v3.26.1
Loans and Leases
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Loans and Leases Loans and Leases
Peoples' loan portfolio consists of various types of loans and leases originated primarily as a result of lending opportunities within Peoples' footprint. Peoples also originates insurance premium finance loans nationwide through its Peoples Premium Finance division, and originates leases nationwide through its North Star Leasing ("NSL") division and its Vantage Financial, LLC ("Vantage") subsidiary.
The major classifications of loan balances (in each case, net of deferred fees and costs) excluding loans held for sale, were as follows:
(Dollars in thousands)March 31,
2026		December 31, 2025
Construction$269,571 $300,941 
Commercial real estate, other2,340,833 2,363,967 
Commercial and industrial1,646,797 1,535,755 
Premium finance228,883 253,075 
Leases350,226 365,649 
Residential real estate852,011 861,722 
Home equity lines of credit260,909 253,864 
Consumer, indirect699,854 700,582 
Consumer, direct119,859 120,338 
Deposit account overdrafts1,265 1,014 
Total loans, at amortized cost$6,770,208 $6,756,907 
The table above includes net deferred loan origination costs of $20.2 million and $20.0 million at March 31, 2026 and at December 31, 2025, respectively. The remaining unamortized net discount included in the amortized cost of loans and leases was $8.4 million and $9.7 million at March 31, 2026 and at December 31, 2025, respectively.
Accrued interest receivable is not included within the loan balances, but is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses. Total interest receivable on loans was $23.9 million at March 31, 2026 and $25.0 million at December 31, 2025.
Nonaccrual and Past Due Loans
A loan is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. A loan may be placed on nonaccrual status regardless of whether or not such loan is considered past due.
The amortized cost of loans on nonaccrual status and of loans delinquent for 90 days or more and accruing was as follows:
March 31, 2026December 31, 2025
(Dollars in thousands)
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Commercial real estate, other$7,363 $— $4,056 $579 
Commercial and industrial4,558 105 8,045 126 
Premium finance455 1,820 573 2,477 
Leases9,909 77 11,063 542 
Residential real estate9,601 426 8,556 1,937 
Home equity lines of credit1,555 196 1,507 69 
Consumer, indirect2,994 107 2,718 286 
Consumer, direct279 115 368 140 
Total loans, at amortized cost$36,714 $2,846 $36,886 $6,156 
(a) There were $2.5 million and $1.8 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2026 and at December 31, 2025, respectively.
During the first three months of 2026, nonaccrual loans were flat when compared to at December 31, 2025, with decreases in nonaccrual leases and in commercial and industrial loans being offset by an increase in other commercial real estate loans. The decrease in accruing loans 90+ days past due at March 31, 2026, when compared to at December 31, 2025, was primarily due to reductions in residential real estate loans.
The following table presents the aging of the amortized cost of past due loans:
Loans Past Due
Current
Loans
Total
Loans
(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal
March 31, 2026
Construction$3,229 $— $— $3,229 $266,342 $269,571 
Commercial real estate, other3,437 3,702 3,062 10,201 2,330,632 2,340,833 
Commercial and industrial1,820 3,416 3,253 8,489 1,638,308 1,646,797 
Premium finance1,147 600 2,275 4,022 224,861 228,883 
Leases3,726 2,260 9,120 15,106 335,120 350,226 
Residential real estate11,182 2,455 3,725 17,362 834,649 852,011 
Home equity lines of credit962 311 1,132 2,405 258,504 260,909 
Consumer, indirect6,808 1,144 1,456 9,408 690,446 699,854 
Consumer, direct582 240 262 1,084 118,775 119,859 
Deposit account overdrafts— — — — 1,265 1,265 
Total loans, at amortized cost$32,893 $14,128 $24,285 $71,306 $6,698,902 $6,770,208 
December 31, 2025
Construction$— $— $— $— $300,941 $300,941 
Commercial real estate, other1,760 4,066 3,664 9,490 2,354,477 2,363,967 
Commercial and industrial1,600 1,329 7,780 10,709 1,525,046 1,535,755 
Premium finance2,767 2,956 3,050 8,773 244,302 253,075 
Leases9,966 3,560 11,187 24,713 340,936 365,649 
Residential real estate13,821 3,035 5,767 22,623 839,099 861,722 
Home equity lines of credit2,160 402 981 3,543 250,321 253,864 
Consumer, indirect8,752 1,726 1,550 12,028 688,554 700,582 
Consumer, direct752 165 431 1,348 118,990 120,338 
Deposit account overdrafts— — — — 1,014 1,014 
Total loans, at amortized cost$41,578 $17,239 $34,410 $93,227 $6,663,680 $6,756,907 
Delinquency trends improved as 98.9% of Peoples' loan portfolio was considered “current” at March 31, 2026, compared to 98.6% at December 31, 2025.
Pledged Loans
Peoples has pledged certain loans secured by one-to-four family and multifamily residential mortgages, home equity lines of credit and commercial real estate loans under a blanket collateral agreement to secure borrowings from the FHLB. Peoples also has pledged eligible commercial and industrial loans to secure borrowings with the FRB. Loans pledged are summarized as follows:
(Dollars in thousands)March 31, 2026December 31, 2025
Loans pledged to FHLB$1,342,775 $1,347,242 
Loans pledged to FRB628,390 624,503 
Credit Quality Indicators
As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2025 Form 10-K, Peoples categorizes the majority of its loans into risk categories based upon an established risk grading matrix using a scale of 1 to 8. Loan grades are assigned at the time a new loan or lending commitment is extended by Peoples and may be changed at any time when circumstances warrant. Commercial loans to borrowers with an aggregate unpaid principal balance in excess of $1.0 million are reviewed at least on an annual basis for possible credit deterioration. Commercial leases, as well as loan relationships whose aggregate credit exposure to Peoples is equal to or less than $1.0 million, are reviewed on an event driven basis. Triggers for review include knowledge of adverse events affecting the borrower's business, receipt of financial statements indicating deteriorating credit quality or other similar events. Adversely classified loans are reviewed on a quarterly basis. A description of the general characteristics of the risk grades used by Peoples, follows:
“Pass” (grades 1 through 4): Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations. Loans in this risk category would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the loan if required, for any weakness that may exist.
“Special Mention” (grade 5): Loans in this risk grade are the equivalent of the regulatory definition of “Other Assets Especially Mentioned.” Loans in this risk category possess some credit deficiency or potential weakness, which requires a high level of management attention. Potential weaknesses include declining trends in operating earnings and cash flows and/or reliance on a secondary source of repayment. If left uncorrected, these potential weaknesses may result in noticeable deterioration of the repayment prospects for the loan or in Peoples' credit position.
“Substandard” (grade 6): Loans in this risk grade are inadequately protected by the borrower's current financial condition and payment capability or the collateral pledged, if any. Loans so classified have one or more well-defined weaknesses that jeopardize the orderly repayment of the loans. They are characterized by the distinct possibility that Peoples will sustain some loss if the weaknesses are not corrected.
“Doubtful” (grade 7): Loans in this risk grade have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, classification of each of these loans as an estimated loss is deferred until its more exact status may be determined.
“Loss” (grade 8): Loans in this risk grade are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean a loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future. Charge-offs against the allowance for credit losses are taken during the period in which the loan becomes uncollectible. Consequently, Peoples typically does not maintain a recorded investment in loans within this category.
Consumer loans and other smaller-balance loans are evaluated and categorized as "substandard," "doubtful" or "loss" based upon the regulatory definition of these classes and consistent with regulatory requirements. Leases are categorized as "special mention", "substandard", "doubtful", or "loss" based upon delinquency status and the prospect of collecting the remaining net investment balance owed under the lease. All other loans not evaluated individually, nor meeting the regulatory conditions to be categorized as described above, would be considered as being "not rated."
The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the most recent analysis performed at March 31, 2026:
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20262025202420232022PriorRevolving Loans
Total
Loans
Construction

  Pass$4,759 $80,096 $89,883 $76,939 $916 $11,317 $— $— $263,910 
  Substandard— — 3,092 1,101 1,468 — — — 5,661 
     Total4,759 80,096 92,975 78,040 2,384 11,317 — — 269,571 
Current period gross charge-offs (a)— — — — — — — 
Commercial real estate, other

  Pass36,577 347,903 171,905 332,057 344,684 942,868 41,881 — 2,217,875 
  Special mention— 1,107 32,375 173 1,594 12,341 — — 47,590 
  Substandard4,818 — 15,084 1,618 7,185 46,583 70 — 75,358 
  Doubtful— — — — — 10 — — 10 
     Total41,395 349,010 219,364 333,848 353,463 1,001,802 41,951 — 2,340,833 
Current period gross charge-offs (a)— — — — — — — 
Commercial and industrial
  Pass144,670 367,014 220,204 110,583 87,636 382,940 265,908 3,311 1,578,955 
  Special mention208 43 5,983 70 588 970 24,695 — 32,557 
  Substandard479 1,122 181 226 8,172 13,789 11,287 — 35,256 
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20262025202420232022PriorRevolving Loans
Total
Loans
  Doubtful— — — — — 29 — — 29 
     Total145,357 368,179 226,368 110,879 96,396 397,728 301,890 3,311 1,646,797 
Current period gross charge-offs (a)90 — 64 104 — 7 265 
Premium Finance
Pass100,719 126,254 1,443 12 — — — — 228,428 
Substandard— — 455 — — — — — 455 
Total100,719 126,254 1,898 12 — — — — 228,883 
Current period gross charge-offs (a)— 18 34 — — — 52 
Leases
Pass43,186 117,606 84,026 62,238 22,971 9,072 — — 339,099 
Special mention12 255 632 915 159 39 — — 2,012 
Substandard— 508 744 1,926 579 137 — — 3,894 
Doubtful— 108 841 2,824 912 536 — — 5,221 
Total43,198 118,477 86,243 67,903 24,621 9,784 — — 350,226 
Current period gross charge-offs (a)— 201 1,467 2,598 352 193 4,811 
Residential real estate
Pass18,762 102,952 64,705 54,248 75,916 524,036 — — 840,619 
Substandard— 455 619 1,549 703 7,889 — — 11,215 
Loss— 20 — — 62 95 — — 177 
     Total18,762 103,427 65,324 55,797 76,681 532,020 — — 852,011 
Current period gross charge-offs (a)— 4 39 — — 76 119 
Home equity lines of credit
Pass2,740 57,214 50,570 30,929 32,541 76,986 8,520 663 259,500 
Substandard— 10 15 277 299 798 — — 1,399 
Loss— — — — — 10 — — 10 
     Total2,740 57,224 50,585 31,206 32,840 77,794 8,520 663 260,909 
Current period gross charge-offs (a)— — — — — 32 32 
Consumer, indirect
Pass71,743 273,365 146,975 95,439 72,648 36,299 — — 696,469 
Substandard— 901 607 647 603 587 — — 3,345 
Loss— 1 7 5 1 26 — — 40 
     Total71,743 274,267 147,589 96,091 73,252 36,912 — — 699,854 
Current period gross charge-offs (a)34 812 530 338 160 55 1,929 
Consumer, direct
Pass23,685 44,783 20,935 12,841 10,103 7,164 — — 119,511 
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20262025202420232022PriorRevolving Loans
Total
Loans
Substandard— 38 53 89 64 85 — — 329 
Loss— — — — 6 13 — — 19 
     Total23,685 44,821 20,988 12,930 10,173 7,262 — — 119,859 
Current period gross charge-offs (a)111 40 24 22 2 5 204 
Deposit account overdrafts1,265 — — — — — — — 1,265 
Current period gross charge-offs (a)347 — — — — — 347 
Total loans, at amortized cost453,623 1,521,755 911,334 786,706 669,810 2,074,619 352,361 3,974 6,770,208 
Total current period gross charge-offs (a)$582 $1,075 $2,158 $3,062 $514 $368 $7,759 
(a) Current period gross charge-offs are for the three months ended as of March 31, 2026.
The following table summarizes the risk category of loans within Peoples' loan portfolio, including acquired loans, based upon the then most recent analysis performed at December 31, 2025:
Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20252024202320222021PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Construction

  Pass$81,441 $98,488 $99,069 $918 $6,618 $8,720 $— $512 $295,254 
  Substandard— 3,092 1,113 1,482 — — — — 5,687 
     Total81,441 101,580 100,182 2,400 6,618 8,720 — 512 300,941 
Current period gross charge-offs (a)— — — — — — — 
Commercial real estate, other

  Pass330,087 164,537 345,618 378,500 310,160 670,053 44,947 1,794 2,243,902 
  Special mention83 22,415 2,580 1,696 4,460 13,067 133 — 44,434 
  Substandard— 8,042 1,188 15,727 17,170 32,945 549 87 75,621 
  Doubtful— — — — — 10 — — 10 
     Total330,170 194,994 349,386 395,923 331,790 716,075 45,629 1,881 2,363,967 
Current period gross charge-offs (a)— — — 174 — 121 295 
Commercial and industrial
  Pass381,903 230,861 115,712 95,158 92,556 290,243 248,204 7,621 1,454,637 
  Special mention45 3,117 2,653 847 981 4,885 30,001 2,292 42,529 
  Substandard130 251 263 8,745 12,196 6,407 10,562 5,423 38,554 
  Doubtful— — — — — 35 — — 35 
     Total382,078 234,229 118,628 104,750 105,733 301,570 288,767 15,336 1,535,755 
Current period gross charge-offs (a)— 19 161 202 202 1,167 1,751 
Premium finance
  Pass248,710 3,649 143 — — — — — 252,502 
Substandard— 520 53 — — — — — 573 
Total248,710 4,169 196 — — — — — 253,075 
Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20252024202320222021PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Current period gross charge-offs (a)31 192 229 30 — — 482 
Leases
Pass145,052 94,499 72,336 27,742 9,768 3,161 — — 352,558 
Special mention480 739 774 402 21 — — — 2,416 
Substandard228 1,001 3,386 785 334 — — — 5,734 
Doubtful48 1,406 2,249 864 374 — — — 4,941 
Total145,808 97,645 78,745 29,793 10,497 3,161 — — 365,649 
Current period gross charge-offs (a)204 4,240 8,297 6,717 1,450 496 21,404 
Residential real estate
  Pass104,910 66,847 56,842 77,533 117,758 426,547 — — 850,437 
  Substandard183 501 1,540 663 924 7,378 — — 11,189 
   Loss— — — — — 96 — — 96 
     Total105,093 67,348 58,382 78,196 118,682 434,021 — — 861,722 
Current period gross charge-offs (a)— — 27 8 39 199 273 
Home equity lines of credit
  Pass54,398 51,042 32,052 34,382 24,293 56,416 21 3,560 252,604 
  Substandard— — 312 285 89 559 — — 1,245 
   Loss— — — 5 — 10 — — 15 
     Total54,398 51,042 32,364 34,672 24,382 56,985 21 3,560 253,864 
Current period gross charge-offs (a)— — 36 — — 5 41 
Consumer, indirect
  Pass292,512 164,565 108,928 84,987 27,026 19,049 — — 697,067 
  Substandard655 648 708 667 412 305 — — 3,395 
   Loss37 15 19 6 7 36 — — 120 
     Total293,204 165,228 109,655 85,660 27,445 19,390 — — 700,582 
Current period gross charge-offs (a)1,128 2,030 1,948 1,121 350 147 6,724 
Consumer, direct
  Pass60,248 24,070 15,182 11,889 4,516 4,000 — — 119,905 
  Substandard43 57 171 71 1 41 — — 384 
   Loss— 1 10 6 1 31 — — 49 
     Total60,291 24,128 15,363 11,966 4,518 4,072 — — 120,338 
Current period gross charge-offs (a)344 143 98 75 19 23 702 
Deposit account overdrafts1,014 — — — — — — — 1,014 
Current period gross charge-offs (a)1,149 — — — — — 1,149 
Total loans, at amortized cost$1,702,207 $940,363 $862,901 $743,360 $629,665 $1,543,994 $334,417 $21,289 $6,756,907 
Current period gross charge-offs (a)$2,856 $6,624 $10,796 $8,327 $2,060 $2,158 $32,821 
(a) Current period gross charge-offs are for the year ended as of December 31, 2025.
Collateral Dependent Loans
Peoples has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans:
•Construction loans are typically secured by owner occupied commercial real estate or non-owner occupied investment real estate. Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner occupied commercial construction loans are generally secured by multi-family complexes, warehouse buildings, industrial buildings, land under development, and other commercial real estate in process of construction.
•Commercial real estate loans can be secured by either owner occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by multifamily complexes, retail facilities, office buildings and complexes, warehouses, industrial buildings, land under development, as well as other commercial real estate.
•Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property.
•Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage, on residential real estate property.
•Home equity lines of credit are generally secured by second mortgages on residential real estate property.
•Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property. Some consumer loans are unsecured and have no underlying collateral.
•Leases are most often secured by commercial equipment and other essential business assets.
•Premium finance loans are secured by the unearned portion of the insurance premium being financed.
The following table details Peoples' amortized cost of collateral dependent loans:
(Dollars in thousands)March 31, 2026December 31, 2025
Construction$3,092 $— 
Commercial real estate, other11,364 687 
Commercial and industrial1,332 4,666 
Leases738 2,385 
Total collateral dependent loans$16,526 $7,738 
Collateral dependent loans increased at March 31, 2026, compared to at December 31, 2025, and were primarily impacted by one large relationship consisting of one other commercial real estate loan and one construction loan, totaling $7.4 million and $3.1 million, respectively.
Modifications for Borrowers Experiencing Financial Difficulty
As part of Peoples' loss mitigation activities, Peoples may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty. The most common modifications to the contractual terms of a loan to a borrower experiencing financial difficulty include an extension of the maturity date and a temporary period of interest-only payments.
In addition to loan modifications, Peoples also provides other loss mitigation options, such as forbearance and repayment plans, to assist borrowers who experience financial difficulties. In assessing whether or not a borrower is experiencing financial difficulty, Peoples considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (1) the borrower is currently in payment default on any of the borrower's debt; (2) a payment default is probable in the foreseeable future without the modification; (3) the borrower has declared or is in the process of declaring bankruptcy; and (4) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification.
The allowance for credit losses for loans modified for borrowers experiencing financial difficulty is determined based on the allowance for credit losses policy as described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2025 Form 10-K.
The following tables display the amortized cost of loans that were restructured during the three months ended March 31, 2026 and March 31, 2025, presented by loan classification.
(Dollars in thousands)Payment DeferralTerm ExtensionTotal
Percentage of Total by Loan Category(a)(b)(c)
During the Three Months Ended March 31, 2026
Commercial real estate, other$— $952 $952 0.04 %
Commercial and industrial702 1,476 2,178 0.13 %
Residential real estate— 130 130 0.02 %
Total$702 $2,558 $3,260 0.05 %
During the Three Months Ended March 31, 2025
Commercial real estate, other$— $2,445 $2,445 0.11 %
Commercial and industrial— 5,646 5,646 0.42 %
Total$— $8,091 $8,091 0.13 %
(a) Based on the amortized cost basis as of period end, divided by the period end amortized cost basis of the corresponding class of financing receivable.
(b) The table presented above excludes loans that were paid off or otherwise no longer included in the loan portfolio as of period end.
(c) Each with --% is considered not meaningful.
The following tables summarize the impacts of loan modifications and payment deferrals made to loans during the three months ended March 31, 2026 and March 31, 2025, presented by loan classification.
Weighted-Average Term Extension
(in months)
During the Three Months Ended March 31, 2026
Commercial real estate, other11
Commercial and industrial8
Residential real estate37
During the Three Months Ended March 31, 2025
Commercial real estate3
Commercial and industrial8
The following tables display the amortized cost of loans that received a completed modification or payment deferral within the previous 12 months and that had a payment default in the periods presented. For purposes of this disclosure, Peoples defines loans that had a payment default as loans that were 90 days or more past due following a modification.
Term Extension(a)
For the Three Months Ended March 31, 2026
Commercial real estate, other$281 
Total loans that subsequently defaulted$281 
For the Three Months Ended March 31, 2025
Commercial and industrial117 
Total loans that subsequently defaulted$117 
(a) Represents the sum of amortized cost and gross charge-off as of period end. Excludes loans that liquidated either through foreclosure, deed-in-lieu of foreclosure, or a short sale.
The following table displays an aging analysis of loans that were modified during the 12 months prior to March 31, 2026 and March 31, 2025, respectively, presented by classification and class of financing receivable.
As of March 31, 2026
(Dollars in thousands)30-59 Days Delinquent60-89 Days Delinquent90+ Days DelinquentTotal DelinquentCurrentTotal
Commercial real estate, other$— $— $281 $281 $952 $1,233 
Commercial and industrial42 — — 42 4,326 4,368 
Residential real estate181 — — 181 133 314 
Home equity lines of credit— — — — 95 95 
Total loans modified(a)
$223 $— $281 $504 $5,506 $6,010 
(a) Represents the amortized cost basis as of period end.
As of March 31, 2025
(Dollars in thousands)30-59 Days Delinquent60-89 Days Delinquent90+ Days DelinquentTotal DelinquentCurrentTotal
Commercial real estate, other$1,058 $69 $— $1,127 $1,887 $3,014 
Commercial and industrial— — 117 117 7,789 7,906 
Residential real estate— — — — 15 15 
Home equity lines of credit— — — — 158 158 
Consumer, indirect— — 12 12 — 12 
Total loans modified(a)
$1,058 $69 $129 $1,256 $9,849 $11,105 
(a) Represents the amortized cost basis as of period end.

Allowance for Credit Losses
As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2025 Form 10-K, Peoples estimates the allowance for credit losses using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In management's estimation of expected credit losses, Peoples uses a one-year reasonable and supportable forecast period across all segments. Following the reasonable and supportable forecast period, Peoples reverts the macroeconomic variables to their long run average over a four-quarter reversion period.
Changes in the allowance for credit losses for the three months ended March 31, 2026 and March 31, 2025 are summarized below:
(Dollars in thousands)
Beginning Balance, December 31, 2025
Provision for (Recovery of) Credit Losses (a)Charge-offsRecoveries
Ending Balance, March 31, 2026
Construction$1,391 $121 $— $— $1,512 
Commercial real estate, other19,726 1,077 — — 20,803 
Commercial and industrial18,804 3,209 (265)11 21,759 
Premium finance749 (17)(52)6 686 
Leases16,475 3,083 (4,811)557 15,304 
Residential real estate6,295 385 (119)82 6,643 
Home equity lines of credit1,934 (271)(32)12 1,643 
Consumer, indirect7,706 1,646 (1,929)337 7,760 
Consumer, direct2,485 (151)(204)26 2,156 
Deposit account overdrafts111 279 (347)83 126 
Total$75,676 $9,361 $(7,759)$1,114 $78,392 
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.
(Dollars in thousands)Beginning Balance, December 31, 2024Provision for (Recovery of) Credit Losses (a)Charge-offsRecoveries
Ending Balance, March 31, 2025
Construction$878 $278 $— $— $1,156 
Commercial real estate, other16,256 1,110 (215)4 17,155 
Commercial and industrial13,283 (126)(380)6 12,783 
Premium finance662 49 (71)6 646 
Leases12,893 6,091 (5,654)245 13,575 
Residential real estate6,491 388 (142)49 6,786 
Home equity lines of credit1,792 71 — — 1,863 
Consumer, indirect8,576 1,776 (1,866)210 8,696 
Consumer, direct2,396 213 (155)20 2,474 
Deposit account overdrafts121 155 (277)99 98 
Total$63,348 $10,005 $(8,760)$639 $65,232 
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.
During the first quarter of 2026, Peoples recorded a total provision for credit losses on loans of $9.4 million, which was primarily driven by net charge-offs and a deterioration in the macroeconomic forecasts used within the current expected credit loss ("CECL") model. Net charge-offs for the first quarter of 2026 were $6.6 million, primarily driven by the North Star Leasing division. The increase in the allowance for credit losses at March 31, 2026 when compared to at December 31, 2025, was driven by a deterioration of economic forecasts.
During the first quarter of 2025, Peoples recorded a provision for credit losses of $10.0 million, which was driven by net charge-offs. Net charge-offs for the first quarter of 2025 were $8.1 million, primarily driven by an increase in charge-offs on leases originated by the North Star Leasing division. The increase in the allowance for credit losses at March 31, 2025, when compared to at December
31, 2024, was attributable to a deterioration of macroeconomic conditions used within the CECL model, an increase in reserves on individually analyzed loans, and loan growth.
Peoples had recorded allowances for unfunded commitments of $2.8 million and $2.5 million as of March 31, 2026 and as of December 31, 2025, respectively. The allowance for unfunded commitments (also referred to as "unfunded commitment liability") is presented in the “Accrued expenses and other liabilities” line of the Unaudited Consolidated Balance Sheets. The change in the allowance for unfunded commitments is also reflected in the "Provision for (recovery of) credit losses" line of the Unaudited Consolidated Statements of Operations.