Long-Term Borrowings

The following table summarizes Peoples' long-term borrowings:



	September 30, 2014				December 31, 2013
(Dollars in thousands)	Balance		Weighted- Average Rate		Balance		Weighted- Average Rate
Term note payable (parent company)	$	15,564	3.50	%	$	19,147	3.80	%
Callable national market repurchase agreements	$	40,000	3.63	%	$	40,000	3.63	%
FHLB putable non-amortizing, fixed rate advances	60,000		3.00	%	50,000		3.32	%
FHLB amortizing, fixed rate advances	41,890		2.16	%	12,679		3.58	%
Total long-term borrowings	$	157,454	2.98	%	$	121,826	3.53	%

As disclosed in Note 10 of the Notes to the Consolidated Financial Statements included in Peoples' 2013 Form 10-K, Peoples entered into a Loan Agreement (the "Loan Agreement") on December 18, 2012, to obtain a $24 million unsecured term loan from an unaffiliated financial institution with an original maturity of five years, and a $5 million unsecured revolving credit loan with an original maturity of one year. On August 4, 2014, the Loan Agreement was amended (as amended, the "Amended Loan Agreement"). Under the Amended Loan Agreement, the interest rate on the term loan was reduced from 3.80% to 3.50%, and the amount of the revolving credit loan was increased from $5 million to $10 million. In addition, certain loan covenants related to the operations of Peoples' business were modified under the Amended Loan Agreement, which include:


•	issuance of dividends from Peoples Bank, National Association ("Peoples Bank") may not exceed the amount permitted by law without requiring regulatory approval;

•minimum liquidity position of $2 million at Peoples Bancorp Inc.; and


•	Peoples Bank must maintain a ratio of "Allowance for Loan Losses" to "Nonperforming Loans" (as each term is defined in the Amended Loan Agreement) of not less than 70% measured as of the last day of each fiscal quarter;

As disclosed in Note 10 of the Notes to the Consolidated Financial Statements included in Peoples' 2013 Form 10-K, Peoples is also subject to certain covenants under the Loan Agreement, which include restrictions on ownership interests of its subsidiaries; cash and cash equivalents; transfers of criticized, classified or nonperforming assets; additional indebtedness; certain material transactions; and other financial covenants which include:


•	Peoples and Peoples Bank must maintain, as of the last day of each fiscal quarter, sufficient capital to qualify as "well capitalized" under applicable regulatory guidance;


•	Peoples Bank must maintain a "Total Risk-Based Capital Ratio" (as defined in the Loan Agreement) equal to or in excess of 12.50%, measured as of the last day of each fiscal quarter;


•	Peoples Bank must maintain a ratio of "Nonperforming Assets" to the sum of "Tangible Capital" plus the "Allowance for Loan Losses" (as each term is defined in the Loan Agreement) of not more than 20%, measured as of the last day of each fiscal quarter;


•	Peoples must maintain a "Fixed Charge Coverage Ratio" (as defined in the Loan Agreement) that equals or exceeds 1.25 to 1.00, commencing with the quarter ended December 31, 2012 and for each quarter thereafter, with the items used in the ratio determined on a trailing 12-month basis.

As of September 30, 2014, Peoples was in compliance with the applicable material covenants imposed by the Amended Loan Agreement.

Peoples' national market repurchase agreements consist of agreements with unrelated financial service companies and have original maturities ranging from five to ten years. In general, these agreements may not be terminated by Peoples prior to maturity without incurring additional costs. The callable agreements contain call option features, in which the buyer has the right, at its discretion, to terminate the repurchase agreement after an initial period ranging from three months to five years. After the initial call period, the buyer has a one-time option to terminate the agreement. If the buyer exercises its option, Peoples would be required to repay the agreement in whole at the quarterly date. Peoples is required to make quarterly interest payments.

During the third quarter of 2014, Peoples obtained one FHLB putable, non-amortizing, fixed rate FHLB advance for $10 million. The putable, non-amortizing, fixed rate FHLB advances have original maturities ranging from ten to twenty years that may be repaid prior to maturity, subject to termination fees. The FHLB has the option, solely at its discretion, to terminate the advance after the initial fixed rate periods ranging from three months to five years, requiring full repayment of the advance by Peoples, prior to the stated maturity. If the advance is terminated prior to maturity, the FHLB will offer Peoples replacement funding at the then-prevailing rate on an advance product then-offered by the FHLB, subject to normal FHLB credit and collateral requirements. These advances require monthly interest payments, with no repayment of principal until the earlier of either an option exercise by the FHLB or the stated maturity. During the third quarter of 2014, Peoples obtained two FHLB amortizing, fixed-rate advances, totaling $30 million. The amortizing, fixed rate FHLB advances have a fixed rate for the term of the loan, with maturities ranging from ten to twenty years. These advances require monthly principal and interest payments, with some having a constant prepayment rate requiring an additional principal payment annually. These advances are not eligible for optional prepayment prior to maturity. As discussed in Notes 9 and 10 of the Notes to the Consolidated Financial Statements included in Peoples' 2013 Form 10-K, long-term FHLB advances are collateralized by assets owned by Peoples.

The aggregate minimum annual retirements of long-term borrowings in future periods are as follows:



(Dollars in thousands)	Balance		Weighted-Average Rate
Three Months Ending December 31, 2014	$	2,366	3.42	%
Year Ending December 31, 2015	13,366		2.49	%
Year Ending December 31, 2016	11,521		2.60	%
Year Ending December 31, 2017	20,083		2.03	%
Year Ending December 31, 2018	84,700		3.42	%
Thereafter	25,418		2.67	%
Total long-term borrowings	$	157,454	2.98	%