| Loans and Leases | Loans and Leases Peoples' loan portfolio consists of various types of loans and leases originated primarily as a result of lending opportunities within Peoples' footprint. Peoples also originates insurance premium finance loans nationwide through its Peoples Premium Finance division, and originates leases nationwide through its North Star Leasing ("NSL") division and its Vantage Financial, LLC ("Vantage") subsidiary. 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) September 30, December 31, 2023 Construction $ 320,094 $ 364,019 Commercial real estate, other 2,180,491 2,196,957 Commercial and industrial 1,250,152 1,184,986 Premium finance 286,983 203,177 Leases 433,009 414,060 Residential real estate 777,542 791,095 Home equity lines of credit 233,109 208,675 Consumer, indirect 677,056 666,472 Consumer, direct 112,198 128,769 Deposit account overdrafts 1,205 986 Total loans, at amortized cost $ 6,271,839 $ 6,159,196 Accrued interest receivable is not included within the loan balances, but is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses. Total interest receivable on loans was $22.9 million at September 30, 2024 and $24.5 million at December 31, 2023. Nonaccrual and Past Due Loans A loan is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. A loan may be placed on nonaccrual status regardless of whether or not such loan is considered past due. The amortized cost of loans on nonaccrual status and of loans delinquent for 90 days or more and accruing was as follows: September 30, 2024 December 31, 2023 (Dollars in thousands) Nonaccrual (a) Accruing Loans 90+ Days Past Due Nonaccrual (a) Accruing Loans 90+ Days Past Due Commercial real estate, other 4,416 3,838 2,816 78 Commercial and industrial 7,008 413 2,758 316 Premium finance — 7,771 — 1,355 Leases 12,428 12,675 8,436 3,826 Residential real estate 6,658 2,442 7,921 877 Home equity lines of credit 1,461 292 1,022 171 Consumer, indirect 2,726 46 2,412 68 Consumer, direct 110 101 112 25 Total loans, at amortized cost $ 34,807 $ 27,578 $ 25,477 $ 6,716 (a) There were $3.8 million of nonaccrual loans for which there was no allowance for credit losses at September 30, 2024 and $1.2 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2023. During the first nine months of 2024, nonaccrual loans increased compared to at December 31, 2023, which was primarily due to twelve large leases totaling $3.6 million and four commercial real estate loans of approximately $1.1 million that went on nonaccrual status during 2024. The increase in accruing loans 90+ days past due at September 30, 2024, when compared to at December 31, 2023, was primarily due to an increase in leases that were 90+ days past due and accruing of $8.8 million, which was administrative in nature, an increase in premium finance loans loans of approximately $6.4 million, and an increase in commercial real estate loans of approximately $3.8 million. The increase in past due premium finance loans carry low credit risk, due to the ability to cancel premiums and recover the majority of the receivable from the insurer. The amount of interest income recognized on accruing loans 90+ days past due during the nine months ended September 30, 2024 was $1.3 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 days 60 - 89 days 90 + Days Total September 30, 2024 Construction $ — $ — $ — $ — $ 320,094 $ 320,094 Commercial real estate, other 1,349 2,437 7,073 10,859 2,169,632 2,180,491 Commercial and industrial 3,818 674 5,159 9,651 1,240,501 1,250,152 Premium finance 2,267 1,192 7,771 11,230 275,753 286,983 Leases 3,417 10,788 24,894 39,099 393,910 433,009 Residential real estate 3,144 3,100 4,915 11,159 766,383 777,542 Home equity lines of credit 1,324 276 1,094 2,694 230,415 233,109 Consumer, indirect 7,405 1,542 1,436 10,383 666,673 677,056 Consumer, direct 619 76 168 863 111,335 112,198 Deposit account overdrafts — — — — 1,205 1,205 Total loans, at amortized cost $ 23,343 $ 20,085 $ 52,510 $ 95,938 $ 6,175,901 $ 6,271,839 December 31, 2023 Construction $ 13 $ 52 $ — $ 65 $ 363,954 $ 364,019 Commercial real estate, other 2,728 4,556 1,572 8,856 2,188,101 2,196,957 Commercial and industrial 1,717 1,491 3,052 6,260 1,178,726 1,184,986 Premium finance 1,288 867 1,355 3,510 199,667 203,177 Leases 12,743 4,932 12,014 29,689 384,371 414,060 Residential real estate 14,021 2,733 4,481 21,235 769,860 791,095 Home equity lines of credit 1,561 691 683 2,935 205,740 208,675 Consumer, indirect 7,488 1,550 1,230 10,268 656,204 666,472 Consumer, direct 536 282 43 861 127,908 128,769 Deposit account overdrafts — — — — 986 986 Total loans, at amortized cost $ 42,095 $ 17,154 $ 24,430 $ 83,679 $ 6,075,517 $ 6,159,196 Delinquency trends decreased slightly, as 98.5% of Peoples' loan portfolio was considered “current” at September 30, 2024, compared to 98.6% at December 31, 2023. Pledged Loans Peoples has pledged certain loans secured by one-to-four family and multifamily residential mortgages, home equity lines of credit and commercial real estate loans under a blanket collateral agreement to secure borrowings from the FHLB. Peoples also has pledged eligible commercial and industrial loans to secure borrowings with the FRB. Loans pledged are summarized as follows: (Dollars in thousands) September 30, 2024 December 31, 2023 Loans pledged to FHLB $ 1,223,345 $ 1,206,134 Loans pledged to FRB 458,896 419,245 Credit Quality Indicators As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2023 Form 10-K, Peoples categorizes the majority of its loans into risk categories based upon an established risk grading matrix using a scale of 1 to 8. Loan grades are assigned at the time a new loan or lending commitment is extended by Peoples and may be changed at any time when circumstances warrant. Commercial loans to borrowers with an aggregate unpaid principal balance in excess of $1.0 million are reviewed at least on an annual basis for possible credit deterioration. Commercial leases, as well as loan relationships whose aggregate credit exposure to Peoples is equal to or less than $1.0 million, are reviewed on an event driven basis. Triggers for review include knowledge of adverse events affecting the borrower's business, receipt of financial statements indicating deteriorating credit quality or other similar events. Adversely classified loans are reviewed on a quarterly basis. A description of the general characteristics of the risk grades used by Peoples, follows: “Pass” (grades 1 through 4): Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations. Loans in this risk category would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the loan if required, for any weakness that may exist. “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 currently existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, classification of each of these loans as an estimated loss is deferred until its more exact status may be determined. “Loss” (grade 8): Loans in this risk grade are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean a loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future. Charge-offs against the allowance for credit losses are taken during the period in which the loan becomes uncollectible. Consequently, Peoples typically does not maintain a recorded investment in loans within this category. Consumer loans and other smaller-balance loans are evaluated and categorized as "substandard," "doubtful" or "loss" based upon the regulatory definition of these classes and consistent with regulatory requirements. Leases are categorized as "special mention", "substandard", or "loss" based upon delinquency status and the prospect of collecting the remaining net investment balance owed under the lease. All other loans not evaluated individually, nor meeting the regulatory conditions to be categorized as described above, would be considered as being "not rated." The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at September 30, 2024: Term Loans at Amortized Cost by Origination Year Revolving Loans Converted to Term (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Total Loans Construction Pass $ 30,953 $ 137,659 $ 96,715 $ 34,864 $ 3,179 $ 13,887 $ — $ — $ 317,257 Special mention — — — — — 117 — — 117 Substandard — 1,172 1,548 — — — — — 2,720 Total 30,953 138,831 98,263 34,864 3,179 14,004 — — 320,094 Current period gross charge-offs — — — — — — — Commercial real estate, other Pass 81,458 213,204 343,926 372,653 207,222 819,922 40,812 — 2,079,197 Special mention 273 4,197 13,939 1,649 1,312 8,059 291 32 29,720 Substandard 147 2,024 2,720 18,487 9,326 38,233 627 — 71,564 Doubtful — — — — — 10 — — 10 Total 81,878 219,425 360,585 392,789 217,860 866,224 41,730 32 2,180,491 Current period gross charge-offs — — 212 — — — 212 Commercial and industrial Pass 152,272 209,996 139,519 151,660 70,178 183,600 245,498 4,865 1,152,723 Special mention 51 3,591 10,820 5,095 11,569 16,937 19,815 5,500 67,878 Substandard 210 250 4,567 12,962 4,570 1,800 3,061 — 27,420 Doubtful — — 1,968 — — 163 — — 2,131 Total 152,533 213,837 156,874 169,717 86,317 202,500 268,374 10,365 1,250,152 Term Loans at Amortized Cost by Origination Year Revolving Loans Converted to Term (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Total Loans Current period gross charge-offs — — — 15 78 457 550 Premium Finance Pass 275,918 10,906 159 — — — — — 286,983 Total 275,918 10,906 159 — — — — — 286,983 Current period gross charge-offs 3 110 33 — — — 146 Leases Pass 157,377 141,799 74,242 30,513 6,061 2,426 — — 412,418 Special mention 2,660 1,371 2,555 57 17 3 — — 6,663 Substandard 479 4,516 2,580 1,569 384 380 — — 9,908 Doubtful 686 1,824 722 596 — — — — 3,828 Loss — — — 192 — — — — 192 Total 161,202 149,510 80,099 32,927 6,462 2,809 — — 433,009 Current period gross charge-offs 473 2,560 3,530 731 68 38 7,400 Residential real estate Pass 59,312 68,606 86,717 131,488 53,439 367,695 — — 767,257 Substandard 162 613 264 756 172 8,212 — — 10,179 Loss 10 28 — — — 68 — — 106 Total 59,484 69,247 86,981 132,244 53,611 375,975 — — 777,542 Current period gross charge-offs — — 46 5 — 93 144 Home equity lines of credit Pass 44,119 39,248 38,761 31,113 17,335 60,983 25 1,463 231,584 Substandard — 19 168 46 34 1,250 — — 1,517 Loss — — — — — 8 — — 8 Total 44,119 39,267 38,929 31,159 17,369 62,241 25 1,463 233,109 Current period gross charge-offs — — — — — 11 11 Consumer, indirect Pass 193,608 193,746 165,610 65,132 36,265 19,405 — — 673,766 Substandard 173 755 861 797 327 317 — — 3,230 Loss 9 10 15 14 — 12 — — 60 Total 193,790 194,511 166,486 65,943 36,592 19,734 — — 677,056 Current period gross charge-offs 211 1,730 1,426 598 130 753 4,848 Consumer, direct Pass 37,653 28,873 24,753 11,161 5,007 4,507 — — 111,954 Term Loans at Amortized Cost by Origination Year Revolving Loans Converted to Term (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Total Loans Substandard — 55 50 21 6 99 — — 231 Loss 10 3 — — — — — — 13 Total 37,663 28,931 24,803 11,182 5,013 4,606 — — 112,198 Current period gross charge-offs 2 96 197 43 11 180 529 Deposit account overdrafts 1,205 — — — — — — — 1,205 Current period gross charge-offs 1,232 — — — — — 1,232 Total loans, at amortized cost 1,038,745 1,064,465 1,013,179 870,825 426,403 1,548,093 310,129 11,860 6,271,839 Total current period gross charge-offs $ 1,921 $ 4,496 $ 5,444 $ 1,392 $ 287 $ 1,532 $ 15,072 The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the then most recent analysis performed at December 31, 2023: Term Loans at Amortized Cost by Origination Year (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Revolving Loans Converted to Term Total Loans Construction Pass $ 80,273 $ 141,245 $ 85,913 $ 27,169 $ 9,995 $ 12,723 $ — $ — $ 357,318 Special mention — 3,757 — — — 123 — — 3,880 Substandard 1,200 1,590 — — — 31 — — 2,821 Total 81,473 146,592 85,913 27,169 9,995 12,877 — — 364,019 Current period gross charge-offs — — 9 — — — 9 Commercial real estate, other Pass 199,565 327,762 366,752 227,604 262,099 650,265 37,177 189 2,071,224 Special mention 999 12,975 4,850 10,324 7,074 22,186 408 41 58,816 Substandard 287 2,421 5,878 8,679 1,972 47,213 457 — 66,907 Doubtful — — — — — 10 — — 10 Total 200,851 343,158 377,480 246,607 271,145 719,674 38,042 230 2,196,957 Current period gross charge-offs — — — 39 — 575 614 Commercial and industrial Pass 225,894 180,068 212,938 86,934 55,434 132,675 213,714 38 1,107,657 Special mention 540 12,051 533 9,723 4,722 6,336 16,236 8,614 50,141 Substandard 78 6,441 5,104 5,617 1,602 6,278 1,889 779 27,009 Doubtful — — — — — 179 — — 179 Total 226,512 198,560 218,575 102,274 61,758 145,468 231,839 9,431 1,184,986 Current period gross charge-offs — 36 202 25 173 415 851 Premium finance Pass 201,659 1,517 1 — — — — — 203,177 Total 201,659 1,517 1 — — — — — 203,177 Current period gross charge-offs 25 97 — — — — 122 Term Loans at Amortized Cost by Origination Year (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Revolving Loans Converted to Term Total Loans Leases Pass 216,559 114,327 51,307 14,061 4,883 1,501 — — 402,638 Special mention 363 1,529 476 81 1 5 — — 2,455 Substandard 1,937 3,006 2,944 448 321 311 — — 8,967 Total 218,859 118,862 54,727 14,590 5,205 1,817 — — 414,060 Current period gross charge-offs 963 1,328 1,173 233 165 135 3,997 Residential real estate Pass 75,957 91,506 140,157 58,144 45,507 369,552 — — 780,823 Substandard 43 243 585 182 529 8,604 — — 10,186 Loss — — — — — 86 — — 86 Total 76,000 91,749 140,742 58,326 46,036 378,242 — — 791,095 Current period gross charge-offs — — — — — 170 170 Home equity lines of credit Pass 39,706 42,565 33,406 19,838 14,297 57,482 27 1,346 207,321 Substandard 19 — 61 34 123 1,109 — — 1,346 Loss — — — — — 8 — — 8 Total 39,725 42,565 33,467 19,872 14,420 58,599 27 1,346 208,675 Current period gross charge-offs — — — — — 110 110 Consumer, indirect Pass 247,829 225,225 96,698 59,044 18,644 15,977 — — 663,417 Substandard 333 934 789 558 190 206 — — 3,010 Loss 7 34 2 — 2 — — — 45 Total 248,169 226,193 97,489 59,602 18,836 16,183 — — 666,472 Current period gross charge-offs 609 2,091 865 255 63 147 4,030 Consumer, direct Pass 58,445 37,050 17,434 8,282 3,185 4,081 — — 128,477 Substandard 55 79 47 28 30 27 — — 266 Loss — — — — — 26 — — 26 Total 58,500 37,129 17,481 8,310 3,215 4,134 — — 128,769 Current period gross charge-offs 36 154 77 100 14 35 416 Deposit account overdrafts 986 — — — — — — — 986 Current period gross charge-offs 1,161 1,161 Total loans, at amortized cost 1,352,734 1,206,325 1,025,875 536,750 430,610 1,336,994 269,908 11,007 6,159,196 Current period gross charge-offs $ 2,794 $ 3,706 $ 2,326 $ 652 $ 415 $ 1,587 $ 11,480 Collateral Dependent Loans Peoples has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans: • Construction loans are typically secured by owner occupied commercial real estate or non-owner occupied investment real estate. Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner occupied commercial construction loans are generally secured by multi-family complexes, warehouse buildings, industrial buildings, land under development, and other commercial real estate in process of construction. • Commercial real estate loans can be secured by either owner occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by multifamily complexes, retail facilities, office buildings and complexes, warehouses, industrial buildings, land under development, as well as other commercial real estate. • Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property. • Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage, on residential real estate property. • Home equity lines of credit are generally secured by second mortgages on residential real estate property. • Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property. Some consumer loans are unsecured and have no underlying collateral. • Leases are most often secured by commercial equipment and other essential business assets. • Premium finance loans are secured by the unearned portion of the insurance premium being financed. The following table details Peoples' amortized cost of collateral dependent loans: (Dollars in thousands) September 30, 2024 December 31, 2023 Commercial real estate, other $ 1,923 $ — Premium finance 4,034 — Leases 3,805 — Commercial and industrial 1,186 — Residential real estate — 501 Total collateral dependent loans $ 10,948 $ 501 The increase in collateral dependent loans at September 30, 2024, compared to December 31, 2023, was primarily due to the addition of fourteen leases associated with five customer relationships and seven premium finance loans during the three months ended September 30, 2024. Modifications for Borrowers Experiencing Financial Difficulty As part of Peoples' loss mitigation activities, Peoples may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty. The most common modifications to the contractual terms of a loan to a borrower experiencing financial difficulty include an extension of the maturity date, a reduction in the interest rate for the remaining life of the loan, a temporary period of interest-only payments, and a reduction in the contractual payment amount for either a short period or the remaining term of the loan. In addition to loan modifications, Peoples also provides other loss mitigation options, such as forbearance and repayment plans, to assist borrowers who experience financial difficulties. In assessing whether or not a borrower is experiencing financial difficulty, Peoples considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (1) the borrower is currently in payment default on any of the borrower's debt; (2) a payment default is probable in the foreseeable future without the modification; (3) the borrower has declared or is in the process of declaring bankruptcy; and (4) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification. The following tables display the amortized cost of loans that were restructured during the three and nine months ended September 30, 2024 and September 30, 2023, presented by loan classification. Payment Delay (Only) (Dollars in thousands) Payment Deferral Term Extension Total Percentage of Total by Loan Category (a)(b)(c) During the Three Months Ended September 30, 2024 Commercial real estate $ — $ 561 $ 561 0.03 % Commercial and industrial — 9,057 9,057 0.72 % Leasing 14 637 651 0.15 % Residential real estate — 17 17 — % Consumer, indirect 14 1 15 — % Total $ 28 $ 10,273 $ 10,301 0.16 % During the Three Months Ended September 30, 2023 Commercial real estate — 901 901 0.04 % Commercial and industrial — 2,352 2,352 0.21 % Residential real estate — 25 25 — % Home equity lines of credit — 52 52 0.03 % Total $ — $ 3,330 $ 3,330 0.05 % (a) Based on the amortized cost basis as of period end, divided by the period end amortized cost basis of the corresponding class of financing receivable. (b) The table presented above excludes loans that were paid off or otherwise no longer included in the loan portfolio as of period end. (c) Each with --% not meaningful Payment Delay (Only) (Dollars in thousands) Forbearance Plan Payment Deferral Term Extension Forbearance Plan and Term Extension Total Percentage of Total by Loan Category (a)(b)(c) During the Nine Months Ended September 30, 2024 Commercial real estate $ — $ — $ 1,122 $ — $ 1,122 0.05 % Commercial and industrial — — 19,148 — 19,148 1.53 % Leasing — 214 637 — 851 0.20 % Residential real estate — — 90 — 90 0.01 % Home equity lines of credit — — 64 — 64 0.03 % Consumer, indirect — 14 8 — 22 — % Total $ — $ 228 $ 21,069 $ — $ 21,297 0.34 % During the Nine Months Ended September 30, 2023 Construction $ — $ 1,598 $ — $ — $ 1,598 0.43 % Commercial real estate 189 — 1,089 — 1,278 0.06 % Commercial and industrial — — 5,130 293 5,423 0.48 % Residential real estate — — 243 — 243 0.03 % Home equity lines of credit — — 203 — 203 0.10 % Total $ 189 $ 1,598 $ 6,665 $ 293 $ 8,745 0.14 % (a) Based on the amortized cost basis as of period end, divided by the period end amortized cost basis of the corresponding class of financing receivable. (b) The table presented above excludes loans that were paid off or otherwise no longer included in the loan portfolio as of period end. (c) Each with --% not meaningful The following tables summarize the financial impacts of loan modifications and payment deferrals made to loans during both the three and nine months ended September 30, 2024 and September 30, 2023, presented by loan classification. Weighted-Average Term Extension Average Amount Capitalized as a Result of a Payment Delay (a) During the Three Months Ended September 30, 2024 Commercial real estate 6 $ — Commercial and industrial 7 — Leasing 12 — Residential real estate 1 — Consumer, indirect 13 — During the Three Months Ended September 30, 2023 Commercial real estate 4 — Commercial and industrial 4 — Residential real estate 240 — Home equity lines of credit 217 — (a) Represents the average amount of delinquency-related amounts that were capitalized as part of the loan balance. Amounts are in whole dollars. Weighted-Average Term Extension Average Amount Capitalized as a Result of a Payment Delay (a) During the Nine Months Ended September 30, 2024 Commercial real estate 6 $ — Commercial and industrial 7 — Leasing 12 — Residential real estate 1 — Home equity lines of credit 120 — Consumer, indirect 3 — During the Nine Months Ended September 30, 2023 Commercial real estate 6 — Commercial and industrial 5 — Residential real estate 213 8,072 Home equity lines of credit 189 — Consumer, indirect 2 — (a) Represents the average amount of delinquency-related amounts that were capitalized as part of the loan balance. Amounts are in whole dollars. The following tables display the amortized cost of loans that received a completed modification or payment deferral within the previous 12 months and that had a payment default in the periods presented. For purposes of this disclosure, Peoples defines loans that had a payment default as loans that were 90 days or more past due following a modification. Payment Delay as a Result of a Payment Deferral (Only) (a) For the Three Months Ended September 30, 2024 Leasing 26 Total loans that subsequently defaulted $ 26 For the Nine Months Ended September 30, 2024 Commercial real estate 193 Commercial and industrial 28 Leasing 26 Residential real estate 73 Total loans that subsequently defaulted $ 320 For the Three Months Ended September 30, 2023 (b) Commercial and industrial 245 Total loans that subsequently defaulted $ 245 For the Nine Months Ended September 30, 2023 (b) Commercial and industrial 245 Consumer, indirect 11 Total loans that subsequently defaulted $ 256 (a) Represents the sum of amortized cost and gross charge-off as of period end. Excludes loans that liquidated either through foreclosure, deed-in-lieu of foreclosure, or a short sale. (b) Accounting standard was implemented as of January 1, 2023, thus information above reflects loan modifications made on or after that date. The following table displays an aging analysis of loans that were modified during the 12 months prior to September 30, 2024, presented by classification and class of financing receivable. As of September 30, 2024 (Dollars in thousands) 30-59 Days Delinquent 60-89 Days Delinquent 90+ Days Delinquent Total Delinquent Current Total Commercial real estate — — 193 193 2,311 2,504 Commercial and industrial 50 — 28 78 11,363 11,441 Leasing — — 26 26 174 200 Residential real estate — — 34 34 63 97 Home equity lines of credit — — — — 120 120 Consumer, indirect — — — — 7 7 Total loans modified (a) $ 50 $ — $ 281 $ 331 $ 14,038 $ 14,369 (a) Represents the amortized cost basis as of period end. The following table displays an aging analysis of loans that were modified on or after January 1, 2023, the date Peoples adopted ASU 2022-02, through September 30, 2023, presented by classification and class of financing receivable. As of September 30, 2023 (Dollars in thousands) 30-59 Days Delinquent 60-89 Days Delinquent 90+ Days Delinquent Total Delinquent Current Total Construction $ — $ — $ — $ — $ 1,598 $ 1,598 Commercial real estate — 76 — 76 1,203 1,279 Commercial and industrial — 276 2,042 2,318 3,105 5,423 Residential real estate — — — — 242 242 Home equity lines of credit — — — — 203 203 Total loans modified (a) $ — $ 352 $ 2,042 $ 2,394 $ 6,351 $ 8,745 (a) Represents the amortized cost basis as of period end. Allowance for Credit Losses As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2023 Form 10-K, Peoples estimates the allowance for credit losses using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In management's estimation of expected credit losses, Peoples uses a one-year reasonable and supportable period across all segments. Following the reasonable and supportable period, Peoples reverts the macroeconomic variables to their long run average over a four-quarter reversion period. Changes in the allowance for credit losses for the three and nine months ended September 30, 2024 and September 30, 2023 are summarized below: (Dollars in thousands) Beginning Balance, June 30, 2024 Initial Allowance for Acquired PCD Assets (Recovery of) Provision for Credit Losses (a) Charge-offs Recoveries Ending Balance, September 30, 2024 Construction $ 673 $ — $ 181 $ — $ — $ 854 Commercial real estate, other 19,852 — (2,713) — 100 17,239 Commercial and industrial 10,943 — 907 (259) 1 11,592 Premium finance 763 — (19) (37) 4 711 Leases 15,218 — 5,449 (3,753) 56 16,970 Residential real estate 5,939 — 61 — 58 6,058 Home equity lines of credit 1,737 — 69 (2) — 1,804 Consumer, indirect 8,654 — 1,904 (1,820) 186 8,924 Consumer, direct 2,332 — 181 (162) 19 2,370 Deposit account overdrafts 136 — 456 (558) 83 117 Total $ 66,247 $ — $ 6,476 $ (6,591) $ 507 $ 66,639 (a) Amount does not include the provision for the allowance for credit losses on unfunded commitments. (Dollars in thousands) Beginning Balance, June 30, 2023 Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, September 30, 2023 Construction $ 1,496 $ — $ (255) $ — $ — $ 1,241 Commercial real estate, other 19,731 138 1,569 (278) 97 21,257 Commercial and industrial 11,028 3 (630) (199) 3 10,205 Premium finance 431 — 66 (33) 12 476 Leases 10,377 — 2,052 (905) 168 11,692 Residential real estate 6,112 6 156 (50) 27 6,251 Home equity lines of credit 1,676 5 (9) (32) — 1,640 Consumer, indirect 7,610 — 683 (926) 149 7,516 Consumer, direct 2,642 1 (43) (92) 11 2,519 Deposit account overdrafts 108 — 289 (319) 49 127 Total $ 61,211 $ 153 $ 3,878 $ (2,834) $ 516 $ 62,924 (a) Amount does not include the provision for the allowance for credit losses on unfunded commitments. (Dollars in thousands) Beginning Balance, December 31, 2023 Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, September 30, 2024 Construction $ 699 $ — $ 155 $ — $ — $ 854 Commercial real estate, other 20,915 — (3,567) (212) 103 17,239 Commercial and industrial 10,490 — 1,634 (550) 18 11,592 Premium finance 484 — 357 (146) 16 711 Leases 10,850 — 13,079 (7,400) 441 16,970 Residential real estate 5,937 — 56 (144) 209 6,058 Home equity lines of credit 1,588 — 220 (11) 7 1,804 Consumer, indirect 8,590 — 4,808 (4,848) 374 8,924 Consumer, direct 2,343 — 513 (529) 43 2,370 Deposit account overdrafts 115 — 1,010 (1,232) 224 117 Total $ 62,011 $ — $ 18,265 $ (15,072) $ 1,435 $ 66,639 (a) Amount does not include the provision for the allowance for credit losses on unfunded commitments. (Dollars in thousands) Beginning Balance, Initial Allowance for Acquired PCD Assets Provision for (Recovery of) Credit Losses (a) Charge-offs Recoveries Ending Balance, September 30, 2023 Construction $ 1,250 $ — $ — $ (9) $ — $ 1,241 Commercial real estate, other 17,710 418 3,307 (318) 140 21,257 Commercial and industrial 8,229 379 1,354 (211) 454 10,205 Premium finance 344 — 187 (79) 24 476 Leases 8,495 — 4,838 (1,978) 337 11,692 Residential real estate 6,357 260 (341) (150) 125 6,251 Home equity lines of credit 1,693 18 35 (106) — 1,640 Consumer, indirect 7,448 — 2,507 (2,796) 357 7,516 Consumer, direct 1,575 86 1,071 (274) 61 2,519 Deposit account overdrafts 61 — 701 (809) 174 127 Total $ 53,162 $ 1,161 $ 13,659 $ (6,730) $ 1,672 $ 62,924 (a) Amount does not include the provision for the allowance for credit losses on unfunded commitments. During the third quarter of 2024, Peoples recorded a total provision for credit losses of $6.5 million, which was a result of higher net charge-offs. Net charge-offs for the third quarter of 2024 were $6.1 million, primarily driven by an increase in charge-offs on leases originated by our North Star Leasing division, partially offset by recoveries of other commercial real estate loans.The increase in the allowance for credit losses at Sep |
