PEOPLES BANCORP INC MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

Management's Discussion and Analysis ("MD&A") represents an overview of the
results of operations and financial condition of Peoples for the six months
ended June 30, 2022 and June 30, 2021. This MD&A should be read in conjunction
with the Unaudited Condensed Consolidated Financial Statements and the Notes
thereto.
Certain statements in this Form 10-Q, which are not historical fact, are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are identified by the fact they are not historical
facts and include words such as "anticipate," "estimate," "may," "feel,"
"expect," "believe," "plan," "will," "will likely," "would," "should," "could,"
"project," "goal," "target," "potential," "seek," "intend," "continue,"
"remain," and similar expressions.
These forward-looking statements reflect management's current expectations based
on all information available to management and its knowledge of Peoples'
business and operations. Additionally, Peoples' financial condition, results of
operations, plans, objectives, future performance and business are subject to
risks and uncertainties that may cause actual results to differ materially.
These factors include, but are not limited to:

(1)the ever-changing effects of the global COVID-19 pandemic - the duration,
extent and severity of which are impossible to predict, including the
possibility of further resurgence in the spread of COVID-19 or variants thereof
- on economies (local, national and international), supply chains and markets,
on the labor market, including the potential for a sustained reduction in labor
force participation, and on Peoples' customers, counterparties, employees and
third-party service providers, as well as the effects of various responses of
governmental and nongovernmental authorities to the COVID-19 pandemic, including
public health actions directed toward the containment of the COVID-19 pandemic
(such as quarantines, shut downs and other restrictions on travel and
commercial, social and other activities), the availability, effectiveness and
acceptance of vaccines, and the implementation of fiscal stimulus packages,
which could adversely impact sales volumes, add volatility to the global stock
markets, and increase loan delinquencies and defaults;
(2)changes in the interest rate environment due to economic conditions related
to the COVID-19 pandemic or other factors and/or the fiscal and monetary policy
measures undertaken by the U.S. government and the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") in response to such
economic conditions, which may adversely impact market interest rates, the
interest rate yield curve, interest margins, loan demand and interest rate
sensitivity;
(3)the effects of inflationary pressures and the impact of rising interest rates
on borrowers' liquidity and ability to repay;
(4)the success, impact, and timing of the implementation of Peoples' business
strategies and Peoples' ability to manage strategic initiatives, including the
completion and successful integration of planned acquisitions, including the
recently-completed merger with Premier and the recently-completed acquisitions
of NSL and Vantage, and the expansion of commercial and consumer lending
activities, in light of the continuing impact of the COVID-19 pandemic on
customers' operations and financial condition;
(5)competitive pressures among financial institutions, or from non-financial
institutions, which may increase significantly, including product and pricing
pressures, which can in turn impact Peoples' credit spreads, changes to
third-party relationships and revenues, changes in the manner of providing
services, customer acquisition and retention pressures, and Peoples' ability to
attract, develop and retain qualified professionals;
(6)uncertainty regarding the nature, timing, cost, and effect of legislative or
regulatory changes or actions, or deposit insurance premium levels, promulgated
and to be promulgated by governmental and regulatory agencies in the State of
Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and
the Consumer Financial Protection Bureau, which may subject Peoples, its
subsidiaries, or one or more acquired companies to a variety of new and more
stringent legal and regulatory requirements which adversely affect their
respective businesses, including in particular the rules and regulations
promulgated and to be promulgated under the CARES Act, and the follow-up
legislation enacted as the Consolidated Appropriations Act, 2021, the American
Rescue Plan Act of 2021, the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, and the Basel III regulatory capital reform;
(7)the effects of easing restrictions on participants in the financial services
industry;
(8)local, regional, national and international economic conditions (including
the impact of potential or imposed tariffs, a U.S. withdrawal from or
significant renegotiation of trade agreements, trade wars and other changes in
trade regulations, and changes in the relationship of the U.S. and its global
trading partners) and the impact these conditions may have on Peoples, its
customers and its counterparties, and Peoples' assessment of the impact, which
may be different than anticipated;
(9)Peoples may issue equity securities in connection with future acquisitions,
which could cause ownership and economic dilution to Peoples' current
shareholders;

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(10)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 the COVID-19 pandemic and adversely impact the amount of
interest income generated;
(11)Peoples may have more credit risk and higher credit losses to the extent
there are loan concentrations by location or industry of borrowers or
collateral;
(12)future credit quality and performance, including expectations regarding
future credit losses and the allowance for credit losses;
(13)changes in accounting standards, policies, estimates or procedures may
adversely affect Peoples' reported financial condition or results of operations;
(14)the impact of assumptions, estimates and inputs used within models, which
may vary materially from actual outcomes, including under the CECL model;
(15)the replacement of the London Interbank Offered Rate ("LIBOR") with other
reference rates which may result in increased expenses and litigation, and
adversely impact the effectiveness of hedging strategies;
(16)adverse changes in the conditions and trends in the financial markets,
including the impacts of the COVID-19 pandemic and the related responses by
governmental and nongovernmental authorities to the pandemic, 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;
(17)the volatility from quarter to quarter of mortgage banking income, whether
due to interest rates, demand, the fair value of mortgage loans, or other
factors;
(18)Peoples' ability to receive dividends from its subsidiaries;
(19)Peoples' ability to maintain required capital levels and adequate sources of
funding and liquidity;
(20)the impact of larger or similar-sized financial institutions encountering
problems, which may adversely affect the banking industry and/or Peoples'
business generation and retention, funding and liquidity;
(21)Peoples' ability to secure confidential information and deliver products and
services through the use of computer systems and telecommunications networks,
including those of Peoples' third-party vendors and other service providers,
which may prove inadequate, and could adversely affect customer confidence in
Peoples and/or result in Peoples incurring a financial loss;
(22)Peoples' ability to anticipate and respond to technological changes, and
Peoples' reliance on, and the potential failure of, a number of third-party
vendors to perform as expected, including Peoples' primary core banking system
provider, which can impact Peoples' ability to respond to customer needs and
meet competitive demands;
(23)operational issues stemming from and/or capital spending necessitated by the
potential need to adapt to industry changes in information technology systems on
which Peoples and its subsidiaries are highly dependent;
(24)changes in consumer spending, borrowing and saving habits, whether due to
changes in retail distribution strategies, consumer preferences and behavior,
changes in business and economic conditions (including as a result of the
COVID-19 pandemic), legislative or regulatory initiatives (including those in
response to the COVID-19 pandemic), or other factors, which may be different
than anticipated;
(25)the adequacy of Peoples' internal controls and risk management program in
the event of changes in strategic, reputational, market, economic, operational,
cybersecurity, compliance, legal, asset/liability repricing, liquidity, credit
and interest rate risks associated with Peoples' business;
(26)the impact on Peoples' businesses, personnel, facilities, or systems, of
losses related to acts of fraud, theft, misappropriation or violence;
(27)the impact on Peoples' businesses, as well as on the risks described above,
of various domestic or international widespread natural or other disasters,
pandemics (including COVID-19), cybersecurity attacks, system failures, civil
unrest, military or terrorist activities or international conflicts;
(28)the impact on Peoples' businesses and operating results of any costs
associated with obtaining rights in intellectual property claimed by others and
adequately protecting Peoples' intellectual property;
(29)risks and uncertainties associated with Peoples' entry into new geographic
markets and risks resulting from Peoples' inexperience in these new geographic
markets;
(30)Peoples' ability to integrate the NSL and Vantage acquisitions, and the
merger of Premier into Peoples, which may be unsuccessful, or may be more
difficult, time-consuming or costly than expected;
(31)the risk that expected revenue synergies and cost savings from the merger of
Peoples and Premier may not be fully realized or realized within the expected
time frame;
(32)changes in laws or regulations imposed by Peoples' regulators impacting
Peoples' capital actions, including dividend payments and share repurchases;
(33)the effect of a fall in stock market prices on the asset and wealth
management business;
(34)Peoples' continued ability to grow deposits; and,
(35)other risk factors relating to the banking industry or Peoples as detailed
from time to time in Peoples' reports filed with the Securities and Exchange
Commission (the "SEC"), including those risk factors included in the disclosures
under the heading "ITEM 1A. RISK FACTORS" of Peoples' Annual Report on Form 10-K
for the fiscal year ended December 31, 2021 and the heading "ITEM 1A. RISK
FACTORS" in Part II of Peoples' Quarterly Report on Form 10-

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Q for the quarterly period ended March 31, 2022. 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 these forward-looking statements to reflect
events or circumstances after the date 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.

All forward-looking statements speak only as of the filing date of this Form
10-Q and are expressly qualified in their entirety by the cautionary
statements. Although management believes the expectations in these
forward-looking statements are based on reasonable assumptions within the bounds
of management's knowledge of Peoples' business and operations, it is possible
that actual results may differ materially from these projections. Additionally,
Peoples undertakes no obligation to update these forward-looking statements to
reflect events or circumstances after the filing date of this Form 10-Q or to
reflect the occurrence of unanticipated events except as may be required by
applicable legal requirements. Copies of documents filed with the SEC are
available free of charge at the SEC's website at www.sec.gov and/or from
Peoples' website - www.peoplesbancorp.com under the "Investor Relations"
section.

This discussion and analysis should be read in conjunction with the Audited
Consolidated Financial Statements, and Notes thereto, contained in Peoples' 2021
Form 10-K, as well as the Unaudited Condensed Consolidated Financial Statements,
Notes to the Unaudited Condensed Consolidated Financial Statements, ratios,
statistics and discussions contained elsewhere in this Form 10-Q.

Business Overview The following discussion and analysis of Peoples’ unaudited condensed consolidated financial statements is presented to provide an overview of management’s assessment of financial condition and results of operations.

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 provides
services through traditional offices, ATMs, mobile banking and telephone and
internet-based banking. Peoples offers a complete array of insurance products
through Peoples Insurance Agency, LLC. 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 division.
Peoples also offers lease financing through its North Star Leasing division and
through Vantage, a subsidiary of Peoples Bank. As of June 30, 2022, Peoples had
136 locations, including 117 full-service bank branches in Ohio, West Virginia,
Kentucky, 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 Federal Reserve Bank ("FRB") of Cleveland and the
Federal Deposit Insurance Corporation (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.

Critical Accounting Policies
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 account
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 MD&A at June 30, 2022, which have been disclosed in Peoples' 2021 Form 10-K
and updated in "Note 1 Summary of Significant Accounting Policies" in this Form
10-Q. This Management's Discussion and Analysis should be read in conjunction
with the policies disclosed in Peoples' 2021 Form 10-K.

Summary of recent transactions and events

The following is a summary of recent transactions and events that have had or are expected to have an impact on Peoples’ results of operations or financial condition:

•On April 1, 2022, Peoples Insurance acquired substantially all of the assets
and rights of an insurance agency with five locations in eastern Kentucky and
certain rights to related customer accounts, which were previously developed and
maintained by Elite Agency, Inc. ("Elite"), pursuant to an Asset Purchase
Agreement between Peoples Insurance and Elite. Total consideration for this
transaction was $3.8 million. Peoples recognized preliminary intangibles of $2.1
million, primarily comprised of a customer relationship intangible.

•On March 7, 2022, Peoples completed its acquisition of Vantage pursuant to an
Asset Purchase Agreement, dated February 16, 2022, in which Peoples Bank
purchased 100% of the equity of Vantage. Peoples Bank acquired assets comprising
Vantage's lease business, including $157.5 million in leases and certain
third-party debt in the amount of $107.1 million. Peoples paid total
consideration of $82.9 million. Based in Excelsior, Minnesota, Vantage offers
mid-ticket equipment leases primarily for business essential information
technology equipment across a wide array of industries. Peoples recorded


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preliminary goodwill in the amount of $24.7 million and preliminary other
intangible assets of $13.2 million, which included a customer relationship
intangible, a trade-name intangible and non-compete agreements related to this
transaction.

•On September 17, 2021, Peoples completed its merger with Premier, in which
Peoples acquired, in an all-stock merger, a bank holding company headquartered
in Huntington, West Virginia, and the parent company of Premier Bank, Inc.
("Premier Bank") and Citizens Deposit Bank and Trust, Inc. ("Citizens"). Under
the terms and subject to the conditions of the definitive Agreement and Plan of
Merger dated March 26, 2021 ("Merger Agreement"), Premier merged with and into
Peoples (the "Premier Merger"), and Premier Bank and Citizens subsequently
merged with and into Peoples' wholly-owned subsidiary, Peoples Bank, in a
transaction valued at $261.9 million. At the close of business on September 17,
2021, the financial services offices of each of Premier Bank and Citizens became
branches of Peoples Bank. Peoples acquired $1.2 billion in loans and $1.8
billion in deposits and recorded preliminary goodwill of $66.9 million and other
intangible assets of $4.2 million in connection with the Premier Merger as of
September 17, 2021.

•On May 4, 2021, Peoples Insurance acquired substantially all of the assets and
rights of an insurance agency located in Pikeville, Kentucky and certain rights
to related customer accounts, which were previously developed and maintained by
Justice & Stamper Insurance Agency, Inc., pursuant to an Asset Purchase
Agreement between Peoples Insurance and Justice & Stamper Insurance Agency, Inc.
Total consideration for this transaction was $325,000, with $162,500 paid at
closing and the second installment in the amount of $162,500 was paid on the
first anniversary of the closing date, less any adjustments pursuant to adverse
claims incurred or sustained by or imposed by Peoples Insurance. Peoples
recorded customer relationship intangible assets of $230,000 and goodwill of
$46,000 related to this transaction.

•On March 31, 2021, Peoples completed its acquisition of NS Leasing, LLC ("NSL")
pursuant to an Asset Purchase Agreement, dated March 24, 2021 in which Peoples
Bank acquired the equipment finance and leasing business of NSL. The transaction
closed after the end of business on March 31, 2021 and Peoples Bank began
operating the acquired business as North Star Leasing, a division of Peoples
Bank, on April 1, 2021. Peoples Bank acquired assets comprising NSL's equipment
finance business, including $83.3 million in leases and satisfied, on behalf of
NSL, certain third-party debt in the amount of $69.1 million. Peoples Bank paid
total consideration of $116.6 million, plus an earn-out payment to NSL of up to
$3.1 million. Based in Burlington, Vermont, the North Star Leasing division
underwrites, originates and services equipment leases and equipment financing
agreements to businesses throughout the United States. Peoples recorded goodwill
in the amount of $24.7 million and other intangibles of $14.0 million, which
included a customer relationship intangible, a trade-name intangible and
non-compete agreements related to this transaction.

•Peoples began originating loans during the second quarter of 2020, and
continued to originate loans during the first five months of 2021 under the loan
guarantee program created under the CARES Act, called the Paycheck Protection
Program ("PPP"). These loans were targeted to provide small businesses with
financial support to cover payroll and certain other specified types of expenses
for a specified period of time. Loans made under the PPP are fully guaranteed by
the Small Business Administration ("SBA"). As of June 30, 2022, Peoples had
$15.2 million aggregate principal amount in PPP loans outstanding (including
$5.6 million acquired in the Premier Merger), which were included in commercial
and industrial loan balances, compared to $41.9 million (including $15.0 million
acquired in the Premier Merger) at March 31, 2022. Peoples recognized interest
income of $0.6 million for deferred loan fees/costs and $79,000 of interest
income on PPP loans during the second quarter of 2022, compared to $1.2 million
and $154,000, respectively, for the first quarter of 2022, and $3.4 million and
$0.7 million, respectively, for the second quarter of 2021. During the first six
months of 2022, Peoples recognized interest income of $1.8 million for deferred
loan fee/cost accretion and $232,000 of interest income on PPP loans, compared
to $8.1 million for deferred loan/ fee costs accretion and $1.6 million of
interest income during the first six months of 2021.

•During the second quarter of 2022, Peoples recorded a recovery of credit losses
of $0.8 million, compared to a recovery of credit losses of $6.8 million in the
linked quarter and a provision for credit losses of $3.1 million in the second
quarter of 2021. For the first half of 2022, Peoples recorded a recovery of
credit losses of $7.6 million compared to a recovery of credit losses of $1.7
million for 2021. The release of credit losses for the first two quarters of
2022 was driven by improvements in economic forecasts, coupled with loan payoffs
and sales during certain periods. For more information, please refer to the
section titled "RESULTS OF OPERATIONS - (Recovery of) Provision for Credit
Losses" found later in this discussion.

•During the second quarter of 2022, Peoples incurred $0.6 million of
acquisition-related expenses, compared to $1.4 million in the first quarter of
2022 and $2.4 million in the second quarter of 2021. For the first six months of
2022, Peoples incurred $2.0 million of acquisition-related expenses compared to
$4.3 million for 2021. The acquisition-related expenses in 2022 were primarily
related to the Vantage acquisition, while the 2021 expenses were primarily
related to the NSL acquisition and the Premier Merger.

•In an effort to stimulate an economy that was being adversely impacted by the
impacts of the COVID-19 pandemic, the Federal Reserve Board lowered the
benchmark Federal Funds Target Rate in two separate actions in the first quarter
of 2020 to a range of 0% - 0.25% as of March 31, 2020 and maintained this rate
until March 16, 2022. The Federal Reserve Board increased the Federal Funds
Target Rate range to 0.25% to 0.50% on March 16, 2022, to 0.75% to 1.00% on May
4, 2022, to 1.50% to 1.75% on June 15, 2022, and has stated it anticipates
continuing to raise rates throughout 2022.

The impact of these transactions and events, when material, is disclosed in the applicable sections of this MD&A.

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Contents

                               EXECUTIVE SUMMARY

Peoples reported net income of $24.9 million for the second quarter of 2022,
representing earnings per diluted common share of $0.88. In comparison, Peoples
recognized earnings per diluted common share of $0.84 for the first quarter of
2022, and earnings per diluted common share of $0.51 for the second quarter of
2021. Peoples recorded net income of $48.5 million, or $1.72 per diluted common
share for the six months ended 2022, compared to $25.6 million, or $1.31 per
diluted common share, for the six months ended June 30, 2021. Non-core items,
and the related tax effect of each, in net income primarily included acquisition
and COVID-related expenses. Non-core items negatively impacted earnings per
diluted common share by $0.02 for the second quarter of 2022, $0.04 for the
first quarter of 2022, and $0.10 for the second quarter of 2021. Non-core items
negatively impacted earnings per diluted share by $0.06 and $0.21 for the six
months ended June 30, 2022 and 2021, respectively.

Net interest income was $61.5 million for the second quarter of 2022, an
increase of $7.2 million, or 13%, compared to the linked quarter. Net interest
margin was 3.84% for the second quarter of 2022, compared to 3.41% for the
linked quarter. The increase in net interest income and net interest margin
reflects the positive impact of accretion income, net of amortization expense,
coupled with the recent increases in market interest rates, which expanded loan
yields by 44 basis points compared to the linked quarter. Net interest income
for the second quarter of 2022 increased $21.8 million, or 55%, compared to the
second quarter of 2021. Net interest margin increased 39 basis points compared
to 3.45% for the second quarter of 2021. The increase in net interest income
compared to the second quarter of 2021 was driven by the increases in market
interest rates and the acquisitions of Premier and Vantage. For the first six
months of 2022, net interest income increased $40.5 million, or 54%, compared to
the first six months of 2021, while net interest margin increased 27 basis
points to 3.63%. The increase in net interest income was driven by the
acquisitions of Premier and Vantage, core growth, and an increase in market
interest rates.

Accretion income, net of amortization expense, from acquisitions was $3.9
million for the second quarter of 2022, $2.7 million for the first quarter of
2022 and $0.8 million for the second quarter of 2021, which added 25 basis
points, 17 basis points and 7 basis points, respectively, to net interest
margin. The increase in accretion income for the current quarter was a result of
the acquisition of Vantage. Accretion income, net of amortization expense, from
acquisitions was $6.7 million for the six months ended June 30, 2022, compared
to $1.2 million for the six months ended June 30, 2021, which added 21 and 6
basis points, respectively, to net interest margin. The increase in accretion
income for the first six months of 2022 compared to 2021 was a result of the
acquisitions of NSL, Premier, and Vantage.

The recovery of credit losses was $0.8 million for the second quarter of 2022,
compared to a recovery of credit losses of $6.8 million for the linked quarter
and a provision for credit losses of $3.1 million for the second quarter of
2021. The release of credit losses in the second quarter of 2022 was largely
attributable to a reduction in reserves for individually analyzed loans coupled
with changes in loss drivers. Net charge-offs for the second quarter of 2022
were $1.5 million, or 0.14% of average total loans annualized, compared to net
charge-offs of $1.9 million, or 0.17% of average total loans annualized, for the
linked quarter and net charge-offs of $0.8 million, or 0.09% of average total
loans annualized, for the second quarter of 2021. For additional information on
credit trends and the allowance for credit losses, see the "FINANCIAL CONDITION
- Allowance for Credit Losses" section below.

The recovery of credit losses during the first six months of 2022 was $7.6
million, compared to a recovery of credit losses of $1.7 million for the first
six months of 2021. Net charge-offs for the first six months of 2022 were $3.5
million, or 0.15% of average total loans annualized, compared to net charge-offs
of $1.8 million, or 0.11% annualized, for the first six months of 2021. The
recovery of credit losses during the first half of 2022 was primarily due to the
impact of economic assumptions used in the CECL model, while the recovery of
credit losses during the first half of 2021 was impacted by economic assumptions
used in the CECL model, offset by the day-one allowance for credit losses
required from the acquisition of NSL in the second quarter of 2021.

Total non-interest income, excluding net gains and losses, for the second
quarter of 2022 declined $0.5 million compared to the linked quarter. The
decrease in non-interest income, excluding net gains and losses, was the result
of lower insurance income, which included annual performance-based insurance
commissions of $1.3 million that are recognized in the first quarter of each
year. The decrease was partially offset by an increase of $0.4 million in bank
owned life insurance income, which includes $248,000 recognized on a one-time
death benefit and an additional $30.0 million of new investment in bank owned
life insurance policies. Compared to the second quarter of 2021, non-interest
income, excluding net gains and losses, increased $3.4 million. Deposit account
service charges increased $1.5 million and electronic banking income increased
$1.0 million. The increase in deposit account service charges was primarily
attributable to overdraft and NSF fees driven by a larger customer base
following the Premier Merger. Electronic banking income increased in the second
quarter of 2022 due to an increase in the interchange income earned from
customers' debit card usage, driven partially by customers added in the Premier
Merger.

For the first six months of 2022, total non-interest income, excluding gains and losses, increased $6.2 millionor 19%, compared to the first six months of 2021. The increase was driven by growth in $3.0 millioni.e. 73%, in deposit account management fees and $2.3 millioni.e. 28% of electronic payment revenues.

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Total non-interest expense decreased $1.7 million, or 3%, for the three months
ended June 30, 2022, compared to the linked quarter. The decrease in total
non-interest expense for the second quarter of 2022 was attributable to
decreases in professional fees, acquisition-related expenses, net occupancy and
equipment expense, and FDIC insurance premiums. Total non-interest expense in
the second and first quarter of 2022 also contained non-core expenses, including
acquisition-related expenses of $0.6 million and $1.4 million, respectively.
Compared to the second quarter of 2021, total non-interest expense increased
$10.0 million, or 25%, primarily due to an increase in salaries and employee
benefit costs of $5.7 million, an increase in net occupancy and equipment
expense of $1.5 million, an increase in amortization of intangible assets of
$0.7 million, and an increase in FDIC insurance premiums of $0.7 million. Those
increases were primarily the result of the Premier Merger and the acquisition of
the equipment financing business from Vantage.

For the six months ended June 30, 2022, total non-interest expense increased
$23.6 million, or 30%, compared to the first six months of 2021. The variance
was driven by an increase of $12.6 million in salaries and employee benefits
costs, $3.2 million in net occupancy and equipment expense, $1.8 million in
amortization of other intangible assets, and $1.5 million in electronic banking
expense.

The efficiency ratio for the second quarter of 2022 was 58.8%, compared to 66.8%
for the linked quarter, and 68.6% for the second quarter of 2021. The change in
the efficiency ratio compared to the linked quarter was primarily due to the
increases in accretion and market interest rates coupled with decreases in
professional fees, acquisition-related expenses, salaries and employee benefits,
net occupancy and equipment expense, and FDIC insurance premiums. The efficiency
ratio, adjusted for non-core items, was 58.0% for the second quarter of 2022,
compared to 64.8% for the linked quarter and 64.0% for the second quarter of
2021. The efficiency ratio is typically higher in the first quarter of the year
driven by the higher salaries and employee benefit costs, specifically by higher
payroll taxes, employer contributions to health savings accounts and stock-based
compensation expenses for certain employees. Peoples continues to focus on
controlling expenses, while recognizing some necessary costs in order to
continue growing the business.

Peoples recorded income tax expense of $6.8 million for the second quarter of
2022, compared to income tax expense of $6.0 million for the linked quarter and
income tax expense of $2.4 million for the second quarter of 2021. The increase
in income tax expense for the second quarter of 2022, compared to income tax
expense for the linked quarter, was due to an increase its pre-tax income and
increase in the effective tax rates. The increase in income tax expense for the
three months ended June 30, 2022, compared to the three months ended June 30,
2021, was largely driven by higher pre-tax income and increased effective tax
rates.

At June 30, 2022, total assets were $7.28 billion, compared to $7.06 billion at
December 31, 2021 and $5.07 billion at June 30, 2021. The growth in total assets
of 3% compared to December 31, 2021 was largely attributable to the Vantage
acquisition, which added $157.5 million in leases as of the acquisition date.
The 44% increase compared to June 30, 2021 was driven primarily by $1.1 billion
of loans and $0.6 billion of investment securities added in the Premier Merger
as of the merger date, along with leases acquired from Vantage of $157.5
million. The allowance for credit losses at June 30, 2022 decreased to $52.4
million, or 1.14% of total loans, primarily driven by due to continued
improvement in economic factors and changes in loss drivers used in the CECL
model, compared to $64.0 million and 1.43%, respectively, at December 31, 2021,
and $47.9 million and 1.42%, respectively, at June 30, 2021.

Total liabilities were $6.49 billion at June 30, 2022, up from $6.22 billion at
December 31, 2021 and $4.48 billion at June 30, 2021. The increase in total
liabilities compared to December 31, 2021 was primarily due to increases of
$110.8 million in governmental deposit accounts and $43.3 million in savings
accounts, and $74.6 million of long-term borrowings assumed from Vantage. Also
contributing to the increase compared to June 30, 2021 were $1.82 billion in
deposits acquired in the Premier Merger.

Total stockholders' equity at June 30, 2022 decreased by $21.5 million compared
to March 31, 2022, which reflected an other comprehensive loss of $30.7 million
and dividends paid of $10.8 million, partially offset by net income for the
quarter of $24.9 million. Total stockholders' equity at June 30, 2022 decreased
by $58.2 million compared to December 31, 2021, which was due to an other
comprehensive loss of $81.7 million and dividends paid of $20.9 million,
partially offset by net income of $48.5 million for the first six months of
2022. The other comprehensive losses were the result of the changes in the
market value of available-for-sale investment securities, which were driven by
changes in market interest rates.

                             RESULTS OF OPERATIONS

Net Interest Income
Net interest income, the amount by which interest income exceeds interest
expense, remains Peoples' largest source of revenue. The amount of net interest
income earned by Peoples each quarter is affected by various factors, including
changes in market interest rates due to the Federal Reserve's monetary policy,
the level and degree of pricing competition for loans and deposits in Peoples'
markets, and the amount and composition of Peoples' earning assets and
interest-bearing liabilities.

Net interest margin, which is calculated by dividing FTE net interest income by
average interest-earning assets, serves as an important measurement of the net
revenue stream generated by the volume, mix and pricing of interest-earning
assets and interest-bearing liabilities. FTE net interest income is calculated
by increasing interest income to convert tax-exempt income earned on


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obligations of states and political subdivisions and tax-exempt loans to the
pre-tax equivalent of taxable income using a blended federal and state corporate
income tax rate of 23.3% for 2022 and using a federal corporate income tax rate
of 21% for 2021.

The following table details the calculation of ETP net interest income:

                                                      Three Months Ended                       Six Months Ended
                                             June 30,      March 31,      June 30,                 June 30,
(Dollars in thousands)                         2022          2022           2021               2022        2021
Net interest income                        $  61,468    $     54,310    $  39,660          $ 115,778    $ 75,238
Taxable equivalent adjustment                    414             391          324                806         578

Fully tax-equivalent net interest income $61,882 $54,701 $39,984 $116,584 $75,816




The following tables detail Peoples' average balance sheets for the periods
presented:
                                                                                                            For the Three Months Ended
                                                         June 30, 2022                                           March 31, 2022                                            June 30, 2021
                                                             Income/                                                  Income/                                                  Income/
(Dollars in thousands)                   Average Balance     Expense       Yield/Cost             Average Balance     Expense       Yield/Cost            Average Balance      Expense       Yield/Cost
Short-term investments                 $        182,456    $     299              0.66  %       $        332,098    $     160             0.20  %       $        180,730    $       53              0.12  %

Investment securities (a)(b):
Taxable                                       1,515,647        7,014              1.85  %              1,465,998        6,096             1.66  %                883,948         3,217              1.45  %
Nontaxable                                      193,112        1,344              2.78  %                204,381        1,316             2.58  %                168,015         1,095              2.61  %
Total investment securities                   1,708,759        8,358              1.96  %              1,670,379        7,412             1.78  %              1,051,963         4,312              1.64  %
Loans (b)(c):
Construction                                    209,822        2,216              4.18  %                225,676        2,155             3.82  %                 87,075           979              4.45  %
Commercial real estate, other                 1,353,201       15,599              4.56  %              1,362,434       14,782             4.34  %                916,604         8,829              3.81  %
Commercial and industrial                       864,023        8,715              3.99  %                888,598        8,023             3.61  %                887,756         9,241              4.12  %
Premium finance                                 143,898        1,778              4.89  %                132,758        1,164             3.51  %                108,387         1,298              4.74  %
Leases                                          288,360       10,541             14.46  %                162,277        6,102            15.04  %                 86,519         4,215             19.27  %
Residential real estate (d)                     888,809        9,326              4.20  %                913,730        9,766             4.28  %                607,691         6,429              4.23  %
Home equity lines of credit                     167,935        1,748              4.17  %                163,339        1,612             4.00  %                119,354         1,180              3.97  %
Consumer, indirect                              541,135        5,243              3.89  %                523,770        5,045             3.91  %                529,180         5,313              4.03  %
Consumer, direct                                111,541        1,647              5.92  %                106,298        1,595             6.09  %                 80,409         1,272              6.35  %
Total loans                                   4,568,724       56,813              4.94  %              4,478,880       50,244             4.50  %              3,422,975        38,756              4.50  %
Allowance for credit losses                     (54,148)                                                 (61,947)                                                (46,967)
Net loans                                     4,514,576       56,813              5.00  %              4,416,933       50,244             4.56  %              3,376,008        38,756              4.56  %
Total earning assets                          6,405,791       65,470              4.06  %              6,419,410       57,816             3.61  %              4,608,701        43,121              3.72  %
Goodwill and other intangible assets            329,243                                                  304,124                                                 222,553
Other assets                                    386,629                                                  344,282                                                 351,892
  Total assets                         $      7,121,663                                         $      7,067,816                                        $      5,183,146



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                                                                                                                       For the Three Months Ended
                                                                     June 30, 2022                                            March 31, 2022                                           June 30, 2021
                                                                        Income/                                                   Income/                                                  Income/
(Dollars in thousands)                              Average Balance     Expense        Yield/Cost             Average Balance     Expense       Yield/Cost             Average Balance     Expense       Yield/Cost
Interest-bearing deposits:
Savings accounts                                  $      1,076,028    $      45               0.02  %       $      1,050,813    $      34              0.01  %       $        680,825    $      21              0.01  %
Governmental deposit accounts                              704,632          471               0.27  %                670,419          447              0.27  %                496,906          551              0.44  %
Interest-bearing demand accounts                         1,177,751          115               0.04  %              1,171,266           92              0.03  %                733,913           66              0.04  %
Money market accounts                                      641,066          104               0.07  %                650,272           97              0.06  %                564,593           94              0.07  %
Retail certificates of deposit                             602,225          747               0.50  %                626,978          871              0.56  %                424,279          980              0.93  %
Brokered deposits (e)                                       87,006          532               2.45  %                 91,531          512              2.27  %                167,109          865              2.08  %
Total interest-bearing deposits                          4,288,708        2,014               0.19  %              4,261,279        2,053              0.20  %              3,067,625        2,577              0.34  %
Borrowed funds:
Short-term FHLB advances (e)                                53,846          237               1.77  %                 55,000          313              2.31  %                 19,176           81              1.69  %
Repurchase agreements and other                             96,589           24               0.10  %                 99,346           25              0.10  %                 50,852           11              0.09  %
Total short-term borrowings                                150,435          261               0.70  %                154,346          338              0.89  %                 70,028           92              0.53  %
Long-term FHLB advances                                     58,498          257               1.76  %                 85,653          306              1.45  %                101,161          392              1.55  %

Other borrowings                                            94,097        1,056               4.44  %                 43,445          418              3.85  %                  7,669           76              3.96  %
Total long-term borrowings                                 152,595        1,313               3.44  %                129,098          724              2.26  %                108,830          468              1.72  %
 Total borrowed funds                                      303,030        1,574               2.08  %                283,444        1,062              1.51  %                178,858          560              1.26  %
   Total interest-bearing liabilities                    4,591,738        3,588               0.31  %              4,544,723        3,115              0.28  %              3,246,483        3,137              0.39  %
Non-interest-bearing deposits                            1,648,067                                                 1,606,665                                                1,272,623
Other liabilities                                           90,457                                                    81,676                                                   82,209
Total liabilities                                        6,330,262                                                 6,233,064                                                4,601,315

Total stockholders' equity                                 791,401                                                   834,752                                                  581,831

Total Liabilities and Equity $7,121,663

                                $      7,067,816                                         $      5,183,146
Interest rate spread (b)                                              $  61,882               3.75  %                           $  54,701              3.33  %                           $  39,984              3.33  %
Net interest margin (b)                                                                       3.84  %                                                  3.41  %                                                  3.45  %





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Contents

                                                                                             For the Six Months Ended
                                                                     June 30, 2022                                              June 30, 2021
                                                                         Income/                                                   Income/
(Dollars in thousands)                              Average Balance      Expense        Yield/Cost             Average Balance     Expense        Yield/Cost
Short-term investments                            $        256,864    $      459               0.36  %       $        163,937    $      93               0.11  %

Investment securities (a)(b):
Taxable                                                  1,490,960        13,110               1.76  %                858,999        5,834               1.36  %
Nontaxable                                                 198,716         2,661               2.68  %                137,527        1,868               2.72  %
Total investment securities                              1,689,676        15,771               1.87  %                996,526        7,702               1.55  %
Loans (b)(c):
Construction                                               217,705         4,371               3.99  %                100,565        1,973               3.90  %
Commercial real estate, other                            1,357,792        30,381               4.45  %                898,072       17,431               3.86  %
Commercial and industrial                                  876,242        16,738               3.80  %                914,542       19,833               4.31  %
Premium finance                                            138,359         2,942               4.23  %                107,891        2,595               4.78  %
Leases                                                     225,667        16,643              14.67  %                 43,499        4,215              19.27  %
Residential real estate (d)                                901,201        19,092               4.24  %                611,172       13,101               4.29  %
Home equity lines of credit                                165,649         3,360               4.09  %                120,602        2,367               3.96  %
Consumer, indirect                                         532,501        10,288               3.90  %                519,566       10,516               4.08  %
Consumer, direct                                           108,934         3,242               6.00  %                 79,718        2,511               6.35  %
Total loans                                              4,524,050       107,057               4.72  %              3,395,627       74,542               4.38  %
Allowance for credit losses                                (58,026)                                                   (48,403)
Net loans                                                4,466,024       107,057               4.78  %              3,347,224       74,542               4.45  %
Total earning assets                                     6,412,564       123,287               3.84  %              4,507,687       82,337               3.65  %
Goodwill and other intangible assets                       316,753                                                    203,509
Other assets                                               364,911                                                    337,164
  Total assets                                    $      7,094,228                                           $      5,048,360
Interest-bearing deposits:
Savings accounts                                  $      1,063,490    $       79               0.01  %       $        663,882    $      56               0.02  %
Governmental deposit accounts                              687,620           919               0.27  %                463,391        1,145               0.50  %
Interest-bearing demand accounts                         1,174,526           207               0.04  %                717,129          131               0.04  %
Money market accounts                                      645,644           201               0.06  %                564,714          226               0.08  %
Retail certificates of deposit                             614,533         1,617               0.53  %                432,006        2,103               0.98  %
Brokered deposits (e)                                       89,256         1,044               2.36  %                171,194        1,733               2.04  %
Total interest-bearing deposits                          4,275,069         4,067               0.19  %              3,012,316        5,394               0.36  %
Borrowed funds:
Short-term FHLB advances (e)                                54,420           550               2.04  %                 19,586          169               1.74  %
Repurchase agreements and other                             97,960            49               0.10  %                 50,969           23               0.09  %
Total short-term borrowings                                152,380           599               0.79  %                 70,555          192               0.55  %
Long-term FHLB advances                                     72,001           563               1.58  %                101,952          782               1.55  %

Repurchase agreement and other borrowings                   68,911         1,474               4.25  %                  7,650          153               4.00  %
Total long-term borrowings                                 140,912         2,037               2.90  %                109,602          935               1.72  %
 Total borrowed funds                                      293,292         2,636               1.80  %                180,157        1,127               1.26  %
   Total interest-bearing liabilities                    4,568,361         6,703               0.29  %              3,192,473        6,521               0.41  %
Non-interest-bearing deposits                            1,627,480                                                  1,192,254
Other liabilities                                           85,431                                                     83,912
Total liabilities                                        6,281,272                                                  4,468,639

Total stockholders' equity                                 812,956                                                    579,721

Total Liabilities and Equity $7,094,228

                                 $      5,048,360
Interest rate spread (b)                                              $  116,584               3.55  %                           $  75,816               3.24  %
Net interest margin (b)                                                                        3.63  %                                                   3.36  %


(a)Average balances are based on carrying value.
(b)Interest income and yields are presented on a fully tax-equivalent basis
using a blended federal and state corporate income tax rate of 23.3% for 2022
and a federal corporate income tax rate of 21% for 2021.
(c)Average balances include nonaccrual and impaired loans. Interest income
includes interest earned and received on nonaccrual loans prior to the loans
being placed on nonaccrual status. Loan fees included in interest income were
immaterial for all periods presented.
(d)Loans held for sale are included in the average loan balance listed. Related
interest income on loans originated for sale prior to the loan being sold is
included in loan interest income.

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

Peoples' average balances compared to prior periods have been impacted by recent
acquisitions, which included: (i) Vantage on March 7, 2022, which added to
average lease and borrowed funds balances; (ii) Premier on September 17, 2021,
which added to average short-term investments, average total investment
securities, average total loans and average total deposits; and (iii) NSL on
April 1, 2021, which added to average lease balances. Peoples has maintained
high cash balances in recent periods due to an influx of deposits, coupled with
PPP proceeds.

The following table provides an analysis of the changes in FTE net interest
income:

                                                                                                                           Six Months Ended June 30, 2022
                                                   Three Months Ended June 30, 2022 Compared to                                     Compared to
(Dollars in thousands)                      March 31, 2022                             June 30, 2021                               June 30, 2021
Increase (decrease) in:              Rate      Volume     Total (a)            Rate       Volume     Total (a)             Rate        Volume     Total (a)
INTEREST INCOME:
Short-term investments            $   598    $  (459)   $      139          $    255    $     (9)   $     246          $      277    $     89    $     366

Investment Securities (b):
Taxable                               706        212           918             1,052       2,745        3,797              (8,752)     16,028        7,276
Nontaxable                            362       (334)           28                77         172          249              (3,065)      3,858          793
Total investment income             1,068       (122)          946             1,129       2,917        4,046             (11,817)     19,886        8,069
Loans (b):
Construction                          728       (667)           61              (400)      1,637        1,237                  47       2,351        2,398

Business real estate, other 1,428 (611) 817

   1,978       4,792        6,770               2,977       9,973       12,950
Commercial and industrial           1,953     (1,261)          692              (283)       (243)        (526)             (2,290)       (805)      (3,095)
Premium finance                       506        108           614                41         439          480                (747)      1,094          347
Leases                             (1,583)     6,022         4,439            (6,910)     13,236        6,326              (3,119)     15,547       12,428
Residential real estate              (177)      (263)         (440)             (364)      3,261        2,897                (455)      6,446        5,991
Home equity lines of credit            82         54           136                65         503          568                  82         911          993
Consumer, indirect                   (157)       355           198              (627)        557          (70)               (830)        602         (228)
Consumer, direct                     (206)       258            52              (525)        900          375                (418)      1,149          731
Total loan income                   2,574      3,995         6,569            (7,025)     25,082       18,057              (4,753)     37,268       32,515
Total interest income             $ 4,240    $ 3,414    $    7,654          $ (5,641)   $ 27,990    $  22,349          $  (16,293)   $ 57,243    $  40,950
INTEREST EXPENSE:
Deposits:
Savings accounts                  $    10    $     1    $       11         

$9 $15 $24 $ (18) $41 $23
Government deposit accounts (23) 47

            24              (939)        859          (80)             (1,198)        972         

(226)

Interest-bearing demand accounts       22          1            23                 6          43           49                 (13)         89           76
Money market accounts                  16         (9)            7               (15)         25           10                 (94)         69          (25)

Retail certificates of deposit (93) (31) (124)

  (1,853)      1,620         (233)             (2,120)      1,634         (486)
Brokered deposits                     140       (120)           20               821      (1,154)        (333)                651      (1,340)        (689)
Total deposit cost                     72       (111)          (39)           (1,971)      1,408         (563)             (2,792)      1,465       (1,327)
Borrowed funds:
Short-term borrowings                 (70)        (7)          (77)                6         163          169                  36         371          407
Long-term borrowings                  372        217           589               293         552          845                (413)      1,515        1,102
Total borrowed funds cost             302        210           512               299         715        1,014                (377)      1,886        1,509
Total interest expense                374         99           473            (1,672)      2,123          451              (3,169)      3,351          182
Fully tax-equivalent net interest
income                            $ 3,866    $ 3,315    $    7,181          $ (3,969)   $ 25,867    $  21,898          $  (13,124)   $ 53,892    $  40,768


(a)The change in interest due to both rate and volume has been allocated to rate
and volume changes in proportion to the relationship of the dollar amounts of
the change in each.
(b)Interest income and yields are presented on a fully tax-equivalent basis
using a blended federal and state corporate income tax rate of 23.3% for 2022
and a federal corporate income tax rate of 21% for 2021.

Compared to the linked quarter, net interest income increased 13% and net
interest margin expanded by 43 basis points. Both increases were driven higher
by accretion income from acquisitions and the recent rise in market interest
rates. Loan yields grew by


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44 basis points, of which 34 basis points was attributable to higher accretion
income. Deposit costs remained stable, while borrowing costs increased by 57
basis points and was mostly related to the acquired borrowings from the Vantage
acquisition.

Net interest income grew 55% over the prior year quarter and net interest margin
increased 39 basis points. The recent acquisitions have positively impacted net
interest income, coupled with organic growth and the increase in market interest
rates. During the second quarter of 2022, compared to the prior year quarter,
loan yields grew 44 basis points due to the rising interest rate environment,
while deposit costs declined 15 basis points driven by a reduction in
higher-interest bearing deposits, and borrowing costs increased 82 basis points
as a result of the non-recourse debt assumed in the acquisition of Vantage.

For the first half of 2022, net interest income and net interest margin grew 54%
and 27 basis points, respectively, compared to 2021. During that same time, loan
yields increased 34 basis points, which was partially offset by higher borrowing
costs. Net interest income has been positively impacted due to the acquisitions
in recent periods. Net interest income and net interest margin both have been
negatively impacted by the excess liquidity environment present in the financial
services sector since the beginning of the COVID-19 pandemic by way of increased
low yielding cash reserves.

Peoples recognized interest income on deferred loan fees/costs associated with
PPP loans of $0.6 million, $1.2 million and $3.4 million during the second and
first quarters of 2022 and the second quarter of 2021, respectively, along with
$79,000, $154,000, and $0.8 million of interest earned on PPP loans, during the
respective periods. For the first half of 2022, interest income recognized on
deferred loan fees/costs related to PPP loans was $1.8 million, and interest
earned was $232,000, compared to $8.1 million and $1.6 million, respectively,
for the first half of 2021. The interest income recognized on PPP loans added 2
basis points, 5 basis points and 15 basis points to net interest margin for the
second and first quarters of 2022 and the second quarter of 2021, respectively,
while adding 4 basis points and 21 basis points to net interest margin for the
first half of 2022 and 2021, respectively.

Accretion income, net of amortization expense, from acquisitions was $3.9
million for the second quarter of 2022, $2.7 million for the linked quarter and
$0.8 million for the second quarter of 2021, which added 25 basis points, 17
basis points and 7 basis points, respectively, to net interest margin. For the
first half of 2022, accretion income totaled $6.7 million and added 21 basis
points to net interest margin compared to $1.2 million and 6 basis points for
the first half of 2021, with the increase from the prior year due to the
acquired loans and leases from the Premier Merger and Vantage acquisition,
respectively.

Additional information regarding changes in the Unaudited Consolidated Balance
Sheets can be found under appropriate captions of the "FINANCIAL CONDITION"
section of this MD&A. Additional information regarding Peoples' interest rate
risk and the potential impact of interest rate changes on Peoples' results of
operations and financial condition can be found later in this MD&A under the
caption "FINANCIAL CONDITION - Interest Rate Sensitivity and Liquidity."

(Recovery of) Provision For Credit Losses
The following table details Peoples' (recovery of) provision for credit losses:

                                                    Three Months Ended                    Six Months Ended
                                            June 30,    March 31,     June 30,                June 30,
(Dollars in thousands)                        2022         2022         2021              2022        2021
(Recovery of) provision for other credit  $  (1,135)   $  (7,006)   $   3,035          $ (8,141)   $ (1,745)
losses
Provision for checking account overdraft
credit losses                                   355          199           53               554          84
(Recovery of) provision for credit losses $    (780)   $  (6,807)   $   3,088          $ (7,587)   $ (1,661)
As a percentage of average total loans
(a)                                           (0.07) %     (0.62) %      0.36  %          (0.34) %    (0.10) %
(a) Presented on an annualized basis.


The (recovery of) 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. For the second quarter of 2022, the
recovery of credit losses was driven by the reduction in allowance for
individually analyzed loans, as well as changes in loss drivers used in the CECL
model.
For the first quarter of 2022, the recovery of credit losses was related to an
improvement in the economic forecast, along with payoffs of several loans during
the quarter, which were partially offset by $387,000 for the establishment of an
allowance for credit losses for the non-purchased credit deteriorated leases
from the Vantage acquisition.
The provision for credit losses recorded during the second quarter of 2021 was
primarily due to the day-one allowance for credit losses of $3.3 million related
to the leases acquired from NSL. Excluding leases, the reduction of specific
reserves on individually evaluated loans positively impacted the allowance for
credit losses for the second quarter of 2021.
For the first half of 2022, the recovery of credit losses was mostly due to
improvements in the economic forecast and loss drivers, coupled with releases of
allowance for credit losses on individually analyzed loans. For the first six
months of 2021, the recovery of credit losses was associated with improved
economic forecasts compared to prior periods, which was partially offset by the
establishment of the allowance for credit losses for acquired leases.
Additional information regarding changes in the allowance for credit losses and
loan credit quality can be found later in this MD&A under the caption "FINANCIAL
CONDITION - Allowance for Credit Losses."


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Net (Loss) Gain Included in Total Non-Interest Income
Net (loss) gains includes losses and gains on investment securities, asset
disposals and other transactions, which are recognized in total non-interest
income. The following table details Peoples' net losses and gains for the
periods presented:

                                                            Three Months Ended                       Six Months Ended
                                                    June 30,     March 31,     June 30,                  June 30,
(Dollars in thousands)                                2022         2022          2021                2022          2021

Net gain (loss) on investment securities $ (44) $130

(202) $ $86 ($538)

Net (loss) gain on asset disposals and other
transactions:
Net loss on other assets                          $    (119)   $      (22)   $    (132)         $    (141)      $  (159)
Net (loss) gain on OREO                                 (33)           (1)           8                (34)            8

Net loss on other transactions                            -          (104)           -               (104)            -
Net loss on asset disposals and other
transactions                                      $    (152)   $     (127)  

$ (124) ($279) $ (151)


Losses on asset disposals and other transactions increased in the second quarter
relative to the linked and prior year quarters, driven by losses on repossessed
assets, losses on the sale of investment securities and losses on the sale of
OREO properties acquired from Premier. During the first three months of 2022,
Peoples sold several investment securities, resulting in a net gain on
investment securities. This gain was offset by a net loss on other transactions
primarily driven by an adjustment to the gain on sale of loans recognized in the
fourth quarter of 2021, which was driven by changes to the acquisition-date fair
value of Premier loans acquired that were subsequently sold.

During the second quarter of 2021, net loss on other assets was due to a market
value write-down of $208,000 related to a closed office that was held for sale,
which was partially offset by a net gain of $76,000 on repossessed assets. For
the first six months of 2021, net loss on investment securities was recorded due
to the sale of investment securities in order to reinvest proceeds into higher
yielding investment securities.

Total Non-Interest Income, Excluding Net Gains and Losses
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 second quarter of 2022, compared
to 27% for the linked quarter and 29% for the prior year quarter. For the first
half of 2022, total non-interest income, excluding net gains and losses, totaled
26% of total revenues compared to 31% for 2021. The decline in this ratio
compared to the prior periods was primarily due to higher net interest income
associated with the recent acquisition of Vantage and Premier Merger, coupled
with the increase in the market interest rate environment.

For the second quarter of 2022, electronic banking income comprised the largest
portion of Peoples' total non-interest income, excluding net gains and losses.
Peoples' electronic banking ("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 clients. The following table details Peoples'
e-banking income:

                                         Three Months Ended              Six Months Ended
                                  June 30,   March 31,    June 30,           June 30,
        (Dollars in thousands)      2022        2022        2021          2022       2021

        E-banking income         $  5,419   $    5,253   $  4,418      $  10,672   $ 8,329


Peoples' e-banking income is derived largely from ATM and debit cards, as other
services are mainly provided at no charge to customers. The amount of e-banking
income is largely dependent on the timing and volume of customer activity.
E-banking income increased compared to the linked quarter primarily due to
increased customer activity. Compared to the prior year quarter and first half
of 2021, e-banking income grew 23% and 28%, respectively, from increased
customer activity, coupled with the addition of the Premier customers during the
third quarter of 2021.

The following table details personal insurance income:

                                                          Three Months Ended                        Six Months Ended
                                                 June 30,      March 31,     June 30,                   June 30,
(Dollars in thousands)                             2022          2022          2021                2022          2021

Property and liability insurance commissions $3,039 $2,862 $2,765 $5,901 $5,520

Performance-based commissions                          10         1,346            35               1,356        1,985
Life and health insurance commissions                 506           452           430                 956          852
Other fees and charges                                 92            72           105                 164          199
Insurance income                               $    3,647    $    4,732    $    3,335          $    8,377    $   8,556



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Insurance income declined compared to the linked quarter, and was mostly due to
the recognition of $1.3 million of annual performance-based insurance
commissions recorded during the first quarter of each year. Compared to the
prior year quarter, insurance income grew due to additional customers, while the
decline compared to the first half of 2021 was driven by lower performance-based
commissions.

Peoples' fiduciary income and brokerage income continued to be based primarily
upon the value of assets under administration and management, with additional
income generated from transaction commissions, cross-selling of products and
additional retirement plan services business. The following tables detail
Peoples' trust and investment income and related assets under administration and
management:

                                           Three Months Ended              Six Months Ended
                                    June 30,   March 31,    June 30,           June 30,
     (Dollars in thousands)           2022        2022        2021          2022       2021
     Fiduciary income              $  1,999   $    1,965   $  2,095      $   3,964   $ 3,997
     Brokerage income                 1,631        1,649      1,494          3,280     2,831
     Employee benefit fees              616          662        631          1,278     1,237

Trust and investment income $4,246 $4,276 $4,220 $

8,522 $8,065


Fiduciary income and brokerage income were mostly flat in the current quarter
relative to the linked quarter, with the timing of brokerage fee income
mitigating the decrease in assets under management, and fees for tax preparation
and estate services mitigating the decrease in trust assets. An improvement in
the values of assets under administration and management, coupled with new
accounts added, contributed to the growth in trust and investment income
compared to the first half of 2021.

The following table details the assets under administration and management of Peoples:

                                               June 30,      March 31,     December 31,     September 30,      June 30,
(Dollars in thousands)                           2022           2022           2021             2021             2021

Trust                                       $ 1,731,454    $ 1,927,828    $  2,009,871    $    1,937,123    $ 1,963,884
Brokerage                                     1,068,261      1,152,530       1,183,927         1,133,668      1,119,247
Total                                       $ 2,799,715    $ 3,080,358    $  3,193,798    $    3,070,791    $ 3,083,131
Quarterly average                           $ 2,927,405    $ 3,106,021    $  3,126,398    $    3,077,554    $ 3,051,027


The declines in assets under administration and management at June 30, 2022,
compared to the linked quarter and December 31, 2021, were driven by a decrease
in market values during the first half of 2022 due to the recent economic
downturn.

Deposit account service charges are based on the recovery of costs associated
with services provided. The following table details Peoples' deposit account
service charges:

                                                        Three Months Ended                       Six Months Ended
                                               June 30,      March 31,     June 30,                  June 30,
(Dollars in thousands)                           2022          2022          2021                2022        2021

Overdraft and NSF fees $2,019 $1,902 $

  1,012          $   3,921    $  2,009
Account maintenance fees                          1,306         1,311           854              2,617       1,664
Other fees and charges                              233           213           178                446         356
Deposit account service charges              $    3,558    $    3,426    $  

2,044 $6,984 $4,029


The amount of deposit account service charges, particularly fees for overdrafts
and non-sufficient funds, is largely dependent on the timing and volume of
customer activity. Management periodically evaluates its cost recovery fees to
ensure they are reasonable based on operational costs and similar to fees
charged in Peoples' markets by competitors. Deposit account service charges
increased compared to the linked quarter, prior year quarter and first half of
2021 due to increased customer activity in recent quarters, compared to the very
low levels of early 2021 associated with fiscal stimulus payments and PPP loan
proceeds provided to customers, along with changed customer spending habits due
to the COVID-19 pandemic. Also contributing to the increase compared to the
prior year quarter and first half of 2021 was the additional customers
associated with the Premier Merger.



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The following table details the other items included within Peoples' total
non-interest income:

                                                        Three Months Ended                                 Six Months Ended
                                            June 30,          March 31,        June 30,                        June 30,
(Dollars in thousands)                        2022              2022             2021                   2022              2021

Mortgage banking income                           352              436              820                    788             1,960
Bank owned life insurance income                  797              431              446                  1,228               892
Commercial loan swap fees                         270              168               61                    438               121
Other non-interest income                       1,294            1,326              803                  2,620             1,461


Mortgage banking income is comprised mostly of net gains from the origination
and sale of real estate loans in the secondary market, and, to a lesser extent,
servicing income for loans sold with servicing retained. As a result, the amount
of income recognized by Peoples is largely dependent on customer demand and
long-term interest rates for residential real estate loans offered in the
secondary market. Mortgage banking income declined compared to the linked
quarter, prior year quarter and first half of 2021 due to the increased interest
rate environment in recent quarters and a lower volume of new loan originations
due to the lack of inventory of homes for sale.

In the second quarter of 2022, Peoples sold $4.6 million in loans to the
secondary market with servicing retained and $6.1 million in loans with
servicing released, compared to $7.2 million and $7.9 million, respectively, for
the first quarter of 2022, and $15.8 million and $7.8 million, respectively, for
the second quarter of 2021. For the first half of 2021, Peoples sold $33.0
million in loans to the secondary market with servicing retained, and $17.4
million in servicing released.

Bank owned life insurance income for the current quarter included a $248,000
death benefit related to the cash surrender value of the underlying policy.
Peoples also invested an additional $30.0 million in bank owned life insurance
policies during the second quarter of 2022. For the first half of 2022, the
increased bank owned life insurance income compared to the first half of 2021,
was due to the aforementioned death benefit proceeds and additional investment.

Commercial loan swap fees are largely dependent on timing, interest rates, and
the volume of customer activity. During the second quarter of 2022, commercial
loan swap fees increased as a result of several new commercial loan swaps in the
period, driven by the recent increases in interest rates, compared to less
activity in the linked and prior year quarter, and first half of 2021.

Other non-interest income was relatively flat compared to the linked quarter.
Compared to the prior year quarter and first half of 2021, other non-interest
income increased 61% and 79%, respectively, due to fee income recognized with
the leasing divisions.

Non-interest expenses Salaries and benefit costs continue to be Peoples’ largest non-interest expenses, accounting for more than half of total non-interest expenses. The following table details Peoples salaries and benefits costs:

                                                     Three Months Ended                     Six Months Ended
                                             June 30,     March 31,     June 30,                June 30,
(Dollars in thousands)                         2022         2022          2021              2022        2021
Base salaries and wages                    $  18,408    $   17,676    $  

13,488 $36,084 $26,253
Sales-based and incentive compensation 4,913 3,636 4,593

             8,549       8,021
Employee benefits                              3,321         3,621        2,821             6,942       5,719
Payroll taxes and other employment costs       1,389         2,091        1,343             3,480       2,836
Stock-based compensation                         600         1,605          604             2,205       1,819
Deferred personnel costs                      (1,046)         (900)        (921)           (1,946)     (1,961)
Salaries and employee benefit costs        $  27,585    $   27,729    $  21,928          $ 55,314    $ 42,687
Full-time equivalent employees:
Actual at end of period                        1,261         1,245          925             1,261         925
Average during the period                      1,255         1,215          914             1,241         907

Base wages and salaries increased 4% from the related quarter and 36% from the second quarter of 2021. The increases for the second quarter of 2022 from the related quarter and the prior year quarter were were driven by additional salaries associated with the Vantage acquisition and the Premier merger, respectively.

The increase in sales-based and incentive compensation for the second quarter of
2022 compared to the linked quarter was primarily due to sales incentives earned
by Vantage employees.


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The decrease in employee benefits for second quarter of 2022, compared to the
linked quarter, was primarily due to annual contributions to employee health
benefit accounts which occur primary in the first quarter of each year. The
increase in employee benefits compared to the second quarter of 2021 was due to
higher medical costs with the addition of the Premier and Vantage employees.

Payroll taxes and other employment costs decreased compared to the first quarter
of 2022, primarily driven by higher payroll taxes recognized in the first
quarter of each year. Those costs increased for the first half of the year
relative to the prior year period due to the additional associates retained from
the Premier Merger, and North Star and Vantage acquisitions.

Stock-based compensation is generally recognized over the vesting period, which
generally ranges from immediate vesting to vesting at the end of three years,
adjusted for an estimate of the portion of awards that will be forfeited. At the
vesting date, an adjustment is made to increase or reverse expense for the
amount of actual forfeitures compared to the estimate. Stock grants to
retirement eligible grantees are expensed either immediately or over a shorter
period than three years. The majority of Peoples' stock-based compensation is
attributable to annual equity-based incentive awards to employees, which are
awarded in the first quarter of each year and are based upon Peoples achieving
certain performance goals during the prior year. Stock-based compensation for
the second quarter of 2022 decreased compared to the linked quarter, which
included expense related to stock grants to retirement eligible individuals and
the annual vesting of prior stock grants. Stock-based compensation for the first
half of the year increased 21% compared to the first half of the prior year due
to employees added in the acquisition of Vantage and the Premier Merger.

Deferred personnel costs represent the portion of current period salaries and
employee benefit costs considered to be direct loan origination costs. These
costs are capitalized and recognized over the life of the loan as a yield
adjustment in interest income. As a result, the amount of deferred personnel
costs for each period corresponds directly with the volume of loan originations,
coupled with the average deferred costs per loan that are updated annually at
the beginning of each year. Higher deferred personnel costs compared to the
linked quarter was primarily due to an increase in loan origination volume.

Peoples' net occupancy and equipment expense was comprised of the following:

                                                       Three Months Ended                       Six Months Ended
                                             June 30,      March 31,      June 30,                  June 30,
(Dollars in thousands)                         2022           2022          2021                2022        2021
Depreciation                               $    1,770    $     1,823    $    1,398          $   3,593    $  2,769
Repairs and maintenance costs                   1,245          1,378           903              2,625       1,846
Net rent expense                                  756            685           382              1,441         722

Property taxes, utilities and other costs 997 1,202

    606              2,197       1,279

Net occupancy and equipment charges $4,768 $5,088 $

3,289 $9,856 $6,616


Depreciation on capitalized assets declined compared to the linked quarter as a
result of certain capitalized assets and improvements reaching the end of their
depreciable lives, coupled with lower repairs and maintenance costs from snow
removal expenses compared to the first quarter of 2022. Compared to the second
quarter and first half of 2021, net occupancy and equipment expense increased
45% and 49%, respectively, with the increases driven by the additional
geographic locations from recent acquisitions.

The following table details the other items included in total non-interest
expense:

                                                         Three Months Ended                       Six Months Ended
                                               June 30,      March 31,      June 30,                  June 30,
(Dollars in thousands)                           2022          2022           2021                2022        2021
Professional fees                            $    2,280    $    3,672    $     3,565          $   5,952    $  7,033
Data processing and software expense              3,033         2,916          2,411              5,949       4,865
E-banking expense                                 2,727         2,759          2,075              5,486       3,969
Amortization of other intangible assets           2,034         1,708          1,368              3,742       1,988
FDIC insurance premiums                           1,018         1,194            326              2,212         789
Marketing expense                                   860           995            676              1,855       1,587
Other loan expenses                                 445           832            494              1,277         956
Franchise tax expense                             1,102           764            822              1,866       1,677
Communication expense                               649           625            386              1,274         668
Other non-interest expense                        3,398         3,347          2,559              6,745       5,051


Professional fees decreased $1.4 million from the linked quarter and second
quarter of 2021 primarily due to lower acquisition-related expenses.
Professional fees for the first half of the year decreased $1.1 million compared
to the first half of the prior year, primarily driven by acquisition-related
expenses related to the Premier Merger which had been realized in the prior
year.


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Data processing and software expense increased relative to prior year periods,
driven by software upgrades and implementation of new systems, coupled with the
increased size of Peoples' organization.

E-banking expense increased compared to the second quarter of 2021 and first
half of 2021, and is correlated to e-banking income, which also increased over
those same periods.

Amortization of other intangible assets is associated with acquisition-related
activity, and grew 19% compared to the linked quarter, due to the Vantage
acquisition. Compared to the second quarter of 2021, amortization of other
intangible assets increased $0.7 million as Peoples merged with Premier, and
acquired Vantage on September 17, 2021 and March 7, 2022, respectively.
Amortization of other intangible assets grew 88% versus the first half 2021 due
to the Premier Merger, and the acquisitions of North Star and Vantage.

Peoples' FDIC insurance premiums decreased compared to the linked quarter, as
Peoples recognized a prior year adjustment in the first quarter relating to its
larger assessment base as a result of the liabilities assumed from Premier. FDIC
insurance premiums increased compared to the prior year quarter, as Peoples
recorded increased premiums after the acquisition of Premier.

Marketing expense declined 14% compared to the linked quarter, and increased 27%
versus the prior year quarter. The decrease from the linked quarter was mainly
due to a vendor credit related to prior year customer debit card spend. The
increase relative to the prior year quarter was driven by higher public
relations and media spend associated with the acquisition of Premier, and recent
community-based spend in celebration of Peoples' 120th anniversary.

Other loan expenses decreased $0.4 million compared to the linked quarter driven
by the timing of the reimbursement of appraisal costs. Compared to the first
half of 2021, other loan expenses grew 34% and were mostly related to higher
indirect lending volume and increased collection expense driven by the Premier
Merger.

Peoples is subject to state franchise taxes, which are based largely on Peoples'
equity, in the states where Peoples has a physical presence. Franchise tax
expense also includes the Ohio Financial Institution Tax ("FIT"), which is a
business privilege tax that is imposed on financial institutions organized for
profit and doing business in Ohio. The Ohio FIT is based on the total equity
capital in proportion to the taxpayer's gross receipts in Ohio as of the most
recent year-end. The increase versus the linked quarter was driven by a credit
received in the first quarter of 2022 for an overpayment of the prior year's
franchise taxes.

Communications expense increased 68% compared to the second quarter of 2021 and
91% compared to the first half of 2021. The growth relative to those periods was
due to upgraded networking to certain branches (including new branches acquired
from Premier coupled with the addition of the NSL and Vantage locations
acquired) and increased costs compared to the prior periods among certain
vendors that provide communication services.

Other non-interest expense increased 33% compared to the prior year quarter and
34% versus the first half of 2021 driven by higher ongoing costs associated with
Peoples' recent acquisitions, mostly due to increased postage, travel and
entertainment, insurance and supplies expense.

Income Tax Expense
Peoples recorded an income tax expense of $6.8 million for the second quarter of
2022, compared to income tax expense of $6.0 million for the linked quarter and
income tax expense of $2.4 million for the second quarter of 2021. The increase
in income tax expense for the second quarter of 2022, compared to the linked
quarter, was due to an increase in Peoples' effective tax rate driven by an
expansion of its footprint associated with the acquisition of Vantage, and
higher pre-tax income. The increase in income tax expense for the six months
ended June 30, 2022 compared to the six months ended June 30, 2021, was largely
driven by higher pre-tax income.

Additional information regarding income taxes can be found in “Note 13 Income Taxes” in the Notes to the Consolidated Financial Statements included in Peoples’ 2021 Form 10-K.

Pre-Provision Net Revenue (Non-US GAAP)
Pre-provision net revenue ("PPNR") has become a key financial measure used by
state and federal bank regulatory agencies when assessing the capital adequacy
of financial institutions. PPNR is defined as net interest income plus total
non-interest income, excluding all gains and losses, minus total non-interest
expense. As a result, PPNR represents the earnings capacity that can be either
retained in order to build capital or used to absorb unexpected losses and
preserve existing capital. This ratio represents a Non-US GAAP financial measure
since it excludes the provision for (recovery of) credit losses and all gains
and losses included in earnings.


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The following table provides a reconciliation of this Non-US GAAP financial
measure to the amounts reported in Peoples' Unaudited Condensed Consolidated
Financial Statements for the periods presented:

                                                    Three Months Ended                      Six Months Ended
                                           June 30,      March 31,     June 30,                 June 30,
(Dollars in thousands)                       2022          2022          2021               2022         2021
Pre-provision net revenue:
Income before income taxes               $   31,735    $   29,538    $  12,494          $  61,273    $  31,737
Add: provision for credit losses                  -             -        3,088                  -            -

Add: loss on OREO                                32             1            -                 33            -
Add: loss on investment securities               44             -          202                 44          538
Add: loss on other assets                       119            22          132                141          159
Add: loss on other transactions                   -           104            -                104            -
Less: gain on OREO                                -             -            8                  -            8
Less: recovery of credit losses                 780         6,807            -              7,587        1,661
Less: gain on investment securities               -           130            -                130            -

Pre-provision net revenue                $   31,150    $   22,728    $  15,908          $  53,878    $  30,765

Total average assets                      $7,121,663    $7,067,816    $5,183,146         $7,094,228   $5,048,360
Pre-provision net revenue to total
average assets (annualized)                    1.75  %       1.30  %      1.23  %            1.53  %      1.23  %

Weighted-average common shares
outstanding - diluted                     28,061,736    28,129,131    19,461,934         28,041,145   19,448,544
Pre-provision net revenue per common
share - diluted                          $     1.11    $     0.81    $    

0.81 $1.91 $1.63


The increase in PPNR compared to the linked quarter was driven by increased net
interest income reflecting the positive impact of recent increase in market
interest rates. PPNR grew compared to the second quarter of 2021 and first half
of 2021, mostly due to the impact of the Premier Merger and the Vantage and NSL
acquisitions improving net interest income, the recent increases in market
interest rates, and higher non-interest income.

Core Non-Interest Expense (Non-US GAAP)
Core non-interest expense is a financial measure used to evaluate Peoples'
recurring expense stream. This measure is Non-US GAAP since it excludes the
impact of all acquisition-related expenses, severance expenses, COVID-19-related
expenses and a Peoples Bank Foundation, Inc. contribution.

The following table provides a reconciliation of this non-GAAP measure to amounts disclosed in Peoples’ unaudited condensed consolidated financial statements for the periods presented:

                                                       Three Months Ended                      Six Months Ended
                                               June 30,     March 31,     June 30,                 June 30,
(Dollars in thousands)                           2022         2022          2021               2022        2021

Core non-interest expense:
Total non-interest expense                   $  49,899    $   51,629    $  39,899          $ 101,528    $ 77,886

Less: acquisition-related expenses                 602         1,373        2,400              1,975       4,311

Less: severance expenses                             -             -           14                  -          63

Less: COVID-19-related expenses                     29            94          210                123         502
Less: Peoples Bank Foundation, Inc.
contribution                                         -             -            -                  -         500

Core non-interest expense                    $  49,268    $   50,162    $  37,275          $  99,430    $ 72,510


Efficiency Ratio (Non-US GAAP)
The efficiency ratio is a key financial measure used to monitor performance. The
efficiency ratio is calculated as total non-interest expense (less amortization
of other intangible assets) as a percentage of fully tax-equivalent net interest
income plus total non-interest income excluding net gains and losses. This
measure is Non-US GAAP since it excludes amortization of other intangible assets
and all gains and losses included in earnings, and uses fully tax-equivalent net
interest income.


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The following table provides a reconciliation of this Non-US GAAP financial
measure to the amounts reported in Peoples' Unaudited Condensed Consolidated
Financial Statements for the periods presented:

                                                      Three Months Ended                 Six Months Ended
                                              June 30,    March 31,     June 30,                 June 30,
(Dollars in thousands)                          2022         2022         2021               2022         2021

Efficiency ratio:
Total non-interest expense                  $  49,899    $  51,629    $  

39,899 $101,528 $77,886
Less: amortization of other intangible assets 2,034 1,708 1,368

              3,742        1,988

assets

Adjusted total non-interest expense            47,865       49,921       38,531             97,786       75,898

Total non-interest income                      19,386       20,050       15,821             39,436       32,724

Less: net (loss) gain on investment
securities                                        (44)         130         (202)                86         (538)
Less: net (loss) on asset disposals and
other transactions                               (152)        (127)        (124)              (279)        (151)
Total non-interest income excluding net
gains and losses                               19,582       20,047       16,147             39,629       33,413

Net interest income                            61,468       54,310       39,660            115,778       75,238

Add: fully equivalent fiscal adjustment (a) 414 391 324

                806          578
Net interest income on a fully
tax-equivalent basis                           61,882       54,701       39,984            116,584       75,816
Adjusted revenue                            $  81,464    $  74,748    $  56,131          $ 156,213    $ 109,229
Efficiency ratio                                58.76  %     66.79  %     68.64  %           62.60  %     69.49  %

Efficiency ratio adjusted for non-core
items:
Core non-interest expense                   $  49,268    $  50,162    $  37,275          $  99,430    $  72,510
Less: amortization of other intangible          2,034                     1,368              3,742        1,988
assets                                                       1,708
Adjusted core non-interest expense             47,234       48,454       35,907             95,688       70,522
Non-interest income excluding net gains and
losses                                         19,582       20,047       16,147             39,629       33,413
Net interest income on a fully
tax-equivalent basis                           61,882       54,701       39,984            116,584       75,816
Adjusted revenue                            $  81,464    $  74,748    $  56,131          $ 156,213    $ 109,229
Efficiency ratio adjusted for non-core
items                                           57.98  %     64.82  %     63.97  %           61.25  %     64.56  %


(a) Based on a tax rate of 23.3% for the period June 30, 202222.9% for the period ended March 31, 2022and 21.0% for the period ended June 30, 2021.

The efficiency ratio for the second quarter of 2022 decreased compared to the
linked quarter, due to higher net interest income driven by increases in market
interest rates, coupled with decreases in acquisition-related expenses, salaries
and employee benefits, and FDIC insurance premiums. The efficiency ratio,
adjusted for non-core items, also decreased and the decrease was attributable to
the items previously mentioned. Additionally, compared to the second quarter of
2021 and the first half of 2021, the efficiency ratio and adjusted efficiency
ratio, both declined due to improvements in net interest income from the recent
acquisitions, coupled with higher non-interest income, outpacing increases in
total non-interest expense.

Return on Average Assets Adjusted for Non-Core Items Ratio (Non-US GAAP)
In addition to return on average assets, management uses return on average
assets adjusted for non-core items to monitor performance. The return on average
assets adjusted for non-core items ratio represents a Non-US GAAP financial
measure since it excludes the after-tax impact of all gains and losses,
acquisition-related expenses, severance expenses, COVID-19-related expenses and
a Peoples Bank Foundation, Inc. contribution.


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The following table provides a reconciliation of this Non-US GAAP financial
measure to the amounts reported in Peoples' Unaudited Condensed Consolidated
Financial Statements for the periods presented:

                                                         Three Months Ended                         Six Months Ended
                                               June 30,      March 31,      June 30,                    June 30,
(Dollars in thousands)                           2022          2022           2021                2022           2021

Annualized net income adjusted for non-strategic items: Net income

                                   $   24,888    $   23,577    $  

10 103 $48,465 $25,566

Add: net loss on investment securities               44             -            202                   -            538
Less: tax effect of net loss on investment
securities (a)                                        9             -             42                   -            113
Less: net gain on investment securities               -           130              -                  86              -
Add: tax effect of net gain on investment
securities (a)                                        -            27              -                  18              -
Add: net loss on asset disposals and other
transactions                                        152           127            124                 279            151
Less: tax effect of net loss on asset
disposals and other transactions (a)                 32            27             26                  59             32

Add: acquisition-related expenses                   602         1,373          2,400               1,975          4,311
Less: tax effect of acquisition-related
expenses (a)                                        126           288            504                 415            905

Add: severance expenses                               -             -             14                   -             63
Less: tax effect of severance expenses (a)            -             -              3                   -             13
Add: COVID-19-related expenses                       29            94            210                 123            502
Less: tax effect of COVID-19-related
expenses (a)                                          6            20             44                  26            105
Add: Peoples Bank Foundation, Inc.
contribution                                          -             -              -                   -            500
Less: tax effect of Peoples Bank Foundation,
Inc. contribution (a)                                 -             -              -                   -            105

Net income adjusted for non-core items
(after tax)                                  $   25,542    $   24,733    $    12,434          $   50,274    $    30,358
Days in the period                                   91            90             91                 181            181
Days in the year                                    365           365            365                 365            365
Annualized net income                        $   99,825    $   95,618    $    40,523          $   97,733    $    51,556
Annualized net income adjusted for non-core
items (after tax)                            $  102,449    $  100,306    $    49,873          $  101,381    $    61,219
Return on average assets:
Annualized net income                        $   99,825    $   95,618    $    40,523          $   97,733    $    51,556
Total average assets                          7,121,663     7,067,816      5,183,146           7,094,228      5,048,360
Return on average assets                           1.40  %       1.35  %        0.78  %             1.38  %        1.02  %

Return on average assets adjusted for non-core items: annualized net income adjusted for non-core items (after tax)

                            $  102,449    $  100,306    $    49,873          $  101,381    $    61,219
Total average assets                          7,121,663     7,067,816      5,183,146           7,094,228      5,048,360
Return on average assets adjusted for
non-core items                                     1.44  %       1.42  %        0.96  %             1.43  %        1.21  %


(a) Based on a federal corporate income tax rate of 21%.

The return on average assets improved compared to the linked quarter, due to
higher net interest income driven by increases in market interest rates, coupled
with decreases in acquisition-related expenses, salaries and employee benefits,
and FDIC insurance premiums.

The increase in return on average assets in the second quarter of 2022, compared to the second quarter of 2021 and the first half of 2022 compared to the first half of 2021, is attributable to the increase in net interest income and non-interest income, which has been driven by recent acquisitions.

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Return on Average Tangible Equity Ratio (Non-US GAAP)
The return on average tangible equity ratio is a key financial measure used to
monitor performance. This ratio is calculated as annualized net income (less the
after-tax impact of amortization of other intangible assets) divided by average
tangible equity. This measure is Non-US GAAP since it excludes amortization of
other intangible assets from earnings and the impact of goodwill and other
intangible assets acquired through acquisitions on total stockholders' equity.

                                                       Three Months Ended                      Six Months Ended
                                             June 30,         March 31,       June 30,                 June 30,
(Dollars in thousands)                         2022              2022           2021               2022         2021

Annualized net income excluding amortization of other intangible assets: Net income

                               $      24,888     $      23,577    $  10,103          $  48,465    $  25,566
Add: amortization of other intangible
assets                                           2,034             1,708        1,368              3,742        1,988
Less: tax effect of amortization of
other intangible assets (a)                        427               359          287                786          417
Net income excluding amortization of
other intangible assets                  $      26,495     $      24,926    $  11,184          $  51,421    $  27,137
Days in the period                                  91                90           91                181          181
Days in the year                                   365               365          365                365          365
Annualized net income                    $      99,825     $      95,618    $  40,523          $  97,733    $  51,556
Annualized net income excluding
amortization of other intangible assets  $     106,271     $     101,089    $  44,859          $ 103,694    $  54,724
Average tangible equity:
Total average stockholders' equity       $     791,401     $     834,752    $ 581,831          $ 812,956    $ 579,721
Less: average goodwill and other
intangible assets                              329,243           304,124      222,553            316,753      203,509
Average tangible equity                  $     462,158     $     530,628    $ 359,278          $ 496,203    $ 376,212
Return on average stockholders' equity ratio:
Annualized net income                    $      99,825     $      95,618    $  40,523          $  97,733    $  51,556
Average stockholders' equity             $     791,401     $     834,752    $ 581,831          $ 812,956    $ 579,721
Return on average stockholders' equity           12.61   %         11.45  %      6.96  %           12.02  %      8.89  %
Return on average tangible equity ratio:
Annualized net income excluding
amortization of other intangible assets  $     106,271     $     101,089    $  44,859          $ 103,694    $  54,724
Average tangible equity                  $     462,158     $     530,628    $ 359,278          $ 496,203    $ 376,212
Return on average tangible equity                22.99   %         19.05  %     12.49  %           20.90  %     14.55  %


(a) Based on a federal corporate income tax rate of 21%.

The return on average stockholders' equity and average tangible equity ratios
were higher in the current quarter and the first half of 2022 relative to all
prior periods, due to higher total net interest income driven by the recent
increases in market interest rates and loans and leases added in the Premier
Merger and acquisitions of Vantage and NSL, coupled with higher non-interest
income. At the same time, the average tangible equity was negatively impacted by
the Vantage acquisition, for which People did not issue any equity, and recorded
additional goodwill and other intangible assets. Additionally, average tangible
equity declined compared to the first quarter of 2022 due to a higher
accumulated other comprehensive loss during the second quarter of 2022 as a
result of the impact of the interest rate environment on the available-for-sale
investment securities portfolio.



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                              FINANCIAL CONDITION

Cash and Cash Equivalents
At June 30, 2022, Peoples' interest-bearing deposits in other banks had
decreased $35.2 million from December 31, 2021. Peoples paid $82.9 million in
cash for the Vantage acquisition during the first quarter of 2022. The total
cash and cash equivalents balance included $297.4 million of excess cash
reserves being maintained at the FRB of Cleveland at June 30, 2022, compared to
$318.1 million at December 31, 2021. The amount of excess cash reserves
maintained is dependent upon Peoples' daily liquidity position, which is driven
primarily by changes in deposit and loan balances.

Through the first six months of 2022, Peoples' total cash and cash equivalents
decreased $17.3 million as Peoples had net cash used in investing activities of
$196.0 million, which more than offset cash provided by financing activities of
$116.0 million and by operating activities of $62.7 million. Peoples' investing
activities reflected purchases of available-for-sale investment securities
totaling $233.1 million, cash outflows for business combinations of $85.8
million, net of a decrease in loans held for investment of $70.9 million and
proceeds from principal payments, calls and prepayments of available-for-sale
investment securities of $112.8 million. The cash provided by financing
activities was largely driven by increases in short-term borrowings of $154.9
million, and in interest-bearing deposits of $46.5 million, the latter of which
was driven by higher governmental deposits, which are seasonal in nature.

Further information regarding the management of Peoples’ liquidity position can be found later in this discussion under “Interest Rate Sensitivity and Liquidity”.

Investment Securities
The following table provides information regarding Peoples' investment
portfolio:

                                   Weighted Average     June 30,      March 31,     December 31,     September 30,      June 30,
(Dollars in thousands)                  Yield             2022           2022           2021             2021             2021
Available-for-sale securities, at fair value:
Obligations of:
U.S. Treasury and government
agencies                                     2.24  % $   175,255    $   167,406    $     35,604    $            -    $         -
U.S. government sponsored
agencies                                     1.48  %      82,465         80,654          81,739            78,481         14,235
States and political subdivisions            2.64  %     249,402        231,644         259,319           252,919        223,853
Residential mortgage-backed
securities                                   1.78  %     691,735        753,353         828,517           898,459        579,152
Commercial mortgage-backed
securities                                   1.65  %      58,301         58,112          63,519            62,552         27,631
Bank-issued trust preferred
securities                                   2.83  %      10,440         10,670           6,795             4,679          4,766

Total fair value                                     $ 1,267,598    $ 

1,301,839 $1,275,493 $1,297,090 $849,637
Total amortized cost

                                 $ 1,389,621    $ 

1,381,259 $1,283,146 $1,294,654 $839,682
Net unrealized gain (loss)

                           $  (122,023)   $   (79,420)   $     (7,653)   $        2,436    $     9,955
Held-to-maturity securities, at amortized cost:
Obligations of:
U.S. government sponsored
agencies                                     1.99  % $    50,990    $    

38,486 $36,431 $29,995 $30,103
States and political subdivisions (a)

                                          2.15  %     151,034        151,217         151,402           124,181        102,224
Residential mortgage-backed
securities                                   1.55  %     112,095        115,613         110,708            41,035         24,067
Commercial mortgage-backed
securities                                   1.69  %      86,601         79,340          75,588            47,889         23,830
Total amortized cost                                 $   400,720    $   

384,656 $374,129 $243,100 $180,224
Other investment securities

                          $    41,655    $    41,840    $     33,987    $       34,486    $    32,584
Total investment securities:
Amortized cost                                       $ 1,831,996    $ 1,807,755    $  1,691,262    $    1,572,240    $ 1,052,490
Carrying value                                       $ 1,709,973    $ 1,728,335    $  1,683,609    $    1,574,676    $ 1,062,445


(a)Amortized cost is presented net of the allowance for credit losses of $286 at
June 30, 2022 and December 31, 2021; $236 at September 30, 2021 and $201 at June
30, 2021.

For the first quarter of 2022, total investment securities increased compared to
the prior quarter, largely due to investments made in U.S. Treasury and
government agencies' obligations, in an effort to deploy cash, improve
investment yields and reduce risk, partially offset by the reduction in market
value of available-for-sale securities driven by the recent increases in market
interest rates.


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During the third quarter of 2021, Peoples acquired investment securities in the
Premier Merger, driving the increase compared to June 30, 2021.

Additional information regarding Peoples’ investment portfolio can be found in “Note 3 Investment security” Notes to the unaudited condensed consolidated financial statements.

Loans

The following table provides information about outstanding loan balances:

                                      June 30,      March 31,     December 31,   September 30,     June 30,
(Dollars in thousands)                  2022           2022           2021           2021            2021
Originated loans:
Construction                       $   144,062    $   171,934    $   137,437    $    108,334    $    97,424
Commercial real estate, other          899,774        854,721        861,610         838,333        836,613
   Commercial real estate            1,043,836      1,026,655        999,047         946,667        934,037
Commercial and industrial              777,050        791,307        779,064         715,169        778,122
Premium finance                        152,237        145,813        136,121         134,755        117,039
Leases                                 149,894         97,168         69,169          49,464         24,217
Residential real estate                373,010        364,989        350,595         334,838        324,321
Home equity lines of credit            115,935        107,414        104,176          98,806         95,376
Consumer, indirect                     563,088        524,778        530,532         543,243        537,926
Consumer, direct                        95,371         87,994         81,330          80,746         78,736
  Consumer                             658,459        612,772        611,862         623,989        616,662
Deposit account overdrafts                 851            699            756             927            498
Total originated loans             $ 3,271,272    $ 3,146,817    $ 3,050,790    $  2,904,615    $ 2,890,272
Acquired loans (a):
Construction                       $    58,526    $    66,371    $    72,795    $     66,450    $     3,175
Commercial real estate, other          560,249        602,511        688,471         790,783        111,647
   Commercial real estate              618,775        668,882        761,266         857,233        114,822
Commercial and industrial               81,402         95,844        112,328         143,369         27,629
Premium finance                              -              -             15               -             49
Leases                                 164,628        169,900         53,339          61,982         71,426
Residential real estate                369,995        391,440        421,123         433,296        242,276
Home equity lines of credit             53,400         54,874         59,417          62,564         23,025
Consumer, indirect                           -              -              -              13              -
Consumer, direct                        16,433         19,396         23,322          27,956          2,700
  Consumer                              16,433         19,396         23,322          27,969          2,700
Total acquired loans               $ 1,304,633    $ 1,400,336    $ 1,430,810    $  1,586,413    $   481,927
Total loans                        $ 4,575,905    $ 4,547,153    $ 4,481,600    $  4,491,028    $ 3,372,199

Percent of loans to total loans:
Construction                               4.4  %         5.2  %         4.7  %          3.9  %         3.0  %
Commercial real estate, other             32.0  %        32.1  %        34.7  %         36.3  %        28.1  %
   Commercial real estate                 36.4  %        37.3  %        39.4  %         40.2  %        31.1  %
Commercial and industrial                 18.8  %        19.5  %        19.9  %         19.1  %        23.9  %
Premium finance                            3.3  %         3.2  %         3.0  %          3.0  %         3.5  %
Leases                                     6.9  %         5.9  %         2.7  %          2.5  %         2.8  %
Residential real estate                   16.2  %        16.6  %        17.2  %         17.1  %        16.8  %
Home equity lines of credit                3.7  %         3.6  %         3.7  %          3.6  %         3.5  %
Consumer, indirect                        12.3  %        11.5  %        11.8  %         12.1  %        16.0  %
Consumer, direct                           2.4  %         2.4  %         2.3  %          2.4  %         2.4  %
  Consumer                                14.7  %        13.9  %        14.1  %         14.5  %        18.4  %

Total percentage                         100.0  %       100.0  %       100.0  %        100.0  %       100.0  %
Residential real estate loans
being serviced for others          $   410,007    $   420,024    $   430,597    $    441,085    $   454,399


(a)  Includes all loans acquired, and related loan discount recorded as part of
acquisition accounting, in 2012 or thereafter. Loans that were acquired and
subsequently re-underwritten are reported as originated upon execution of such
credit actions (for example, renewals and increases in lines of credit).


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Period-end total loan balances at June 30, 2022 increased $28.8 million compared
to March 31, 2022, and were driven by increases of $38.3 million in consumer
indirect loans and $47.4 million in leases, $15.5 million of which related to a
purchase accounting adjustment on the Vantage portfolio, partially offset by a
reduction in construction loans of $35.7 million. The acquired loan decrease was
driven by payoffs of commercial real estate and commercial and industrial loans
in the Premier Merger.

The increase in loans to September 30, 2021compared to June 30, 2021was mainly due to the Premier merger, which added $1.1 billion in loans. The increase in leases of December 31, 2021 at March 31, 2022was driven by the leases acquired from Vantage.

Loan Concentration
Peoples categorizes its commercial loans according to standard industry
classifications and monitors for concentrations in a single industry or multiple
industries that could be impacted by changes in economic conditions in a similar
manner. Peoples' commercial lending activities continue to be spread over a
diverse range of businesses from all sectors of the economy, with no single
industry comprising over 10% of Peoples' total loan portfolio.

Loans secured by commercial real estate, including commercial construction
loans, continued to comprise the largest portion of Peoples' loan portfolio. The
following tables provide information regarding the largest concentrations of
commercial construction loans and commercial real estate loans within the loan
portfolio at June 30, 2022:

                                                  Outstanding
(Dollars in thousands)                              Balance        Loan

Commitments Total exposure % of total

Construction:
Apartment complexes                             $      64,451    $          95,898    $       160,349                 36.5  %
Mixed-use facilities                                   39,333               19,205             58,538                 13.3  %
Assisted living facilities and nursing homes           18,106               15,775             33,881                  7.7  %
Land only                                              18,106               12,207             30,313                  6.9  %
Office buildings and complexes                         11,711               10,321             22,032                  5.0  %

Lodging and lodging related                             5,170                1,379              6,549                  1.5  %
Retail                                                  8,654                2,023             10,677                  2.4  %
Residential property                                    8,699                7,156             15,855                  3.6  %
Industrial                                              8,393                7,651             16,044                  3.6  %

Day care facilities - owner occupied                    3,960                4,000              7,960                  1.8  %

Other (a)                                              16,005               61,514             77,519                 17.7  %
Total construction                              $     202,588    $         237,129    $       439,717                100.0  %

(a) All other outstanding balances represent less than 2% of the total loan portfolio.

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Contents

                                                  Outstanding
(Dollars in thousands)                              Balance      Loan Commitments     Total Exposure        % of Total
Commercial real estate, other:
Office buildings and complexes:
Owner occupied                                  $     75,510    $          3,243    $        78,753                  5.2  %
Non-owner occupied                                    80,295               4,011             84,306                  5.6  %
Total office buildings and complexes                 155,805               7,254            163,059                 10.8  %
Retail facilities:
Owner occupied                                        43,491                 711             44,202                  2.9  %
Non-owner occupied                                   128,410               1,226            129,636                  8.6  %
Total retail facilities                              171,901               1,937            173,838                 11.5  %
Mixed-use facilities:
Owner occupied                                        51,186                 274             51,460                  3.4  %
Non-owner occupied                                    58,225                 775             59,000                  3.9  %
Total mixed-use facilities                           109,411               1,049            110,460                  7.3  %
Apartment complexes                                  109,585               3,825            113,410                  7.5  %
Light industrial facilities:
Owner occupied                                        96,708               1,610             98,318                  6.5  %
Non-owner occupied                                    40,963               3,662             44,625                  3.0  %
Total light industrial facilities                    137,671               5,272            142,943                  9.5  %
Assisted living facilities and nursing homes          72,498                 250             72,748                  4.8  %
Warehouse facilities:
Owner occupied                                        35,884               1,471             37,355                  2.5  %
Non-owner occupied                                    35,681                 163             35,844                  2.4  %
Total warehouse facilities                            71,565               1,634             73,199                  4.9  %
Lodging and lodging related:
Owner occupied                                        13,659               2,553             16,212                  1.1  %
Non-owner occupied                                    88,329                 430             88,759                  5.9  %
Total lodging and lodging related                    101,988               2,983            104,971                  7.0  %
Education services:
Owner occupied                                        17,887                  98             17,985                  1.2  %
Non-owner occupied                                    22,140               4,000             26,140                  1.7  %
Total education services                              40,027               4,098             44,125                  2.9  %
Healthcare facilities:
Owner occupied                                        24,114                 401             24,515                  1.6  %
Non-owner occupied                                    10,842                   -             10,842                  0.7  %
Total healthcare facilities                           34,956                 401             35,357                  2.3  %
Restaurant/bar facilities:
Owner occupied                                        23,959                  74             24,033                  1.6  %
Non-owner occupied                                    10,780                 298             11,078                  0.7  %
Total restaurant/bar facilities                       34,739                 372             35,111                  2.3  %

Agriculture                                           26,744               1,474             28,218                  1.9  %
Other (a)                                            393,133              18,584            411,717                 27.3  %
Total commercial real estate, other             $  1,460,023    $         49,133    $     1,509,156                100.0  %


(a) All other outstanding balances represent less than 2% of the total loan portfolio.

Peoples' commercial lending activities continue to focus on lending
opportunities within Ohio, Kentucky, West Virginia, Virginia, Washington, D.C.
and Maryland. In all other states, the aggregate outstanding balances of
commercial loans in each state were less than 4% of total loans at both June 30,
2022 and December 31, 2021. The repayment of premium finance loans are secured
by the underlying insurance policy prepaid premium, and therefore, have no
geographical impact from a repayment perspective. The repayment of leases is
secured by the underlying equipment collateral and not real estate, which
mitigates geographic risk.

Small Business Administration Paycheck Protection Program

In March 2020, the CARES Act created the PPP targeted to provide small
businesses with support to cover payroll and certain other specified expenses.
Loans made under the PPP are fully guaranteed by the SBA. The PPP loans also
afford borrowers forgiveness up to the principal amount of the PPP covered loan,
plus accrued interest, if the loan proceeds are used to retain workers


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and maintain payroll and/or to make certain mortgage interest, lease and utility
payments, and certain other criteria are satisfied. The SBA will reimburse PPP
lenders for any amount of a PPP covered loan that is forgiven, and PPP lenders
will not be held liable for any representations made by PPP borrowers in
connection with their requests for loan forgiveness.

Peoples is a PPP participating lender, and the PPP loans originated are included
in commercial and industrial loans. Peoples also recorded deferred loan
origination fees related to the PPP loans, net of deferred loan origination
costs, which will be amortized over the life of the respective loans, or until
forgiven by the SBA, and will be recognized in net interest income. The
following tables detail Peoples' PPP loans and related income:

                                     June 30,        March 31,     December 31,     September 30,      June 30,
(Dollars in millions)                  2022            2022            2021             2021             2021
PPP aggregate outstanding
principal balances                $       15.2    $       42.9    $       89.3    $        139.8    $     194.7
PPP net deferred loan origination
fees                                       0.4             1.0             2.2               4.0            7.1
Accretion of net deferred loan
origination fees                           0.6             1.2             1.8               3.1            3.4


Allowance for Credit Losses
The amount of the allowance for credit losses at the end of each period
represents management's estimate of expected losses from existing loans based
upon its quarterly analysis of the loan portfolio. While this process involves
allocations being made to specific loans and pools of loans, the entire
allowance is available for all losses expected within the loan portfolio.

The following details management's allocation of the allowance for credit
losses:

                                          June 30,      March 31,     December 31,    September 30,     June 30,
(Dollars in thousands)                      2022           2022           2021             2021           2021
Commercial real estate                 $    20,239    $    23,786    $     32,146    $      39,252    $   18,147
Commercial and industrial                    8,572         10,114          11,063           13,378         8,686
Premium finance                                311            345             379            1,137           998
Leases                                       7,585          5,875           4,797            4,505         3,715

Residential real estate                      6,332          6,495           7,233            9,568         4,837
Home equity lines of credit                  1,699          1,894           2,005            2,224         1,504
Consumer, indirect                           6,234          5,172           5,326            6,160         8,841
Consumer, direct                             1,321          1,036             961            1,079         1,161

Deposit account overdrafts                      53             51              57               79            53
Allowance for credit losses            $    52,346    $    54,768    $     63,967    $      77,382    $   47,942
As a percent of total loans                   1.14  %        1.20  %         1.43  %          1.72  %       1.42  %


The allowance for credit losses declined at June 30, 2022 compared to March 31,
2022, as a result of improved loss drivers and releases related to individually
analyzed loans. The reduction in the allowance for credit losses compared to
December 31, 2021 was due to improvements in economic forecasts and loss
drivers, along with reductions in loan balances from acquired loans due to
payoffs during the quarter. Peoples recorded $387,000 of provision for credit
losses during the first quarter of 2022 to establish the allowance for credit
losses for non-purchase credit deteriorated leases acquired from Vantage.

The increase in the allowance for credit losses at September 30, 2021, compared
to June 30, 2021, was related to the provision for credit losses recorded in the
amount of $11.0 million in order to establish an allowance for credit losses for
non-purchased credit deteriorated loans of $10.6 million, and a liability for
unfunded commitments of $0.4 million, both relating to the Premier Merger.
Peoples also recorded a $22.3 million increase in the allowance for credit
losses during the third quarter of 2021 related to the purchased credit
deteriorated loans acquired from Premier.

Additional information regarding Peoples' allowance for credit losses can be
found in "Note 1 Summary of Significant Accounting Policies" in Peoples' 2021
Form 10-K and "Note 4 Loans and Leases" of the Notes to the Unaudited Condensed
Consolidated Financial Statements.



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The following table summarizes Peoples' net charge-offs and recoveries:
                                                                      Three 

Months ended

                                            June 30,      March 31,     December 31,    September 30,    June 30,
(Dollars in thousands)                        2022           2022           2021            2021           2021

Gross allocations:

Commercial real estate, other             $       22    $       278    $        226    $          -    $        4

Commercial and industrial                        420            463             105             654             5
Premium finance                                   30             14              15               7             7
Leases                                           493            473             478             431           525
Residential real estate                           47            309              72              44           136
Home equity lines of credit                       25             16               1             180             4
Consumer, indirect                               449            385             566             416           269
Consumer, direct                                  60            136              56              29            31
  Consumer                                       509            521             622             445           300
Deposit account overdrafts                       405            259             248             135            89
Total gross charge-offs                   $    1,951    $     2,333    $      1,767    $      1,896    $    1,070
Recoveries:

Commercial real estate, other             $      176    $        49    $        196    $          4    $        4

Commercial and industrial                          2              4               4               4            18
Premium finance                                    8              -               -               -             -
Leases                                            64            176             109             120           110
Residential real estate                           14             14              40              48            40
Home equity lines of credit                        -             29               -              37             -
Consumer, indirect                                83             86              42              43            63
Consumer, direct                                  11             11              58              17            11
  Consumer                                        94             97             100              60            74
Deposit account overdrafts                        52             54              42              37            44
Total recoveries                          $      410    $       423    $        491    $        310    $      290
Net charge-offs (recoveries):

Commercial real estate, other             $     (154)   $       229    $         30    $         (4)   $        -

Commercial and industrial                        418            459             101             650           (13)
Premium finance                                   22             14              15               7             7
Leases                                           429            297             369             311           415
Residential real estate                           33            295              32              (4)           96
Home equity lines of credit                       25            (13)              1             143             4
Consumer, indirect                               366            299             524             373           206
Consumer, direct                                  49            125              (2)             12            20
  Consumer                                       415            424             522             385           226
Deposit account overdrafts                       353            205             206              98            45
Total net charge-offs                     $    1,541    $     1,910    $      1,276    $      1,586    $      780
Ratio of net charge-offs to average total loans (annualized):

Commercial real estate, other                  (0.01) %        0.02  %            -  %            -  %          -  %

Commercial and industrial                       0.04  %        0.03  %         0.01  %         0.08  %          -  %

Leases                                          0.04  %        0.03  %         0.03  %         0.03  %       0.05  %
Residential real estate                            -  %        0.03  %            -  %            -  %       0.01  %
Home equity lines of credit                        -  %           -  %            -  %         0.02  %          -  %
Consumer, indirect                              0.03  %        0.03  %         0.05  %         0.04  %       0.02  %
Consumer, direct                                0.01  %        0.01  %            -  %            -  %          -  %
  Consumer                                      0.04  %        0.04  %         0.05  %         0.04  %       0.02  %
Deposit account overdrafts                      0.03  %        0.02  %         0.02  %         0.01  %       0.01  %
Total                                           0.14  %        0.17  %         0.11  %         0.18  %       0.09  %

Each with “–%” not significant.

Net charge-offs during the second quarter of 2022 were 0.14% of average total
loans on an annualized basis. Peoples has anticipated an increase in the net
charge-offs to average total loans, as recent periods have been below historical
levels. Compared to


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the prior quarter, both commercial real estate and residential real estate gross
charge-offs decreased, while commercial real estate experienced higher
recoveries.


The following table details Peoples non-performing assets:

                                         June 30,    March 31,     December 31,     September 30,     June 30,
(Dollars in thousands)                     2022         2022           2021             2021            2021
Loans 90+ days past due and accruing:
Construction                           $       -    $       -    $          90    $            -    $       -
Commercial real estate, other                330          603              689             1,912        1,361
Commercial and industrial                     89           53            1,139                98          161
Premium finance                              304          613              865               368          216
Leases                                     5,722        3,921                -             1,736        1,522
Residential real estate                    1,687          677              805             1,156          342
Home equity lines of credit                   89           75               50                61           60
Consumer, indirect                            15           17                -                 -           39
Consumer, direct                               -            -               85                32           40
  Consumer                                    15           17               85                32           79
Total loans 90+ days past due and
accruing                               $   8,236    $   5,959    $       3,723    $        5,363    $   3,741
Nonaccrual loans:
Construction                           $       5    $       6    $           6    $            -    $       4
Commercial real estate, other             11,795       14,745           16,849            17,207        7,965
Commercial and industrial                  1,748        2,394            2,505             4,133        3,938
Leases                                     1,573        1,731            1,581             1,411            -
Residential real estate                    7,463        7,459            8,016             8,046        5,811
Home equity lines of credit                  567          604              687               661          572
Consumer, indirect                         1,351        1,408            1,302               850          704
Consumer, direct                             166          231              273               177          100
  Consumer                                 1,517        1,639            1,575             1,027          804
Total nonaccrual loans                 $  24,668    $  28,578    $      31,219    $       32,485    $  19,094
Nonaccrual troubled debt
restructurings ("TDRs"):

Commercial real estate, other          $   2,458    $     197    $         218    $           94           99
Commercial and industrial                    101          999            1,067             1,223        1,774
Residential real estate                    1,731        1,676            1,631             1,689        1,784
Home equity lines of credit                  323          333              352               315          129
Consumer, indirect                           207          220              272               219          193
Consumer, direct                               -            -                6                 9            6
  Consumer                                   207          220              278               228          199
Total nonaccrual TDRs                  $   4,820    $   3,425    $       3,546    $        3,549    $   3,985
Total nonperforming loans ("NPLs")     $  37,724    $  37,962    $      38,488    $       41,397    $  26,820
OREO:
Commercial                             $   9,065    $   9,106    $       9,105    $       10,804    $       -
Residential                                  145          301              391               464          239
Total OREO                             $   9,210    $   9,407    $       9,496    $       11,268    $     239
Total nonperforming assets ("NPAs")    $  46,934    $  47,369    $      47,984    $       52,665    $  27,059
Criticized loans (a)                   $ 181,395    $ 190,315    $     194,016    $      234,845    $ 113,802
Classified loans (b)                     115,483      109,530          106,547           142,628       69,166



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                                           June 30,           March 31,           December 31,           September 30,           June 30,
(Dollars in thousands)                       2022               2022                  2021                   2021                  2021
Asset Quality Ratios (c):
Nonaccrual loans as a percent of                 0.64  %             0.70  %                0.78  %                 0.80  %            0.68  %
total loans (d)
NPLs as a percent of total loans (d)             0.82  %             0.83  %                0.86  %                 0.92  %            0.79  %
NPAs as a percent of total assets (d)            0.64  %             0.65  %                0.68  %                 0.75  %            0.53  %
NPAs as a percent of total loans and             1.02  %             1.04  %                1.07  %                 1.17  %            0.80  %
OREO (d)
Allowance for credit losses as a
percent of nonaccrual loans                    177.52  %           171.13  %              184.00  %               214.75  %          207.73  %
Allowance for credit losses as a
percent of NPLs (d)                            138.76  %           144.27  %              166.20  %               186.93  %          178.75  %
Criticized loans as a percent of                                                            4.33  %
total loans (a)                                  3.96  %             4.19  %                                        5.23  %            3.37  %
Classified loans as a percent of                                                            2.38  %
total loans (b)                                  2.52  %             2.41  %                                        3.18  %            2.05  %


(a)  Includes loans categorized as special mention, substandard or doubtful.
(b)  Includes loans categorized as substandard or doubtful.
(c)  Data presented as of the end of the period indicated.
(d)  Nonperforming loans ("NPL") include loans 90+ days past due and accruing,
TDRs and nonaccrual loans. Nonperforming assets ("NPA") include nonperforming
loans and OREO.

Compared to March 31, 2022, Peoples' NPAs declined to 0.64%, from 0.65%, with
the reduction primarily attributable to a reduction in nonaccrual commercial and
industrial loans offset by an increase in past due leases. Loans 90+ days past
due and accruing increased compared to December 31, 2021, mostly due to the
Vantage acquisition. During the second quarter of 2022, criticized loans, which
are those categorized as special mention, substandard or doubtful, declined $8.9
million, while classified loans, which are those categorized as substandard or
doubtful, grew $6.0 million.

During the third quarter of 2021, non-performing assets, criticized and classified loans increased due to the Premier merger.

On March 22, 2020, federal and state government banking regulators issued a
joint statement, with which the FASB concurred as to the approach, regarding
accounting for loan modifications for borrowers affected by COVID-19. In this
guidance, short-term modifications, made on a good faith basis in response to
COVID-19, to borrowers who were current prior to any relief, are not considered
TDRs. This includes short-term modifications such as payment deferrals, fee
waivers, extensions of repayment terms, or other delays in payment which are
insignificant. Under the guidance, borrowers that are considered to be current
are those that were less than 30 days past due on their contractual payments at
the time a modification program is implemented. In addition, modification or
deferral programs mandated by the U.S. federal government or any state
government related to COVID-19 are not TDRs within the scope of ASC 310-40.

On August 3, 2020, federal and state banking regulators issued a joint
statement, encouraging financial institutions to consider prudent accommodation
options to mitigate losses for the borrower and financial institution beyond the
initial accommodation period. In this guidance, institutions should also provide
consumers with available options for repaying missed payments at the end of
their accommodation to avoid delinquencies, as well as options for changes to
terms to support sustainable and affordable payments for the long term. These
considerations should also include prudent risk management practices at the
financial institution based on the credit risk of the borrower. Peoples is
actively working with its customers to address any further accommodation needs
while carefully evaluating the associated credit risk of the borrowers.



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Deposits

The following table details Peoples deposit balances:

                                            June 30,      March 31,     December 31,   September 30,     June 30,
(Dollars in thousands)                        2022           2022           2021           2021            2021
Non-interest-bearing deposits (a)        $ 1,661,865    $ 1,666,668    $ 1,641,422    $  1,559,993    $ 1,181,045
Interest-bearing deposits:
Interest-bearing demand accounts (a)       1,143,010      1,179,199      1,167,460       1,140,639        732,478
Savings accounts                           1,080,053      1,065,678      1,036,738       1,016,755        689,086
Retail certificates of deposit ("CDs")       584,259        612,936        643,759         691,680        417,466
Money market deposit accounts                645,242        656,266        651,169         637,635        547,412
Governmental deposit accounts                728,057        734,784        617,259         679,305        498,390
Brokered deposits                             86,739         87,395        104,745         106,013        166,746
Total interest-bearing deposits            4,267,360      4,336,258      

4,221,130 4,272,027 3,051,578

 Total deposits                          $ 5,929,225    $ 6,002,926    $ 5,862,552    $  5,832,020    $ 4,232,623
Demand deposits as a percent of total
deposits                                          47  %          47  %          48  %           46  %          45  %


(a) The sum of the amounts presented is considered as the total demand deposits.

At June 30, 2022, period-end deposits decreased $73.7 million, or 1%, compared
to March 31, 2022, and increased $1.7 billion, or 40%, compared to June 30,
2021. The decrease was driven by a decline in interest bearing transaction
accounts of $36.2 million, a decrease in retail certificates of deposits of
$28.7 million, and a decrease of $11.0 million in money market deposit accounts.
The increase in total deposits at September 30, 2021, compared to June 30, 2021,
was driven by deposits acquired from Premier. Total deposits in periods
presented through March 31, 2022, were higher due to customers maintaining
larger balances, as a result of PPP loan proceeds, fiscal stimulus payments and
changes in customer spending habits in light of the COVID-19 pandemic. In
quarterly periods prior to June 30, 2022, Peoples experienced increases in most
low-cost deposit categories.

Peoples reduced its reliance on brokered deposits in each quarterly period,
beginning after June 30, 2021. This decline was largely due to the increase in
deposit balances from customers, which allowed Peoples to reduce its position in
the higher-cost brokered CDs during each period. As part of its funding
strategy, Peoples hedges 90-day brokered deposits with interest rate swaps. The
swaps pay a fixed rate of interest while receiving three-month LIBOR, which
offsets the rate on the brokered deposits. As of June 30, 2022, Peoples had
thirteen effective interest rate swaps, with an aggregate notional value of
$125.0 million, of which $85.0 million were designated as cash flow hedges of
overnight brokered deposits, which are expected to be extended every 90 days
through the maturity dates of the swaps. The remaining $40.0 million of interest
rate swaps hedged 90-day FHLB advances, which are also expected to be extended
every 90 days through the maturity dates of the swaps. Peoples continually
evaluates the overall balance sheet position given the interest rate
environment.

Borrowed Funds
The following table details Peoples' short-term and long-term borrowings:

                                   June 30,      March 31,     December 31,     September 30,     June 30,
(Dollars in thousands)               2022          2022            2021             2021            2021
Short-term borrowings:

FHLB 90-day advances             $   40,000    $   40,000    $      40,000    $       50,000    $        -
Current portion of long-term              -        15,000           15,000            15,000        15,000
FHLB advances
Retail repurchase agreements        286,442        89,275          111,482  

119 693 51 496

Total short-term borrowings $326,442 $144,275 $166,482

  $      184,693    $   66,496
Long-term borrowings:
FHLB advances                    $   35,348    $   85,564    $      85,825    $       86,483    $   87,393

Vantage non-recourse debt            74,622       102,364                -                 -             -
Junior subordinated debt             13,717        13,682           13,650            12,928         7,688
securities
Total long-term borrowings       $  123,687    $  201,610    $      99,475    $       99,411    $   95,081
Total borrowed funds             $  450,129    $  345,885    $     265,957    $      284,104    $  161,577


Borrowed funds, in total, which include overnight borrowings, are mainly a
function of loan growth and changes in total deposit balances. Borrowed funds
increased compared to March 31, 2022, driven by a large individual customer
deposit, thereby increasing retail repurchase agreements at June 30, 2022. The
increase in total borrowed funds at September 30, 2021, compared to June 30,
2021, was primarily due to the addition of $63.8 million retail repurchase
agreements from Premier.


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Capital/Stockholders' Equity
At June 30, 2022, capital levels for both Peoples and Peoples Bank remained
substantially higher than the minimum amounts needed to be considered "well
capitalized" institutions under applicable banking regulations. These higher
capital levels reflect Peoples' desire to maintain a strong capital position. In
order to avoid limitations on dividends, equity repurchases and compensation,
Peoples must exceed the three minimum required ratios by at least the capital
conservation buffer of 2.50%, which applies to the common equity tier 1 ("CET1")
ratio, the tier 1 capital ratio and the total risk-based capital ratio. At
June 30, 2022, Peoples had a capital conservation buffer of 4.81%.

The following table details Peoples risk-based capital levels and corresponding ratios:

                                              June 30,      March 31,     December 31,   September 30,     June 30,
(Dollars in thousands)                          2022           2022           2021           2021            2021
Capital Amounts:
Common Equity Tier 1                       $   564,708    $   547,215    $   577,565    $    567,172    $   383,502
Tier 1                                         578,425        560,897        591,215         580,100        391,190
Total (Tier 1 and Tier 2)                      622,516        607,493        648,948         637,802        431,424
Net risk-weighted assets                   $ 4,857,818    $ 4,752,428    $ 4,614,258    $  4,611,321    $ 3,382,736
Capital Ratios:
Common Equity Tier 1                             11.62  %       11.51  %       12.52  %        12.30  %       11.34  %
Tier 1                                           11.91  %       11.80  %       12.81  %        12.58  %       11.56  %
Total (Tier 1 and Tier 2)                        12.81  %       12.78  %       14.06  %        13.83  %       12.75  %
Tier 1 leverage ratio                             8.38  %        8.29  %    

8.67% 11.20% 7.87%


Peoples' regulatory capital and related ratio levels improved during the second
quarter of 2022 driven by higher net interest income. The ratios were negatively
impacted in the prior quarter by the cash acquisition of Vantage, for which
Peoples recorded goodwill and intangible assets for which the impact was
partially offset by net income exceeding dividends declared during the period.
Regulatory capital ratios increased as of September 30, 2021, compared to June
30, 2021, due to the Premier Merger, which included an equity issuance of $261.9
million.

In addition to traditional capital measurements, management uses tangible
capital measures to evaluate the adequacy of Peoples' stockholders' equity. Such
ratios represent Non-US GAAP financial measures since their calculation removes
the impact of goodwill and other intangible assets acquired through acquisitions
on amounts reported in the Unaudited Consolidated Balance Sheets. Management
believes this information is useful to investors since it facilitates the
comparison of Peoples' operating performance, financial condition and trends to
peers, especially those without a similar level of intangible assets to that of
Peoples. Further, intangible assets generally are difficult to convert into
cash, especially during a financial crisis, and could decrease substantially in
value should there be deterioration in the overall franchise value. As a result,
tangible equity represents a conservative measure of the capacity for Peoples to
incur losses but remain solvent.


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The following table reconciles the calculation of these Non-US GAAP financial
measures to amounts reported in Peoples' Unaudited Condensed Consolidated
Financial Statements:

                                       June 30,      March 31,     December 31,   September 30,     June 30,
(Dollars in thousands)                   2022           2022           2021           2021            2021
Tangible equity:
Total stockholders' equity          $   786,824    $   808,340    $   845,025    $    831,882    $   585,505
Less: goodwill and other intangible
assets                                  328,132        341,865        291,009         295,415        221,576
Tangible equity                     $   458,692    $   466,475    $   554,016    $    536,467    $   363,929

Tangible assets:
Total assets                        $ 7,278,292    $ 7,239,261    $ 7,063,521    $  7,059,752    $ 5,067,634
Less: goodwill and other intangible
assets                                  328,132        341,865        291,009         295,415        221,576
Tangible assets                     $ 6,950,160    $ 6,897,396    $ 6,772,512    $  6,764,337    $ 4,846,058

Tangible book value per common share:
Tangible equity                     $   458,692    $   466,475    $   554,016    $    536,467    $   363,929
Common shares outstanding            28,290,115     28,453,175     28,297,771      28,265,791     19,660,877

Tangible book value per common share $16.21 $16.39 $19.58 $18.98 $18.51
to share

Tangible equity to tangible assets ratio:
Tangible equity                     $   458,692    $   466,475    $   554,016    $    536,467    $   363,929
Tangible assets                     $ 6,950,160    $ 6,897,396    $ 6,772,512    $  6,764,337    $ 4,846,058

Tangible equity on tangible assets 6.60% 6.76% 8.18% 7.93% 7.51%


Tangible book value per common share declined to $16.21 at June 30, 2022,
compared to $16.39 at March 31, 2022. The change in tangible book value per
common share was due to tangible equity declining as a result of other
comprehensive losses recognized on available-for-sale investment securities,
which were driven by changes in market interest rates. Also contributing to the
decline compared to December 31, 2021, was a $81.7 million increase in
accumulated other comprehensive loss. The increase in tangible equity to
tangible assets at September 30, 2021, was attributable to the Premier Merger,
and related equity issued.

Interest Rate Sensitivity and Liquidity
While Peoples is exposed to various business risks, the risks relating to
interest rate sensitivity and liquidity are major risks that can materially
impact future results of operations and financial condition due to their
complexity and dynamic nature. The objective of Peoples' asset-liability
management function is to measure and manage these risks in order to optimize
net interest income within the constraints of prudent capital adequacy,
liquidity and safety. This objective requires Peoples to focus on interest rate
risk exposure and adequate liquidity through its management of the mix of assets
and liabilities, their related cash flows and the rates earned and paid on those
assets and liabilities. Ultimately, the asset-liability management function is
intended to guide management in the acquisition and disposition of earning
assets and selection of appropriate funding sources.

Interest Rate Risk
Interest rate risk ("IRR") is one of the most significant risks arising in the
normal course of business of financial services companies like Peoples. IRR is
the potential for economic loss due to future interest rate changes that can
impact the earnings stream, as well as market values, of financial assets and
liabilities. Peoples' exposure to IRR is due primarily to differences in the
maturity or repricing of earning assets and interest-bearing liabilities. In
addition, other factors, such as prepayments of loans and investment securities,
or early withdrawal of deposits, can affect Peoples' exposure to IRR and
increase interest costs or reduce revenue streams.

Peoples has assigned overall management of IRR to its Asset-Liability Committee
(the "ALCO"), which has established an IRR management policy that sets minimum
requirements and guidelines for monitoring and managing the level of IRR. The
methods used by the ALCO to assess IRR remain largely unchanged from those
disclosed in Peoples' 2021 Form 10-K.


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The following table shows the estimated changes in net interest income and the
economic value of equity based upon a standard, parallel shock analysis with
balances held constant (dollars in thousands):


Increase (Decrease) in               Estimated Increase (Decrease) in
    Interest Rate                           Net Interest Income                                     Estimated Decrease in Economic Value of Equity
  (in Basis Points)            June 30, 2022                   December 31, 2021                    June 30, 2022                     December 31, 2021
         300           $  27,881              11.1  %       $  24,903        11.7  %       $   (22,151)             (1.6) %       $  (24,232)       (2.0) %
         200              18,446               7.3  %          16,312         7.7  %           (15,790)             (1.1) %          (16,541)       (1.3) %
         100               9,148               3.6  %           7,899         3.7  %            (9,132)             (0.7) %           (5,308)       (0.4) %
        (100)            (16,168)             (6.4) %          (8,615)       (4.1) %           (58,315)             (4.2) %          (91,568)       (7.4) %


Estimated changes in net interest income and the economic value of equity are
partially driven by assumptions regarding the rate at which non-maturity
deposits will reprice given a move in short-term interest rates, as well as
assumptions regarding prepayment speeds on mortgage-backed securities. These and
other modeling assumptions are monitored closely by Peoples on an ongoing basis.

With respect to investment prepayment speeds, the assumptions used are the
results of a third-party prepayment model which projects the rate at which the
underlying mortgages will prepay. These prepayment speeds affect the amount
forecasted for cash flow reinvestment, premium amortization, and discount
accretion assumed in interest rate risk modeling results. This prepayment
activity is generally the result of refinancing activity and tends to increase
as longer term interest rates decline, and decrease as interest rates increase.
The assumptions in the interest rate risk model could be incorrect, leading to
either a lesser or greater impact on net interest income or asset duration.

While parallel interest rate shock scenarios are useful in assessing the level
of IRR inherent in the balance sheet, interest rates typically move in a
nonparallel manner with differences in the timing, direction and magnitude of
changes in short-term and long-term interest rates. Thus, any benefit that might
occur as a result of the Federal Reserve increasing short-term interest rates in
the future could be offset by an inverse movement in long-term rates, and vice
versa. For this reason, Peoples considers other interest rate scenarios in
addition to analyzing the impact of parallel yield curve shifts. These include
various flattening and steepening scenarios in which short-term and long-term
rates move in different directions with varying magnitude. Peoples believes
these scenarios to be more reflective of how interest rates change versus the
severe parallel rate shocks described above. Given the shape of market yield
curves at June 30, 2022, consideration of the bear steepener and bull flattener
scenarios provides insights which were not captured by parallel shifts. These
scenarios were evaluated as the current environment suggests these may be
possible outcomes for the trajectory of interest rates.

The bear steepener scenario highlights the risk to net interest income and the
economic value of equity when short-term rates remain constant while long-term
rates rise. In such a scenario, Peoples' deposit and borrowing costs, which are
generally correlated with short-term rates, remain constant, while asset yields,
which are correlated with long-term rates, rise. Increased asset yields would
not be offset by increases in deposit or funding costs; resulting in an
increased amount of net interest income and higher net interest margin. At June
30, 2022, the bear steepener scenario resulted in an increase in both net
interest income and the economic value of equity of 0.1% and 2.9%, respectively.

The bull flattener scenario highlights the risk to net interest income and the
economic value of equity when short-term rates remain constant while long-term
rates fall. In such a scenario, Peoples' deposit and borrowing costs, which are
correlated with short-term rates, remain constant while asset yields, which are
correlated with long-term rates, fall. Asset yields driven lower by increased
investment securities premium amortization would not be offset by reductions in
deposit or funding costs; resulting in a decreased amount of net interest income
and lower net interest margin. At June 30, 2022, the bull flattener scenario
resulted in small decreases in net interest income and the economic value of
equity of -0.1% and -0.1%, respectively. Peoples was within its policy
limitations for this alternative scenario as of June 30, 2022, which set the
maximum allowable downside exposure as 5.0% of net interest income and 10.0% of
economic value of equity.

Peoples has entered into interest rate swaps as part of its interest rate risk
management strategy. These interest rate swaps are designated as cash flow
hedges and involve the receipt of variable rate amounts from a counterparty in
exchange for Peoples making fixed payments. As of June 30, 2022, Peoples had
entered into thirteen interest rate swap contracts with an aggregate notional
value of $125.0 million. Additional information regarding Peoples' interest rate
swaps can be found in "Note 10 Derivative Financial Instruments" of the Notes to
the Unaudited Condensed Consolidated Financial Statements.

At June 30, 2022, Peoples' Unaudited Consolidated Balance Sheet was positioned
to benefit from rising interest rates in terms of the potential impact on net
interest income. The table above illustrates this point as changes to net
interest income increase in the rising rate scenarios. While the heavy
concentration of floating rate loans remains the largest contributor to the
level of asset sensitivity, the decrease in economic value of equity asset
sensitivity, as measured, from December 31, 2021 was largely attributable to
increased effective duration in the investment securities portfolio.


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Liquidity

Besides managing the TRI, another major objective of the ALCO is to maintain a sufficient level of liquidity. The methods used by ALCO to monitor and assess the adequacy of People’s Bank the liquidity position remains unchanged from that disclosed in Peoples’ 2021 Form 10-K.

At June 30, 2022, Peoples Bank had liquid assets of $383.4 million, which
represented 4.7% of total assets and unfunded loan commitments. Peoples also had
an additional $248.0 million of unpledged investment securities not included in
the measurement of liquid assets.

Management believes that the current balance of cash and cash equivalents, the expected cash flows from the investment portfolio and the availability of other sources of funding will allow Peoples to meet expected cash obligations, as well as special needs and off-balance sheet commitments.

Off-Balance Sheet Activities and Contractual Obligations
In the normal course of business, Peoples is a party to financial instruments
with off-balance sheet risk necessary to meet the financing needs of Peoples'
customers. These financial instruments include commitments to extend credit and
standby letters of credit. The instruments involve, to varying degrees, elements
of credit risk in excess of the amount recognized in the Unaudited Consolidated
Balance Sheets. The contract amounts of these instruments express the extent of
involvement Peoples has in these financial instruments.

Loan Commitments and Standby Letters of Credit
Loan commitments are made to accommodate the financial needs of Peoples'
customers. Standby letters of credit are instruments issued by Peoples Bank
guaranteeing the beneficiary payment by Peoples Bank in the event of default by
Peoples Bank's customer in the performance of an obligation or service.
Historically, most loan commitments and standby letters of credit expire unused.
Peoples Bank's exposure to credit loss in the event of nonperformance by the
counter-party to the financial instrument for loan commitments and standby
letters of credit is represented by the contractual amount of those instruments.
Peoples Bank uses the same underwriting standards in making commitments and
conditional obligations as it does for on-balance sheet instruments. The amount
of collateral obtained is based on management's credit evaluation of the
customer. Collateral held varies, but may include accounts receivable,
inventory, property, plant, and equipment, and income-producing commercial
properties.

Peoples Bank routinely engages in activities that involve, to varying degrees,
elements of risk that are not reflected in whole or in part in the Unaudited
Condensed Consolidated Financial Statements. These activities are part of
Peoples Bank's normal course of business and include traditional off-balance
sheet credit-related financial instruments, interest rate contracts and
commitments to make additional capital contributions in low-income housing tax
credit investments. Traditional off-balance sheet credit-related financial
instruments continue to represent the most significant off-balance sheet
exposure.

The following table details the total contractual amount of loan commitments and stand-by letters of credit:

                                           June 30,      March 31,      

the 31st of December, September 30, June 30th,

 (Dollars in thousands)                      2022           2022            2021             2021            2021
Home equity lines of credit              $  188,803    $   184,616    $     177,262    $      177,963    $  134,516
Unadvanced construction loans               237,129        203,719          227,135           271,483       207,403
Other loan commitments                      566,624        616,696          577,170           646,374       542,429
Loan commitments                         $  992,556    $ 1,005,031    $     981,567    $    1,095,820    $  884,348
Standby letters of credit                $   15,977    $    12,729    $      12,805    $       12,358    $   10,252

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