Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Summary of Loans by Classification

The major classifications of loan balances (in each case, net of deferred fees and costs) excluding loans held for sale, were as follows:

(Dollars in thousands)	March 31, 2023		December 31, 2022
Construction	$	232,296	$	246,941
Commercial real estate, other	1,481,062		1,423,518
Commercial and industrial	891,139		892,634
Premium finance	158,263		159,197
Leases	354,641		345,131
Residential real estate	712,602		723,360
Home equity lines of credit	174,383		177,858
Consumer, indirect	647,177		629,426
Consumer, direct	107,406		108,363
Deposit account overdrafts	749		722
Total loans, at amortized cost	$	4,759,718	$	4,707,150

Nonaccrual and Past Due Loans

The amortized cost of loans on nonaccrual status and of loans delinquent for 90 days or more and accruing was as follows:

	March 31, 2023				December 31, 2022
(Dollars in thousands)	Nonaccrual (a)		Accruing Loans 90+ Days Past Due		Nonaccrual (a)		Accruing Loans 90+ Days Past Due
Construction	$	1	$	—	$	12	$	—
Commercial real estate, other	11,345		150		12,121		167
Commercial and industrial	3,064		228		3,462		130
Premium finance	—		764		—		504
Leases	3,884		2,491		3,178		3,041
Residential real estate	8,641		238		9,496		917
Home equity lines of credit	793		127		820		58
Consumer, indirect	2,147		13		2,176		—
Consumer, direct	105		3		208		25
Total loans, at amortized cost	$	29,980	$	4,014	$	31,473	$	4,842

(a) There were $3.4 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2023 and $1.4 million at December 31, 2022.

Schedule of Aging of The Recorded Investment In Past Due Loans and Leases

The following table presents the aging of the amortized cost of past due loans:

	Loans Past Due				Current Loans	Total Loans
(Dollars in thousands)	30 - 59 days	60 - 89 days	90 + Days	Total
March 31, 2023

	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
Construction	$	—	$	—	$	1	$	1	$	232,295	$	232,296
Commercial real estate, other	2,382		36		10,475		12,893		1,468,169		1,481,062
Commercial and industrial	641		863		2,928		4,432		886,707		891,139
Premium finance	886		307		764		1,957		156,306		158,263
Leases	7,054		2,908		6,310		16,272		338,369		354,641
Residential real estate	7,921		1,240		4,521		13,682		698,920		712,602
Home equity lines of credit	520		351		594		1,465		172,918		174,383
Consumer, indirect	3,541		769		811		5,121		642,056		647,177
Consumer, direct	402		8		44		454		106,952		107,406
Deposit account overdrafts	—		—		—		—		749		749
Total loans, at amortized cost	$	23,347	$	6,482	$	26,448	$	56,277	$	4,703,441	$	4,759,718
December 31, 2022
Construction	$	196	$	161	$	9	$	366	$	246,575	$	246,941
Commercial real estate, other	2,279		1,051		10,370		13,700		1,409,818		1,423,518
Commercial and industrial	2,522		289		3,449		6,260		886,374		892,634
Premium finance	646		816		504		1,966		157,231		159,197
Leases	6,074		1,921		6,218		14,213		330,918		345,131
Residential real estate	10,113		2,128		5,519		17,760		705,600		723,360
Home equity lines of credit	987		149		552		1,688		176,170		177,858
Consumer, indirect	5,866		1,048		921		7,835		621,591		629,426
Consumer, direct	703		70		108		881		107,482		108,363
Deposit account overdrafts	—		—		—		—		722		722
Total loans, at amortized cost	$	29,386	$	7,633	$	27,650	$	64,669	$	4,642,481	$	4,707,150

Summary of Pledged Securities

The following table summarizes the carrying amount of Peoples' pledged securities:

	Carrying Amount
(Dollars in thousands)	March 31, 2023		December 31, 2022
Securing public and trust department deposits, and repurchase agreements:
Available-for-sale	$	704,074	$	779,244
Held-to-maturity	372,372		312,921
Securing additional borrowing capacity at the FHLB and the FRB:
Available-for-sale	3,949		3,972
Held-to-maturity	145,867		128,870

Loans pledged are summarized as follows:

(Dollars in thousands)	March 31, 2023		December 31, 2022
Loans pledged to FHLB	$	918,075	$	783,843
Loans pledged to FRB	332,521		339,005

Summary of Loans by Risk Category

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at March 31, 2023:

	Term Loans at Amortized Cost by Origination Year														Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans				Total Loans
Construction
Pass	$	4,420	$	101,719	$	87,280	$	23,208	$	3,241	$	9,692	$	—	$	—	$	229,560
Special mention	968		1,600		—		—		—		128		—		—		2,696
Substandard	—		—		—		—		—		40		—		—		40
Total	5,388		103,319		87,280		23,208		3,241		9,860		—		—		232,296
Current period gross charge-offs	—		—		9		—		—		—						9
Commercial real estate, other
Pass	76,569		173,133		219,202		223,034		214,534		458,817		25,537		—		1,390,826
Special mention	—		—		184		1,200		5,128		17,998		50		—		24,560
Substandard	—		—		10,027		2,523		1,580		51,290		216		—		65,636
Doubtful	—		—		—		—		—		40		—		—		40
Total	76,569		173,133		229,413		226,757		221,242		528,145		25,803		—		1,481,062
Current period gross charge-offs	—		—		—		—		—		33						33
Commercial and industrial
Pass	31,958		157,317		135,973		60,760		70,506		124,255		208,303		—		789,072
Special mention	—		8,794		14,375		20,441		2,021		7,579		25,116		—		78,326
Substandard	4		317		10,065		3,217		2,154		3,038		4,744		—		23,539
Doubtful	—		—		—		—		—		202		—		—		202
Total	31,962		166,428		160,413		84,418		74,681		135,074		238,163		—		891,139

	Term Loans at Amortized Cost by Origination Year							Revolving Loans Converted to Term
(Dollars in thousands)	2023	2022	2021	2020	2019	Prior	Revolving Loans		Total Loans
Current period gross charge-offs	—	—	—	—	—	1			1
Premium finance
Pass	79,103	79,160	—	—	—	—	—	—	158,263
Total	79,103	79,160	—	—	—	—	—	—	158,263
Current period gross charge-offs	23	—	—	—	—	—			23
Leases
Pass	68,756	151,048	79,901	29,306	13,233	3,398	—	—	345,642
Special mention	16	1,212	2,087	371	7	21	—	—	3,714
Substandard	127	1,691	2,091	512	410	454	—	—	5,285
Total	68,899	153,951	84,079	30,189	13,650	3,873	—	—	354,641
Current period gross charge-offs	—	108	189	100	58	14			469
Residential real estate
Pass	10,786	77,494	136,027	57,950	42,022	377,777	—	—	702,056
Substandard	—	—	280	146	560	9,488	—	—	10,474
Loss	—	—	—	—	—	72	—	—	72
Total	10,786	77,494	136,307	58,096	42,582	387,337	—	—	712,602
Current period gross charge-offs	—	—	—	—	—	41			41
Home equity lines of credit
Pass	4,830	43,159	34,111	18,852	13,774	58,278	114	635	173,118
Substandard	—	—	72	21	63	1,105	—	—	1,261
Loss	—	—	—	—	—	4	—	—	4
Total	4,830	43,159	34,183	18,873	13,837	59,387	114	635	174,383
Current period gross charge-offs	—	—	—	—	—	19			19
Consumer, indirect
Pass	67,265	293,761	135,301	88,220	31,003	28,840	—	—	644,390
Substandard	—	566	849	590	315	423	—	—	2,743
Loss	—	33	10	1	—	—	—	—	44
Total	67,265	294,360	136,160	88,811	31,318	29,263	—	—	647,177
Current period gross charge-offs	18	471	279	90	21	50			929
Consumer, direct
Pass	11,420	46,431	24,731	12,561	5,345	6,566	—	—	107,054

	Term Loans at Amortized Cost by Origination Year													Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total Loans
Substandard	—		12		35		91		32		167		—	—	337
Loss	—		—		—		—		—		15		—	—	15
Total	11,420		46,443		24,766		12,652		5,377		6,748		—	—	107,406
Current period gross charge-offs	—		40		12		34		10		8				104
Deposit account overdrafts	749		—		—		—		—		—		—	—	749
Current period gross charge-offs	227		—		—		—		—		—				227
Total loans, at amortized cost	356,971		1,137,447		892,601		543,004		405,928		1,159,687		264,080	635	4,759,718
Total current period gross charge-offs	$	268	$	619	$	489	$	224	$	89	$	166			$	1,855

The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the then most recent analysis performed at December 31, 2022:

	Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Construction
Pass	$	82,143	$	110,719	$	27,893	$	20,223	$	656	$	4,061	$	44	$	81	$	245,739
Special mention	—		—		—		—		—		818		—		—		818
Substandard	—		2		—		—		—		382		—		—		384
Total	82,143		110,721		27,893		20,223		656		5,261		44		81		246,941
Commercial real estate, other
Pass	165,282		224,727		227,799		202,877		110,564		369,578		27,300		5,217		1,328,127
Special mention	—		189		1,099		5,519		3,111		29,334		105		—		39,357
Substandard	—		8,327		2,591		1,366		1,296		42,172		216		190		55,968
Doubtful	—		—		—		—		—		66		—		—		66
Total	165,282		233,243		231,489		209,762		114,971		441,150		27,621		5,407		1,423,518
Commercial and industrial
Pass	167,937		142,615		72,573		71,497		40,229		91,853		215,116		3,722		801,820
Special mention	10,248		14,981		11,923		2,711		236		4,877		16,235		—		61,211
Substandard	84		9,801		3,417		2,410		1,459		3,620		8,603		611		29,394
Doubtful	—		—		—		—		—		209		—		—		209
Total	178,269		167,397		87,913		76,618		41,924		100,559		239,954		4,333		892,634
Premium finance
Pass	158,778		419		—		—		—		—		—		—		159,197
Total	158,778		419		—		—		—		—		—		—		159,197
Leases
Pass	191,148		90,738		34,627		15,951		3,269		1,119		—		—		336,852
Special mention	1,741		2,477		140		22		24		—		—		—		4,404
Substandard	546		1,840		571		464		454		—		—		—		3,875
Total	193,435		95,055		35,338		16,437		3,747		1,119		—		—		345,131
Residential real estate

	Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Pass	78,313		138,860		58,869		42,840		28,174		364,635		—		—		711,691
Substandard	—		—		137		569		563		10,302		—		—		11,571
Loss	—		—		—		—		—		98		—		—		98
Total	78,313		138,860		59,006		43,409		28,737		375,035		—		—		723,360
Home equity lines of credit
Pass	41,781		35,768		19,863		14,820		13,800		50,291		334		2,096		176,657
Substandard	—		60		—		53		126		958		—		—		1,197
Loss	—		—		—		—		—		4		—		—		4
Total	41,781		35,828		19,863		14,873		13,926		51,253		334		2,096		177,858
Consumer, indirect
Pass	305,814		149,445		100,027		35,988		22,789		12,741		—		—		626,804
Substandard	384		811		659		266		304		193		—		—		2,617
Loss	—		5		—		—		—		—		—		—		5
Total	306,198		150,261		100,686		36,254		23,093		12,934		—		—		629,426
Consumer, direct
Pass	50,889		28,351		14,558		6,333		3,725		3,975		—		—		107,831
Special mention	—		—		—		—		—		—		—		—		—
Substandard	97		63		138		46		21		150		—		—		515
Loss	—		—		—		—		—		17		—		—		17
Total	50,986		28,414		14,696		6,379		3,746		4,142		—		—		108,363
Deposit account overdrafts	722		—		—		—		—		—		—		—		722
Total loans, at amortized cost	$	1,255,907	$	960,198	$	576,884	$	423,955	$	230,800	$	991,453	$	267,953	$	11,917	$	4,707,150

Summary of Amortized Cost of Collateral Dependent Loans

The following table details Peoples' amortized cost of collateral dependent loans:

(Dollars in thousands)	March 31, 2023		December 31, 2022
Commercial real estate, other	7,862		8,362
Commercial and industrial	470		1,456
Residential real estate	528		536
Total collateral dependent loans	$	8,860	$	10,354

Summary of Financing Receivables Modified

The following table displays the amortized cost of loans that were restructured during the three months ended March 31, 2023, presented by loan classification.

For the Three Months Ended March 31, 2023
	Payment Delay (Only)
(Dollars in thousands)	Forbearance Plan		Payment Deferral		Term Extension		Forbearance Plan and Term Extension		Total		Percentage of Total by Loan Category(a)(b)
Construction	$	—	$	1,600	$	—	$	—	$	1,600	0.69	%
Commercial real estate	200		—		—		—		200		0.01	%
Commercial and industrial	—		—		9		335		344		0.04	%
Residential real estate	—		—		221		—		221		0.03	%
Consumer, indirect	—		—		28		—		28		—	%
Total	$	200	$	1,600	$	258	$	335	$	2,393	0.05	%

(a) Based on the amortized cost basis as of period end, divided by the period end amortized cost basis of the corresponding class of financing receivable.

(b) Each with "--%" not meaningful.

The following table summarizes the financial impacts of loan modifications and payment deferrals made to loans during the three months ended March 31, 2023, presented by loan classification.

For the Three Months Ended March 31, 2023
	Weighted-Average Term Extension (in months)	Average Amount Capitalized as a Result of a Payment Delay(a)
Commercial and industrial	12	$	—
Residential real estate	210	8,969
Consumer, indirect	2	—
(a) Represents the average amount of delinquency-related amounts that were capitalized as part of the loan balance. Amounts are in whole dollars.

The following table displays an aging analysis of loans that were modified on or after January 1, 2023, the date Peoples adopted ASU 2022-02, through March 31, 2023, presented by classification and class of financing receivable.

As of March 31, 2023
(Dollars in thousands)	30-59 Days Delinquent		60-89 Days Delinquent		90+ Days Delinquent		Total Delinquent		Current		Total
Construction	$	—	$	—	$	—	$	—	$	1,600	$	1,600
Commercial real estate	—		—		—		—		200		200
Commercial and industrial	—		—		—		—		344		344
Residential real estate	—		—		—		—		221		221
Consumer, indirect	28		—		—		28		—		28
Total loans modified(a)	$	28	$	—	$	—	$	28	$	2,365	$	2,393
(a) Represents the amortized cost basis as of period end.

The following table summarizes the loans that were modified as TDRs during the three months ended March 31, 2022:

		Three Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
March 31, 2022
Construction	1	$	344	$	344	$	343
Commercial real estate, other	1	102		102		102
Commercial and industrial	1	4		4		4
Residential real estate	10	493		502		501
Home equity lines of credit	1	22		22		21
Consumer, indirect	10	106		106		105
Consumer, direct	2	14		14		14
Consumer	12	120		120		119
Total	26	$	1,085	$	1,094	$	1,090
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Summary of Activity in Allowance for Loan and Lease Losses

Changes in the allowance for credit losses for the three months ended March 31, 2023 and March 31, 2022 are summarized below:

(Dollars in thousands)	Beginning Balance, December 31, 2022		Initial Allowance for Acquired PCD Assets		Provision for (Recovery of) Credit Losses (a)		Charge-offs		Recoveries		Ending Balance, March 31, 2023
Construction	$	1,250	$	—	$	32	$	(9)	$	—	$	1,273
Commercial real estate, other	17,710		—		(1,230)		(33)		27		16,474
Commercial and industrial	8,229		—		79		(1)		—		8,307
Premium finance	344		—		103		(23)		9		433
Leases	8,495		—		1,003		(469)		80		9,109
Residential real estate	6,357		—		159		(41)		29		6,504
Home equity lines of credit	1,693		—		43		(19)		—		1,717
Consumer, indirect	7,448		—		1,183		(929)		79		7,781
Consumer, direct	1,575		—		133		(104)		15		1,619
Deposit account overdrafts	61		—		180		(227)		72		86
Total	$	53,162	$	—	$	1,685	$	(1,855)	$	311	$	53,303

(a) Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(Dollars in thousands)	Beginning Balance, December 31, 2021		Initial Allowance for Acquired PCD Assets (a)		(Recovery of) Provision for Credit Losses (b)		Charge-offs		Recoveries		Ending Balance, March 31, 2022
Construction	$	2,999	$	—	$	(268)	$	—	$	—	$	2,731
Commercial real estate, other	29,147		(217)		(7,646)		(278)		49		21,055
Commercial and industrial	11,063		(165)		(325)		(463)		4		10,114
Premium finance	379		—		(20)		(14)		—		345
Leases	4,797		132		1,243		(473)		176		5,875
Residential real estate	7,233		(521)		78		(309)		14		6,495
Home equity lines of credit	2,005		(11)		(113)		(16)		29		1,894
Consumer, indirect	5,326		(41)		186		(385)		86		5,172
Consumer, direct	961		—		200		(136)		11		1,036
Deposit account overdrafts	57		—		199		(259)		54		51
Total	$	63,967	$	(823)	$	(6,466)	$	(2,333)	$	423	$	54,768

(a)Includes purchase price adjustments related to acquisitions previously completed but were within the 12-month measurement period.

(b)Amount does not include the provision for the allowance for credit losses on unfunded commitments.