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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The reported income tax expense and effective tax rate in the Consolidated Statements of Income differ from the amounts computed by applying the statutory federal corporate income tax rate as follows for the years ended December 31:
|  | 2024 |  | 2023 |  | 2022
(Dollars in thousands) |  | Amount | Rate |  | Amount | Rate |  | Amount | Rate
Income tax computed at statutory federal corporate income tax rate |  | $ | 31,387 |  | 21.0 | % |  | $ | 30,476 |  | 21.0 | % |  | $ | 27,015 |  | 21.0 | %
Differences in rate resulting from: |  |  |  |  |  |  |  |  |
State taxes, net of federal benefit |  | 3,286 |  | 2.2 | % |  | 3,053 |  | 2.1 | % |  | 2,277 |  | 1.8 | %
Investment securities impairment |  | — |  | — | % |  | — |  | — | % |  | 431 |  | 0.3 | %
Nondeductible acquisition costs |  | — |  | — | % |  | 168 |  | 0.1 | % |  | 42 |  | — | %
Common share awards |  | (22) |  | — | % |  | (99) |  | (0.1) | % |  | 12 |  | — | %
Bank owned life insurance |  | (885) |  | (0.6) | % |  | (872) |  | (0.6) | % |  | (551) |  | (0.4) | %
Investments in tax credit funds |  | (601) |  | (0.4) | % |  | (352) |  | (0.2) | % |  | (629) |  | (0.5) | %
Captive insurance benefit |  | — |  | — | % |  | (330) |  | (0.2) | % |  | (421) |  | (0.3) | %
Tax-exempt interest income |  | (258) |  | (0.2) | % |  | (555) |  | (0.4) | % |  | (921) |  | (0.7) | %
Other, net |  | (648) |  | (0.4) | % |  | 274 |  | 0.2 | % |  | 94 |  | 0.1 | %
Income tax expense |  | $ | 32,259 |  | 21.6 | % |  | $ | 31,763 |  | 21.9 | % |  | $ | 27,349 |  | 21.3 | %
Peoples’ reported income tax expense consisted of the following for the years ended December 31:
(Dollars in thousands) |  | 2024 |  | 2023 |  | 2022
Current income tax expense |  | $ | 25,286 |  |  | $ | 32,001 |  |  | $ | 8,783 |
Deferred income tax (benefit) expense |  | 6,973 |  |  | (238) |  |  | 18,566 |
Income tax expense |  | $ | 32,259 |  |  | $ | 31,763 |  |  | $ | 27,349 |
The significant components of Peoples’ deferred tax assets and deferred tax liabilities consisted of the following at December 31:
(Dollars in thousands) |  | 2024 |  | 2023
Deferred tax assets: |  |  |  |
Available-for-sale securities |  | $ | 33,996 |  |  | $ | 31,774 |
Allowance for credit losses |  | 15,035 |  |  | 14,902 |
Nonaccrual loan interest income |  | 1,312 |  |  | 2,753 |
Accrued employee benefits |  | 7,472 |  |  | 7,344 |
Lease obligation |  | 2,523 |  |  | 2,822 |
Net operating loss carryforward |  | 8,393 |  |  | 11,367 |
Purchase accounting adjustments |  | — |  |  | 1,920 |
Other |  | 1,837 |  |  | 1,622 |
Gross deferred tax assets |  | $ | 70,568 |  |  | $ | 74,504 |
Valuation allowance |  | $ | 158 |  |  | $ | 158 |
Total deferred tax assets |  | $ | 70,410 |  |  | $ | 74,346 |
Deferred tax liabilities: |  |  |  |
Equipment leases |  | $ | 11,790 |  |  | $ | 11,286 |
Deferred loan income |  | 2,015 |  |  | 3,117 |
Purchase accounting adjustments |  | 3,219 |  |  | — |
Bank premises and equipment |  | 5,283 |  |  | 5,116 |
Lease right-of-use assets |  | 2,397 |  |  | 2,731 |
Derivative instruments |  | 416 |  |  | 774 |
Other |  | 2,312 |  |  | 3,951 |
Total deferred tax liabilities |  | $ | 27,432 |  |  | $ | 26,975 |
Net deferred tax asset |  | $ | 42,978 |  |  | $ | 47,371 |
At December 31, 2024, Peoples had approximately $39 million of federal net operating loss carryforwards and $208,000 of federal tax credit carryforwards, the annual utilization of which are subject to limitation under IRC sections 382 and 383, respectively. Peoples has recorded a deferred tax asset only for the portion of these net operating loss and tax credit carryforwards it is able to, and expects to, utilize under these limitations. At December 31, 2024, Peoples had approximately $2.2 million of state net operating loss carryforwards, the annual utilization of which are subject to limitation under applicable state tax law. However, all $2.2 million of state net operating loss carryforwards are unlikely to be utilized, resulting in a valuation allowance against the net tax benefit of approximately $158,000. The federal income tax benefit from sales of investment securities was $87,000 in 2024, $777,000 in 2023, and $13,000 in 2022. Income tax benefits are recognized in the Consolidated Financial Statements for a tax position only if it is considered “more-likely-than-not” of being sustained in an audit, based solely on the technical merits of the income tax position. If the recognition criteria are met, the amount of income tax benefits to be recognized are measured based on the largest income tax benefit that is more than 50 percent likely to be realized on ultimate resolution of the tax position. The following table provides a reconciliation of uncertain tax positions at December 31:
(Dollars in thousands) |  | 2024 | 2023
Uncertain tax positions, beginning of year |  | $ | 527 |  | $ | 89 |
Gross increase based on tax positions related to current year |  | 45 |  | 527 |
Gross decrease due to the statute of limitations |  | — |  | (89) |
Uncertain tax positions, end of year |  | $ | 572 |  | $ | 527 |
All of the gross unrecognized tax benefits would impact People’s effective tax rate if recognized. Peoples is subject to U.S. federal income tax, as well as to tax in various state income tax jurisdictions. Peoples’ income tax returns are subject to review and examination by federal and state taxing authorities. Peoples is currently open to audit under the applicable statutes of limitations by the Internal Revenue Service for the years ended December 31, 2021 through 2023. The years open to examination by state taxing authorities vary by jurisdiction.

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