)%(100)(8,608)(2.9)%(11,404)(3.9)%6,268 0.4 %(21,124)(1.4)%
(200)(200)(23,095)(7.8)%(27,659)(9.4)%(35,500)(2.4)%(80,484)(5.2)%
(300)(300)(38,575)(13.1)%(43,728)(14.8)%(105,742)(7.1)%(152,152)(9.8)%
This table uses a standard, parallel shock analysis for assessing the IRR to net interest income and the economic value of equity. A parallel shock assumes all points on the yield curve (one year, two year, three year, etc.) are directionally changed by the same degree. Management regularly assesses the impact of both increasing and decreasing interest rates. The table above shows the impact of upward and downward parallel shocks of 100, 200 and 300 basis points.
Estimated changes in net interest income and the economic value of equity are partially driven by assumptions regarding the rate at which non-maturity deposits will reprice given a move in short-term interest rates, as well as assumptions regarding prepayment speeds on mortgage-backed securities. These and other modeling assumptions are monitored closely by Peoples on an ongoing basis.
With respect to investment prepayment speeds, the assumptions used are the results of a third-party prepayment model which projects the rate at which the underlying mortgages will prepay. These prepayment speeds affect the amount forecasted for cash flow reinvestment, premium amortization, and discount accretion assumed in interest rate risk modeling results. This prepayment activity is generally the result of refinancing activity and tends to increase as longer term interest rates decline, and decrease as interest rates increase. The assumptions in the interest rate risk model could be incorrect, leading to either a lesser or greater impact on net interest income or asset duration.
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 benefitimpact 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, 2022,2023, consideration of the bear steepener and bullbear flattener scenarios providesprovide insights which were not captured by parallel shifts. These scenarios were evaluated as the current environment suggests these may be possible outcomes for the trajectory of interest rates.
The bear steepener scenario highlights the risk to net interest income and the 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. Increased asset yields would not be offset by increases in deposit or funding costs; resulting in an increased amount of net interest income and higher net interest margin. At March 31, 2022,2023, the bear steepener scenario resulted inproduced an increase in both net interest income of 0.1% and a decline in the economic value of equity of 0.2% and 2.9%, respectively.1.4%.
The bullbear flattener scenario highlights the risk to net interest income and the economic value of equity when short-term rates remain constantrise while long-term rates fall.remain constant. In such a scenario, Peoples’Peoples' variable rate asset yields along with deposit and short-term borrowing costs, which are correlated with short-term rates, remain constantincrease, while long-term asset yields and long-term borrowing costs, which are more correlated with long-term rates, fall. Asset yields driven lowerremain constant. Increased deposit and funding costs would be more than offset by increased investment securities premium amortization would not be offset by reductions in deposit or funding costs;variable rate asset yields; resulting in a decreasedan increased amount of net interest income and lowera higher net interest margin. At March 31, 2022,2023, the bullbear flattener scenario resulted in a decrease inproduced no change to net interest income and an increasea decline in the economic value of equity of -0.1%0.8%.
As of March 31, 2023, the yield curve was inverted. A notable non-parallel shift scenario would be a continued increase in short-term interest rates relative to long-term interest rates in which the yield curve would further invert. As of March 31, 2023, this inversion scenario would have resulted in no change to net interest income and 0.8%, respectively.a decrease in the economic value of equity of (0.8)%. Peoples was within theits policy limitations for this alternative scenario as of March 31, 2022,2023, which setsset the maximum allowable downside exposure as 5.0% of net interest income and 10.0% of the economic value of equity.
Peoples has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for Peoples making fixed payments. As of March 31, 2022,2023, Peoples had entered into thirteen interest rate swap contracts with an aggregate notional value of $125.0 million. Additional information regarding Peoples’ interest rate swaps can be found in “Note 10 Derivative Financial Instruments” of the Notes to the Unaudited Condensed Consolidated Financial Statements.
At March 31, 2022,2023, Peoples' Unaudited Consolidated Balance Sheet was positioned to benefit from rising interest rates in terms of the potential impact on net interest income. The table above illustrates this point as changes to net interest income

67

Table of Contents
increase in the rising interest rate scenarios. While the heavy concentration of floating rate loans remains the largest contributor to the level of asset sensitivity, the decrease in economic value of equity asset sensitivity, as measured, from December 31, 20212022 was largely attributable to increased effective duration inwithin the investment securities portfolio.

74

Table of Contents
Liquidity
In addition to IRR management, another major objective of the ALCO is to maintain a sufficient level of liquidity. The methods used by the ALCO to monitor and evaluate the adequacy of Peoples Bank's liquidity position remain unchanged from those disclosed in Peoples' 20212022 Form 10-K.
At March 31, 2022,2023, Peoples Bank had liquid assets of $582.5$318.0 million, which represented 7.3%3.9% of total assets and unfunded loan commitments. Peoples also had an additional $238.4$231.4 million of unpledged investment securities not included in the measurement of liquid assets.
Management believes the current balancemix of cashshort-term liquidity sources, loan and cash equivalents, anticipated investmentsecurity portfolio cash flows, and the availability of other funding sources will allow Peoples to meet anticipated cash obligations, as well as special needs and off-balance sheet commitments.
Since March 31, 2020, there has been an increase in deposit balances due to the influx of funds from the government fiscal stimulus, the PPP and other government actions. Peoples anticipates that these deposit balances will decline over time as the funds are used for intended business purposes; however, this deposit outflow should be partially offset as the associated PPP loans are forgiven and loan reimbursement funds are received. At the same time, we have experienced a decrease in the utilization rate for commercial lines of credit. This decrease is related to the receipt of PPP loan proceeds and other increased cash flows to certain companies. Peoples expects the commercial line of credit utilization percentage to revert back to more historical averages as time progresses. The utilization percentage for consumer line of credit products has been relatively steady.
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,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
Home equity lines of credit$184,616 $177,262 $177,963 $134,516 $124,027 
Unadvanced construction loans203,719 227,135 271,483 207,403 190,715 
Other loan commitments616,696 577,170 646,374 542,429 555,102 
Loan commitments$1,005,031 $981,567 $1,095,820 $884,348 $869,844 
Standby letters of credit$12,729 $12,805 $12,358 $10,252 $10,295 


 (Dollars in thousands)
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Home equity lines of credit$201,692 $197,995 $194,685 $188,803 $184,616 
Unadvanced construction loans241,225 270,229 320,825 237,129 203,719 
Other loan commitments717,149 730,015 653,384 566,624 616,696 
Loan commitments$1,160,066 $1,198,239 $1,168,894 $992,556 $1,005,031 
Standby letters of credit$15,046 $15,451 $15,096 $15,977 $12,729 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for by this Item 3 is provided under the caption “Interest Rate Sensitivity and Liquidity” under “ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in this Quarterly Report on Form 10-Q, and is incorporated herein by reference.


7568

Table of Contents

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, 2022.2023.  Based upon that evaluation, Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer have concluded that:
(a)information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q and other reports Peoples files or submits under the Exchange Act would be accumulated and communicated to Peoples’ management, including its President and Chief Executive Officer and its Executive Vice President, Chief Financial Officer and Treasurer, as appropriate to allow timely decisions regarding required disclosure;
(b)information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q and other reports Peoples files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and
(c)as previously disclosed within "ITEM 9A. CONTROLS AND PROCEDURES" of Peoples' 2021 Form 10-K, Peoples did not design effective controls supporting acquired purchased credit deteriorated loan accounting and the related allowance for credit losses aggregated to a material weakness in internal control over financial reporting; and
(d)as part of Peoples' efforts to remediate the material weakness described above, new controls and procedures have been designed and are in process of being implemented. Therefore, Peoples' President and Chief Executive Officer, and its Executive Vice President, Chief Financial Officer and Treasurer concluded that, as of March 31, 2022, Peoples'Peoples’ disclosure controls and procedures were not effective. Despite the foregoing, Management has concluded the financial statements fairly present in all material respects, Peoples' financial position, results of operations and cash flowseffective as of the dates, and forend of the periods presented, in conformity with US GAAP.fiscal quarter covered by this Quarterly Report on Form 10-Q.
 Changes in Internal Control Over Financial Reporting
The remediation activities described above, and discussed in further detail in "ITEM 9A. CONTROLS AND PROCEDURES" of Peoples' 2021 Form 10-K, areThere 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, 2022. These changes may2023, that have materially affect,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,be; however, based on management's current knowledge and after consultation with legal counsel, Peoples' management believes thesethat damages, if any, and other amounts related to pending legal proceedings will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of Peoples.

ITEM 1A. RISK FACTORS
The disclosure below supplements the risk factors previously disclosed under “ITEM 1A. RISK FACTORS” of Part I of Peoples’ 20212022 Form 10-K. ThoseThese risk factors are not the only risks Peoples faces. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially adversely affect Peoples’ business, financial condition and/or operating results. In the first quarter of 2023, we identified the following additional risk factor:
On February 24, 2022, Russian military forces invaded Ukraine,General Risks
The impact of larger or similar-sized financial institutions encountering problems may adversely affect Peoples' business, earnings and sustained conflictfinancial condition.
Peoples is exposed to the risk that when a peer financial institution experiences financial difficulties, there could be an adverse impact on the regional banking industry and disruptionthe business environment in which Peoples operates. The recent bank failures of Silicon Valley Bank in California, Signature Bank in New York, and First Republic Bank in California during the first and second quarters of 2023 have caused a degree of panic and uncertainty in the region is likely. Althoughinvestor community and among bank customers generally. While Peoples does not believe that the length, impactcircumstances of these three banks' failures are indicators of broader issues with the banking system, the failures may reduce customer confidence, affect sources of funding and outcome ofliquidity, increase regulatory requirements and costs, adversely affect financial markets and/or have a negative reputational ramification for the banking industry, including Peoples. Peoples will continue to monitor the ongoing war in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferencesevents concerning these three banks as well as increaseany future potential bank failures and volatility within the banking industry generally, together with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in cyberattacks and espionage. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and Peoples' business for an unknown period of time. Any of the above-mentioned factors could affect Peoples' business, financial condition and operating results. Any suchbanking industry.

7669

Table of Contents
disruptions may also magnify the impact of other risks described in this Quarterly Report on Form 10-Q and Peoples' 2021 Form 10-K for the year ended December 31, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table details repurchases by Peoples and purchases by “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, of Peoples’ common shares during the three months ended March 31, 2022:2023:
Period
Total Number of Common Shares Purchased
 
Average Price Paid per Common Share
 
 
Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Maximum
Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 1 – 31, 2022650 (3)$32.91 (3)— $30,000,000 
February 1 – 28, 202235,474 (2)$32.63 (2)— $30,000,000 
March 1 – 31, 2022735 (3)$32.75 (3)— $30,000,000 
Total36,859  $32.64   $30,000,000 
Period
Total Number of Common Shares Purchased
 
Average Price Paid per Common Share
 
 
Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (3)

Maximum
Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs (3)
January 1 – 31, 20232,077 (2)$28.38 (2)— $22,606,290 
February 1 – 28, 202324,350 (3)$30.27 (3)— $22,606,290 
March 1 – 31, 20232,579 (2)(3)$30.43 (2)(3)— $22,606,290 
Total29,006  $30.15   $22,606,290 
(1)On January 29, 2021, Peoples announced that on January 28, 2021, Peoples' Board of Directors authorized a share repurchase program authorizing Peoples to purchase up to an aggregate of $30 million of Peoples' outstanding common shares. There were no common shares repurchased under the share repurchase program during the three months ended March 31, 2022.2023.
(2)Information reported includes an aggregate of 35,474 common shares withheld to satisfy income taxes associated with restricted common shares which were granted under the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan and vested during February 2022.
(3)Information reported includes 6502,077 common shares and 735952 common shares purchased in open market transactions during January 20222023 and March 2022,2023, respectively, by Peoples Bank under the Rabbi Trust Agreement. The Rabbi Trust Agreement establishes a rabbi trust that holds assets to provide funds for the payment of the benefits under the Peoples Bancorp Inc. Third Amended and Restated Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries.

(3)
Information reported includes 24,350 common shares and 1,627 common shares withheld to satisfy income taxes associated with restricted common shares which were granted under the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan and vested during February 2023 and March 2023, respectively.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5. OTHER INFORMATION
None


None.

7770

Table of Contents

ITEM 6. EXHIBITS
Exhibit
Number
 
 
Description
 
 
Exhibit Location
Agreement and Plan of Merger, dated as of March 26, 2021, by and between Peoples Bancorp Inc. and Premier Financial Bancorp, Inc.+
Incorporated herein by reference to Exhibit 2.1Included as Annex A to the Current Reportpreliminary joint proxy statement/prospectus which forms a part of the Registration Statement of Peoples Bancorp Inc. ("Peoples") on Form 8-K dated andS-4/A filed on March 31,June 1, 2021 (File(Registration No. 0-16772)333-256040)
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)
     
 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")
     
 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
     
 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”)
     
 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)
     
 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)
     
 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")
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)
     
 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.


71

Table of Contents
Exhibit
Number
Description
Exhibit Location
 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)
+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 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.


78

Table of Contents
Exhibit
Number
Description
Exhibit Location
 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)
 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)
Certificate regarding Adoption of Amendment to Division (D) of Section 2.02 of the Code of Regulations of Peoples Bancorp Inc. by the Shareholders at the Annual Meeting of Shareholders on April 26, 2018Incorporated herein by reference to Exhibit 3.1 to Peoples' Current Report on Form 8-K dated and filed on June 28, 2018 (File No. 0-16772) ("Peoples' June 28, 2018 Form 8-K")
 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
Summary of perquisitesPeoples Bancorp Inc. Annual Incentive Plan for Executive Officers and other employees of Peoples Bancorp Inc. [Effective beginning with the fiscal year beginning January 1, 2023Incorporated herein bby reference to Exhibit 10.510.4 to Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 20212022 (File No. 0-16772) ("Peoples' 20212022 Form 10-K")
Summary of Perquisites for Executive Officers of Peoples Bancorp Inc.Incorporated herein by reference to Exhibit 10.5 to Peoples' 2022 Form 10-K
Summary of Base Salaries for Executive Officers of Peoples Bancorp Inc.Filed herewith
Summary of Compensation for Directors of Peoples Bancorp Inc.Incorporated herein bby reference to Exhibit 10.7 to Peoples' Annual Report2022 Form 10-K
First Amendment to the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan (adopted and approved by the Board of Directors of Peoples Bancorp Inc. on January 26, 2023)Incorporated herein by reference to Exhibit 10.8(b) to Peoples' 2022 Form 10-K for the fiscal year ended December 31, 2021 (File No. 0-16772) ("Peoples' 2021 Form 10-K")
 Rule 13a-14(a)/15d-14(a) Certifications [President and Chief Executive Officer] Filed herewith
     
 Rule 13a-14(a)/15d-14(a) Certifications [Executive Vice President, Chief Financial Officer and Treasurer] Filed herewith
     
 Section 1350 Certifications Furnished herewith
101.INSInline XBRL Instance Document ##Submitted electronically herewith #
101.SCHInline XBRL Taxonomy Extension Schema DocumentSubmitted electronically herewith #
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentSubmitted electronically herewith #
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentSubmitted electronically herewith #
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentSubmitted electronically herewith #
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentSubmitted electronically herewith #
104Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)Submitted electronically herewith

72

Table of Contents
# Attached as Exhibit 101 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 20222023 of Peoples Bancorp Inc. are the following documents formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 20222023 (Unaudited) and December 31, 2021;2022; (ii) Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 20222023 and 2021;2022; (iii) Consolidated Statements of Comprehensive Income (Loss) Income (Unaudited) for the three months ended March 31, 20222023 and 2021;2022; (iv) Consolidated Statements of Stockholders' Equity (Unaudited) for the three months ended March 31, 20222023 and 2021;2022; (v) Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 20222023 and 2021;2022; and (vi) Notes to the Unaudited Condensed Consolidated Financial Statements.
## The instance document does not appear in the interactive data file because its XBRL tags are imbeddedembedded within the Inline XBRL document.

7973

Table of Contents
SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
  PEOPLES BANCORP INC.
   
Date:May 6, 20224, 2023By: /s/CHARLES W. SULERZYSKI
  Charles W. Sulerzyski
  President and Chief Executive Officer
Date:May 6, 20224, 2023By: /s/KATIE BAILEY
  Katie Bailey
  Executive Vice President,
  Chief Financial Officer and Treasurer


74