XML 45 R22.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Taxes
 12 Months Ended
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:
202420232022
(Dollars in thousands)AmountRateAmountRateAmountRate
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 benefit3,286 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)202420232022
Current income tax expense$25,286 $32,001 $8,783 
Deferred income tax (benefit) expense6,973 (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)20242023
Deferred tax assets:  
Available-for-sale securities$33,996 $31,774 
Allowance for credit losses15,035 14,902 
Nonaccrual loan interest income1,312 2,753 
Accrued employee benefits7,472 7,344 
Lease obligation2,523 2,822 
Net operating loss carryforward8,393 11,367 
Purchase accounting adjustments— 1,920 
Other1,837 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 income2,015 3,117 
Purchase accounting adjustments3,219 — 
Bank premises and equipment5,283 5,116 
Lease right-of-use assets2,397 2,731 
Derivative instruments416 774 
Other2,312 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)20242023
Uncertain tax positions, beginning of year$527 $89 
Gross increase based on tax positions related to current year45 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.