0000318300FALSE00003183002024-07-232024-07-23


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

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 23, 2024

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PEOPLES BANCORP INC.
(Exact name of Registrant as specified in its charter)
Ohio000-1677231-0987416
(State or other jurisdiction(Commission File(I.R.S. Employer
of incorporation)Number)Identification Number)
138 Putnam Street, PO Box 738
Marietta,Ohio45750-0738
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:(740)373-3155
Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
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Item 2.02     Results of Operation and Financial Condition.

On July 23, 2024 Peoples Bancorp Inc. ("Peoples") issued a news release regarding its financial results for the second quarter and full year of 2024. A copy of the news release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Peoples also provided electronic presentation slides that will be used in connection with its conference call to discuss earnings. A copy of the electronic slides is attached as Exhibit 99.2 to this Current Report on Form 8-K.

Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss second quarter and full year 2024 results of operations today at 11:00 a.m., Eastern Daylight Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285. A simultaneous webcast of the conference call audio and earnings call presentation will be available online via the “Investor Relations” section of Peoples' website, www.peoplesbancorp.com.  Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the “Investor Relations” section for one year.

Item 8.01     Other Events

On July 23, 2024, Peoples issued a news release announcing that the Board of Directors declared a quarterly dividend of $0.40 per common share on July 22, 2024. A copy of the news release is included as Exhibit 99.2 to this Current Report on Form 8-K.


Item 9.01     Financial Statements and Exhibits

a) Financial statements of businesses acquired
No response required.

b) Pro forma financial information
No response required.

c) Exhibits
See Index to Exhibits on Page 3.



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 hereunto duly authorized.

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PEOPLES BANCORP INC.
Date:July 23, 2024By:/s/KATIE BAILEY
Katie Bailey
Executive Vice President,
Chief Financial Officer and Treasurer
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INDEX TO EXHIBITS
Exhibit NumberDescription
News Release issued by Peoples Bancorp Inc. on July 23, 2024
News Release issued by Peoples Bancorp Inc. on July 23, 2024
News Release issued by Peoples Bancorp Inc. on July 23, 2024
104Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

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P.O. BOX 738 - MARIETTA, OHIO - 45750NEWS RELEASE
www.peoplesbancorp.com
FOR IMMEDIATE RELEASEContact:Katie Bailey
July 23, 2024Chief Financial Officer and Treasurer
(740) 376-7138

PEOPLES BANCORP INC. ANNOUNCES SECOND QUARTER 2024 RESULTS
_____________________________________________________________________

MARIETTA, Ohio - Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for the quarter ended June 30, 2024. Net income totaled $29.0 million for the second quarter of 2024, representing earnings per diluted common share of $0.82. In comparison, Peoples reported net income of $29.6 million, representing earnings per diluted common share of $0.84, for the first quarter of 2024 and net income of $21.1 million, representing earnings per diluted common share of $0.64, for the second quarter of 2023.
"We are pleased with our results for the quarter, in particular our loan growth and continued stable credit metrics. Additionally, we are very honored to be recognized by Newsweek for being awarded one of America's Best Regional Banks and one of America's Greatest Workplaces, one of only five banks being recognized for both awards," said Tyler Wilcox, President and Chief Executive Officer. "We continue to focus on creating a top tier workplace while producing solid and consistent performance."
Statement of Operations Highlights:
•Net interest income for the second quarter of 2024 was relatively consistent when compared to the linked quarter, with higher interest income offset by higher funding costs.
◦Net interest margin decreased to 4.18% for the second quarter of 2024, compared to 4.26% for the linked quarter driven by lower accretion income.
•Peoples recorded a provision for credit losses of $5.7 million for the second quarter of 2024, compared to a provision for credit losses of $6.1 million for the first quarter of 2024.
◦The provision for credit losses negatively impacted earnings per diluted common share by $0.13 for the second quarter of 2024 and $0.14 for the first quarter of 2024.
•Total non-interest income, excluding net gains and losses, decreased $1.6 million, or 6%, for the second quarter of 2024 compared to the linked quarter.
◦The decrease was primarily driven by lower insurance income due to annual contingency income recognized in the first quarter of each year.
•Total non-interest expense for the second quarter of 2024 increased $0.3 million compared to the linked quarter.
◦The efficiency ratio for the second quarter of 2024 was 59.2%, compared to 58.1% for the linked quarter.
Balance Sheet Highlights:
•Period-end total loan and lease balances at June 30, 2024 increased $122.5 million, or 8% annualized, compared to at March 31, 2024.
◦The increase was driven by growth in (i) premium finance loans, (ii) commercial and industrial loans, (iii) constructions loans, and (iv) consumer indirect loans, partially offset by a decrease in other commercial real estate loans.
•Asset quality metrics remained stable during the second quarter of 2024.
◦Delinquency trends improved compared to March 31, 2024.
◦Criticized and classified loans both decreased and were driven by the paydowns of previously downgraded commercial and industrial relationships.
◦Annualized net charge-offs were 0.27% of average total loans, representing a return to pre-pandemic levels.
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•Period-end total deposit balances at June 30, 2024 decreased $28.8 million compared to at March 31, 2024
◦Excluding a decrease in brokered certificates of deposit of $70.8 million, core deposits were up $42.0 million compared to the linked quarter, driven by an increase in retail certificates of deposits and higher money market deposit accounts.
◦Total loan balances were 87% of total deposit balances at June 30, 2024, compared to 85% at March 31, 2024.
Completion of the Limestone Merger:
As of the close of business on April 30, 2023, Peoples completed its previously announced merger with Limestone Bancorp, Inc. (“Limestone”), a bank holding company headquartered in Louisville, Kentucky, and the parent company of Limestone Bank, pursuant to a definitive Agreement and Plan of Merger (the “Merger Agreement”) dated October 24, 2022. Under the terms of the Merger Agreement, Limestone merged with and into Peoples, and immediately thereafter Limestone Bank merged with and into Peoples’ wholly-owned subsidiary, Peoples Bank (collectively, the "Limestone Merger"), in a transaction valued at $177.9 million. Peoples recorded acquisition-related expenses, primarily related to the Limestone Merger, which included $(0.1) million and $10.7 million in other non-interest expense for the three months ended March 31, 2024, and three months ended June 30, 2023, respectively. There was no such expense for the three months ended June 30, 2024. For the six months ended June 30, 2024, Peoples recorded acquisition expenses of $(0.1) million compared to $11.3 million for the six months ended June 30, 2023.

Net Interest Income
Net interest income was $86.6 million for the second quarter of 2024 and was relatively flat when compared to the linked quarter. Net interest margin was 4.18% for the second quarter of 2024, compared to 4.26% for the linked quarter. The decrease in net interest margin was primarily driven by a decrease in accretion income, net of amortization, from acquisitions and higher borrowing costs, which offset higher earning asset yields.
Net interest income for the second quarter of 2024 increased $1.8 million, or 2%, compared to the second quarter of 2023. The increase in net interest income compared to the second quarter of 2023 was driven by increases in market interest rates, the Limestone Merger, and organic growth. Net interest margin decreased 36 basis points when compared to the second quarter of 2023, driven primarily by an increase in interest expense on deposits.
Accretion income, net of amortization expense, from acquisitions was $5.8 million for the second quarter of 2024, $6.5 million for the first quarter of 2024 and $4.5 million for the second quarter of 2023, which added 29 basis points, 32 basis points and 24 basis points, respectively, to net interest margin. The decrease in accretion income for the second quarter of 2024 when compared to the linked quarter was primarily driven by lower pay-offs. The increase in accretion income for the current quarter compared to the second quarter of 2023 was a result of the accretion from the Limestone Merger.
For the first six months of 2024, net interest income increased $15.5 million, or 10%, compared to the first six months of 2023, while net interest margin decreased 31 basis points to 4.22%. The increase in net interest income was driven by increases in market interest rates and an additional four months of income from the Limestone Merger. The decrease in net interest margin for the first six months of 2024 compared to the first six months of 2023 was primarily driven by higher borrowing costs, which offset higher earning asset yields.
Accretion income, net of amortization expense, from acquisitions was $12.3 million for the six months ended June 30, 2024, compared to $6.5 million for the six months ended June 30, 2023, which added 30 and 18 basis points, respectively, to net interest margin. The increase in accretion income for the first six months of 2024 compared to the same period in 2023 was due to more accretion in 2024 from the Limestone Merger.
Provision for Credit Losses:
The provision for credit losses was $5.7 million for the second quarter of 2024, compared to $6.1 million for the linked quarter and $8.0 million for the second quarter of 2023. The provision for credit losses for the second quarter of 2024 was a result of (i) higher net charge-offs, (ii) an increase of reserves on individually analyzed loans and leases, and (iii) loan growth. The provision for credit losses for the first quarter of 2024 was driven by (i) a deterioration in macro-economic conditions used within the current expected credit loss ("CECL") model, (ii) an increase of reserves on individually analyzed loans and leases and (iii) loan growth. The decrease in the provision for credit losses for the second quarter of 2024 compared to the second quarter of 2023, was largely attributable to the provision for loans acquired in the Limestone Merger recorded in the second quarter of 2023, as well as a reduction in the reserves for individually analyzed loans and leases, offset by loan growth, an increase in net charges-offs and economic forecast deterioration.
The provision for credit losses during the first six months of 2024 was $11.8 million, compared to a provision for credit losses of $9.8 million for the first six months of 2023. The provision for credit losses during the first six months of 2024 was mainly a result of (i) higher net charge-offs, (ii) an increase in reserves on individually analyzed loans and leases and (iii) loan growth. The provision for credit losses during the first six months of 2023 was driven by (i) the addition of the provision for the non-purchased credit deteriorated loans acquired in the Limestone Merger, (ii) loan growth and (iii)
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economic forecast deterioration, partially offset by a reduction in the reserves for individually analyzed loans and leases and the use of updated loss drivers.
The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management’s quarterly estimates. The provision for credit losses negatively impacted earnings per diluted common share by $0.13 for the second quarter of 2024, $0.14 for the first quarter of 2024, and $0.19 for the second quarter of 2023. For the first six months of 2024, the provision negatively impacted earnings per diluted common share by $0.27, compared to $0.25 for the first six months of 2023.
For additional information on net charge-offs, credit trends and the allowance for credit losses, see the "Asset Quality" section below.
Net Gains and Losses:
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 Income. The net loss for the second quarter of 2024 was $0.8 million, compared to a net loss of $0.3 million for the linked quarter, and a net loss of $1.8 million for the second quarter of 2023. The net loss for the second quarter of 2024 was driven primarily by $0.4 million of net losses on repossessed assets. The net loss for the linked quarter was primarily due to $0.3 million of net losses on repossessed assets. The second quarter of 2023 net loss was primarily driven by a $1.6 million write-down of an other real estate owned ("OREO") property.
The net loss realized during the first six months of 2024 was $1.1 million, compared to a net loss realized of $4.0 million for the first six months of 2023. The net loss for the first six months of 2024 was primarily driven by the $0.7 million of net losses on repossessed assets mentioned above. The net loss recognized in the first six months of 2023 was primarily driven by a $2.0 million pre-tax net loss on the sale of available-for-sale investment securities and the $1.6 million write-down of an OREO property mentioned above.
Total Non-interest Income, Excluding Net Gains and Losses:
Total non-interest income, excluding net gains and losses, for the second quarter of 2024 decreased $1.6 million compared to the linked quarter. The decrease in non-interest income, excluding net gains and losses, was primarily impacted by a decrease of $2.4 million in insurance income due to seasonal performance-based commissions being paid in the first quarter of each year. Partially offsetting the decrease was an increase of $0.4 million in each of electronic banking income and trust and investment income, respectively. Total non-interest income, excluding net gains and losses, for the second quarter of 2024 was 22% of total revenue (defined as net interest income plus total non-interest income excluding net gains and losses) compared to 23% for the first quarter of 2023.
Compared to the second quarter of 2023, total non-interest income, excluding net gains and losses, increased $1.6 million, primarily due to a $1.1 million increase in other non-interest income, driven by operating lease income, and a $0.6 million increase in trust and investment income, partially offset by a $0.6 million decrease in lease income. The increases for the second quarter of 2024, when compared to the second quarter of 2023, were primarily due to the additional customers brought in from the Limestone Merger and increases of assets under administration and management.
For the first six months of 2024, total non-interest income, excluding gains and losses, increased $6.5 million, or 15%, compared to the first six months of 2023. The increase was driven by (i) a $2.1 million increase in other non-interest income, driven by operating lease income, (ii) a $1.2 million increase in insurance income, (iii) a $1.1 million increase in trust and investment income, (iv) a $1.0 million increase in bank owned life insurance income, (v) a $0.9 million increase in deposit account service charge income, and (vi) a $0.6 million increase in electronic banking income, offset by a $0.4 million decrease in lease income. The increases for the first six months of 2024, when compared to the first six months of 2023, were primarily due to the additional customers brought in from the Limestone Merger, increases of assets under administration and management, higher contingency income, and market increases for premiums.
Total Non-interest Expense:
Total non-interest expense increased $0.3 million for the second quarter of 2024, compared to the linked quarter. The increase in total non-interest expense was primarily due to increases of $2.2 million in other non-interest expense driven by a one-time $1.3 million true-up of corporate expenses and $1.0 million in data processing and software expense driven by higher expenses attributable to recent technology projects, partially offset by a decrease of $2.3 million in salaries and employee benefit costs. The decrease in salaries and employee benefits costs was due to annual expenses that occur in the first quarter of each year including annual merit increases, stock-based compensation expenses attributable to retirement-eligible employees and health savings account ("HSA") contributions.
Compared to the second quarter of 2023, total non-interest expense decreased $1.9 million, or 3%. Excluding acquisition-related expenses, non-interest expenses increased $8.8 million, or 15%, primarily due to increases of $3.7
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million in salaries and employee benefits costs due to additional employees added in the Limestone Merger, and $2.0 million in data processing and software expense due to the recent growth, including through acquisitions.
For the six months of 2024, total non-interest expense increased $10.1 million, or 8%, compared to the first six months of 2023. Excluding acquisition-related expenses, non-interest expenses increased $21.5 million, or 19%, primarily due to increases of $10.5 million in salaries and employee benefits costs due to additional employees added in the Limestone Merger, and $3.2 million and $2.1 million in data processing and software expense and in net occupancy and equipment expense, respectively, due to recent growth, included through acquisitions.
The table below summarizes the amount of acquisition-related expenses for each line item that is a component of non-interest expense. Acquisition-related expenses are considered a non-core non-interest expense by Peoples. This information is used by Peoples to provide information useful to investors in understanding Peoples' operating performance and trends.
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Three Months EndedSix Months Ended
June 30March 31June 30June 30
20242024202320242023
(Dollars in thousands)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Non-interest expense:
Salaries and employee benefit costs$36,564 $38,893 $38,025 $75,457 $70,053 
Data processing and software expense6,743 5,769 4,728 12,512 9,290 
Net occupancy and equipment expense6,142 6,283 5,380 12,425 10,335 
Professional fees2,935 2,967 7,438 5,902 10,319 
Amortization of other intangible assets2,787 2,788 2,800 5,575 4,671 
Electronic banking expense1,941 1,781 1,832 3,722 3,323 
Marketing expense681 1,056 1,357 1,737 2,287 
FDIC insurance premiums1,251 1,186 1,464 2,437 2,265 
Franchise tax expense760 881 872 1,641 1,906 
Communication expense736 799 724 1,535 1,337 
Other loan expenses1,036 1,076 538 2,112 1,277 
Other non-interest expense7,182 4,986 5,465 12,168 10,039 
  Total non-interest expense68,758 68,465 70,623 137,223 127,102 
Acquisition-related non-interest expense:
Salaries and employee benefit costs— 16 5,125 16 5,146 
Data processing and software expense— (18)1 (18)1 
Net occupancy and equipment expense— — 20 — 29 
Professional fees— (38)4,812 (38)5,103 
Electronic banking expense— (100)115 (100)115 
Marketing expense— 10 13 10 23 
Other loan expenses— — 1 — 1 
Other non-interest expense— 46 622 46 842 
  Total acquisition-related non-interest expense— (84)10,709 (84)11,260 
Non-interest expense excluding acquisition-related expense:
Salaries and employee benefit costs36,564 38,877 32,900 75,441 64,907 
Data processing and software expense6,743 5,787 4,727 12,530 9,289 
Net occupancy and equipment expense6,142 6,283 5,360 12,425 10,306 
Professional fees2,935 3,005 2,626 5,940 5,216 
Amortization of other intangible assets2,787 2,788 2,800 5,575 4,671 
Electronic banking expense1,941 1,881 1,717 3,822 3,208 
Marketing expense681 1,046 1,344 1,727 2,264 
FDIC insurance premiums1,251 1,186 1,464 2,437 2,265 
Franchise tax expense760 881 872 1,641 1,906 
Communication expense736 799 724 1,535 1,337 
Other loan expenses1,036 1,076 537 2,112 1,276 
Other non-interest expense7,182 4,940 4,843 12,122 9,197 
Total non-interest expense excluding acquisition-related expense$68,758 $68,549 $59,914 $137,307 $115,842 
The efficiency ratio for the second quarter of 2024 was 59.2%, compared to 58.1% for the linked quarter and 62.7% for the second quarter of 2023. The efficiency ratio improved compared to the prior year quarter due to the decrease in acquisition-related expenses. The efficiency ratio, adjusted for non-core items, was 59.2% for the second quarter of 2024, compared to 58.1% for the linked quarter, and 53.3% for the second quarter of 2023. The efficiency ratio and the adjusted for non-core items efficiency ratio increased compared to the linked quarter increased mainly as the result of a reduction in
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non-interest income. The efficiency ratio for the first six months of 2024 was 58.6%, compared to 60.4% for the first six months of 2023. The efficiency ratio improved compared to the prior year first six months due to the decrease in acquisition-related expenses. The efficiency ratio, adjusted for non-core items, was 58.7% for the first six months of 2024, compared to 55.2% for the first six months of 2023. Peoples continues to focus on controlling expenses, while recognizing necessary costs in order to continue growing the business.
Income Tax Expense:
Peoples recorded income tax expense of $6.9 million with an effective tax rate of 19.1% for the second quarter of 2024, compared to income tax expense of $8.3 million with an effective tax rate of 21.8% for the linked quarter and income tax expense of $6.2 million with an effective tax rate of 22.6% for the second quarter of 2023. The decrease in income tax expense when compared to the prior quarter was driven by a $1.1 million one-time benefit related to a prior year amended return. The increase in income tax expense when compared to the second quarter of 2023 was primarily due to higher pre-tax income. Peoples recorded income tax expense of $15.1 million with an effective tax rate of 20.5% for the first six months of 2024 and $13.2 million with an effective tax rate of 21.7% in the first six months of 2023. The increase was driven by higher pre-tax income.
Investment Securities and Liquidity:
Peoples' investment portfolio primarily consists of available-for-sale investment securities reported at fair value and held-to-maturity investment securities reported at amortized cost. The available-for-sale investment securities balance at June 30, 2024 increased $2.7 million when compared to at March 31, 2024, increased $70.8 million when compared to at December 31, 2023, and decreased $14.3 million when compared to at June 30, 2023. The decrease in the balance when compared to at June 30, 2023, was driven by principal payment reductions. The balances of unrealized losses, net of tax, on available-for-sale investment securities recognized within accumulated other comprehensive loss were $112.7 million, $111.8 million, and $121.5 million at June 30, 2024, at March 31, 2024, and at June 30, 2023, respectively.
The held-to-maturity investment securities balance at June 30, 2024 decreased $22.5 million and increased $18.3 million and $28.1 million when compared to at March 31, 2024, at December 31, 2023 and at June 30, 2023, respectively. The decrease when compared to the linked quarter was driven by principal payments. The increase when compared to June 30, 2023 was primarily driven by higher yielding, longer duration securities booked as held-to-maturity. The balances of net unrealized losses on held-to-maturity investment securities were $79.4 million, $77.4 million, and $81.1 million at June 30, 2024, at March 31, 2024, and at June 30, 2023, respectively.
The effective duration of the investment portfolio as of June 30, 2024 was estimated to be 5.26 years. The duration of Peoples’ investments is managed as part of its Asset Liability Management program, and has the potential to impact both liquidity and capital, as mismatches in duration may require a liquidation of investment securities at market prices to meet funding needs. These assets are one component of Peoples' liquidity profile.
Peoples maintains a number of liquid and liquefiable assets, borrowing capacity, and other sources of liquidity to ensure the availability of funds. At June 30, 2024, Peoples had liquid and liquefiable assets totaling $607.0 million, which included (i) cash and cash equivalents, (ii) unpledged government and agency investment securities and (iii) unpledged non-agency investment securities that could be liquidated. At June 30, 2024, Peoples had a borrowing capacity of $727.3 million available through the Federal Home Loan Bank (“FHLB”), the Federal Reserve Bank ("FRB"), and federal funds. Additionally at June 30, 2024, Peoples had other contingent sources of liquidity totaling $2.7 billion. Cash and cash equivalents decreased $190.9 million when compared to December 31, 2023 due to an improvement in other inputs in our aforementioned liquidity metrics, specifically unencumbered securities, driven by the migration of deposit balances to insured cash sweep accounts ("ICS"), freeing up investment securities previously held as collateral against those balances, and requiring less cash to be held on the balance sheet.
Loans and Leases:
The period-end total loan and lease balances at June 30, 2024 increased $122.5 million, or 8% annualized, compared to at March 31, 2024. The increase in the period-end total loan and lease balances was primarily driven by increases of (i) $54.4 million in premium finance loans, (ii) $43.4 million in commercial and industrial loans, (iii) $25.9 million in construction loans, (iv) $24.8 million in indirect consumer loans, partially offset by a reduction of $47.8 million in other commercial real estate loans.
The period-end total loan and lease balances at June 30, 2024 increased $166.2 million compared to at December 31, 2023, primarily driven by growth of $90.2 million, $73.1 million, and $18.9 million in premium finance loans, commercial and industrial loans, and home equity lines of credit, respectively, partially offset by a decrease of $23.4 million in construction loans.
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The period-end total loan and lease balances at June 30, 2024 increased $350.8 million compared to at June 30, 2023, primarily driven by organic growth in our premium finance, other commercial real estate, commercial and industrial, and lease portfolios of $130.1 million, $124.5 million, $97.8 million, and $52.9, respectively.
Quarterly average total loan balances increased $73.5 million compared to the linked quarter. The increase in average total loan balances when compared to the linked quarter was primarily the result of growth of (i) $50.1 million in premium finance loans, (ii) $27.1 million in commercial and industrial loans,and (iii) $9.9 million in leases, partially offset by reductions of $10.5 million in construction loans, $5.4 million in residential real estate loans, and $5.0 million in consumer direct loans.
Compared to the second quarter of 2023, quarterly average loan balances in the current quarter increased $0.7 billion, or 12%. The increase was driven by loans acquired in the Limestone Merger, and to a lesser extent, organic growth in other commercial real estate loans, commercial and industrial loans, premium finance loans, and leases.
Asset Quality:
Overall, asset quality remained relatively stable through the second quarter of 2024. Delinquency trends remained stable as loans considered current comprised 98.8%, 98.7%, and 99.0% of the loan portfolio at June 30, 2024, at March 31, 2024, and and at June 30, 2023, respectively. Total nonperforming assets at June 30, 2024 increased $2.4 million, or 5%, compared to at March 31, 2024, and increased $6.8 million, or 16%, compared to at June 30, 2023. The increase in nonperforming assets compared to the linked quarter was primarily due to an increase in the balance of nonaccrual small-ticket leases, produced by our North Star Leasing business, and other commercial real estate loans. The increase in nonperforming assets compared to at June 30, 2023, was impacted by the increase of small-ticket nonaccrual leases and an increase in loans past due and accruing. Nonperforming assets as a percent of total loans and OREO was 0.77% at June 30, 2024, compared to 0.74% at March 31, 2024, and 0.70% at June 30, 2023.
Criticized loans, which are those categorized as special mention, substandard or doubtful, decreased $16.6 million, or 6%, compared to at March 31, 2024, increased $4.7 million, or 2%, compared to at December 31, 2023, and increased $20.1 million, or 9%, compared to at June 30, 2023. As a percent of total loans, criticized loans were 3.79% at June 30, 2024, compared to 4.14% at March 31, 2024, 3.82% at December 31, 2023, and 3.68% at June 30, 2023. The decrease in the amount of criticized loans compared to at March 31, 2024 and at December 31, 2023 was primarily driven by paydowns on previously downgraded loans. Compared to June 30, 2023, the increase in the amount of criticized loans was primarily driven by loan downgrades.
Classified loans, which are those categorized as substandard or doubtful, decreased $27.3 million, or 19%, compared to at March 31, 2024, increased $0.2 million compared to at December 31, 2023, and increased $9.2 million, or 8%, compared to at June 30, 2023. As a percent of total loans, classified loans were 1.90% at June 30, 2024, compared to 2.38% at March 31, 2024, 1.95% at December 31, 2023, and 1.86% at June 30, 2023. The decrease in classified loans compared to at March 31, 2024 was driven by paydowns and two upgrades in the commercial portfolio. The increase in classified loans when compared to at June 30, 2023, was primarily driven by loan downgrades.
Annualized net charge-offs were 0.27% of average total loans for the second quarter of 2024, compared to 0.22% for the linked quarter, and 0.09% for the second quarter of 2023. The increase relative to the linked quarter was driven by an increase in charge-offs on small-ticket leases partially offset by decreases in net charge-offs on commercial and industrial loans and other commercial real estate loans. The increase in net charge-offs during the second quarter of 2024 versus the prior year second quarter was primarily attributable to an increase in charge-offs on (i) small-tickets leases, (ii) indirect consumer loans, (iii) commercial and industrial loans, and (iv) other commercial real estate loans.
At June 30, 2024, the allowance for credit losses increased $1.4 million when compared to at March 31, 2024, increased $4.2 million when compared to at December 31, 2023, and increased $5.0 million when compared to at June 30, 2023. The increase in the allowance for credit losses at June 30, 2024 when compared to at March 31, 2024 and at December 31, 2023 was primarily due to an increase on reserves for individually analyzed loans and leases. The increase in the allowance balance at June 30, 2024 when compared to June 30, 2023 was driven by loan growth and a deterioration in macro-economic conditions used within the CECL model, partially offset by a release of reserves on individually analyzed loans and leases. The ratio of the allowance for credit losses as a percent of total loans was 1.05% at June 30, 2024, compared to 1.05% at March 31, 2024, and 1.02% at June 30, 2023.
Deposits:
As of June 30, 2024, period-end total deposits decreased $28.8 million compared to at March 31, 2024. The decrease was primarily driven by decreases of (i) $70.8 million in brokered certificates of deposit, (ii) $58.8 million in governmental deposit accounts, and (iii) $24.2 million in interest-bearing demand deposit accounts, partially offset by an increase of $132.5 million in retail certificates of deposit. The increase in retail certificates of deposits was due to current specials being offered, while the decrease in governmental deposit accounts was due to the seasonality of those balances, which are typically higher in the first quarter. Excluding a decrease in brokered certificates of deposit of $70.8 million, deposits were
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up $42.0 million compared to the linked quarter, driven by the aforementioned increase in retail certificates of deposits and higher money market deposit accounts.
Compared to December 31, 2023, period-end total deposits increased $145.5 million, or 2%. The increase was primarily driven by increases of $369.5 million in retail certificates of deposit and $93.7 million in money market deposit accounts, partially offset by decreases of $162.8 million in brokered certificates of deposits, $95.0 million in non-interest bearing deposits and $60.8 million in interest bearing demand accounts.
Compared to June 30, 2023, period-end deposit balances increased $337.9 million, or 5%. The increase was primarily driven by increases of $862.1 million in retail certificates of deposit, $150.5 million in money market deposit accounts, and $60.7 million in governmental deposit accounts, offset by decreases of $236.1 million, $209.9 million, $147.3 million, and $142.1 million in savings accounts, non-interest bearing deposits, brokered certificates of deposit, and interest-bearing demand deposit accounts, respectively. The increase in retail certificates of deposits was driven by current promotions being offered.
The percentages of retail deposit balances and commercial deposit balances of the total deposit balance at June 30, 2024 were 78% and 22%, respectively, compared to 76% and 24%, respectively, at March 31, 2024, and 78% and 22%, respectively, at June 30, 2023.
Uninsured deposits were 30%, 32%, and 32% of total deposits at June 30, 2024, at March 31, 2024, and at June 30, 2023, respectively. Uninsured amounts are estimated based on the portion of customer account balances that exceeded the FDIC limit of $250,000. Peoples pledges investment securities against certain governmental deposit accounts, which collateralized $748.3 million, or 38%, $865.6 million, or 42%, and $749.9 million, or 38% of the uninsured deposit balances at June 30, 2024, at March 31, 2024, and at June 30, 2023, respectively.
Average deposit balances during the second quarter of 2024 increased $120.2 million when compared to the linked quarter, and increased $0.7 billion, or 11%, when compared to the second quarter of 2023. The increase in average deposit balances compared to the linked quarter was driven by increases of $160.8 million in retail certificates of deposits, $65.6 million in money market deposit accounts, and $32.0 million in governmental deposits, partially offset by decreases of $86.7 million in brokered certificates of deposits and $24.9 million in non-interest bearing deposits. Total demand deposit accounts comprised 35%, 35% and 42% of total deposits at June 30, 2024, at March 31, 2024 and at June 30, 2023, respectively.
Stockholders' Equity:
Total stockholders' equity at June 30, 2024 increased $15.8 million, or 1%, compared to at March 31, 2024. This change was primarily driven by net income of $29.0 million during the quarter, partially offset by dividends paid of $14.2 million. The increase in accumulated other comprehensive loss was the result of the changes in the market value of available-for-sale investment securities during the period.
Total stockholders' equity at June 30, 2024 increased $24.3 million, or 2%, compared to at December 31, 2023, which was due to net income of $58.6 million in the first six months of 2024, partially offset by dividends paid of $27.9 million and an increase of $8.6 million in accumulated other comprehensive loss.
Total stockholders' equity at June 30, 2024 increased $78.9 million, or 8%, compared to at June 30, 2023, which was due to net income of $124.3 million in the last twelve months and a decrease in other comprehensive loss of $8.7 million, partially offset by dividends paid of $55.9 million.
At June 30, 2024, the tier 1 risk-based capital ratio was 12.55%, compared to 12.50% at March 31, 2024, and 12.10% at June 30, 2023. The common equity tier 1 risk-based capital ratio was 11.76% at June 30, 2024, compared to 11.69% at March 31, 2024, and 11.36% at June 30, 2023. The total risk-based capital ratio was 13.47% at June 30, 2024, compared to 13.40% at March 31, 2024, and 12.92% at June 30, 2023. Peoples adopted the five-year transition to phase in the impact of the adoption of CECL on regulatory capital ratios. Compared to at March 31, 2024, and at June 31, 2023, these ratios improved due to net income during the second quarter of 2024, partially offset by dividends paid.
At June 30, 2024, book value per common share and tangible book value per common share, which excludes goodwill and other intangible assets, were $30.36 and $18.91, respectively, compared to $29.93 and $18.39, respectively, at March 31, 2024, and $28.24 and $16.56, respectively, at June 30, 2023. The ratio of total stockholders' equity to total assets increased 21 basis points when compared to March 31, 2024. The tangible equity to tangible assets ratio, which excludes goodwill and other intangible assets, increased 24 basis points when compared to at March 31, 2024. Compared to at June 30, 2023, the total stockholders' equity to total assets ratio increased from 11.37% to 11.68%, and the tangible equity to tangible assets ratio increased from 7.00% to 7.61%. The ratios increased compared to at June 30, 2023, primarily due to net income over the last twelve months.
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Peoples Bancorp Inc. ("Peoples", Nasdaq: PEBO) is a diversified financial services holding company and makes available a complete line of banking, trust and investment, insurance and premium financing solutions through its subsidiaries. Headquartered in Marietta, Ohio since 1902, Peoples has established a heritage of financial stability, growth and community impact. Peoples had $9.2 billion in total assets as of June 30, 2024, and 150 locations, including 130 full-service bank branches in Ohio, West Virginia, Kentucky, Virginia, Washington D.C., and Maryland. Peoples' vision is to be the Best Community Bank in America.
Peoples is a member of the Russell 3000 index of United States ("U.S.") publicly-traded companies. Peoples offers services through Peoples Bank (which includes the divisions of Peoples Investment Services, Peoples Premium Finance and North Star Leasing), Peoples Insurance Agency, LLC, and Vantage Financial, LLC.


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Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss second quarter 2024 results of operations on July 23, 2024, at 11:00 a.m., Eastern Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (866) 890-9285. A simultaneous webcast of the conference call audio and earnings conference call presentation will be available online via the "Investor Relations" section of Peoples' website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples' website in the "Investor Relations" section for one year.

Use of Non-US GAAP Financial Measures:
This news release contains financial information and performance measures determined by methods other than those in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Management uses these "non-US GAAP" financial measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-US GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with US GAAP, nor are they necessarily comparable to non-US GAAP performance measures that may be presented by other companies. Below is a listing of the non-US GAAP financial measures used in this news release:
◦Core non-interest expense is a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses and COVID-19 employee retention credit.
◦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 ratio is 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.
◦The efficiency ratio adjusted for non-core items is calculated as core 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 ratio is a non-US GAAP financial measure since it excludes the impact of acquisition-related expenses, COVID-19 employee retention credit, and the amortization of other intangible assets and all gains and losses included in earnings, and uses fully tax-equivalent net interest income.
◦Tangible assets, tangible equity, the tangible equity to tangible assets ratio and tangible book value per common share are non-US GAAP financial measures since they exclude the impact of goodwill and other intangible assets acquired through acquisitions on both total stockholders' equity and total assets.
◦Total non-interest income, excluding net gains and losses, is a non-US GAAP financial measure since it excludes all gains and losses included in earnings.
◦Pre-provision net revenue is defined as net interest income plus total non-interest income, excluding net gains and losses, minus total non-interest expense. This measure is a non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in net income.
◦Return on average assets adjusted for non-core items is calculated as annualized net income (less the after-tax impact of all gains and losses, acquisition-related expenses, and COVID-19 employee retention credit divided by average assets. This measure is a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses and acquisition-related expenses.
◦Return on average tangible equity is calculated as annualized net income (less the after-tax impact of amortization of other intangible assets) divided by average tangible equity. This measure is a non-US GAAP financial measure since it excludes the after-tax impact of amortization of other intangible assets from net income and the impact of average goodwill and other average intangible assets acquired through acquisitions on average stockholders' equity.
A reconciliation of these non-US GAAP financial measures to the most directly comparable US GAAP financial measures is included at the end of this news release under the caption of "Non-US GAAP Financial Measures (Unaudited)."
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Safe Harbor Statement:
Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, 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 factors include, but are not limited to:
(1)the effects of interest rate policies, changes in the interest rate environment due to economic conditions and/or the fiscal and monetary policy measures undertaken by the U.S. government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions, which may adversely impact interest rates, the interest rate yield curve, interest margins, loan demand and interest rate sensitivity;
(2)the effects of inflationary pressures and the impact of rising interest rates on borrowers’ liquidity and ability to repay;
(3)the success, impact, and timing of the implementation of Peoples' business strategies and Peoples' ability to manage strategic initiatives, including the 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 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 acquired companies to a variety of new and more stringent legal and regulatory requirements;
(6)the effects of easing restrictions on participants in the financial services industry;
(7)current and future local, regional, national and international economic conditions (including the impact of persistent inflation, supply chain issues or labor shortages, supply-demand imbalances affecting local real estate prices, high unemployment rates in the local or regional economies in which Peoples operates and/or the U.S. economy generally, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, and changes in the relationship of the U.S. and U.S. global trading partners) and the impact these conditions may have on Peoples, Peoples' customers and Peoples' counterparties, and Peoples' assessment of the impact, which may be different than anticipated;

(8)Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;
(9)changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans, charge-offs, and customer and other counterparties' performance and creditworthiness generally, which may be less favorable than expected in light of recent inflationary pressures and continued elevated interest rates, and may adversely impact the amount of interest income generated;
(10)Peoples may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
(11)future credit quality and performance, including expectations regarding future credit losses and the allowance for credit losses;
(12)changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations;
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(13)the impact of assumptions, estimates and inputs used within models, which may vary materially from actual outcomes, including under the CECL model;
(14)adverse changes in the conditions and trends in the financial markets, including recent inflationary pressures, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;
(15)the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
(16)Peoples' ability to receive dividends from Peoples' subsidiaries;
(17)Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;
(18)the impact of larger or similar-sized financial institutions encountering problems, such as the 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, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including Russia’s war in Ukraine and the ongoing conflicts in the Middle East);
(27)the potential deterioration of the U.S. economy due to financial, political or other shocks;
(28)the potential influence on the U.S. financial markets and economy from the effects of climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;
(29)the impact on Peoples' businesses and operating results of any costs associated with obtaining rights in intellectual property claimed by others and adequately protecting Peoples' intellectual property;
(30)risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets;
(31)Peoples' ability to integrate the Limestone Merger, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;
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(32)the risk that expected revenue synergies and cost savings from the Limestone Merger may not be fully realized or realized within the expected time frame;
(33)changes in laws or regulations imposed by Peoples' regulators impacting Peoples' capital actions, including dividend payments and share repurchases;
(34)the vulnerability of Peoples' network and online banking portals, and the systems of parties with whom Peoples contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches;
(35)Peoples' business may be adversely affected by increased political and regulatory scrutiny of corporate environmental, social and governance ("ESG") practices;
(36)the effect of a fall in stock market prices on the asset and wealth management business; and
(37)other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples' reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2023. 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.
As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its June 30, 2024 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from the estimates and information contained in this news release.
PER COMMON SHARE DATA AND SELECTED RATIOS (Unaudited)
At or For the Three Months EndedAt or For the Six Months Ended
June 30,March 31,June 30,June 30,
20242024202320242023
PER COMMON SHARE:
Earnings per common share:
   Basic$0.83 $0.85 $0.64 $1.67 $1.57 
   Diluted0.82 0.84 0.64 1.66 1.56 
Cash dividends declared per common share0.40 0.39 0.39 0.79 0.77 
Book value per common share (a)30.36 29.93 28.24 30.36 28.24 
Tangible book value per common share (a)(b)18.91 18.39 16.56 18.91 16.56 
Closing price of common shares at end of period$30.00 $29.61 $26.55 $30.00 $26.55 
SELECTED RATIOS:
Return on average stockholders' equity (c)10.99 %11.30 %8.89 %11.15 %10.96 %
Return on average tangible equity (c)(d)19.21 %19.91 %16.56 %19.55 %19.90 %
Return on average assets (c)1.27 %1.32 %1.01 %1.29 %1.23 %
Return on average assets adjusted for non-core items (c)(e)1.30 %1.33 %1.47 %1.31 %1.53 %
Efficiency ratio (f)(i)59.19 %58.06 %62.75 %58.62 %60.44 %
Efficiency ratio adjusted for non-core items (g)(i)59.19 %58.14 %53.35 %58.66 %55.15 %
Pre-provision net revenue to total average assets (c)(h)1.85 %1.97 %1.78 %1.91 %1.93 %
Net interest margin (c)(i)4.18 %4.26 %4.54 %4.22 %4.54 %
Dividend payout ratio (j)48.94 %46.46 %63.62 %47.69 %50.67 %
(a)Data presented as of the end of the period indicated.
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(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)Return on average assets adjusted for non-core items represents a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses, acquisition-related expenses, and COVID-19 employee retention credit. 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)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)."
(g)The efficiency ratio adjusted for non-core items is defined as core 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 the impact of acquisition-related expenses, COVID-19 employee retention credit, 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)."
(h)Pre-provision net revenue is defined as net interest income plus total non-interest income (excluding all gains and losses) minus total non-interest expense. This measure represents a non-US GAAP financial measure since it excludes the provision for (recovery of) credit losses and all gains and losses included in net income. This measure is a key metric used by federal bank regulatory agencies in their evaluation of capital adequacy for financial institutions. 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)."
(i)Interest income and yields are presented on a fully tax-equivalent basis, using a 21% statutory federal corporate income tax rate.
(j)This ratio is calculated based on dividends declared during the period divided by net income for the period.

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CONSOLIDATED STATEMENTS OF INCOME
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20242024202320242023
(Dollars in thousands, except per share data)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Total interest income$130,770 $127,593 $106,417 $258,363 $190,566 
Total interest expense44,157 40,953 21,564 85,110 32,835 
Net interest income86,613 86,640 84,853 173,253 157,731 
Provision for credit losses5,683 6,102 7,983 11,785 9,836 
Net interest income after provision for credit losses80,930 80,538 76,870 161,468 147,895 
Non-interest income:
Electronic banking income6,470 6,046 6,466 12,516 11,909 
Trust and investment income4,999 4,599 4,414 9,598 8,498 
Deposit account service charges4,339 4,223 4,153 8,562 7,676 
Insurance income4,109 6,498 4,004 10,607 9,429 
Lease income1,116 1,236 1,719 2,352 2,796 
Bank owned life insurance income1,037 1,500 842 2,537 1,549 
Mortgage banking income243 321 189 564 503 
Net loss on investment securities(353)(1)(166)(354)(2,101)
Net loss on asset disposals and other transactions(428)(341)(1,665)(769)(1,911)
Other non-interest income2,172 1,698 1,059 3,870 1,727 
  Total non-interest income23,704 25,779 21,015 49,483 40,075 
Non-interest expense:
Salaries and employee benefit costs36,564 38,893 38,025 75,457 70,053 
Data processing and software expense6,743 5,769 4,728 12,512 9,290 
Net occupancy and equipment expense6,142 6,283 5,380 12,425 10,335 
Professional fees2,935 2,967 7,438 5,902 10,319 
Amortization of other intangible assets2,787 2,788 2,800 5,575 4,671 
Electronic banking expense1,941 1,781 1,832 3,722 3,323 
FDIC insurance expense1,251 1,186 1,464 2,437 2,265 
Other loan expenses1,036 1,076 538 2,112 1,277 
Franchise tax expense760 881 872 1,641 1,906 
Communication expense736 799 724 1,535 1,337 
Marketing expense681 1,056 1,357 1,737 2,287 
Other non-interest expense7,182 4,986 5,465 12,168 10,039 
  Total non-interest expense68,758 68,465 70,623 137,223 127,102 
  Income before income taxes35,876 37,852 27,262 73,728 60,868 
Income tax expense6,869 8,268 6,166 15,137 13,212 
    Net income$29,007 $29,584 $21,096 $58,591 $47,656 
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CONSOLIDATED STATEMENTS OF INCOME (Cont.)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20242024202320242023
(Dollars in thousands, except per share data)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
PER COMMON SHARE DATA:
Net income available to common shareholders$29,007 $29,584 $21,096 $58,591 $47,656 
Less: Dividends paid on unvested common shares218 143 144 361 246 
Less: Undistributed loss allocated to unvested common shares55 64 13 119 45 
Net earnings allocated to common shareholders$28,734 $29,377 $20,939 $58,111 $47,365 
Weighted-average common shares outstanding34,764,489 34,740,349 32,526,962 34,752,419 30,222,165 
Effect of potentially dilutive common shares353,159 311,461 123,014 319,131 92,339 
Total weighted-average diluted common shares outstanding35,117,648 35,051,810 32,649,976 35,071,550 30,314,504 
Earnings per common share – basic$0.83 $0.85 $0.64 $1.67 $1.57 
Earnings per common share – diluted$0.82 $0.84 $0.64 $1.66 $1.56 
Cash dividends declared per common share$0.40 $0.39 $0.39 $0.79 $0.77 
Weighted-average common shares outstanding – basic34,764,489 34,740,349 32,526,962 34,752,419 30,222,165 
Weighted-average common shares outstanding – diluted35,117,648 35,051,810 32,649,976 35,071,550 30,314,504 
Common shares outstanding at the end of period35,498,977 35,486,234 35,374,916 35,498,977 35,374,916 
16

CONSOLIDATED BALANCE SHEETS
June 30,December 31,
20242023
(Dollars in thousands)(Unaudited)
Assets
Cash and cash equivalents:
  Cash and due from banks$119,981 $111,680 
  Interest-bearing deposits in other banks115,890 315,042 
    Total cash and cash equivalents235,871 426,722 
Available-for-sale investment securities, at fair value (amortized cost of
 $1,266,060 at June 30, 2024 and $1,184,288 at December 31, 2023) (a)
1,119,139 1,048,322 
Held-to-maturity investment securities, at amortized cost (fair value of
  $622,593 at June 30, 2024 and $612,022 at December 31, 2023) (a)
701,984 683,657 
Other investment securities, at cost62,742 63,421 
    Total investment securities (a)1,883,865 1,795,400 
Loans and leases, net of deferred fees and costs (b)6,325,371 6,159,196 
Allowance for credit losses(66,247)(62,011)
    Net loans and leases6,259,124 6,097,185 
Loans held for sale3,832 1,866 
Bank premises and equipment, net of accumulated depreciation106,589 103,856 
Bank owned life insurance142,605 140,554 
Goodwill362,169 362,169 
Other intangible assets44,248 50,003 
Other assets188,158 179,627 
    Total assets$9,226,461 $9,157,382 
Liabilities
Deposits:
Non-interest-bearing$1,472,697 $1,567,649 
Interest-bearing5,825,077 5,584,648 
    Total deposits7,297,774 7,152,297 
Short-term borrowings482,733 601,121 
Long-term borrowings234,257 216,241 
Accrued expenses and other liabilities133,864 134,189 
    Total liabilities$8,148,628 $8,103,848 
Stockholders' Equity
Preferred shares, no par value, 50,000 shares authorized, no shares issued at June 30, 2024 or at December 31, 2023
— — 
Common shares, no par value, 50,000,000 shares authorized, 36,760,516 shares issued at June 30, 2024 and 36,736,041 shares issued at December 31, 2023, including shares in treasury
863,975 865,227 
Retained earnings 357,886 327,237 
Accumulated other comprehensive loss, net of deferred income taxes(110,193)(101,590)
Treasury stock, at cost, 1,347,476 common shares at June 30, 2024 and 1,511,348 common shares at December 31, 2023
(33,835)(37,340)
    Total stockholders' equity1,077,833 1,053,534 
    Total liabilities and stockholders' equity$9,226,461 $9,157,382 
(a)Available-for-sale investment securities and held-to-maturity investment securities are presented net of allowance for credit losses of $0 and $238, respectively, as of June 30, 2024 and $0 and $238, respectively, as of December 31, 2023.
(b)Also referred to throughout this document as "total loans" and "loans held for investment."
17

SELECTED FINANCIAL INFORMATION (Unaudited)
June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20242024202320232023
Loan Portfolio
Construction$340,601 $314,687 $364,019 $374,016 $418,741 
Commercial real estate, other2,195,979 2,243,780 2,196,957 2,189,984 2,071,514 
Commercial and industrial1,258,063 1,214,615 1,184,986 1,128,809 1,160,310 
Premium finance293,349 238,962 203,177 189,251 162,357 
Leases430,651 422,694 414,060 402,635 377,791 
Residential real estate789,344 781,888 791,095 791,965 791,442 
Home equity lines of credit227,608 221,079 208,675 203,940 199,221 
Consumer, indirect675,054 650,228 666,472 668,371 654,371 
Consumer, direct113,655 113,588 128,769 134,562 138,019 
Deposit account overdrafts1,067 1,306 986 857 830 
    Total loans and leases$6,325,371 $6,202,827 $6,159,196 $6,084,390 $5,974,596 
Total acquired loans and leases (a)$1,686,784 $1,757,169 $1,825,129 $1,925,554 $2,032,505 
    Total originated loans and leases$4,638,587 $4,445,658 $4,334,067 $4,158,836 $3,942,091 
Deposit Balances
Non-interest-bearing deposits (b)$1,472,697 $1,468,363 $1,567,649 $1,569,095 $1,682,634 
Interest-bearing deposits:
  Interest-bearing demand accounts (b)1,083,512 1,107,712 1,144,357 1,181,079 1,225,646 
  Retail certificates of deposit1,812,874 1,680,413 1,443,417 1,198,733 950,783 
  Money market deposit accounts869,159 859,961 775,488 730,902 718,633 
  Governmental deposit accounts766,337 825,170 726,713 761,625 705,596 
  Savings accounts880,542 901,493 919,244 987,170 1,116,622 
  Brokered deposits412,653 483,444 575,429 608,914 559,955 
    Total interest-bearing deposits$5,825,077 $5,858,193 $5,584,648 $5,468,423 $5,277,235 
    Total deposits$7,297,774 $7,326,556 $7,152,297 $7,037,518 $6,959,869 
Total demand deposits (b)$2,556,209 $2,576,075 $2,712,006 $2,750,174 $2,908,280 
Asset Quality
Nonperforming assets (NPAs):
  Loans 90+ days past due and accruing$7,592 $7,662 $6,716 $9,117 $5,924 
  Nonaccrual loans33,669 31,361 25,477 26,187 28,796 
    Total nonperforming loans (NPLs) (f)41,261 39,023 32,193 35,304 34,720 
  Other real estate owned (OREO)7,409 7,238 7,174 7,174 7,166 
Total NPAs$48,670 $46,261 $39,367 $42,478 $41,886 
Criticized loans (c)$239,943 $256,565 $235,239 $213,156 $219,885 
Classified loans (d)120,180 147,518 120,027 124,836 110,972 
Allowance for credit losses as a percent of NPLs (f)160.56 %166.11 %194.38 %178.23 %176.30 %
NPLs as a percent of total loans (f)0.65 %0.63 %0.52 %0.58 %0.58 %
NPAs as a percent of total assets (f)0.53 %0.50 %0.43 %0.48 %0.48 %
NPAs as a percent of total loans and OREO (f)0.77 %0.74 %0.64 %0.70 %0.70 %
Criticized loans as a percent of total loans (c)3.79 %4.14 %3.82 %3.50 %3.68 %
Classified loans as a percent of total loans (d)1.90 %2.38 %1.95 %2.05 %1.86 %
Allowance for credit losses as a percent of total loans1.05 %1.05 %1.01 %1.03 %1.02 %
Total demand deposits as a percent of total deposits (b)35.03 %35.16 %37.92 %39.08 %41.79 %
Capital Information (e)(g)(i)
Common equity tier 1 capital ratio (h)11.76 %11.69 %11.75 %11.57 %11.36 %
Tier 1 risk-based capital ratio12.55 %12.50 %12.58 %12.31 %12.10 %
Total risk-based capital ratio (tier 1 and tier 2)13.47 %13.40 %13.38 %13.14 %12.92 %
Leverage ratio9.65 %9.43 %9.57 %9.34 %9.64 %
Common equity tier 1 capital$799,710 $780,017 $766,691 $752,728 $728,892 
Tier 1 capital854,050 834,089 820,495 801,010 776,753 
Total capital (tier 1 and tier 2)916,073 894,662 873,225 855,054 828,910 
Total risk-weighted assets$6,802,528 $6,674,114 $6,524,577 $6,505,779 $6,417,511 
Total stockholders' equity to total assets11.68 %11.46 %11.50 %11.11 %11.37 %
Tangible equity to tangible assets (j)7.61 %7.37 %7.33 %6.85 %7.00 %

18

(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)June 30, 2024 data based on preliminary analysis and subject to revision.
(h)Peoples' capital conservation buffer was 5.66% at June 30, 2024, 5.60% at March 31, 2024, 5.38% at December 31, 2023, 5.14% at September 30, 2023, and 4.92% at June 30, 2023, 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)."
19


PROVISION FOR (RECOVERY OF) CREDIT LOSSES INFORMATION
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20242024202320242023
(Dollars in thousands)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Provision for credit losses
Provision for credit losses$5,397 $5,834 $7,751 $11,231 $9,424 
Provision for checking account overdrafts286 268 232 554 412 
  Total provision for credit losses$5,683 $6,102 $7,983 $11,785 $9,836 
Net Charge-Offs
Gross charge-offs$4,607 $3,874 $2,041 $8,481 $3,896 
Recoveries374 554 845 928 1,156 
  Net charge-offs$4,233 $3,320 $1,196 $7,553 $2,740 
Net Charge-Offs (Recoveries) by Type
Construction$— $— $— $— $9 
Commercial real estate, other80 129 (9)209 (3)
Commercial and industrial46 228 (440)274 (439)
Premium finance51 46 20 97 34 
Leases2,204 1,058 515 3,262 904 
Residential real estate(4)(3)(10)(7)2 
Home equity lines of credit9 (7)55 2 74 
Consumer, indirect1,450 1,390 812 2,840 1,662 
Consumer, direct126 217 43 343 132 
Deposit account overdrafts271 262 210 533 365 
  Total net charge-offs$4,233 $3,320 $1,196 $7,553 $2,740 
As a percent of average total loans (annualized)0.27 %0.22 %0.09 %0.24 %0.11 %


SUPPLEMENTAL INFORMATION (Unaudited)
June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20242024202320232023
Trust assets under administration and management$2,071,832 $2,061,402 $2,021,249 $1,900,488 $1,931,789 
Brokerage assets under administration and management1,567,775 1,530,954 1,473,814 1,364,372 1,379,309 
Mortgage loans serviced for others341,298 348,937 356,784 366,996 375,882 
Employees (full-time equivalent) 1,489 1,498 1,478 1,482 1,500 

20

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited)
Three Months Ended
June 30, 2024March 31, 2024June 30, 2023
(Dollars in thousands)BalanceIncome/
Expense		Yield/ CostBalanceIncome/
Expense		Yield/ CostBalanceIncome/
Expense		Yield/ Cost
Assets
Short-term investments$178,094 $2,502 5.65 %$142,381 $1,922 5.43 %$58,245 $673 4.64 %
Investment securities (a)(b)1,870,372 16,144 3.45 %1,832,599 15,234 3.33 %1,873,944 14,240 3.04 %
Loans (b)(c):
Construction 328,943 6,595 7.93 %339,448 6,404 7.46 %358,732 6,491 7.16 %
Commercial real estate, other2,074,718 36,420 6.94 %2,076,219 37,242 7.10 %1,735,466 28,240 6.44 %
Commercial and industrial1,230,290 23,897 7.68 %1,203,196 23,515 7.73 %1,069,529 19,561 7.24 %
Premium finance260,513 5,746 8.73 %210,405 4,564 8.58 %154,557 2,659 6.81 %
Leases419,764 11,982 11.29 %409,870 12,067 11.65 %359,016 10,276 11.32 %
Residential real estate (d)925,629 11,460 4.95 %930,989 11,322 4.86 %921,012 10,818 4.70 %
Home equity lines of credit225,362 4,612 8.23 %216,743 4,297 7.97 %191,915 3,656 7.64 %
Consumer, indirect656,405 9,669 5.92 %656,244 9,281 5.69 %651,669 7,943 4.89 %
Consumer, direct119,048 2,095 7.08 %124,091 2,098 6.80 %123,899 2,247 7.27 %
Total loans6,240,672 112,476 7.16 %6,167,205 110,790 7.13 %5,565,795 91,891 6.55 %
Allowance for credit losses(64,745)(61,236)(53,427)
Net loans6,175,927 6,105,969 5,512,368 
Total earning assets8,224,393 131,122 6.34 %8,080,949 127,946 6.29 %7,444,557 106,804 5.70 %
Goodwill and other intangible assets407,864 410,719 387,055 
Other assets548,197 529,983 511,271 
Total assets$9,180,454 $9,021,651 $8,342,883 
Liabilities and Equity
Interest-bearing deposits:
Savings accounts$892,465 $222 0.10 %$905,713 $226 0.10 %$1,095,713 $583 0.21 %
Governmental deposit accounts795,913 5,594 2.83 %763,899 5,085 2.68 %693,725 2,330 1.35 %
Interest-bearing demand accounts1,095,553 495 0.18 %1,109,033 452 0.16 %1,178,614 532 0.18 %
Money market deposit accounts850,375 5,419 2.56 %784,759 4,888 2.51 %679,123 2,006 1.18 %
Retail certificates of deposit1,743,238 18,423 4.25 %1,582,426 15,900 4.04 %825,155 4,209 2.05 %
Brokered deposits (e)482,310 5,506 4.59 %568,996 6,753 4.77 %480,640 4,744 3.96 %
Total interest-bearing deposits5,859,854 35,659 2.45 %5,714,826 33,304 2.34 %4,952,970 14,404 1.17 %
Short-term borrowings (e)407,273 4,978 4.90 %388,830 4,184 4.31 %493,561 5,314 4.32 %
Long-term borrowings234,961 3,520 5.98 %230,274 3,466 6.01 %132,091 1,847 5.56 %
Total borrowed funds642,234 8,498 5.30 %619,104 7,650 4.94 %625,652 7,161 4.58 %
Total interest-bearing liabilities6,502,088 44,157 2.73 %6,333,930 40,954 2.60 %5,578,622 21,565 1.55 %
Non-interest-bearing deposits1,476,870 1,501,738 1,637,671 
Other liabilities140,042 133,202 175,152 
Total liabilities8,119,000 7,968,870 7,391,445 
Stockholders’ equity1,061,454 1,052,781 951,438 
Total liabilities and stockholders' equity$9,180,454 $9,021,651 $8,342,883 
Net interest income/spread (b)$86,965 3.61 %$86,992 3.69 %$85,239 4.15 %
Net interest margin (b)4.18 %4.26 %4.54 %






21

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME (Unaudited) -- (Continued)
Six Months Ended
June 30, 2024June 30, 2023
(Dollars in thousands)BalanceIncome/
Expense		Yield/ CostBalanceIncome/
Expense		Yield/ Cost
Assets
Short-term investments$160,238 $4,424 5.55 %$47,008 $1,062 4.55 %
Investment securities (a)(b)1,851,485 31,378 3.39 %1,831,335 26,547 2.90 %
Loans (b)(c):
Construction 334,196 12,998 7.69 %300,270 10,454 6.92 %
Commercial real estate, other2,075,468 73,662 7.02 %1,538,771 48,034 6.21 %
Commercial and industrial1,216,743 47,412 7.71 %975,633 34,165 6.96 %
Premium finance 235,459 10,310 8.66 %151,244 4,809 6.32 %
Leases414,817 24,049 11.47 %350,845 19,919 11.29 %
Residential real estate (d)928,309 22,782 4.91 %881,514 20,535 4.66 %
Home equity lines of credit221,053 8,909 8.10 %184,337 6,622 7.24 %
Consumer, indirect656,324 18,950 5.81 %646,045 15,173 4.74 %
Consumer, direct121,569 4,194 6.94 %116,377 3,985 6.91 %
Total loans6,203,938 223,266 7.14 %5,145,036 163,696 6.35 %
Allowance for credit losses(62,990)(53,052)
Net loans6,140,948 5,091,984 
Total earning assets8,152,671 259,068 6.32 %6,970,327 191,305 5.49 %
Goodwill and other intangible assets409,292  356,470 
Other assets539,089  465,782 
Total assets$9,101,052 $7,792,579 
Liabilities and Equity
Interest-bearing deposits:
Savings accounts$899,089 $448 0.10 %$1,071,174 $719 0.14 %
Governmental deposit accounts779,906 10,679 2.75 %666,683 3,396 1.03 %
Interest-bearing demand accounts1,102,293 947 0.17 %1,142,648 712 0.13 %
Money market deposit accounts817,567 10,307 2.54 %632,561 2,831 0.90 %
Retail certificates of deposit1,662,832 34,323 4.15 %702,809 5,959 1.71 %
Brokered deposit (e)525,653 12,259 4.69 %353,760 6,447 3.68 %
Total interest-bearing deposits5,787,340 68,963 2.40 %4,569,635 20,064 0.89 %
Short-term borrowings (e)398,052 9,162 4.62 %482,643 9,772 4.08 %
Long-term borrowings232,617 6,985 5.99 %115,375 3,000 5.19 %
Total borrowed funds630,669 16,147 5.12 %598,018 12,772 4.30 %
Total interest-bearing liabilities6,418,009 85,110 2.66 %5,167,653 32,836 1.28 %
Non-interest-bearing deposits1,489,304   1,598,985 
Other liabilities136,622   149,075 
Total liabilities8,043,935 6,915,713 
Stockholders’ equity1,057,117 876,866 
Total liabilities and stockholders' equity$9,101,052 $7,792,579 
Net interest income/spread (b)$173,958 3.66 %$158,469 4.21 %
Net interest margin (b)4.22 %  4.54 %
(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.

22

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 EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20242024202320242023
Core non-interest expense:
Total non-interest expense$68,758 $68,465 $70,623 $137,223 $127,102 
Less: acquisition-related expenses— (84)10,709 (84)11,260 
Add: COVID -19 Employee Retention Credit— — 548 — 548 
Core non-interest expense$68,758 $68,549 $60,462 $137,307 $116,390 
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20242024202320242023
Efficiency ratio:
Total non-interest expense$68,758 $68,465 $70,623 $137,223 $127,102 
Less: amortization of other intangible assets2,787 2,788 2,800 5,575 4,671 
Adjusted total non-interest expense65,971 65,677 67,823 131,648 122,431 
Total non-interest income23,704 25,779 21,015 49,483 40,075 
Less: net loss on investment securities(353)(1)(166)(354)(2,101)
Less: net loss on asset disposals and other transactions(428)(341)(1,665)(769)(1,911)
Total non-interest income, excluding net gains and losses24,485 26,121 22,846 50,606 44,087 
Net interest income86,613 86,640 84,853 173,253 157,731 
Add: fully tax-equivalent adjustment (a)352 352 386 705 738 
Net interest income on a fully tax-equivalent basis86,965 86,992 85,239 173,958 158,469 
Adjusted revenue$111,450 $113,113 $108,085 $224,564 $202,556 
Efficiency ratio59.19 %58.06 %62.75 %58.62 %60.44 %
Efficiency ratio adjusted for non-core items:
Core non-interest expense$68,758 $68,549 $60,462 $137,307 $116,390 
Less: amortization of other intangible assets2,787 2,788 2,800 5,575 4,671 
Adjusted core non-interest expense65,971 65,761 57,662 131,732 111,719 
Adjusted revenue$111,450 $113,113 $108,085 $224,564 $202,556 
Efficiency ratio adjusted for non-core items59.19 %58.14 %53.35 %58.66 %55.15 %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.
23

NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
At or For the Three Months Ended
June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands, except per share data)20242024202320232023
Tangible equity:
Total stockholders' equity$1,077,833 $1,062,002 $1,053,534 $993,219 $998,907 
Less: goodwill and other intangible assets406,417 409,285 412,172 408,494 413,172 
Tangible equity$671,416 $652,717 $641,362 $584,725 $585,735 
Tangible assets:
Total assets$9,226,461 $9,270,774 $9,157,382 $8,942,534 $8,786,635 
Less: goodwill and other intangible assets406,417 409,285 412,172 408,494 413,172 
Tangible assets$8,820,044 $8,861,489 $8,745,210 $8,534,040 $8,373,463 
Tangible book value per common share:
Tangible equity$671,416 $652,717 $641,362 $584,725 $585,735 
Common shares outstanding35,498,977 35,486,234 35,314,745 35,395,990 35,374,916 
Tangible book value per common share$18.91 $18.39 $18.16 $16.52 $16.56 
Tangible equity to tangible assets ratio:
Tangible equity$671,416 $652,717 $641,362 $584,725 $585,735 
Tangible assets$8,820,044 $8,861,489 $8,745,210 $8,534,040 $8,373,463 
Tangible equity to tangible assets7.61 %7.37 %7.33 %6.85 %7.00 %
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20242024202320242023
Pre-provision net revenue:
Income before income taxes$35,876 $37,852 $27,262 $73,728 $60,868 
Add: provision for credit losses5,683 6,102 7,983 11,785 9,836 
Add: loss on OREO— — 1,612 — 1,622 
Add: loss on investment securities353 1 166 354 2,101 
Add: loss on other assets397 309 45 706 274 
Add: loss on other transactions 31 32 8 63 15 
Pre-provision net revenue$42,340 $44,296 $37,076 $86,636 $74,716 
Total average assets9,180,454 9,021,651 8,342,883 9,101,052 7,792,579 
Pre-provision net revenue to total average assets (annualized)1.85 %1.97 %1.78 %1.91 %1.93 %
Weighted-average common shares outstanding – diluted35,117,64835,051,81032,649,97635,071,55030,314,504
Pre-provision net revenue per common share – diluted$1.21 $1.26 $1.13 $2.45 $2.45 

24

NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20242024202320242023
Annualized net income adjusted for non-core items:
Net income$29,007 $29,584 $21,096 $58,591 $47,656 
Add: net loss on investment securities353 1 166 354 2,101 
Less: tax effect of net loss on investment securities (a)74 — 35 74 441 
Add: net loss on asset disposals and other transactions428 341 1,665 769 1,911 
Less: tax effect of net loss on asset disposals and other transactions (a)90 72 349 161 401 
Add: acquisition-related expenses— (84)10,709 (84)11,260 
Less: tax effect of acquisition-related expenses (a)— (18)2,249 (18)2,365 
Less: COVID -19 Employee Retention Credit— — 548 — 548 
Add: tax effect of COVID -19 Employee Retention Credit (a)— — 115 — 115 
Net income adjusted for non-core items$29,624 $29,788 $30,570 $59,413 $59,288 
Days in the period91 91 91 182 181 
Days in the year366 366 365 366 365 
Annualized net income$116,666 $118,986 $84,616 $117,826 $96,102 
Annualized net income adjusted for non-core items$119,147 $119,807 $122,616 $119,479 $119,559 
Return on average assets:
Annualized net income$116,666 $118,986 $84,616 $117,826 $96,102 
Total average assets$9,180,454 $9,021,651 $8,342,883 $9,101,052 $7,792,579 
Return on average assets1.27 %1.32 %1.01 %1.29 %1.23 %
Return on average assets adjusted for non-core items:
Annualized net income adjusted for non-core items$119,147 $119,807 $122,616 $119,479 $119,559 
Total average assets$9,180,454 $9,021,651 $8,342,883 $9,101,052 $7,792,579 
Return on average assets adjusted for non-core items1.30 %1.33 %1.47 %1.31 %1.53 %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.

25

NON-US GAAP FINANCIAL MEASURES (Unaudited) -- (Continued)
For the Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Dollars in thousands)20242024202320242023
Annualized net income excluding amortization of other intangible assets:
Net income $29,007 $29,584 $21,096 $58,591 $47,656 
Add: amortization of other intangible assets2,787 2,788 2,800 5,575 4,671 
Less: tax effect of amortization of other intangible assets (a)585 585 588 1,171 981 
Net income excluding amortization of other intangible assets$31,209 $31,787 $23,308 $62,995 $51,346 
Days in the period91 91 91 182 181 
Days in the year366 366 365 366 365 
Annualized net income$116,666 $118,986 $84,616 $117,826 $96,102 
Annualized net income excluding amortization of other intangible assets$125,522 $127,847 $93,488 $126,682 $103,543 
Average tangible equity:
Total average stockholders' equity$1,061,454 $1,052,781 $951,438 $1,057,117 $876,866 
Less: average goodwill and other intangible assets407,864 410,719 387,055 409,292 356,470 
Average tangible equity$653,590 $642,062 $564,383 $647,825 $520,396 
Return on average stockholders' equity ratio:
Annualized net income$116,666 $118,986 $84,616 $117,826 $96,102 
Average stockholders' equity$1,061,454 $1,052,781 $951,438 $1,057,117 $876,866 
Return on average stockholders' equity10.99 %11.30 %8.89 %11.15 %10.96 %
Return on average tangible equity ratio:
Annualized net income excluding amortization of other intangible assets$125,522 $127,847 $93,488 $126,682 $103,543 
Average tangible equity$653,590 $642,062 $564,383 $647,825 $520,396 
Return on average tangible equity19.21 %19.91 %16.56 %19.55 %19.90 %
(a) Tax effect is calculated using a 21% statutory federal corporate income tax rate.
END OF RELEASE
26
1 Second Quarter 2024 Earnings Conference Call July 23, 2024

 
1 Statements in this presentation which are not historical 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 may include discussions of the strategic plans and objectives or anticipated future performance and events of Peoples Bancorp Inc. (“Peoples”). The information contained in this presentation should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Form 10-K”), Peoples’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, and Peoples’ earnings release for the quarter ended June 30, 2024 (the “Second Quarter Earnings Release”), included in Peoples’ current report on Form 8-K furnished to the Securities and Exchange Commission (“SEC”) on July 23, 2024, each of which is available on the SEC’s website (sec.gov) or at Peoples’ website (peoplesbancorp.com). Peoples expects to file its quarterly report on Form 10-Q for the quarter ended June 30, 2024 (the “Second Quarter Form 10-Q”) with the SEC on or about August 1, 2024. As required by U.S. generally excepted accounting principles, Peoples is required to evaluate the impact of subsequent events through the issuance date of its June 30, 2024, consolidated financial statements as part of its Second Quarter Form 10-Q. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this presentation. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in the 2023 Form 10-K under the section “Risk Factors” in Part I, Item 1A and in the Second Quarter Earning Release. As such, actual results could differ materially from those contemplated by forward-looking statements made in this presentation. Management believes that the expectations in these forward-looking statements are based upon reasonable assumptions within the bounds of management’s knowledge of Peoples’ business and operations. Peoples disclaims any responsibility to update these forward-looking statements to reflect events or circumstances after the date of this presentation. Safe Harbor Statement

 
2 • Loan growth of 8% annualized • Improvements in our criticized and classified loans, which declined 6% and 19%, respectively, mostly due to paydowns • Core deposits grew by $42 million for the quarter, which excludes brokered CDs ◦ We have been able to reduce our brokered CD balances, as we generated customer deposits • Higher book value and tangible book value per share • Improved tangible equity to tangible assets ratio • Increased regulatory capital ratios • Return on assets of 1.3% Net income totaling $29 million, or $0.82 diluted earnings per share (“EPS”) – Net interest income was flat – Net interest margin was 4.18% – Decline mostly due to lower accretion income, coupled with higher borrowing costs – Improved non-interest income, excluding the annual performance-based insurance commission recognized during the first quarter – Lower provision for credit losses Second Quarter 2024 Financial Highlights

 
3 Loans Balances by Segment 29% 12%20% 11% 28% Consumer loans Owner occupied commercial real estate Non-owner occupied commercial real estate Specialty finance Other commercial loans Loan Balances and Yields (Dollars in billions) $2.03 $1.93 $1.83 $1.76 $1.69 $3.94 $4.16 $4.33 $4.45 $4.64 6.55% 7.13% 7.12% 7.13% 7.16% Acquired loans and leases Originated loans and leases Quarterly loan yield 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 – Second quarter 2024 annualized loan growth was 8%, compared to linked quarter-end – At June 30, 2024, 47% of loans were fixed rate, with the remaining 53% at a variable rate Loans

 
4 Asset Quality Metrics 3.68% 3.50% 3.82% 4.14% 3.79% 1.86% 2.05% 1.95% 2.38% 1.90% 1.02% 1.03% 1.01% 1.05% 1.05% 0.48% 0.48% 0.43% 0.50% 0.53% Criticized loans as a % of total loans Classified loans as a % of total loans Allowance for credit losses as a % of total loans Nonperforming assets as a % of total assets 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 Asset quality metrics remained stable for the second quarter of 2024 – Criticized and classified loans declined $17 million and $27 million, respectively, compared to the linked quarter-end – The reduction was driven by paydowns on relationships downgraded during the first quarter of 2024, and we continue to receive additional paydowns – We also had upgrades of two classified credits totaling $5 million to “watch” status and one upgrade of $2.5 million from criticized to “fair” – Nonperforming assets increased during the second quarter from higher nonaccrual leasing balances – As of June 30, 2024, 98.8% of our loan portfolio was considered “current”, compared to 98.7% at March 31, 2024 Asset Quality

 
5 Second quarter 2024 NIM was impacted by 4 basis point decline in accretion income – Excluding the accretion income impact, NIM was down 4 basis points compared to the linked quarter We implemented a deposit pricing strategy to bring in short-term higher-rate retail CDs in 2023 Net Interest Income (Dollars in Thousands) $84,853 $86,640 $86,613 $157,731 $173,253 2Q 2023 1Q 2024 2Q 2024 YTD 2023 YTD 2024 Quarterly Net Interest Margin ("NIM") 4.44% 4.53% 4.54% 4.70% 4.44% 4.26% 4.18% 0.14% 0.13% 0.24% 0.52% 0.47% 0.32% 0.28% Net interest margin Accretion impact 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Accretion Income (Dollars in Thousands) $4,475 $6,449 $5,754 $6,482 $12,253 2Q 2023 1Q 2024 2Q 2024 YTD 2023 YTD 2024 Net Interest Income

 
6 Non-interest income for the second quarter of 2024 declined 8% compared to the linked quarter – The reduction was mostly due to the first quarter recognition of annual performance-based insurance commissions of $2.2 million – Growth in electronic banking and trust and investment income offset declines in bank owned life insurance and lease income – The second quarter of 2024 included net losses on securities, assets and other transactions of $781,000 Compared to the prior year quarter, non-interest income was up 13% – This improvement was driven by operating lease income, which is included in other non-interest income, and higher trust and investment income For the first half of 2024, non-interest income was up 23% – Increases were experienced in all lines, except lease income, which was down – This was impacted by the full year recognition of the Limestone Merger during 2024 (merged April 30, 2023) Non-Interest Income (Dollars in Thousands) $21,015 $25,779 $23,704 $40,075 $49,483 2Q 2023 1Q 2024 2Q 2024 YTD 2023 YTD 2024 Non-Interest Income

 
7 – Core non-interest expense was relatively flat compared to the linked quarter – Core non-interest expense was higher for the first half of 2024 due to the larger footprint and ongoing operating costs of the Limestone Merger Core Non-Interest Expense (Dollars in Thousands) $60,462 $68,549 $68,758 $116,390 $137,307 2Q 2023 1Q 2024 2Q 2024 YTD 2023 YTD 2024 Non-Core Non-Interest Expense (Dollars in Thousands) $10,161 $(84) $— $10,712 $(84) 2Q 2023 1Q 2024 2Q 2024 YTD 2023 YTD 2024 Efficiency Ratio 62.8% 58.1% 59.2% 60.4% 58.6% 2Q 2023 1Q 2024 2Q 2024 YTD 2023 YTD 2024 Efficiency Ratio, Adjusted for Non-Core Expenses 53.4% 58.1% 59.2% 55.2% 58.7% 2Q 2023 1Q 2024 2Q 2024 YTD 2023 YTD 2024 Non-Interest Expense

 
8 Deposit Balances by Segment 20% 15% 25% 12% 10% 12% 6% Non-interest-bearing deposits Interest-bearing demand accounts Retail certificates of deposit Money market deposit accounts Governmental deposit accounts Savings accounts Brokered deposits Deposit Balances and Costs (Dollars in billions) $1.68 $1.57 $1.57 $1.47 $1.47 $5.28 $5.47 $5.58 $5.86 $5.83 0.87% 1.28% 1.67% 1.85% 1.94% Non-interest-bearing deposits Interest-bearing deposits Quarterly deposit cost 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 Second quarter 2024 deposits increased $42 million compared to the linked quarter, excluding brokered CDs – Growth in customer deposits contributed to the increase, mostly in retail CDs, which were up $132 million, while our brokered CDs declined $71 million At June 30, 2024, 78% of our deposits were to retail customers (comprised of consumers and small businesses), while the remaining 22% were to commercial customers – Our average retail customer deposit relationship was $25,000 at quarter-end, while our median was nearly $3,000. Deposits

 
9 Capital Metrics 11.36% 11.57% 11.75% 11.69% 11.76% 12.10% 12.31% 12.58% 12.50% 12.55% 12.92% 13.14% 13.38% 13.40% 13.47% 9.64% 9.34% 9.57% 9.43% 9.65% 7.00% 6.85% 7.33% 7.37% 7.61% Common equity tier 1 capital ratio Tier 1 risk-based capital ratio Total risk-based capital ratio Leverage ratio Tangible equity to tangible assets 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 Most of our regulatory capital ratios (which excludes the tangible equity to tangible assets ratio) have improved after the Limestone Merger – The leverage ratio has been relatively steady over the periods presented Tangible equity to tangible assets improved during the second quarter largely due to earnings outpacing dividends – This ratio has been negatively impacted by accumulated other comprehensive losses on available-for-sale investment securities for the last several quarters due to market rate increases Capital

 
10 Our 2024 full year expectations are as follows: Net Interest Income – Benefit from the full year impact of the Limestone Merger, but also affected by projected market interest rate reductions during 2024, estimating quarterly net interest margin of between 4.10% and 4.30%, which assumes no significant rate changes for 2024 Non-Interest Income Excluding Gains and Losses – Growth compared to 2023 results will be between 6% and 8% Non-Interest Expense – Quarterly non-interest expense of between $67 to $69 million for the third and fourth quarters of 2024 Loans/Asset Quality – Loan growth will be between 5% and 7% for the full year of 2024, compared to 2023 – The slight reduction in our estimate is partly the result of paydowns and expected payments on criticized and classified loans, which will offset some of our anticipated loan production, coupled with some expected declines from our leasing business due to recent credit quality and net charge-off trends – Provision for credit losses for the third and fourth quarters of 2024 to be relatively consistent with the amounts recognized during the first two quarters of 2024 – Net charge-off rate will be between 25-30 basis points for 2024, primarily driven by expected small-ticket lease charge-offs for 2024 2024 Outlook

 

peo-logoxbancorpxhorizxrgba.jpg
P.O. BOX 738 - MARIETTA, OHIO - 45750NEWS RELEASE
www.peoplesbancorp.com
FOR IMMEDIATE RELEASEContact:Katie Bailey
July 23, 2024
Chief Financial Officer and Treasurer
(740) 376-7138

PEOPLES BANCORP INC. DECLARES
QUARTERLY DIVIDEND
_____________________________________________________________________

MARIETTA, Ohio - The Board of Directors of Peoples Bancorp Inc. (“Peoples”) (Nasdaq: PEBO) declared a quarterly cash dividend of $0.40 per common share on July 22, 2024, payable on August 19, 2024, to shareholders of record on August 5, 2024.
This dividend represents a payout of approximately $14.2 million, or 49.0% of Peoples’ reported second quarter 2024 earnings. Based on the closing stock price of Peoples’ common shares of $32.89 on July 19, 2024, the quarterly dividend produces an annualized yield of 4.86%.
Peoples Bancorp Inc. is a diversified financial services holding company and makes available a complete line of banking, trust and investment, insurance and premium financing solutions through its subsidiaries. Peoples Bank has been headquartered in Marietta, Ohio since 1902. Peoples has established a heritage of financial stability, growth and community impact. Peoples had $9.2 billion in total assets as of June 30, 2024, and 150 locations, including 130 full-service bank branches in Ohio, Kentucky, West Virginia, Virginia, Washington D.C., and Maryland. Peoples is a member of the Russell 3000 index of U.S. publicly-traded companies. Learn more about Peoples at www.peoplesbancorp.com.

END OF RELEASE


v3.24.2
Cover
Jul. 23, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 23, 2024
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common shares, without par value
Trading Symbol PEBO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Incorporation, State or Country Code OH
Entity File Number 000-16772
Entity Tax Identification Number 31-0987416
Entity Address, City or Town Marietta,
Entity Address, State or Province OH
Entity Address, Postal Zip Code 45750-0738
Entity Address, Address Line One 138 Putnam Street, PO Box 738
City Area Code (740)
Local Phone Number 373-3155
Entity Central Index Key 0000318300
Amendment Flag false
Entity Registrant Name PEOPLES BANCORP INC.
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