PEBO 10-K & 10-Q changes, risk factors and insider trading

Peoples’ success depends, in part, on local and national economic and political conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, supply chain issues or labor shortages, supply-demand imbalances affecting real estate prices, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, slowing gross domestic product, 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 other factors beyond Peoples’ control may adversely affect Peoples Bank’s deposit levels and composition, the quality of investment securities available for purchase, the demand for loans, the ability of Peoples Bank’s borrowers to repay their loans, and the value of the collateral securing the loans Peoples Bank makes. Disruptions in U.S. and global financial markets and changes in oil production in the Middle East also affect the economy and stock prices in the U.S., which can affect Peoples’ earnings and capital, as well as the ability of Peoples Bank’s customers to repay loans.

The continued impact on economic conditions caused by rising inflation and changes in market interest rates could have an adverse effect on Peoples’ asset quality, deposit levels and loan demand, and, therefore, Peoples’ financial condition and results of operations. Because a significant amount of Peoples Bank’s loans are secured by either commercial or residential real estate, decreases in real estate values could adversely affect the value of property used as collateral and Peoples Bank’s ability to sell the collateral upon foreclosure.

Peoples’ earnings and cash flows are dependent to a significant degree on net interest income, which is the amount by which interest income exceeds interest expense. Interest rates are highly sensitive to many factors that are beyond Peoples’ control, including general economic conditions and the policies of various governmental and regulatory agencies and, in particular, the Federal Reserve Board. Interest rates are significantly impacted by governmental interest rate policies, including changes to such policies that may result from potential changes in the composition of the Federal Reserve Board, changes in the interest rate environment due to the 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. Changes in monetary policy, including changes in interest rates, not only could influence the interest Peoples receives on loans and securities, and the amount of interest Peoples pays on deposits and borrowings, but such changes could also affect (1) Peoples’ ability to originate loans and obtain deposits, (2) the fair value of Peoples’ financial assets and liabilities, and (3) the average duration of Peoples’ mortgage-backed securities portfolio. If the interest rates paid on deposits and borrowings increase at a faster rate than the interest rates received on loans and other investments, Peoples’ net interest income and, therefore, earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and borrowings.

The accounting treatment of the interest rate swaps entered into by Peoples as part of Peoples’ interest rate management strategy may change if the hedging relationship is not as effective as currently anticipated. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for fixed payments from Peoples. At December 31, 2024,2025, Peoples had eightfive effective interest rate swaps, with an aggregate notional value of $75.0$45.0 million, which were designated as cash flow hedges of brokered deposits, and which are expected to be extended every 90 days through the maturity dates of the swaps.

Although Peoples expects that the hedging relationships described above will be highly effective, such relationships could prove ineffective. At December 31, 2024,2025, the termination value of derivative financial instruments in a net liability position was $17.0$9.3 million, which included accrued interest but excluded any adjustment for nonperformance risk. At December 31, 2024,2025, Peoples had no collateral posted with its derivative counterparties and the derivative financial counterparties had $12.3$4.2 million of cash pledged andwith $1.9its derivative counterparties, while the counterparties had $2.1 million of cash collateral pledged. Peoples and its derivative counterparties did not have investment securities pledge.pledged at December 31, 2025. If Peoples had breached any of the provisions of the derivative financial instruments at December 31, 2024,2025, Peoples could have been required to settle its obligations under the derivative financial agreements at the termination value.

For example, on February 24, 2022, Russian military forces invaded Ukraine, and sustained conflict and disruption in the region have occurred and remains likely to continue. In addition, the October 7, 2023 attack by Hamas in Israel has resulted in prolonged conflict and disruption in the Middle East. Further, there has been growing tension with Venezuela in recent months as well as increased trade competition with China. Although the length, impact and outcome of the ongoingglobal war in Ukraine and the conflict in the Middle Eastconflicts are highly unpredictable, these conflicts have resulted, and could continue to result, in significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increases in cyberattacks and espionage. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and Peoples’ business for an unknown period of time.

The BSA and the USA Patriot Act contain anti-money laundering and financial transparency provisions intended to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing activities. The BSA, as amended by the USA Patriot Act and the AMLA, requires depository institutions and their holding companies to undertake activities including maintaining an anti-money laundering program, verifying the identity of clients, monitoring for and reporting suspicious transactions, reporting on cash transactions exceeding specified thresholds, and responding to requests for information by regulatory authorities and law enforcement agencies. The Financial Crimes Enforcement Network (also known as FinCEN), a unit of the U.S. Department of the Treasury that administers the BSA, is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the federal bank regulatory agencies, as well as the U.S. Department of Justice, the U.S. Drug Enforcement Administration, and the U.S. Internal Revenue Service.requirements. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws, which includes a codified risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for BSA compliance; and expands enforcement-related and investigation-related authority, including increasing available sanctions for certain BSA violations and instituting BSA whistleblower incentives and protections.

Peoples has a Loan Agreement with U.S. Bank National Association (the “U.S. Bank Loan Agreement”) with U.S. Bank National Association that provides Peoples with a revolving line of credit. A SixthSeventh Amendment to the U.S. Bank Loan Agreement, entered into on March 31,28, 2024,2025, extended the maturity from AprilMarch 1,31, 20242025 to March 31,30, 2025.2026. The U.S. Bank Loan Agreement imposes operating and financial covenants on Peoples. These restrictions may affect Peoples’ operations and may limit the ability to take advantage of potential business opportunities as they arise. Peoples’ ability to comply with the covenants contained in the U.S. Bank Loan Agreement may be affected by events beyond Peoples’ control, including deteriorating economic conditions, and these events could require Peoples to seek waivers or amendments of such covenants, or alternative sources of financing. Peoples’ ability to obtain such waivers, amendments or alternative financing, may be on terms unfavorable to Peoples.

The banking industry is highly regulated. Peoples is subject to supervision, regulation and examination by various federal and state regulators, including the Federal Reserve Board, the SEC, the CFPB, the FDIC, Financial Industry Regulatory Authority, Inc. (also known as FINRA), and various state regulatory agencies. The statutory and regulatory framework that governs Peoples is generally designed to protect depositors and customers, the DIF, the U.S. banking and financial system, and financial markets as a whole and not to protect Peoples’ shareholders. These laws and regulations, among other matters, prescribe minimum capital requirements, restrict the ability of Peoples Bank to guarantee Peoples’ debt, and impose limitations on Peoples Bank’s business activities (including foreclosure and collection practices), limit the dividends or distributions that Peoples Bank can pay, and impose certain specific accounting requirements that may be more restrictive and may result in greater or earlier charges to earnings or reductions in capital than would otherwise be required under U.S. generally accepted accounting principles (“US GAAP”). Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs. Both the scope of the laws and regulations, and the intensity of the supervision to which Peoples is subject, have increased in recent years in response to the perceived state of the financial services industry, as well as other factors such as technological and market changes. Such regulation and supervision may increase Peoples’ costs and limit its ability to pursue business opportunities. Further, Peoples’ failure to comply with these laws and regulations, even if the failure was inadvertent or reflects a difference in interpretation, could subject Peoples to restrictions on business activities, fines, and other penalties, any of which could adversely affect the results of operations, the capital base, and the price of Peoples’ common shares. Further, any new laws, rules, or regulations could make compliance more difficult or expensive or otherwise adversely affect Peoples’ business and financial condition.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.services, including artificial intelligence. The effective use of technology increases efficiency and enables financial institutions to better serve customers while reducing costs. Peoples’ future success depends, in part, upon its ability to address customer needs by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in its operations. This could include the development, implementation, and adaptation of digital or cryptocurrency, blockchain, and other “fintech” technology. Peoples may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to Peoples’ customers. Failure to successfully keep pace with technological changes affecting the financial services industry could negatively affect Peoples’ growth, revenue and net income.

Liquidity measures the ability to meet current and future cash flow needs as they become due. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits, and to take advantage of interest rate market opportunities and is essential to a financial institution’s business. The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets, and its access to alternative sources of funds. The bank failures in 2023recent years exemplify the potential serious results of the unexpected inability of insured depository institutions to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institution’s ability to satisfy its obligations to depositors. Peoples seeks to ensure its funding needs are met by maintaining a level of liquidity through asset and liability management. If Peoples becomes unable to obtain funds when needed, it could have a material adverse effect on Peoples’ business, financial condition, and results of operations.

OnPeoples NovemberBank 16,has 2023,limited ability to control the amount of premiums it is required to pay for FDIC insurance. The DIF is funded by fees assessed on insured depository institutions, such as Peoples Bank. If the costs of future bank failures increase, deposit insurance premiums may also increase. Increases in FDIC insurance premiums may have a material adverse effect on Peoples’ results of operations and ability to continue to pay dividends on its common shares at the current rate or at all. The FDIC Board adopted a final rule implementingwhich implemented a special assessment to recover the losslosses to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank. The assessment base for theThis special assessment iswas equalbased toon an insured depository institution’s estimatedtotal uninsured depositsdeposits, reported forwhich the quartervalue endedof Decembersuch 31,deposits 2022,held adjustedby toPeoples excludewas below the firstthreshold $5set billion in estimated uninsured deposits. The FDIC will collectby the specialassessment, assessmentand at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024. Becausethus Peoples Bank’s uninsured deposits were less than $5 billion for the quarter ended December 31, 2022, Peoples Bank was not subject to this specialthe assessment. However, there can be no assurance that assessments may not be changed in the future and/or that additional special assessments may not be imposed in the future by the FDIC, either in response to additional bank failures or otherwise, that could increase the amount of premiums required to be paid to the FDIC by Peoples Bank. Federal deposit insurance is described in more detail in the section captioned “Supervision and Regulation” in “ITEM 1 BUSINESS” of this Form 10-K.

Peoples experiences significant competition in originating loans, obtaining deposits, and maintaining and growing insurance and trust customers, principally from other commercial banks, savings associations, credit unions, trust and brokerage companies, insurance agencies, fintechs and online service providers. Several of Peoples’ competitors have greater resources, larger branch systems and wider arrays of banking and non-banking services. This competition could reduce Peoples’ net income by decreasing the number and size of loans that Peoples originates and the interest rates it can charge on these loans. Moreover, technology and other changes are allowing businesses and individuals to utilize alternative methods to complete financial transactions that historically have involved banks. For example, consumers can now maintain funds that have historically been held as bank deposits in brokerage accounts, mutual funds, or high yield savings accounts with online banks. Consumers can also complete transactions such as paying bills and/or transferring funds directly without the assistance of banks. Digital or cryptocurrencies, blockchain, and other “fintech” technologies are designed to enhance transactional security and have the potential to disrupt the financial industry, change the way banks do business, and reduce the need for banks as financial deposit-keepers and intermediaries. The process of eliminating the use of banks to complete financial transactions could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and lower cost deposits as a source of funding could have a material adverse effect on Peoples’ financial condition and results of operations. If Peoples is unable to compete effectively, Peoples will lose market share, which could reduce income generated from deposits, loans and other products. For a more complete discussion of Peoples’ competitive environment, see the section captioned “Competition” in “ITEM 1 BUSINESS” of this Form 10-K.

Peoples is exposed to the risk that when a peer financial institution experiences financial difficulties, there could be an adverse impact on the regional banking industry and the business environment in which Peoples operates. For example, the bank failuresfailure of Republic First Bank during 2024, and the closures of Silicon Valley Bank in California, Signature Bank in New York, First Republic Bank in California, and Heartland Tri-State Bank in Kansas during 2023 caused a degree of panic and uncertainty in the investor community and among bank customers generally. Peoples will continue to monitor potential bank failures and volatility within the banking industry generally, together with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in the banking industry.

Peoples is subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, franchise, withholding and ad valorem taxes. Changes to tax laws could have a material adverse effect on Peoples’ results of operations,operations fairand valuesthe realization of net deferred tax assets and obligations of states and political subdivisions held in Peoples’ investment securities portfolio.assets. In addition, Peoples’ customers are subject to a wide variety of federal, state and local taxes. Changes in taxes paid by Peoples’ customers may adversely affect their ability to purchase homes or consumer products, which could adversely affect their demand for loans and deposit products. In addition, such negative effects on Peoples’ customers could result in defaults on the loans made by Peoples Bank and decrease the value of mortgage-backed securities in which Peoples has invested.

(1)the effects of interest rate policies, including any changes to such policies that may result from potential changes in the composition of the Federal Reserve Board, 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;

(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 recentcontinued inflationary pressures and continued elevated interest rates, and may adversely impact the amount of interest income generated;

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

(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, First Republic Bank in California, and Heartland Tri-State Bank in Kansas, which may adversely affect the banking industry and/or Peoples’ business generation and retention, funding and liquidity, including Peoples’ continued ability to grow deposits or maintain adequate deposit levels, and may further result in potential increased regulatory requirements, increase reputational risk and potential impacts to macroeconomic conditions;

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

(36)the effectrisk ofthat aenergy falltax incredits stockpurchased marketand pricesused onby Peoples to reduce tax liabilities will be disallowed by the assetInternal andRevenue wealth management businessService; and (37)other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples’ reports filed with the SEC, including those risk factors included in the disclosures under the heading “ITEM 1A RISK FACTORS” of this Form 10-K.

◦During 2024,2025, Peoples recorded a provision for credit losses of $24.8$42.2 million, compared to a provision for credit losses of $15.2$24.8 million for 20232024 and a recoveryprovision offor credit losses of $3.5$15.2 million for 2022.2023. The provision for credit losses during 2025 was driven by (i) net charge-offs, (ii) loan growth, (iii) deterioration in the economic forecasts used within the CECL model, (iv) a periodic refresh in the loss drivers utilized within the CECL model, and (v) an increase in reserves for leases originated by the North Star Leasing division. The provision for credit losses during 2024 was primarily driven by (i) higher net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, (iii) economic forecast deteriorationdeterioration, and (iv) loan growth. The provision for credit losses during 2023 was primarily driven by (i) the addition of the provision for the loans acquired in the Limestone Merger, (ii) loan growth and (iii) an increase in charge-offs, partially offset by a release of reserves on individually analyzed loans and the use of updated loss drivers.

◦During the third quarter of 2023, Peoples terminated its pension plan by settling the remaining benefit obligation of $7.7 million. The pension plan had been closed to new entrants since January 1, 2010. Peoples recorded a settlement charge of $2.4 million in the third quarter of 2023 in relation to the termination of the pension plan. Peoples incurred $185,000 in pension settlement charges in 2022, compared to $143,000 in 2021, due to the aggregate amount of lump-sum distributions to participants in Peoples’ defined benefit pension plan exceeding the threshold for recognizing settlement charges during the period.

◦On January 28, 2021, Peoples’ Board of Directors approved a share repurchase program authorizing Peoples to purchase up to an aggregate of $30.0 million of Peoples’ outstanding common shares,shares. replacingDuring 2025, Peoples repurchased 30,692 common shares totaling $0.8 million under the February 27, 2020 share repurchase program which had authorized Peoples to purchase up to an aggregate of $40.0 million of Peoples’ outstanding common shares.program. During 2024, Peoples repurchased 100,905 common shares totaling $3.0 million under the share repurchase program. During 2023, Peoples repurchased 107,219 common shares totaling $3.0 million under the share repurchase program. During 2022, Peoples repurchased 263,183 common shares totaling $7.4 million under the share repurchase program.

◦On April 3, 2019, Peoples entered into the U.S. Bank Loan Agreement. A SixthSeventh Amendment to the U.S. Bank Loan Agreement, entered into on March 31,28, 2024,2025, extended the maturity from AprilMarch 1,31, 20242025 to March 31,30, 2025.2026. The U.S. Bank Loan Agreement provides Peoples with a revolving line of credit in the maximum aggregate principal amount of $30.0 million that may be used: (i) for working capital purposes; (ii) to finance dividends or other distributions (other than stock dividends and stock splits) on or in respect of Peoples’ capital stock and redemptions, repurchases or other acquisitions of any of Peoples’ capital stock permitted under the U.S. Bank Loan Agreement; and (iii) to finance acquisitions permitted under the U.S. Bank Loan Agreement.

◦To combat the effects of ongoing inflationary pressures, the Federal Reserve Board increased the Federal Funds Target Rate range to 0.25% to 0.50% beginning on March 16, 2022, and continued to raise rates up to 5.25% to 5.50% on July 27, 2023. This rate remained unchanged until the latter half of 2024, when multiple rate cuts reduced the rate down to 4.25% to 4.50%. The Federal Reserve Board hadcut keptinterest rates unchangedthree sincetimes Julyduring 2023,2025, beforefurther beginningreducing the rate to cut3.50% ratesto in3.75%. SeptemberThe 2024.Federal Reserve Board has signaled that future rate reductions continue to be a possibility.

Management has identified fourtwo accounting policies as those that, due to the judgments, estimates and assumptions inherent in the policies, are critical to an understanding of Peoples’ Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations. The fourtwo accounting policies identified were the allowance for credit losses, business combinations, goodwilllosses and fair value measurements. These fourtwo accounting policies are described in further detail below.

Detailed information regarding the fair value measurementsof available-for-sale securities can be found in “Note 2 Fair Value of Financial Instruments.”

Net income for the year ended December 31, 20242025, was $117.2$106.8 million, compared to $117.2 million for 2024 and $113.4 million for 2023 and $101.3 million for 2022,2023, representing earnings per diluted common share of $2.99, $3.31, $3.44 and $3.60,$3.44, respectively. The increasesdecreases in 20242025 earnings when compared to 20232024 and 20222023 were driven by increases in netprovision interestfor income,credit partiallylosses offset by increases inand non-interest expenses. Non-core items, and the related tax effect of each, negatively impacted earnings per diluted common share by $0.13 for 2025 compared to $0.07 for 2024 compared toand $0.59 for 2023 and $0.11 for 2022.2023.

Net interest income increased 3%2% to $355.2 million for 2025, compared to $348.7 million for 2024, compared toand $339.4 million for 2023, and $253.4 million for 2022.2023. Net interest margin was 4.21%4.14% in 2024,2025, compared to 4.21% in 2024 and 4.55% in 2023 and 3.96% in 2022.2023. The increasesincrease in net interest income when compared to 20232024 werewas driven by increaseslower in market interest ratesdeposit and theborrowing full year impact of net interest income from the Limestone Merger.costs. Net interest margin for 20242025 decreased 347 basis points when compared to 2023,2024, which was primarily driven by lower accretion income. Net interest margin decreased during 2024 when compared to 2023 largely due to higher borrowingsborrowing costs, which offset higher earning asset yields. Net interest margin increased during 2023 when compared to 2022 largely due to increases in market interest rates, additional net interest income stemming from the Limestone Merger, and improvements in investment yields. Accretion income, net of amortization expense, fromtotaled acquisitions$9.6 totaledmillion for 2025, compared to $25.2 million for 2024,both $25.22024 million forand 2023, andadding $11.611 millionbasis for 2022, addingpoints, 30 basis points, and 34 basis points, and 19 basis points, respectively, to the net interest margin.margin for 2025, 2024, and 2023, respectively.

The provision for credit losses for 20242025 was $24.8$42.2 million, compared to a provision of credit losses of $24.8 million for 2024 and $15.2 million for 2023 and a recovery of credit losses of $3.5 million for 2022.2023. Net charge-offs for 20242025 were $23.2$29.4 million, compared to $23.2 million for 2024 and $8.5 million for 2023 and $7.3 million for 2022.2023. Net charge-offs as a percent of average total loans were 0.45% for 2025, 0.37% for 2024,2024 and 0.15% for 2023 and 0.16% for 2022.2023. The provision for credit losses during 20242025 was mainly a result of (i) highernet charge-offs, (ii) loan growth, (iii) deterioration in the economic forecasts used within the CECL model, (iv) a periodic refresh in loss drivers utilized within the CECL model, and (v) an increase in reserves for leases originated by the North Star Leasing division. The increase in provision for credit losses during 2024 compared to the provision for credit losses during 2023 was primarily driven by (i) net charge-offs, (ii) an increase in reserves for individually analyzed loans and leases, (iii) economic forecast deteriorationdeterioration, and (iv) loan growth. The provision for credit losses during 2023 compared to the provision for credit losses during 2022 was primarily driven by the addition of the provision for loans acquired in the Limestone Merger. The increase in net-charge-offs as a percent of average total loans was driven by charge-offs on small-ticket leases primarily occurring in the second half of 2024.2024 and continuing into 2025.

Total non-interest income, excluding gains and losses, for 2025 increased $6.7 million, or 6%, when compared to 2024. The increase was because of (i) a $5.1 million increase in lease income, driven by increases in month-to-month lease income and operating lease income, (ii) a $1.9 million increase in trust and investment income due to an increase in assets under administration and management, and (iii) a $0.3 million increase in bank owned life insurance income. These increases were partially offset by a $0.6 million decrease in deposit account service charges due to customer activity. Total non-interest income excluding gains and losses, for 2024 increased $9.1 million, or 10%, when compared to 2023. The increase was driven by (i) a $2.6 million increase in lease income, primarily attributable to operating lease income, (ii) a $2.4 million increase in trust and investment income driven by an increase in assets under administration and management, (iii) a $1.4 million increase in insurance income drivenbecause byof higher contingency income and market increases forincreased premiums, (iv) a $0.9 million increase in deposit account service charge income, and (viv) a $0.7 million increase in mortgage banking income. Total non-interest income for 2023 increased $8.6 million, or 11% when compared to 2022. The increase was driven by growth of $4.1 million in electronic banking income, $2.3 million in insurance income, and $2.1 million in deposit account services charges.

Peoples’ efficiency ratio, which is calculated as total non-interest expense less amortization of other intangible assets divided by fully tax-equivalent (“FTE”) net interest income, plus total non-interest income, excluding all gains and losses, was 58.0%58.7% for 2024,2025, compared to 58.0% for 2024 and 58.7% for 2023 and 59.6% for 2022.2023. The efficiency ratio improvedincreased when compared to prior periods2024 due to increased revenue. The efficiency ratio, when adjusted for non-core items, was 57.9% for 2024, 54.4% for 2023 and 58.6% for 2022. The increase in the efficiency ratio, adjusted for non-core items, for 2024 compared to 2023 was driven by higher non-interest expense. The efficiency ratio and the efficiency ratio, adjusted for non-core items for 20232024 improved when compared to 2022,2023 due to higherincreased net interest income driven by the Limestone Merger, increases in market interest rates, and higher non-interest income.revenue.

Income tax expense totaled $28.0 million for 2025, compared to $32.3 million for 2024,2024 compared toand $31.8 million for 2023 and $27.3 million for 2022.2023. The effective tax rate was 20.8% for 2025, 21.6% for 2024 was 21.6%,and 21.9% for 2023 and 21.3% for 2022.2023. The increaseddecreased expense for 20242025 compared to 20232024 and 20222023 was driven by higherlower pre-tax income. Peoples’The reduction in the effective tax rate has increased primarilywas due to apportionmentupdated instate additionaltax statesrates duedriven toby recentapportionment, acquisitions,reducing buttax wasexpense lowerby in$0.9 2024million, due toand a one-time$0.7 million benefit relating to atax priorcredits yearpurchased amendedin return.the fourth quarter of 2025.

Total assets increased 1%4% to $9.65 billion at December 31, 2025, compared to $9.25 billion at December 31, 2024, compared to $9.16 billion at year-end 2023.2024. The increase was primarily due to increases of $198.8$398.9 million in loans and leases and $123.1$57.4 million in investment securities, partially offset by a decrease of $209.1$28.7 million in cash and cash equivalents. The increase in loans and leases compared to December 31, 20232024, was driven by growthincreases of $162.7 million and $66.3$208.0 million in theother commercial real estate loans, $188.1 million in commercial and industrial loans, and premium$30.7 financemillion segments,in respectively,indirect whichconsumer wasloans, partially offset by a reductiondecrease of $40.9 million in commercialleases. realThe estate.increase in investment securities from at December 31, 2024, was driven by purchases of longer duration, higher yielding held-to-maturity investment securities. The decrease in cash and cash equivalents is primarily related to investing activity and the purchase of both available-for-sale and held-to-maturity securities, partially offset by cash provided by operating activities. The increase in investment securities from at December 31, 2023 was driven by purchases of longer duration, higher yielding held-to-maturity investment securities. Management underwent investment portfolio restructurings during 2023 to increase portfolio yield and reduce Peoples’ sensitivity to falling intermediate and long-term interest rates. The allowance for credit losses increased to $63.3$75.7 million, or 1.00%1.12% of total loans, net of deferred fees and costs, compared to $62.0$63.3 million and 1.01%,1.00%, respectively, at December 31, 2023.2024. The increase in the allowance balance at December 31, 2024 when compared to at December 31, 2023 was driven by an increase in reserves for individually analyzed loans and leases, as well as loan growth. The decrease in the ratio of the allowance for credit losses to total loans wasat dueDecember 31, 2025, when compared to at December 31, 2024, was driven by (i) loan growth.growth, (ii) deterioration in the economic forecasts used within the CECL model, (iii) a periodic refresh in the loss drivers utilized within the CECL model, (iv) an increase in reserves for leases originated by the North Star Leasing division, and (v) an increase in individually analyzed loans and leases.

Total liabilities were $8.14$8.44 billion at December 31, 2024,2025, an increase of $38.8$300.4 million since December 31, 2023,2024, primarily due to an increaseincreases of $487.3$336.8 million in totalshort-term depositsborrowings whichand was$20.0 drivenmillion primarilyin byperiod-end promotional offerings on retail CDs,deposits, partially offset by a decrease inof $435.2$33.9 million in total borrowings due to the payoff of the BTFP and lower FHLB overnightlong-term borrowings. Total demand deposit accounts comprised 34%35% and 38%34% of total deposits at December 31, 2024,2025, and at December 31, 2023,2024, respectively.

Total stockholders’ equity was $1.11$1.21 billion at December 31, 2024,2025, an increase of $58.1$95.0 million, or 6%,9%, from December 31, 20232024, due to net income of $117.2$106.8 million for the full year of 2024,2025 partiallyand offseta by an increasedecrease in other comprehensive loss of $8.8$39.8 millionmillion, andpartially offset by dividends paid of $56.3$58.1 million. The increasedecrease in other comprehensive loss was the result of changes in the market value of available-for-sale investment securities, which were primarily driven by changes in market interest rates.

Peoples continued to exceed the capital required by the Federal Reserve Board to be deemed “well capitalized.” Peoples’ tier 1 capital ratio was 12.73% at December 31, 2025, versus 12.39% at December 31, 2024, versus 12.37% at December 31, 2023, while the total capital ratio was 13.78% at December 31, 2025, versus 13.58% at December 31, 2024, versus 13.17% at December 31, 2023.2024. The common equity tier 1 risk-based capital ratio was 12.29% at December 31, 2025, compared to 11.95% at December 31, 2024 compared to 11.56% at December 31, 2023.2024. Compared to at December 31, 2023,2024, the tier 1 risk-based capital and the total risk-based capital ratios improved due to higher net income, partially offset by dividends paid. Peoples’ book value and tangible book value per share were $33.78 and $22.77, respectively, at December 31, 2025, compared to $31.26 and $19.94, respectively, at December 31, 2024, compared to $29.83 and $18.16, respectively, at December 31, 2023.2024. Additional information regarding capital requirements can be found in “Note 17 Regulatory Matters.”

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

Peoples’ average balances compared to priorthe periods2023 balances have been impacted by recent acquisitions, which included: (i) the Limestone Merger as of the close of business on April 30, 2023, which added to average short-term investments, average total investment securities, and average loans, deposit and borrowed funds balances and (ii) the acquisition of Vantage on March 7, 2022, which added to average lease and borrowed funds balances. Peoples’ cash balances have decreased primarily due to a decrease in interest-bearing deposits in other banks, mostly with the FRB. The increases in market interest rates have increased asset yields and increased borrowing costs.costs have moved in tandem with recent interest rate changes.

FTE net interest income increased $9.1$6.3 million, or 3%,2%, for 20242025 when compared to 2023,2024, and net interest margin decreased 347 basis points to 4.21%.4.14%. The increase in net interest income was driven by increasesdecreased inborrowing market interest rates and an additional four months of income from the Limestone Merger.costs. The decrease in net interest margin for 20242025 compared to 20232024 was primarily driven by higherlower borrowingsaccretion costs, which offset higher earning asset yields.income. Accretion income, net of amortization expense, from acquisitions was $9.6 million for 2025 and $25.2 million for 2024 and 2023,2024, which added 3011 and 3430 basis points to net interest margin for 20242025 and 2023,2024, respectively.

During 2023,2024, FTE net interest income increased $85.9$9.1 million, or 34%,3%, when compared to 2022,2023, and net interest margin increaseddecreased 5934 basis points to 4.55%.4.21%. The increase in net interest income was driven by increaseincreases in market interest rates,rates and an additional netfour interestmonths of income from the Limestone Merger,Merger. andThe improveddecrease investmentin net interest margin for 2024 compared to 2023 was primarily driven by higher borrowings costs, which offset higher earning asset yields. Accretion income, net of amortization expense, from acquisitions was $25.2 million for 2024 and 2023, which added 30 and 34 basis points to net interest margin for 20232024 and was2023, primarily driven by the Limestone Merger.respectively.

For 2024,2025, the increase in the provision for credit losses compared to 20232024 was mainly a result of (i) higheran increase in net charge-offs, (ii) loan growth, (iii) deterioration in the economic forecasts used within the CECL model, (iv) a periodic refresh in loss drivers utilized within the CECL model, and (v) an increase in reserves for individuallyleases analyzedoriginated loansby andthe leases,North (iii)Star economicLeasing forecast deterioration and (iv) loan growth.division.

During 2023,2024, the provision for credit losses was driven by (i) thenet addition of the provision for the loans acquired in the Limestone Merger,charge-offs, (ii) loan growth and (iii) an increase in charge-offs, partially offset by a release of reserves onfor individually analyzed loans and theleases, use(iii) ofeconomic updatedforecast lossdeterioration, drivers.and (iv) loan growth.

TheThere disclosurehave belowbeen supplementsno thematerial changes from those risk factors previously discloseddiscussed under “"ITEM 1A. RISK FACTORS”" of Part I of Peoples’Peoples' 2025 Form 10-K.10-K, as supplemented by the disclosures under "ITEM 1A. RISK FACTORS" of Part II of Peoples' Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026. These risk factors are not only the only risks Peoples faces. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially adversely affect Peoples’Peoples' business, financial condition and/or operating results.

Management’s Discussion and Analysis (“MD&A”) represents an overview of the results of operations and financial condition of Peoples at and for the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025. This MD&A should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the Notes thereto.

(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, including the pending merger with Citizens National Corporation (the "Citizens Mergermerger"), and the expansion of commercial and consumer lending activities;

(19)Peoples' ability to secure confidential information and avoid misappropriation of confidential information in connection with the delivery ofdeliver 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;

(25)the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters (including severe weather events,events), pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts (including Russia's ongoingRussia’s war on Ukraine, the continued U.S. political and military presence in Venezuela,Ukraine and the conflictongoing conflicts in Iran (and the resultingMiddle disruptions in oil, energy and other commodity markets and supply chainsEast);

(3729)Peoples' ability to integrate the pending Citizens Merger,merger, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;

(37)the effect of a fall in stock market prices on Peoples' asset and wealth management business; and (38)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' 2025 Form 10-K as supplemented by the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples' Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2026. Peoples encourages readers of this Form 10-Q to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Peoples undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the filing of this Form 10-Q or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC's website at http://www.sec.gov and/or from Peoples' website – www.peoplesbancorp.com under the “Investor Relations” section.

Peoples is a diversified financial services holding company that makes available a complete line of banking, trust and investment, insurance, premium financing and equipment leasing solutions through its subsidiaries. Peoples' business activities are currently limited to one reporting unit and reportable operating segment, which is community banking. Peoples provides services through traditional offices, automated teller machines ("ATMs"), interactive teller machines ("ITMs"), mobile banking, telephone and internet-based banking. Peoples offers a complete array of insurance products through Peoples Insurance, a subsidiary of Peoples Bank. Brokerage services are offered by Peoples exclusively through an unaffiliated registered broker-dealer located at Peoples Bank's offices. Peoples Bank offers insurance premium finance lending nationwide through its Peoples Premium Finance and Peoples Life Premium Finance divisions.division. Peoples also offers lease financing through its North Star Leasing division and through Vantage, a subsidiary of Peoples Bank. As of MarchJune 31,30, 2026, Peoples had 144 locations, including 127 full-service bank branches in Ohio, Kentucky, West Virginia, Virginia, Washington D.C. and Maryland. Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the "ODFI"), the FRB of Cleveland and the FDIC. Peoples Bank must also follow the regulations promulgated by the Consumer Financial Protection Bureau (the "CFPB"), which regulates consumer financial products and services and certain financial services providers. Peoples Insurance is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states in which Peoples Insurance may do business.

The accounting and reporting policies of Peoples conform to US GAAP. The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Note 1 of the Notes to the Unaudited Condensed Consolidated Financial Statements describes Peoples' significant accounting policies. Management has identified the accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to understanding Peoples’ Unaudited Condensed Consolidated Financial Statements, and this MD&A at MarchJune 31,30, 2026, which have been disclosed in Peoples' 2025 Form 10-K and updated as necessary in "Note 1 Summary of Significant Accounting Policies" in the Notes to the Unaudited Condensed Consolidated Financial Statements included in this Form 10-Q. This MD&A should be read in conjunction with thethose policiesaccounting disclosed in Peoples’ 2025 Form 10-K.policies.

ASU 2025-08 - Financial Instruments - Credit Losses (Topic 326): Purchased Loans: The FASB issued an Accounting Standards Update (“ASU”) 2025-08 on November 12, 2025. The amendments “expand the population of acquired financial assets subject to the gross-up approach in Topic 326.” Specifically, the ASU expands the scope to include purchased “seasoned” loans, which are evaluated after purchase credit deteriorated (“PCD”) loans have been identified. These seasoned loans are defined as non-PCD loans that are obtained in a business combination accounted for using the acquisition method or non-PCD loans that are (i) obtained through a transfer that is not a business combination accounted for using the acquisition method or (ii) initially recognized through the consolidation of a variable interest entity.

TheASU ASU2025-08 applies to all public entities subject to the guidance in Topic 326, including public business entities, privatesprivate companies, and not-for-profit entities. The amendments in this update apply “prospectively to loans that are acquired on or after the initial application date.” The amendments in ASU 2025-08 are effective for all entities for fiscal years beginning after December 15, 2026 and interim periods within those annual reporting periods, with early adoption permitted. Peoples is currently evaluating the impact of this guidance.

◦For the firstsecond quarter of 2026, Peoples recorded a provision for credit losses of $9.7$4.7 million, compared to a provision for credit losses of $8.1$9.7 million for the linked quarter and a provision for credit losses of $10.2$16.6 million for the firstsecond quarter of 2025. The provision for credit losses for the firstsecond quarter of 2026 was driven by net charge-offs and an increase in individually-analyzed loans, offset by a reduction of balances within loan segments with higher loss rates. The provision for credit losses for the linked quarter was primarily driven by net charge-offs and a deterioration in the macroeconomic forecasts used within the CECL model. The provision for credits losses for the linkedsecond quarter of 2025 was primarily driven by (i) net charge-offs, (ii) loanan growth,increase in reserves for individually-analyzed loans and leases, (iii) an increase in reserves for leases originated by our North Star Leasing division, (iv) a slightperiodic refresh in loss drivers utilized within the CECL model, (v) deterioration in the economic forecasts used within the CECL model, partially offset by reductions in reserves for individually analyzed loans and leases.(vi) Theloan provision for credit losses for the first quarter of 2025 was primarily driven by net charge-offs.growth. For more information, please refer to the section titled "RESULTS OF OPERATIONS - Provision for Credit Losses" found later in this MD&A.

◦To combat the effects of ongoing inflationary pressures, the Federal Reserve Board increased the Federal Funds Target Rate range to 0.25% to 0.50% beginning on March 16, 2022, and continued to raise rates up to 5.25% to 5.50% on July 27, 2023. This rate remained unchanged until the latter half of 2024, where multiple rate cuts reduced the rate down to 4.25% to 4.50%. The Federal Reserve Board cut interest rates three times during 2025, further reducing the rate to 3.50% to 3.75%. The Federal Reserve Board haswill signaledremain thatdata dependent on future rate reductions continue to be a possibility.changes.

Peoples reported net income of $29.0$28.0 million for the firstsecond quarter of 2026, representing earnings per diluted common share of $0.81.$0.78. In comparison, Peoples reported net income of $31.8$29.0 million, representing earnings per diluted common share of $0.89,$0.81, for the fourthfirst quarter of 2025,2026, and net income of $24.3$21.2 million, representing earnings per diluted common share of $0.68,$0.59, for the firstsecond quarter of 2025. Non-core itemsitems, which includes one-time losses and expenses, negatively impacted earnings per diluted common share by $0.18 for the second quarter of 2026, $0.01 for the first quarter of 2026, $0.04 for the fourth quarter of 2025, and $0.01 for the firstsecond quarter of 2025. For the six months ended June 30, 2026, Peoples recorded net income of $57.0 million, or $1.59 per diluted common share, compared to $45.5 million, or $1.28 per diluted common share, for the six months ended June 30, 2025.

Net interest income was $90.4$92.7 million for the firstsecond quarter of 2026, aand decreaseincreased of$2.3 $0.6million, millionor 3%, when compared to the linked quarter. Net interest margin was 4.16%4.23% for the firstsecond quarter of 2026, compared to 4.12%4.16% for the linked quarter. The decrease in net interest income was primarily driven by a decrease in accretion income coupled with fewer days in the quarter compared to the linked quarter. The increase in net interest income and net interest margin was primarily driven by a reduction in deposit costs.costs compared to the linked quarter. Net interest income for the firstsecond quarter of 2026 increased $5.2 million, or 6%, compared to the firstsecond quarter of 2025. Net interest margin for the second quarter of 2026 increased 48 basis points when compared to 4.15% for the firstsecond quarter of 2025. The increaseincreases in net interest income and net interest margin were primarily driven by lower deposit and borrowing costs compared to the second quarter of 2025. For the first six months of 2026, net interest income increased $10.3 million compared to the same period of 2025, while net interest margin increased 6 basis points to 4.20%. The increases in net interest income and net interest margin were driven by lower deposit costs and increased interest income compared to the first quarterhalf of 2025 was driven by lower deposit and borrowing costs.2025.

Accretion income, net of amortization expense, was $1.1 million for the second quarter of 2026, $1.3 million for the first quarter of 2026,2026 $1.8and $2.6 million for the fourth quarter of 2025 and $3.5 million for the firstsecond quarter of 2025, which added 65 basis points, 86 basis points and 1712 basis points, respectively, to net interest margin. The decrease in accretion income for the firstsecond quarter of 2026 when compared to the firstlinked quarter and the second quarter of 2025 was driven by lesslower accretionunamortized recognizedloan purchase discount balance in the2026 currentassociated period fromwith the 2023Limestone Bancorp Inc. merger with(the Limestone Bancorp, Inc. ("Limestone Merger")., coupled with fewer related loan payoffs during the second quarter of 2026. Accretion income, net of amortization expense, was $2.4 million and $6.1 million for the first six months of 2026 and 2025, respectively. Accretion income added 6 basis points and 15 basis points to net interest margin for the first six months of 2026 and 2025, respectively. The decrease in accretion income for the first six months of 2026 compared to the same period in 2025 was due to lower unamortized loan purchase discount balance in 2026 from the Limestone Merger.

The provision for credit losses was $9.7$4.7 million for the firstsecond quarter of 2026, compared to a provision for credit losses of $8.1$9.7 million for the linked quarter and a provision for credit losses of $10.2$16.6 million for the firstsecond quarter of 2025. The provision for credit losses for the firstsecond quarter of 2026 was primarily driven by net charge-offs and an increase in individually-analyzed loans, partially offset by a reduction in balances of loan segments with higher loss rates. The provision for credit losses for the linked quarter was primarily driven by net charge-offs and a deterioration in the economic forecasts used within the CECL model. The provision for credits losses for the linked quarter was primarily driven by (i) net charge-offs, (ii) loan growth, and (iii) a slight deterioration in the economic forecasts used within the CECL model, partially offset by reductions in reserves for individually analyzed loans and leases. The provision for credit losses for the first quarter of 2025 was primarily driven by net charge-offs. Net charge-offs for the firstsecond quarter of 2026 were $6.6$5.2 million, or 0.40%0.31% of average total loans annualized, compared to net charge-offs of $7.4$6.6 million, or 0.44%0.40% of average total loans annualized, for the linked quarter and net charge-offs of $8.1$7.0 million, or 0.52%0.43% of average total loans annualized, for the firstsecond quarter of 2025. For additional information on credit trends and the allowance for credit losses, see the "FINANCIAL CONDITION - Allowance for Credit Losses" section below.

Net gains and losses include gains and losses on investment securities, asset disposals and other transactions, which are included in total non-interest income on the Consolidated Statements of Operations. The net loss realized during the firstsecond quarter of 2026 was $0.4$8.6 million, compared to a net loss of $2.0$0.4 million for the linked quarter and a net loss of $0.4$0.3 million for the firstsecond quarter of 2025. The net loss for the second quarter of 2026 was driven by the sale of $135.2 million of available-for-sale securities at a net loss of $8.2 million as Peoples manages its balance sheet under $10 billion in assets ahead of the pending Citizens merger. The net losses for the first quarter of 2026 and for the firstsecond quarter of 2025 were drivendue byto losses on repossessed assets. For the six months ended June 30, 2026, the total net loss was $9.0 million, compared to $0.6 million for the same period in 2025. The net loss for the linkedfirst quartersix months of 2026 was primarily driven by athe $0.9aforementioned millioninvestment portfolio restructure in the second quarter. The net loss onrecognized in the salefirst six months of an2025 OREOwas propertyprimarily anddriven aby $0.8$0.6 million lossof net losses on therepossessed redemption of subordinated debt.assets.

Total non-interest income, excluding net gains and losses, for the firstsecond quarter of 2026 increased $0.4$0.3 million compared to the linked quarter. The increase in non-interest income, excluding net gains and losses, was primarily impacted by an increaseincreases of $1.1 million in insurance income, driven by annual performance-based commissions typically received in the first quarter of each year, partially offset by a decrease of $0.4$0.6 million in electronic banking incomeincome, anddriven by debit card interchange, $0.4 million in depositlease accountincome, servicedriven charges,by whichan areincrease seasonallyin highermonth-to-month income, $0.4 million in trust and investment income, and $0.2 million in mortgage banking income. Partially offsetting those increases was a decrease of $1.2 million in insurance income due to performance-based commissions recognized in the fourthfirst quarter of each year. Compared to the firstsecond quarter of 2025, total non-interest income, excluding net gains and losses, increased $1.2$1.8 million, due to an increaseincreases of $1.1$0.8 million in lease income, driven by an increase inhigher operating lease income, and an increase of $0.5$0.7 million in trust and investment income, which was driven by an increase in assets under administration and management, $0.4 million in deposit account services charges, and $0.4 million in mortgage banking income, partially offset by a decrease of $0.5$0.6 million in insuranceother non-interest income, driven by lower annualswap performance-basedfee commissions.income.

ComparedFor the first six months of 2026, total non-interest income, excluding gains and losses, increased $3.0 million, or 6%, compared to the first quartersix months of 2025, total non-interest expense increased $0.8 million, or 1%.2025. The increase in total non-interest expense was primarily due to increases of $1.9 million in lease income, driven by increasesoperating lease income, $1.2 million in trust and investment income, driven by an increase in assets under administration and management, and $0.7 million in deposit account service charges, partially offset by a decrease of $0.8 million in operating lease expense, $0.6 million in net occupancy and equipment expense, driven by higher property taxes, and $0.5 million in data processing and software expense, due to costs associated with recent technology projects, partially offset by a decreases of $0.5 million in amortization of other intangible assets and $0.5 million in other non-interest expense,income, driven by lower corporateswap expenses.fee income.

The efficiency ratio for the firstsecond quarter of 2026 was 58.6%,58.3%, compared to 57.8%58.6% for the linked quarter and 60.7%59.3% for the firstsecond quarter of 2025. The efficiency ratio increasedimproved slightly compared to the linked quarter mainly as the result of higher non-interestnet expense,interest income, driven by increaseda salariesreduction andin employee benefitsdeposit costs. The efficiency ratio for the first six months of 2026 was 58.4%, compared to 60.0% for the first six months of 2025. The efficiency ratio improved compared to the prior year first six months due to higher revenue. The efficiency ratio adjusted for non-core items was 57.9% for the second quarter of 2026, compared to 58.6% for the linked quarter.

Peoples recorded income tax expense of $7.7 million with an effective tax rate of 21.6% for the second quarter of 2026, compared to income tax expense of $8.3 million with an effective tax rate of 22.3% for the firstlinked quarterquarter, of 2026, compared toand income tax expense of $6.2 million with an effective tax rate of 16.4%22.7% for the linked quarter, and income tax expense of $7.0 million with an effective tax rate of 22.4% for the firstsecond quarter of 2025. The increasedecreases in income tax expense and the effective tax rate when compared to the linked quarter waswere impacted by updatesa $0.5 million benefit relating to statetax apportionmentcredit purchased in the fourthsecond quarter of 2025,2026. reducingPeoples' income tax expense for the first six months of 2026 was $16.0 million with an effective tax rate of 22.0%, compared to $13.3 million with an effective tax rate of 22.6% for the same period of 2025. The increase in income tax expense when compared to June 30, 2025, was driven by $0.9higher million,pretax andincome. aThe $0.7decrease in the effective tax rate when compared to June 30, 2025, was driven by the $0.5 million benefit relating to tax credits purchased in the linked quarter. The increase in income tax expense when compared to thesecond quarter endedof March 31, 2025 was driven by higher pretax income.2026.

Total liabilitiesassets were $8.43$9.54 billion as of June 30, 2026, $9.65 billion at March 31, 2026, down slightly from $8.44$9.65 billion at December 31, 2025, and up from $8.11$9.54 billion at June 30, 2025. Total assets at June 30, 2026 decreased when compared to at March 31, 2025.2026 Theprimarily due to a decrease of $144.0 million in total liabilitiesinvestment whensecurities, partially offset by an increase of $51.4 million in period end total loans and leases, compared to at March 31, 2026. Total assets at June 30, 2026 decreased compared to at December 31, 2025 was primarily due to a decrease of $24.4$158.4 million in short-termtotal borrowingsinvestment and a decrease of $18.7 million in long-term borrowings,securities, partially offset by an increase of $38.2$62.2 million in period-end total deposits.loans Theand increaseleases. inTotal totalassets liabilitiesat whenJune 30, 2026 decreased slightly compared to at MarchJune 31,30, 2025 was primarily due increasesto decreases of $486.6$201.6 million in short-termtotal borrowings,investment securities and $6.4 million in total cash and cash equivalents, partially offset by aan decreaseincrease of $86.3$216.6 million in period-endtotal deposits.loans and leases. The decrease in totalinvestment depositssecurities to all prior periods was primarily driven by athe decreasesale of $196.4$135.2 million in brokeredavailable-for-sale deposits,securities partiallyas offset by increasespart of $60.2a millionportfolio restructure in non-interestadvance bearingof deposits,the $24.7pending millionCitizens in interest-bearing demand accounts, and $24.0 million in savings accounts.Merger.

Total stockholders' equity at MarchJune 31,30, 2026 increased $9.4$20.5 million compared to at DecemberMarch 31, 2025,2026, which was primarily due to net income for the quarter of $29.0$28.0 million,million and a decrease of $5.2 million in accumulated other comprehensive loss, partially offset by dividends paid of $14.7$15.1 million and an increase of $5.4 million in accumulated other comprehensive loss.million. Accumulated unrealized losses related to the available-for-sale investment securities portfolio were $76.4$71.2 million and $71.0$76.4 million at June 30, 2026 and at March 31, 2026 and at December 31, 2025,2026, respectively. Total stockholders' equity at MarchJune 30, 2026 increased $29.9 million, or 2%, compared to at December 31, 2025, which was due to net income of $57.0 million in the first six months of 2026, partially offset by dividends paid of $29.8 million. Total stockholders' equity at June 30, 2026 increased by $78.2$83.2 million compared to at MarchJune 31,30, 2025 and was impacted by net income of $111.4$118.2 million in the last twelve months and a decrease in accumulated other comprehensive loss of $19.6$19.4 million, partially offset by dividends paid of $58.6$59.0 million.

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

Net interest income was $90.4$92.7 million for the firstsecond quarter of 2026 aand decreaseincreased of $0.6$2.3 million when compared to the linked quarter. Net interest margin was 4.16%4.23% for the firstsecond quarter of 2026, compared to 4.12%4.16% for the linked quarter. The decrease in net interest income was primarily driven by a decrease in accretion income coupled with fewer days in the quarter compared to the linked quarter. The increase in net interest income and margin was primarily driven by a reduction in deposit costs.

Net interest income for the firstsecond quarter of 2026 increased $5.2 million, or 6%, compared to the firstsecond quarter of 2025. Net interest margin increased 48 basis points when compared to the firstsecond quarter of 2025. The increase in net interest income and net interest margin was primarily driven by lower deposit and borrowing costs.

Accretion income, net of amortization expense, was $1.3$1.1 million for the firstsecond quarter of 2026, $1.8$1.3 million for the linked quarter and $3.5$2.6 million for the firstsecond quarter of 2025, which added 65 basis points, 86 basis points and 1712 basis points, respectively, to net interest margin. The decrease in accretion income for the firstsecond quarter of 2026 when compared to the firstlinked quarter and the second quarter of 2025 was driven by less accretion income recognized in the current period from the 2023Limestone Merger. Accretion income, net of amortization expense, was $2.4 million and $6.1 million for the first six months of 2026 and 2025, respectively. Accretion income added 6 basis points and 15 basis points to net interest margin for the first six months of 2026 and 2025, respectively. The decrease in accretion income for the first six months of 2026 compared to the same period in 2025 was due to less accretion income recognized from the Limestone Merger.

The provision for credit losses recorded represents the amount needed to maintain the appropriate level of the allowance for credit losses based on management’s quarterly estimates. The provision for credit losses for the firstsecond quarter of 2026 was primarily driven by net charge-offs and an increase in individually-analyzed loans, partially offset by a reduction of balances within loan segments with higher loss rates. The provision for credit losses for the linked quarter was primarily driven by net charge-offs and a deterioration in the economic forecasts used within the CECL model. The provision for credit losses for the linkedsecond quarter of 2025 was primarily driven by (i) net charge-offs, (ii) loanan growth,increase in reserves for individually-analyzed loans and leases, (iii) an increase in reserves for leases originated by our North Star Leasing division, (iv) a slightperiodic refresh in loss drivers utilized within the CECL model, (v) deterioration in the economic forecasts used within the CECL model, partially offset by reductions in reserves for individually analyzed loans and leases.(vi) loan growth.

Total non-interest income, excluding net gains and losses, comprised 24% of Peoples' total revenues (defined as net interest income plus total non-interest income excluding net gains and losses) for the firstsecond quarter of 2026, 24% for the linked quarter, and 24% for the second quarter of 2025. For the first six months of 2026, total non-interest income, excluding net gains and losses, totaled 24% of total revenue, consistent with the linkedsame quarterperiod and the first quarter ofin 2025.

For the firstsecond quarter of 2026, e-banking income comprised the largest portion of Peoples' total non-interest income, excluding net gains and losses. Peoples' e-banking services include ATM and debit cards, direct deposit services, internet and mobile banking, and remote deposit capture, and serve as alternative delivery channels to traditional sales offices for providing services to customers. The following table details Peoples' e-banking income:

Peoples' insurance income for the firstsecond quarter of 2026 increased $1.1 milliondecreased when compared to the linked quarter duewhich towas seasonaldriven by the annual performance-based commissions paidrecognized in the first quarter of each year. Insurance income for the second quarter and first quartersix months of 2026 decreased $0.5 million when compared to the firstsame quarterperiods of 2025 due to lower commissionsperformance-based based on the performance of the policies written during 2025.commissions.

BrokerageFiduciary income in the firstsecond quarter of 2026 remained flatincreased when compared to the linked quarter and increased compared to the firstsecond quarter of 2025 whichand was driven by an increase in assets under administration and management. Trust and investment income increased $1.2 million for the first six months of 2026 when compared to 2025, due to higher brokerage income, primarily reflecting the increase in assets under management.

The decreaseincrease in assets under administration and management at MarchJune 31,30, 2026 compared to at DecemberMarch 31, 20252026 was driven by market value fluctuations. The increase in assets under administration and management at MarchJune 31,30, 2026 when compared to at MarchJune 31,30, 2025 was primarily due to growth, as Peoples added new accounts and the underlying market values of assets under management grew.