PEOPLES BANCORP INC. ANNOUNCES FIRST QUARTER 2025 RESULTS

(1)

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

(2)

the effects of inflationary pressures on borrowers' liquidity and ability to repay;

(3)

the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the interest rate policies of the Federal Reserve Board, the completion and successful integration of acquisitions, and the expansion of commercial and consumer lending activities;

(4)

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

(5)

uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, or deposit insurance premium levels, promulgated and to be promulgated by governmental and regulatory agencies, including the Ohio Division of Financial Institutions, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or acquired companies to a variety of new and more stringent legal and regulatory requirements;

(6)

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

(7)

current and future local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, supply-demand imbalances affecting local real estate prices, high unemployment rates in the local or regional economies in which Peoples operates and/or the U.S. economy generally, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, changes in the relationship of the U.S. and U.S. global trading partners), and changes in the federal, state, and local governmental policy and the impact these conditions may have on Peoples, Peoples' customers and Peoples' counterparties, and Peoples' assessment of the impact, which may be different than anticipated;

(8)

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

(9)

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

(10)

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

(11)

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

(12)

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

(13)

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

(14)

adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures: and the impacts of potential or imposed tariffs on markets, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;

(15)

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

(16)

Peoples' ability to receive dividends from Peoples' subsidiaries;

(17)

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

(18)

the impact of larger or similar-sized financial institutions encountering problems, such as the failure in 2024 of Republic First Bank, and closures in 2023 of Silicon Valley Bank in California, Signature Bank in New York and First Republic Bank in California, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity, including Peoples' continued ability to grow deposits or maintain adequate deposit levels, and may further result in potential increased regulatory requirements, increased reputational risk and potential impacts to macroeconomic conditions;

(19)

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

(20)

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

(21)

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

(22)

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

(23)

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

(24)

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

(25)

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

(26)

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

(27)

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

(28)

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

(29)

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

(30)

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

(31)

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

(32)

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

(33)

regulatory and legal matters, including the failure to resolve any outstanding matters on a timely basis and the potential of new regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;

(34)

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

(35)

the effect of a fall in stock market prices on the asset and wealth management business; and

(36)

other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website - www.peoplesbancorp.com under the "Investor Relations" section.

PER COMMON SHARE DATA AND SELECTED RATIOS (Unaudited)

At or For the Three Months Ended

March 31,

December 31,

March 31,

2025

2024

2024

PER COMMON SHARE:

Earnings per common share:

   Basic

$       0.69

$           0.77

$       0.85

   Diluted

0.68

0.76

0.84

Cash dividends declared per common share

0.40

0.40

0.39

Book value per common share (a)

31.90

31.26

29.93

Tangible book value per common share (a)(b)

20.68

19.94

18.39

Closing price of common shares at end of period

$     29.66

$         31.69

$     29.61

SELECTED RATIOS:

Return on average stockholders' equity (c)

8.79 %

9.56 %

11.30 %

Return on average tangible equity (c)(d)

14.66 %

16.15 %

19.91 %

Return on average assets (c)

1.07 %

1.17 %

1.32 %

Efficiency ratio (e)(f)

60.68 %

59.57 %

58.06 %

Net interest margin (c)(f)

4.12 %

4.15 %

4.26 %

Dividend payout ratio (g)

58.46 %

52.79 %

46.46 %

(a) 

Data presented as of the end of the period indicated.

(b)    

Tangible book value per common share represents a non-US GAAP financial measure since it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on stockholders' equity.  Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."

(c)  

Ratios are presented on an annualized basis.

(d)    

Return on average tangible equity represents a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from net income and it excludes the balance sheet impact of average goodwill and other intangible assets acquired through acquisitions on average stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."

(e)      

The efficiency ratio is defined 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 all gains and losses). This ratio represents a non-US GAAP financial measure since it excludes amortization of other intangible assets, and all gains and losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."

(f)   

Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate.

(g)  

This ratio is calculated based on dividends declared during the period divided by net income for the period.

CONSOLIDATED STATEMENTS OF INCOME 

Three Months Ended

March 31,

December 31,

March 31,

2025

2024

2024

(Dollars in thousands, except per share data)

(Unaudited)

(Unaudited)

(Unaudited)

Total interest income

$            124,542

$             128,793

$            127,593

Total interest expense

39,287

42,257

40,953

Net interest income

85,255

86,536

86,640

Provision for credit losses

10,190

6,267

6,102

Net interest income after provision for credit losses

75,065

80,269

80,538

Non-interest income:

Insurance income

6,054

4,523

6,498

Electronic banking income

5,885

6,267

6,046

Trust and investment income

5,061

5,033

4,599

Deposit account service charges

4,015

4,502

4,223

Lease income

3,446

3,200

2,016

Bank owned life insurance income

1,133

1,219

1,500

Mortgage banking income

396

173

321

Net (loss) gain on investment securities

(2)

12

(1)

Net loss on asset disposals and other transactions

(361)

(1,746)

(341)

Other non-interest income

1,472

1,906

918

  Total non-interest income

27,099

25,089

25,779

Non-interest expense:

Salaries and employee benefit costs

39,821

37,499

38,893

Data processing and software expense

7,005

6,598

5,769

Net occupancy and equipment expense

5,612

5,821

6,283

Professional fees

3,087

3,311

2,967

Amortization of other intangible assets

2,213

2,800

2,788

Electronic banking expense

2,025

1,982

1,781

FDIC insurance expense

1,251

1,251

1,186

Other loan expenses

1,119

857

1,076

Operating lease expense

985

1,102

639

Franchise tax expense

929

664

881

Marketing expense

903

1,206

1,056

Communication expense

734

796

799

Travel and entertainment expense

500

723

608

Other non-interest expense

4,603

5,893

3,739

  Total non-interest expense

70,787

70,503

68,465

  Income before income taxes

31,377

34,855

37,852

Income tax expense

7,041

7,925

8,268

    Net income

$              24,336

$               26,930

$              29,584

CONSOLIDATED STATEMENTS OF INCOME (Cont.)

Three Months Ended

March 31,

December 31,

March 31,

2025

2024

2024

(Dollars in thousands, except per share data)

(Unaudited)

(Unaudited)

(Unaudited)

PER COMMON SHARE DATA:

Net income available to common shareholders

$              24,336

$               26,930

$              29,584

Less: Dividends paid on unvested common shares

210

212

143

Less: Undistributed income allocated to unvested common shares

37

48

64

Net earnings allocated to common shareholders

$              24,089

$               26,670

$              29,377

Weighted-average common shares outstanding

34,895,723

34,819,062

34,740,349

Effect of potentially dilutive common shares

401,412

453,003

311,461

Total weighted-average diluted common shares outstanding

35,297,135

35,272,065

35,051,810

Earnings per common share – basic

$                  0.69

$                   0.77

$                  0.85

Earnings per common share – diluted

$                  0.68

$                   0.76

$                  0.84

Cash dividends declared per common share

$                  0.40

$                   0.40

$                  0.39

Weighted-average common shares outstanding – basic

34,895,723

34,819,062

34,740,349

Weighted-average common shares outstanding – diluted

35,297,135

35,272,065

35,051,810

Common shares outstanding at the end of period

35,669,100

35,563,590

35,480,918

CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2025

2024

(Dollars in thousands)

(Unaudited)

Assets

Cash and cash equivalents:

  Cash and due from banks

$            126,307

$            108,721

  Interest-bearing deposits in other banks

60,671

108,943

    Total cash and cash equivalents

186,978

217,664

Available-for-sale investment securities, at fair value (amortized cost of

 $1,199,676 at March 31, 2025 and $1,229,382 at December 31, 2024) (a)

1,073,674

1,083,555

Held-to-maturity investment securities, at amortized cost (fair value of

  $683,315 at March 31, 2025 and $692,499 at December 31, 2024) (a)

753,466

774,800

Other investment securities, at cost

51,322

60,132

    Total investment securities (a)

1,878,462

1,918,487

Loans and leases, net of deferred fees and costs (b)

6,428,526

6,358,003

Allowance for credit losses

(65,232)

(63,348)

    Net loans and leases

6,363,294

6,294,655

Loans held for sale

2,407

2,348

Bank premises and equipment, net of accumulated depreciation

103,847

103,669

Bank owned life insurance

144,843

143,710

Goodwill

363,199

363,199

Other intangible assets

36,900

39,223

Other assets

166,070

171,292

    Total assets

$         9,246,000

$         9,254,247

Liabilities

Deposits:

Non-interest-bearing

$         1,526,285

$         1,507,661

Interest-bearing

6,208,464

6,082,544

    Total deposits

7,734,749

7,590,205

Short-term borrowings

19,228

193,474

Long-term borrowings

237,000

238,073

Accrued expenses and other liabilities

117,202

120,905

    Total liabilities

$         8,108,179

$         8,142,657

Stockholders' Equity

Preferred shares, no par value, 50,000 shares authorized, no shares issued at March 31, 2025 or at December 31, 2024

—

—

Common shares, no par value, 50,000,000 shares authorized, 36,795,107 shares issued at March 31, 2025 and 36,782,601 shares issued at December 31, 2024, including shares in treasury

866,416

866,844

Retained earnings

398,218

388,109

Accumulated other comprehensive loss, net of deferred income taxes

(95,691)

(110,385)

Treasury stock, at cost, 1,220,262 common shares at March 31, 2025 and 1,311,175 common shares at December 31, 2024

(31,122)

(32,978)

    Total stockholders' equity

1,137,821

1,111,590

    Total liabilities and stockholders' equity

$         9,246,000

$         9,254,247

(a)   

Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $0 and $237, respectively, for both March 31, 2025 and December 31, 2024.

(b) 

Also referred to throughout this document as "total loans" and "loans held for investment."

SELECTED FINANCIAL INFORMATION (Unaudited)

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2025

2024

2024

2024

2024

Loan Portfolio

Construction

$         319,104

$           328,388

$         320,094

$         340,601

$         314,687

Commercial real estate, other

2,230,538

2,156,013

2,180,491

2,195,979

2,243,780

Commercial and industrial

1,343,827

1,347,645

1,250,152

1,258,063

1,214,615

Premium finance

264,080

269,435

286,983

293,349

238,962

Leases

395,454

406,598

433,009

430,651

422,694

Residential real estate

848,168

835,101

777,542

789,344

781,888

Home equity lines of credit

235,409

232,661

233,109

227,608

221,079

Consumer, indirect

680,260

669,857

677,056

675,054

650,228

Consumer, direct

110,639

111,052

112,198

113,655

113,588

Deposit account overdrafts

1,047

1,253

1,205

1,067

1,306

    Total loans and leases

$      6,428,526

$        6,358,003

$      6,271,839

$      6,325,371

$      6,202,827

Total acquired loans and leases (a)

$      1,511,704

$        1,557,728

$      1,585,552

$      1,686,784

$      1,757,169

    Total originated loans and leases

$      4,916,822

$        4,800,275

$      4,686,287

$      4,638,587

$      4,445,658

Total Investment Securities

$      1,878,462

$        1,918,487

$      1,829,995

$      1,883,865

$      1,858,911

Deposit Balances

Non-interest-bearing deposits (b)

$      1,526,285

$        1,507,661

$      1,453,441

$      1,472,697

$      1,468,363

Interest-bearing deposits:

  Interest-bearing demand accounts (b)

1,086,112

1,085,152

1,065,912

1,083,512

1,107,712

  Retail certificates of deposit

1,965,978

1,921,415

1,884,139

1,812,874

1,680,413

  Money market deposit accounts

967,331

878,254

894,690

869,159

859,961

  Governmental deposit accounts

834,409

775,782

824,136

766,337

825,170

  Savings accounts

895,677

866,959

864,935

880,542

901,493

  Brokered deposits

458,957

554,982

495,904

412,653

483,444

    Total interest-bearing deposits

$      6,208,464

$        6,082,544

$      6,029,716

$      5,825,077

$      5,858,193

    Total deposits

$      7,734,749

$        7,590,205

$      7,483,157

$      7,297,774

$      7,326,556

Total demand deposits (b)

$      2,612,397

$        2,592,813

$      2,519,353

$      2,556,209

$      2,576,075

Asset Quality

Nonperforming assets (NPAs):

  Loans 90+ days past due and accruing

$            4,206

$               8,637

$           27,578

$             7,592

$             7,662

  Nonaccrual loans

35,626

34,129

34,807

33,669

31,361

    Total nonperforming loans (NPLs) (f)

39,832

42,766

62,385

41,261

39,023

  Other real estate owned (OREO)

5,980

6,170

7,397

7,409

7,238

Total NPAs (f)

$          45,812

$             48,936

$           69,782

$           48,670

$           46,261

Criticized loans (c)

$         226,883

$           241,302

$         237,627

$         239,943

$         256,565

Classified loans (d)

123,988

128,815

133,241

120,180

147,518

Allowance for credit losses as a percent of NPLs (f)

163.77 %

148.13 %

106.82 %

160.56 %

166.11 %

NPLs as a percent of total loans (f)

0.62 %

0.67 %

0.99 %

0.65 %

0.63 %

NPAs as a percent of total assets (f)

0.50 %

0.53 %

0.76 %

0.53 %

0.50 %

NPAs as a percent of total loans and OREO (f)

0.71 %

0.77 %

1.11 %

0.77 %

0.74 %

Criticized loans as a percent of total loans (c)

3.53 %

3.80 %

3.79 %

3.79 %

4.14 %

Classified loans as a percent of total loans (d)

1.93 %

2.03 %

2.12 %

1.90 %

2.38 %

Allowance for credit losses as a percent of total loans

1.01 %

1.00 %

1.06 %

1.05 %

1.05 %

Total demand deposits as a percent of total deposits (b)

33.77 %

34.16 %

33.67 %

35.03 %

35.16 %

Capital Information (e)(g)(i)

Common equity tier 1 capital ratio (h)

12.09 %

11.95 %

11.80 %

11.74 %

11.69 %

Tier 1 risk-based capital ratio

12.53 %

12.39 %

12.24 %

12.18 %

12.14 %

Total risk-based capital ratio (tier 1 and tier 2)

13.78 %

13.58 %

13.42 %

13.44 %

13.40 %

Leverage ratio

9.81 %

9.73 %

9.59 %

9.29 %

9.16 %

Common equity tier 1 capital

$         845,200

$           833,128

$         821,192

$         799,710

$         780,018

Tier 1 capital

876,245

863,974

851,823

830,126

810,219

Total capital (tier 1 and tier 2)

963,170

946,724

933,679

916,073

894,663

Total risk-weighted assets

$      6,991,360

$        6,971,490

$      6,958,225

$      6,814,149

$      6,674,196

Total stockholders' equity to total assets

12.31 %

12.01 %

12.31 %

11.68 %

11.46 %

Tangible equity to tangible assets (j)

8.34 %

8.01 %

8.25 %

7.61 %

7.37 %

(a)  

Includes all loans and leases acquired and purchased in 2012 and thereafter.

(b)  

The sum of non-interest-bearing deposits and interest-bearing demand accounts is considered total demand deposits.

(c)  

Includes loans categorized as special mention, substandard, or doubtful.

(d)  

Includes loans categorized as substandard or doubtful.

(e)  

Data presented as of the end of the period indicated.

(f)  

Nonperforming loans include loans 90+ days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and OREO.

(g)  

March 31, 2025 data based on preliminary analysis and subject to revision.

(h)  

Peoples' capital conservation buffer was 5.78% at March 31, 2025, 5.58% at December 31, 2024, 5.44% at September 30, 2024, 5.42% at June 30, 2024, 5.40% and at March 31, 2024, compared to required capital conservation buffer of 2.50%

(i)   

Peoples has adopted the five-year transition to phase in the impact of the adoption of CECL on regulatory capital ratios.

(j)    

This ratio represents a non-US GAAP financial measure since it excludes the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets. Additional information regarding the calculation of this ratio is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."

PROVISION FOR (RECOVERY OF) CREDIT LOSSES INFORMATION

Three Months Ended

March 31,

December 31,

March 31,

2025

2024

2024

(Dollars in thousands)

(Unaudited)

(Unaudited)

(Unaudited)

Provision for credit losses

Provision for credit losses

$         10,035

$              6,014

$            5,834

Provision for checking account overdrafts

155

253

268

  Total provision for credit losses

$         10,190

$              6,267

$            6,102

Net Charge-Offs

Gross charge-offs

$           8,760

$            10,040

$            3,874

Recoveries

639

454

554

  Net charge-offs

$           8,121

$              9,586

$            3,320

Net Charge-Offs (Recoveries) by Type

Construction

$                —

$                   —

$                 —

Commercial real estate, other

211

195

129

Commercial and industrial

374

78

228

Premium finance

65

51

46

Leases

5,409

7,619

1,058

Residential real estate

93

99

(3)

Home equity lines of credit

—

—

(7)

Consumer, indirect

1,656

1,153

1,390

Consumer, direct

135

142

217

Deposit account overdrafts

178

249

262

  Total net charge-offs

$           8,121

$              9,586

$            3,320

As a percent of average total loans (annualized)

0.52 %

0.61 %

0.22 %

SUPPLEMENTAL INFORMATION (Unaudited)

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2025

2024

2024

2024

2024

Trust assets under administration and management

$         2,037,992

$          2,061,267

$           2,124,320

$          2,071,832

$         2,061,402

Brokerage assets under administration and management

1,626,768

1,614,189

1,608,368

1,567,775

1,530,954

Mortgage loans serviced for others

337,279

346,189

347,719

341,298

348,937

Employees (full-time equivalent)

1,460

1,479

1,496

1,489

1,498

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)

Three Months Ended

March 31, 2025

December 31, 2024

March 31, 2024

(Dollars in thousands)

Balance

Income/

Expense

Yield/ Cost

Balance

Income/

Expense

Yield/ Cost

Balance

Income/

Expense

Yield/ Cost

Assets

Short-term investments

$      88,919

$        900

4.10 %

$    123,303

$    1,432

4.62 %

$    142,381

$    1,922

5.44 %

Investment securities (a)(b)

1,897,035

16,598

3.50 %

1,910,266

16,353

3.42 %

1,832,599

15,235

3.33 %

Loans (b)(c):

Construction

313,130

5,572

7.12 %

324,856

6,139

7.39 %

339,448

6,404

7.48 %

Commercial real estate, other

2,069,134

33,260

6.43 %

2,034,083

34,776

6.69 %

2,076,219

37,242

7.12 %

Commercial and industrial

1,336,133

23,332

6.98 %

1,259,636

23,467

7.29 %

1,203,196

23,515

7.75 %

Premium finance

259,241

5,585

8.62 %

277,219

5,772

8.15 %

210,405

4,564

8.60 %

Leases

395,161

10,198

10.32 %

412,686

11,528

10.93 %

409,870

12,067

11.68 %

Residential real estate (d)

956,049

12,215

5.11 %

909,719

12,125

5.33 %

930,989

11,322

4.86 %

Home equity lines of credit

233,522

4,382

7.61 %

234,189

4,669

7.93 %

216,743

4,297

8.00 %

Consumer, indirect

674,211

10,548

6.34 %

670,470

10,590

6.28 %

656,244

9,281

5.70 %

Consumer, direct

117,881

2,234

7.69 %

118,370

2,229

7.49 %

124,091

2,098

6.82 %

Total loans

6,354,462

107,326

6.77 %

6,241,228

111,295

7.01 %

6,167,205

110,790

7.15 %

Allowance for credit losses

(63,060)

(65,798)

(61,236)

Net loans

6,291,402

6,175,430

6,105,969

Total earning assets

8,277,356

124,824

6.04 %

8,208,999

129,080

6.20 %

8,080,949

127,947

6.31 %

Goodwill and other intangible assets

401,344

402,930

410,719

Other assets

516,767

534,128

529,983

Total assets

$ 9,195,467

$ 9,146,057

$ 9,021,651

Liabilities and Equity

Interest-bearing deposits:

Savings accounts

$    879,301

$        250

0.12 %

$    862,257

$       209

0.10 %

$    905,713

$       226

0.10 %

Governmental deposit accounts

781,782

4,652

2.41 %

811,633

5,233

2.56 %

763,899

5,084

2.68 %

Interest-bearing demand accounts

1,083,999

490

0.18 %

1,081,591

580

0.21 %

1,109,033

452

0.16 %

Money market deposit accounts

914,076

5,291

2.35 %

892,370

5,518

2.46 %

784,759

4,888

2.51 %

Retail certificates of deposit

1,939,364

18,434

3.85 %

1,904,274

20,037

4.19 %

1,582,426

15,900

4.05 %

Brokered deposits (e)

564,660

6,046

4.34 %

508,944

5,568

4.35 %

568,996

5,900

4.17 %

Total interest-bearing deposits

6,163,182

35,163

2.31 %

6,061,069

37,145

2.44 %

5,714,826

32,450

2.28 %

Short-term borrowings (e)

56,564

508

3.63 %

92,472

1,088

4.70 %

388,830

5,037

5.19 %

Long-term borrowings

237,100

3,615

6.13 %

237,835

4,025

6.69 %

230,274

3,466

6.04 %

Total borrowed funds

293,664

4,123

5.65 %

330,307

5,113

6.13 %

619,104

8,503

5.50 %

Total interest-bearing liabilities

6,456,846

39,286

2.47 %

6,391,376

42,258

2.63 %

6,333,930

40,953

2.60 %

Non-interest-bearing deposits

1,498,964

1,516,933

1,501,738

Other liabilities

116,797

117,151

133,202

Total liabilities

8,072,607

8,025,460

7,968,870

Stockholders' equity

1,122,860

1,120,597

1,052,781

Total liabilities and stockholders' equity

$ 9,195,467

$ 9,146,057

$ 9,021,651

Net interest income/spread (b)

$   85,538

3.57 %

$  86,822

3.57 %

$  86,994

3.71 %

Net interest margin (b)

4.12 %

4.15 %

4.26 %

(a)  

Average balances are based on carrying value.

(b)  

Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate.

(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.

NON-US GAAP FINANCIAL MEASURES (Unaudited)

The following non-US GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. The following tables summarize the non-US GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:

Three Months Ended

March 31,

December 31,

March 31,

(Dollars in thousands)

2025

2024

2024

Efficiency ratio:

Total non-interest expense

$           70,787

$            70,503

$           68,465

Less: amortization of other intangible assets

2,213

2,800

2,788

Adjusted total non-interest expense

68,574

67,703

65,677

Total non-interest income

27,099

25,089

25,779

Less: net gain (loss) on investment securities

(2)

12

(1)

Less: net loss on asset disposals and other transactions

(361)

(1,746)

(341)

Total non-interest income, excluding net gains and losses

27,462

26,823

26,121

Net interest income

85,255

86,536

86,640

Add: fully tax-equivalent adjustment (a)

283

286

354

Net interest income on a fully tax-equivalent basis

85,538

86,822

86,994

Adjusted revenue

$         113,000

$          113,645

$         113,115

Efficiency ratio

60.68 %

59.57 %

58.06 %

(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.

NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)

At or For the Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands, except per share data)

2025

2024

2024

2024

2024

Tangible equity:

Total stockholders' equity

$     1,137,821

$     1,111,590

$     1,124,972

$     1,077,833

$     1,062,002

Less: goodwill and other intangible assets

400,099

402,422

403,922

406,417

409,285

Tangible equity

$        737,722

$        709,168

$        721,050

$        671,416

$        652,717

Tangible assets:

Total assets

$     9,246,000

$     9,254,247

$     9,140,471

$     9,226,461

$     9,270,774

Less: goodwill and other intangible assets

400,099

402,422

403,922

406,417

409,285

Tangible assets

$     8,845,901

$     8,851,825

$     8,736,549

$     8,820,044

$     8,861,489

Tangible book value per common share:

Tangible equity

$        737,722

$        709,168

$        721,050

$        671,416

$        652,717

Common shares outstanding

35,669,100

35,563,590

35,538,607

35,498,977

35,486,234

Tangible book value per common share

$            20.68

$            19.94

$            20.29

$            18.91

$            18.39

Tangible equity to tangible assets ratio:

Tangible equity

$        737,722

$        709,168

$        721,050

$        671,416

$        652,717

Tangible assets

$     8,845,901

$     8,851,825

$     8,736,549

$     8,820,044

$     8,861,489