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Loans and Leases
 3 Months Ended
Mar. 31, 2025
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,
2025		December 31, 2024
Construction$319,104 $328,388 
Commercial real estate, other2,230,538 2,156,013 
Commercial and industrial1,343,827 1,347,645 
Premium finance264,080 269,435 
Leases395,454 406,598 
Residential real estate848,168 835,101 
Home equity lines of credit235,409 232,661 
Consumer, indirect680,260 669,857 
Consumer, direct110,639 111,052 
Deposit account overdrafts1,047 1,253 
Total loans, at amortized cost$6,428,526 $6,358,003 
The table above includes net deferred loan origination costs of $20.4 million and $20.2 million at March 31, 2025 and at December 31, 2024, respectively. The remaining unamortized net discount included in the amortized cost of loans and leases was $15.8 million and $19.5 million at March 31, 2025 and at December 31, 2024, 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 $24.1 million at March 31, 2025 and $23.1 million at December 31, 2024.
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, 2025December 31, 2024
(Dollars in thousands)
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Nonaccrual (a)
Accruing Loans 90+ Days Past Due
Commercial real estate, other5,378 284 7,136 227 
Commercial and industrial5,747 106 6,809 78 
Premium finance— 2,502 — 4,947 
Leases12,079 218 8,850 803 
Residential real estate8,163 853 7,329 2,166 
Home equity lines of credit1,537 47 1,498 213 
Consumer, indirect2,521 77 2,374 159 
Consumer, direct203 120 133 44 
Total loans, at amortized cost$35,628 $4,207 $34,129 $8,637 
(a) There were $2.6 million of nonaccrual loans for which there was no allowance for credit losses at March 31, 2025 and $5.7 million of nonaccrual loans for which there was no allowance for credit losses at December 31, 2024.
During the first three months of 2025, nonaccrual loans increased compared to at December 31, 2024, which was primarily due to an uptick in the volume of leases placed on nonaccrual during the quarter, partially offset by improvements in commercial real estate loans and commercial and industrial loans. The decrease in accruing loans 90+ days past due at March 31, 2025, when compared to at December 31, 2024, was primarily due to reductions in accruing 90+ days past due premium finance loans and residential real estate loans of $2.4 million and $1.3 million, respectively. The delinquent premium finance loans carry low credit risk, due to the ability to cancel premiums and recover the majority of the receivable from the insurer.
The following table presents the aging of the amortized cost of past due loans:
Loans Past Due
Current
Loans
Total
Loans
(Dollars in thousands)30 - 59 days60 - 89 days90 + DaysTotal
March 31, 2025
Construction$— $— $— $— $319,104 $319,104 
Commercial real estate, other1,967 2,605 2,544 7,116 2,223,422 2,230,538 
Commercial and industrial1,119 1,587 3,740 6,446 1,337,381 1,343,827 
Premium finance2,005 1,816 2,502 6,323 257,757 264,080 
Leases31,007 3,260 11,565 45,832 349,622 395,454 
Residential real estate10,129 2,306 4,005 16,440 831,728 848,168 
Home equity lines of credit1,430 357 865 2,652 232,757 235,409 
Consumer, indirect6,486 803 1,287 8,576 671,684 680,260 
Consumer, direct514 149 208 871 109,768 110,639 
Deposit account overdrafts— — — — 1,047 1,047 
Total loans, at amortized cost$54,657 $12,883 $26,716 $94,256 $6,334,270 $6,428,526 
December 31, 2024
Construction$— $— $— $— $328,388 $328,388 
Commercial real estate, other1,300 1,585 6,008 8,893 2,147,120 2,156,013 
Commercial and industrial1,651 583 4,551 6,785 1,340,860 1,347,645 
Premium finance3,863 456 4,947 9,266 260,169 269,435 
Leases10,941 5,241 9,575 25,757 380,841 406,598 
Residential real estate11,481 3,038 5,271 19,790 815,311 835,101 
Home equity lines of credit1,473 317 1,093 2,883 229,778 232,661 
Consumer, indirect7,568 1,522 1,326 10,416 659,441 669,857 
Consumer, direct884 113 138 1,135 109,917 111,052 
Deposit account overdrafts— — — — 1,253 1,253 
Total loans, at amortized cost$39,161 $12,855 $32,909 $84,925 $6,273,078 $6,358,003 
Delinquency trends increased slightly, as 98.5% of Peoples' loan portfolio was considered “current” at March 31, 2025, compared to 98.7% at December 31, 2024.
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, 2025December 31, 2024
Loans pledged to FHLB$1,205,884 $1,218,496 
Loans pledged to FRB604,590 527,989 
Credit Quality Indicators
As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2024 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", 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, 2025:
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20252024202320222021PriorRevolving Loans
Total
Loans
Construction

  Pass$7,760 $90,100 $170,833 $34,732 $6,762 $6,133 $— $234 $316,320 
  Special mention— — — — — 113 — — 113 
  Substandard— — 1,149 1,522 — — — — 2,671 
     Total7,760 90,100 171,982 36,254 6,762 6,246 — 234 319,104 
Current period gross charge-offs— — — — — — — 
Commercial real estate, other

  Pass93,323 148,818 276,560 389,546 398,581 765,684 44,974 2,275 2,117,486 
  Special mention— 416 2,150 7,361 10,834 25,438 285 54 46,484 
  Substandard— 144 1,654 5,633 11,770 44,743 724 2,476 64,668 
  Doubtful— — — — — 1,898 — — 1,898 
  Loss— — — — — 2 — — 2 
     Total93,323 149,378 280,364 402,540 421,185 837,765 45,983 4,805 2,230,538 
Current period gross charge-offs— — — 156 — 59 215 
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20252024202320222021PriorRevolving Loans
Total
Loans
Commercial and industrial
  Pass38,053 287,732 201,501 125,281 137,844 237,175 235,900 2,130 1,263,486 
  Special mention— 760 9,005 9,440 4,132 1,795 27,397 5,500 52,529 
  Substandard— 272 248 5,504 8,192 6,491 4,938 148 25,645 
  Doubtful— — — 2,015 — 152 — 100 2,167 
     Total38,053 288,764 210,754 142,240 150,168 245,613 268,235 7,878 1,343,827 
Current period gross charge-offs— — — — 49 331 380 
Premium Finance
Pass120,789 140,876 2,361 54 — — — — 264,080 
Total120,789 140,876 2,361 54 — — — — 264,080 
Current period gross charge-offs— 33 14 24 — — 71 
Leases
Pass42,962 140,613 116,131 53,851 21,147 5,716 — — 380,420 
Special mention— 742 2,118 572 137 3 — — 3,572 
Substandard— 2,201 2,765 2,183 583 113 — — 7,845 
Doubtful— 336 1,980 1,136 52 113 — — 3,617 
Total42,962 143,892 122,994 57,742 21,919 5,945 — — 395,454 
Current period gross charge-offs— 191 1,938 2,690 574 261 5,654 
Residential real estate
Pass20,021 76,315 64,708 83,506 125,460 466,807 — — 836,817 
Substandard— 167 835 260 985 9,069 — — 11,316 
Loss— 5 7 9 — 14 — — 35 
     Total20,021 76,487 65,550 83,775 126,445 475,890 — — 848,168 
Current period gross charge-offs— — 27 — 54 61 142 
Home equity lines of credit
Pass8,555 55,513 35,860 37,688 26,717 69,940 23 3,407 234,296 
Substandard— — 106 296 16 688 — — 1,106 
Loss— — — — — 7 — — 7 
     Total8,555 55,513 35,966 37,984 26,733 70,635 23 3,407 235,409 
Current period gross charge-offs— — — — — — — 
Consumer, indirect
Pass77,083 225,426 158,529 130,515 47,959 37,984 — — 677,496 
Substandard— 433 581 727 516 472 — — 2,729 
Loss— 1 2 8 15 9 — — 35 
     Total77,083 225,860 159,112 131,250 48,490 38,465 — — 680,260 
Current period gross charge-offs14 635 637 388 134 58 1,866 
Consumer, direct
Pass19,982 33,921 22,842 18,622 8,124 6,840 — — 110,331 
Term Loans at Amortized Cost by Origination YearRevolving Loans Converted to Term
(Dollars in thousands)20252024202320222021PriorRevolving Loans
Total
Loans
Substandard— 38 76 87 29 68 — — 298 
Loss— 2 1 6 — 1 — — 10 
     Total19,982 33,961 22,919 18,715 8,153 6,909 — — 110,639 
Current period gross charge-offs11 48 23 57 9 7 155 
Deposit account overdrafts1,047 — — — — — — — 1,047 
Current period gross charge-offs277 — — — — — 277 
Total loans, at amortized cost429,575 1,204,831 1,072,002 910,554 809,855 1,687,468 314,241 16,324 6,428,526 
Total current period gross charge-offs$302 $907 $2,639 $3,315 $820 $777 $8,760 
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, 2024:
Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20242023202220212020PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Construction

  Pass$69,862 $162,605 $47,133 $30,592 $1,845 $13,540 $— $— $325,577 
  Special mention— — — — — 115 — — 115 
  Substandard— 1,161 1,535 — — — — — 2,696 
     Total69,862 163,766 48,668 30,592 1,845 13,655 — — 328,388 
Current period gross charge-offs— — — — — — — 
Commercial real estate, other

  Pass130,971 219,105 366,256 337,905 201,367 751,415 41,122 — 2,048,141 
  Special mention271 2,923 11,876 7,197 5,107 10,689 288 — 38,351 
  Substandard145 1,073 2,460 18,851 9,234 37,136 612 — 69,511 
  Doubtful— — — — — 10 — — 10 
     Total131,387 223,101 380,592 363,953 215,708 799,250 42,022 — 2,156,013 
Current period gross charge-offs— — 376 — — 55 431 
Commercial and industrial
  Pass311,631 202,929 134,558 148,288 66,102 152,143 229,821 4,779 1,245,472 
  Special mention779 9,019 10,886 4,449 12,049 13,537 19,465 — 70,184 
  Substandard200 99 4,791 11,429 3,850 4,430 5,045 49 29,844 
  Doubtful— — 1,987 — — 158 — — 2,145 
     Total312,610 212,047 152,222 164,166 82,001 170,268 254,331 4,828 1,347,645 
Current period gross charge-offs— 14 — 17 105 532 668 
Premium finance
  Pass265,504 3,837 94 — — — — — 269,435 
Total265,504 3,837 94 — — — — — 269,435 
Current period gross charge-offs67 109 33 — — — 209 
Term Loans at Amortized Cost by Origination Year
(Dollars in thousands)20242023202220212020PriorRevolving LoansRevolving Loans Converted to Term
Total
Loans
Leases
Pass175,449 125,664 61,064 24,181 4,661 2,153 — — 393,172 
Special mention791 1,529 1,140 365 5 — — — 3,830 
Substandard351 2,108 1,777 193 8 — — — 4,437 
Doubtful170 2,127 1,859 624 110 269 — — 5,159 
Total176,761 131,428 65,840 25,363 4,784 2,422 — — 406,598 
Current period gross charge-offs1,315 5,623 5,421 2,308 301 138 15,106 
Residential real estate
  Pass77,130 66,712 85,045 128,359 52,090 414,574 — — 823,910 
  Substandard321 1,088 161 980 306 8,087 — — 10,943 
   Loss— 4 — — — 244 — — 248 
     Total77,451 67,804 85,206 129,339 52,396 422,905 — — 835,101 
Current period gross charge-offs— — 46 5 — 237 288 
Home equity lines of credit
  Pass54,724 37,417 37,752 27,430 16,583 57,303 24 731 231,233 
  Substandard— 138 163 16 34 1,069 — — 1,420 
   Loss— — — — — 8 — — 8 
     Total54,724 37,555 37,915 27,446 16,617 58,380 24 731 232,661 
Current period gross charge-offs— — — — — 11 11 
Consumer, indirect
  Pass239,584 176,115 148,210 56,846 30,231 16,129 — — 667,115 
  Substandard269 557 681 618 312 251 — — 2,688 
   Loss14 — 16 14 — 10 — — 54 
     Total239,867 176,672 148,907 57,478 30,543 16,390 — — 669,857 
Current period gross charge-offs497 2,207 1,880 691 141 763 6,179 
Consumer, direct
  Pass45,978 25,605 21,544 9,614 4,180 3,884 — — 110,805 
  Substandard18 65 46 29 4 73 — — 235 
   Loss— 4 — — — 8 — — 12 
     Total45,996 25,674 21,590 9,643 4,184 3,965 — — 111,052 
Current period gross charge-offs2 154 212 51 12 247 678 
Deposit account overdrafts1,253 — — — — — — — 1,253 
Current period gross charge-offs1,542 $— $— $— $— $— 1,542 
Total loans, at amortized cost1,375,415 1,041,884 941,034 807,980 408,078 1,487,235 296,377 5,559 6,358,003 
Current period gross charge-offs$3,423 $8,107 $7,968 $3,072 $559 $1,983 $25,112 
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, 2025December 31, 2024
Commercial real estate, other$1,887 $2,764 
Leases1,789 652 
Commercial and industrial— 959 
Total collateral dependent loans$3,676 $4,375 
The decrease in collateral dependent loans at March 31, 2025, compared to December 31, 2024, was primarily driven by the payoff of one commercial real estate loan and one commercial and industrial loan, which in aggregate totaled approximately $3.0 million. This was partially offset by collateral dependent leases added during the first quarter.
Modifications for Borrowers Experiencing Financial Difficulty
As part of Peoples' loss mitigation activities, Peoples may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty. The most common modifications to the contractual terms of a loan to a borrower experiencing financial difficulty include an extension of the maturity date, a reduction in the interest rate for the remaining life of the loan, a temporary period of interest-only payments, and a reduction in the contractual payment amount for either a short period or the remaining term of the loan.
In addition to loan modifications, Peoples also provides other loss mitigation options, such as forbearance and repayment plans, to assist borrowers who experience financial difficulties. In assessing whether or not a borrower is experiencing financial difficulty, Peoples considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (1) the borrower is currently in payment default on any of the borrower's debt; (2) a payment default is probable in the foreseeable future without the modification; (3) the borrower has declared or is in the process of declaring bankruptcy; and (4) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification.
The following tables display the amortized cost of loans that were restructured during the three months ended March 31, 2025 and March 31, 2024, presented by loan classification.
Payment Delay (Only)
(Dollars in thousands)Payment DeferralTerm ExtensionPrincipal ForgivenessTotal
Percentage of Total by Loan Category(a)(b)(c)
During the Three Months Ended March 31, 2025
Commercial real estate$— $2,445 — $2,445 0.11 %
Commercial and industrial— 5,646 — 5,646 0.42 %
Leasing12 — 68 80 0.02 %
Total$12 $8,091 $68 $8,171 0.13 %
During the Three Months Ended March 31, 2024
Commercial real estate— 565 — 565 0.03 %
Commercial and industrial— 10,203 — 10,203 0.84 %
Leasing25 — — 25 0.01 %
Residential real estate— 76 — 76 0.01 %
Total$25 $10,844 $— $10,869 0.18 %
(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 --% not meaningful
The following tables summarize the financial impacts of loan modifications and payment deferrals made to loans during the three months ended March 31, 2025 and March 31, 2024, presented by loan classification.
Weighted-Average Term Extension
(in months)
During the Three Months Ended March 31, 2025
Commercial real estate3
Commercial and industrial8
During the Three Months Ended March 31, 2024
Commercial real estate6
Commercial and industrial6
Leasing9
Residential real estate2
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, 2025
Commercial and industrial117 
Leasing638 
Total loans that subsequently defaulted$755 
For the Three Months Ended March 31, 2024
Commercial and industrial648 
Total loans that subsequently defaulted$648 
(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, 2025 and March 31, 2024, respectively, presented by classification and class of financing receivable.
As of March 31, 2025
(Dollars in thousands)30-59 Days Delinquent60-89 Days Delinquent90+ Days DelinquentTotal DelinquentCurrentTotal
Commercial real estate1,058 69 — 1,127 1,887 3,014 
Commercial and industrial— — 117 117 7,789 7,906 
Leasing300 — 638 938 250 1,188 
Residential real estate— — — — 15 15 
Home equity lines of credit— — — — 158 158 
Consumer, indirect— — 12 12 — 12 
Total loans modified(a)
$1,358 $69 $767 $2,194 $10,099 $12,293 
(a) Represents the amortized cost basis as of period end.
As of March 31, 2024
(Dollars in thousands)30-59 Days Delinquent60-89 Days Delinquent90+ Days DelinquentTotal DelinquentCurrentTotal
Construction$— $— $— $— $70 $70 
Commercial real estate193 — — 193 2,443 2,636 
Commercial and industrial— 667 648 1,315 12,752 14,067 
Leasing— — — — 25 25 
Residential real estate76 — — 76 24 100 
Home equity lines of credit— — — — 207 207 
Total loans modified(a)
$269 $667 $648 $1,584 $15,521 $17,105 
(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' 2024 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 period across all segments. Following the reasonable and supportable 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, 2025 and March 31, 2024 are summarized below:
(Dollars in thousands)
Beginning Balance, December 31, 2024
Initial Allowance for Acquired PCD Assets(Recovery of) Provision for 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.
(Dollars in thousands)Beginning Balance, December 31, 2023Initial Allowance for Acquired PCD AssetsProvision for (Recovery of) Credit Losses (a)Charge-offsRecoveries
Ending Balance, March 31, 2024
Construction$699 $— $2 $— $— $701 
Commercial real estate, other20,915 — 1,002 (212)83 21,788 
Commercial and industrial10,490 — 319 (235)7 10,581 
Premium finance484 — 169 (54)8 607 
Leases10,850 — 3,097 (1,270)212 12,889 
Residential real estate5,937 — (74)(80)83 5,866 
Home equity lines of credit1,588 — 94 — 7 1,689 
Consumer, indirect8,590 — 1,101 (1,461)71 8,301 
Consumer, direct2,343 — 153 (226)9 2,279 
Deposit account overdrafts115 — 268 (336)74 121 
Total$62,011 $— $6,131 $(3,874)$554 $64,822 
(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.
During the first quarter of 2025, Peoples recorded a total provision for credit losses on loans of $10.0 million, which was a result of higher net charge-offs. Net charge-offs for the first quarter of 2025 were $8.1 million, primarily driven by our 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 macro-economic conditions used within the CECL model, an increase in reserves on individually analyzed loans, and loan growth.
During the first quarter of 2024, Peoples recorded a provision for credit losses of $6.1 million, which was driven by (i) a deterioration in macro-economic conditions used within the CECL model, (ii) an increase of reserves on individually analyzed loans and (iii) loan growth.
Peoples had recorded an allowance for unfunded commitments of $2.2 million and $2.0 million as of March 31, 2025 and December 31, 2024, 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.