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Acquisitions

3 Months Ended

Mar. 31, 2024

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

Limestone Bancorp, Inc.

As of the close of business on April 30, 2023, Peoples completed the Limestone Merger. In connection with the Limestone Merger, Limestone Bank, Inc., which operated 20 branches in Kentucky, merged into Peoples Bank. As consideration in the Limestone Merger, Limestone shareholders were paid 0.90 common shares of Peoples for each full share of Limestone that was owned at the merger date, resulting in the issuance of 6,827,668 common shares by Peoples, or aggregate consideration of $177.9 million. Peoples accounted for this transaction as a business combination under the acquisition method.

Peoples recorded acquisition-related expenses primarily related to the Limestone Merger, which included $(0.1) million in non-interest expense for the three months ended March 31, 2024. Peoples recorded acquisition-related expenses related to the Limestone Merger, which included $16.9 million in non-interest expense for the year ended December 31, 2023.

The following table provides the preliminary purchase price calculation as of the date of the Limestone Merger, and the assets acquired and liabilities assumed at their estimated fair values. The estimated fair values below are subject to adjustment for up to one year after April 30, 2023, which include, but are not limited to, loans, including the designation of PCD loans, deferred tax assets and liabilities, long-term borrowings, and certain other assets and other liabilities.

(Dollars in thousands)									Fair Value
Total purchase price									$	177,931
Assets
Cash and balances due from banks									6,422
Interest-bearing deposits in other banks									87,115
Total cash and cash equivalents									93,537
Available-for-sale investment securities, at fair value									166,944
Other investment securities									5,716
Total investment securities									172,660
Loans									1,077,929
Allowance for credit losses (on PCD loans)									(2,051)
Net loans									1,075,878
Bank premises and equipment, net of accumulated depreciation									17,690

(Dollars in thousands)									Fair Value
Bank owned life insurance									31,343
Other intangible assets									27,722
Other assets									36,874
Total assets									1,455,704
Liabilities
Deposits:
Non-interest-bearing									262,727
Interest-bearing									971,457
Total deposits									1,234,184
Short-term borrowings									60,000
Long-term borrowings									39,453
Accrued expenses and other liabilities									12,967
Total liabilities									1,346,604
Net assets									109,100
Goodwill									$	68,831

The goodwill recorded in connection with the Limestone Merger is related to expected synergies to be gained from the combination of Limestone with Peoples' operations. The employees retained from the Limestone Merger and the geographic locations of Limestone should allow Peoples to continue to grow the loan and deposit portfolios while also increasing Peoples' ability to penetrate the new markets, which should benefit Peoples in future periods. During Peoples' evaluation of intangible assets, it was determined that an assembled workforce intangible asset was not separately recognizable and was included in goodwill. Peoples recorded a core deposit asset in other intangible assets related to the Limestone Merger.

There were no changes in the estimated fair value that impacted goodwill for the three months ended March 31, 2024.

Loans acquired by Peoples in a business combination that have evidence of more than insignificant credit deterioration, which includes loans as to which Peoples believes it is probable that Peoples will be unable to collect all contractually required payments, are considered "purchased credit deteriorated" (or "PCD") loans. Acquired PCD loans are reported net of the unamortized fair value adjustment. These loans are recorded at the purchase price, and an allowance for credit losses is determined based upon discrete credit marks, along with discounted cash flow models based upon similar pools of loans, using a similar methodology as for other loans. The following table details the fair value adjustment for acquired PCD loans as of the acquisition date:

(Dollars in thousands)						Par Value			Allowance for Credit Losses			Non-Credit (Discount) Premium			Fair Value
PCD loans
Commercial real estate, other						30,907			(1,340)			(2,160)			27,407
Commercial and industrial						16,466			(379)			(610)			15,477
Residential real estate						6,328			(228)			(770)			5,330
Home equity lines of credit						774			(18)			11			767
Consumer						1,029			(86)			78			1,021
Fair value						$	55,504		$	(2,051)		$	(3,451)		$	50,002

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- References

No definition available.

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- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 805
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479907/805-20-50-5

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 805
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//805/tableOfContent

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