Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Effective Income Tax Rate Reconciliation

The reported income tax expense and effective tax rate in the Consolidated Statements of Income differ from the amounts computed by applying the statutory federal corporate income tax rate as follows for the years ended December 31:


	2023				2022				2021
(Dollars in thousands)	Amount		Rate		Amount		Rate		Amount		Rate
Income tax computed at statutory federal corporate income tax rate	$	30,476	21.0	%	$	27,015	21.0	%	$	11,954	21.0	%
Differences in rate resulting from:
State taxes, net of federal benefit	3,053		2.1	%	2,277		1.8	%	119		0.2	%
Investment securities impairment	—		—	%	431		0.3	%	—		—	%
Nondeductible acquisition costs	168		0.1	%	42		—	%	269		0.5	%
Common share awards	(99)		(0.1)	%	12		—	%	74		0.1	%
Bank owned life insurance	(872)		(0.6)	%	(551)		(0.4)	%	(371)		(0.6)	%
Investments in tax credit funds	(352)		(0.2)	%	(629)		(0.5)	%	(381)		(0.7)	%
Captive insurance benefit	(330)		(0.2)	%	(421)		(0.3)	%	(435)		(0.8)	%
Tax-exempt interest income	(555)		(0.4)	%	(921)		(0.7)	%	(835)		(1.5)	%

Fixed asset depreciation	—		—	%	—		—	%	(1,142)		(2.0)	%
Other, net	274		0.2	%	94		0.1	%	163		0.3	%
Income tax expense	$	31,763	21.9	%	$	27,349	21.3	%	$	9,415	16.5	%

Schedule of Components of Income Tax Expense (Benefit)

Peoples’ reported income tax expense consisted of the following for the years ended December 31:


(Dollars in thousands)	2023		2022		2021
Current income tax expense	$	32,001	$	8,783	$	6,541
Deferred income tax (benefit) expense	(238)		18,566		2,874
Income tax expense	$	31,763	$	27,349	$	9,415

Schedule of Deferred Tax Assets and Liabilities

The significant components of Peoples’ deferred tax assets and deferred tax liabilities consisted of the following at December 31:


(Dollars in thousands)	2023		2022
Deferred tax assets:
Available-for-sale securities	$	31,774	$	39,425
Allowance for credit losses	14,902		12,827
Nonaccrual loan interest income	2,753		4,366
Accrued employee benefits	7,344		3,391
Lease obligation	2,822		1,757
Net operating loss carryforward	11,367		158
Purchase accounting adjustments	1,920		—


Other	1,622		899
Gross deferred tax assets	$	74,504	$	62,823
Valuation allowance	$	158	$	158
Total deferred tax assets	$	74,346	$	62,665
Deferred tax liabilities:
Equipment leases	$	11,286	$	16,316
Deferred loan income	3,117		5,512
Purchase accounting adjustments	—		4,431
Bank premises and equipment	5,116		3,206
Lease right-of-use assets	2,731		1,588

Derivative instruments	774		1,302

Other	3,951		2,259
Total deferred tax liabilities	$	26,975	$	34,614
Net deferred tax asset	$	47,371	$	28,051

Schedule of Income Tax Contingencies

The following table provides a reconciliation of uncertain tax positions at December 31:


(Dollars in thousands)	2023		2022
Uncertain tax positions, beginning of year	$	89	$	106
Gross increase based on tax positions related to current year	527		39


Gross decrease due to the statute of limitations	(89)		(56)
Uncertain tax positions, end of year	$	527	$	89