10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

            For the quarterly period ended June 30, 2019

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

            For the transition period from ____ to ____

Commission File Number: 000-16772

PEOPLES BANCORP INC.
(Exact name of Registrant as specified in its charter)
Ohio				31-0987416
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)
138 Putnam Street, P.O. Box 738, Marietta, Ohio				45750
(Address of principal executive offices)				(Zip Code)
Registrant’s telephone number, including area code:				(740) 373-3155
	Not Applicable
	(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class		Trading Symbol(s)	Name of each exchange on which registered
Common Shares, without par value		PEBO	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No  x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:20,698,571 common shares, without par value, at July 31, 2019.

Table of Contents
PART I – FINANCIAL INFORMATION	3
ITEM 1.  FINANCIAL STATEMENTS	3
CONSOLIDATED BALANCE SHEETS (Unaudited)	3
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)	4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)	5
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)	6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)	7
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	8
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39
SELECTED FINANCIAL DATA	40
EXECUTIVE SUMMARY	47
RESULTS OF OPERATIONS	49
FINANCIAL CONDITION	64
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	77
ITEM 4.  CONTROLS AND PROCEDURES	78
PART II – OTHER INFORMATION	78
ITEM 1.  LEGAL PROCEEDINGS	78
ITEM 1A.  RISK FACTORS	78
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	79
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES	79
ITEM 4. MINE SAFETY DISCLOSURES	79
ITEM 5.  OTHER INFORMATION	79
ITEM 6.  EXHIBITS	79
SIGNATURES	82

2

PART I

ITEM 1.  FINANCIAL STATEMENTS

PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30, 2019			December 31, 2018
(Dollars in thousands)	(Unaudited)
Assets
Cash and cash equivalents:
Cash and due from banks	$	56,731		$	61,775
Interest-bearing deposits in other banks	36,692			15,837
Total cash and cash equivalents	93,423			77,612
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	919,364			791,891
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	34,839			36,961
Other investment securities	43,508			42,985
Total investment securities	997,711			871,837
Loans, net of deferred fees and costs (a)	2,833,533			2,728,778
Allowance for loan losses	(21,357		)	(20,195		)
Net loans	2,812,176			2,708,583
Loans held for sale	5,928			5,470
Bank premises and equipment, net of accumulated depreciation	64,451			56,542
Bank owned life insurance	69,909			68,934
Goodwill	163,292			151,245
Other intangible assets	13,471			10,840
Other assets	56,015			40,391
Total assets	$	4,276,376		$	3,991,454
Liabilities
Deposits:
Non-interest-bearing	$	643,058		$	607,877
Interest-bearing	2,720,555			2,347,588
Total deposits	3,363,613			2,955,465
Short-term borrowings	186,457			356,198
Long-term borrowings	85,691			109,644
Accrued expenses and other liabilities	61,593			50,007
Total liabilities	3,697,354			3,471,314
Stockholders’ equity
Preferred stock, no par value, 50,000 shares authorized, no shares issued at June 30, 2019 and December 31, 2018	—			—
Common stock, no par value, 24,000,000 shares authorized, 21,142,256 shares issued at June 30, 2019 and 20,124,378 shares issued at December 31, 2018, including shares in treasury	418,950			386,814
Retained earnings	171,410			160,346
Accumulated other comprehensive income (loss), net of deferred income taxes	316			(12,933		)
Treasury stock, at cost, 489,802 shares at June 30, 2019 and 601,289 shares at December 31, 2018	(11,654		)	(14,087		)
Total stockholders’ equity	579,022			520,140
Total liabilities and stockholders’ equity	$	4,276,376		$	3,991,454

(a) Also referred to throughout the document as "total loans" and "loans held for investment."

See Notes to the Unaudited Consolidated Financial Statements

3

PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands, except per share data)	2019			2018			2019			2018
Interest income:
Interest and fees on loans	$	36,660		$	31,250		$	70,713		$	58,131
Interest and dividends on taxable investment securities	5,969			5,830			11,779			11,480
Interest on tax-exempt investment securities	729			635			1,266			1,278
Other interest income	263			54			439			106
Total interest income	43,621			37,769			84,197			70,995
Interest expense:
Interest on deposits	5,719			3,101			10,563			5,314
Interest on short-term borrowings	1,233			1,175			2,406			2,143
Interest on long-term borrowings	620			685			1,265			1,371
Total interest expense	7,572			4,961			14,234			8,828
Net interest income	36,049			32,808			69,963			62,167
Provision for loan losses	626			1,188			363			3,171
Net interest income after provision for loan losses	35,423			31,620			69,600			58,996
Non-interest income:
Insurance income	3,486			3,369			8,107			8,024
Trust and investment income	3,401			3,232			6,513			6,300
Electronic banking income	3,267			2,785			6,254			5,570
Deposit account service charges	2,977			2,388			5,318			4,508
Mortgage banking income	1,000			969			1,788			1,320
Bank owned life insurance income	490			497			975			965
Commercial loan swap fees	516			146			662			262
Net loss on investment securities	(57		)	(147		)	(27		)	(146		)
Net loss on asset disposals and other transactions	(293		)	(405		)	(475		)	(331		)
Other non-interest income	502			421			1,603			1,752
Total non-interest income	15,289			13,255			30,718			28,224
Non-interest expense:
Salaries and employee benefit costs	20,824			18,025			40,026			34,015
Net occupancy and equipment expense	3,132			2,803			6,110			5,669
Professional fees	2,344			3,022			3,620			4,740
Electronic banking expense	1,693			1,407			3,270			2,857
Data processing and software expense	1,567			1,359			3,112			2,681
Amortization of other intangible assets	824			861			1,518			1,615
Franchise tax expense	772			614			1,477			1,258
Marketing expense	490			656			1,084			981
FDIC insurance expense	381			416			752			782
Foreclosed real estate and other loan expenses	469			338			724			550
Communication expense	317			300			595			644
Other non-interest expense	6,063			6,170			8,448			8,400
Total non-interest expense	38,876			35,971			70,736			64,192
Income before income taxes	11,836			8,904			29,582			23,028
Income tax expense	2,238			1,012			5,615			3,395
Net income	$	9,598		$	7,892		$	23,967		$	19,633
Earnings per common share - basic	$	0.47		$	0.41		$	1.20		$	1.05
Earnings per common share - diluted	$	0.46		$	0.41		$	1.19		$	1.04
Weighted-average number of common shares outstanding - basic	20,277,028			19,160,728			19,824,035			18,646,266
Weighted-average number of common shares outstanding - diluted	20,442,366			19,293,381			19,972,350			18,773,169
Cash dividends declared	$	7,035		$	5,466		$	12,903		$	10,237
Cash dividends declared per common share	$	0.34		$	0.28		$	0.64		$	0.54

See Notes to the Unaudited Consolidated Financial Statements

4

PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Net income	$	9,598		$	7,892		$	23,967		$	19,633
Other comprehensive income (loss):
Available-for-sale investment securities:
Gross unrealized holding gain (loss) arising during the period	12,947			(2,661		)	21,672			(12,774		)
Related tax (expense) benefit	(2,719		)	559			(4,551		)	3,737
Less: reclassification adjustment for net gain included in net income	(57		)	(147		)	(27		)	(146		)
Related tax benefit	12			31			6			31
Amounts reclassified out of accumulated other comprehensive loss per ASU 2016-01 (a)	—			—			—			(5,020		)
Net effect on other comprehensive income (loss)	10,273			(1,986		)	17,142			(13,942		)
Defined benefit plans:
Net gain arising during the period	—			—			2			—
Amortization of unrecognized loss and service cost on benefit plans	20			26			37			52
Related tax expense	(4		)	(5		)	(8		)	(11		)
Net effect on other comprehensive income	16			21			31			41
Cash flow hedges:
Net (loss) gain arising during the period	(3,134		)	537			(4,967		)	1,915
Related tax benefit (expense)	658			(113		)	1,043			(402		)
Net effect on other comprehensive (loss) income	(2,476		)	424			(3,924		)	1,513
Total other comprehensive income (loss), net of tax	7,813			(1,541		)	13,249			(12,388		)
Total comprehensive income	$	17,411		$	6,351		$	37,216		$	7,245

(a) As of January 1, 2018, Peoples adopted ASU 2016-01, which resulted in the reclassification of $5.0 million in net unrealized gains on equity investment securities from accumulated other comprehensive loss to retained earnings.

See Notes to the Unaudited Consolidated Financial Statements

5

PEOPLES BANCORP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

							Accumulated Other Comprehensive Income (Loss)						Total Stockholders' Equity
	Common Stock			Retained Earnings						Treasury Stock
(Dollars in thousands)
Balance, December 31, 2018	$	386,814		$	160,346		$	(12,933	)	$	(14,087	)	$	520,140
Net income	—			23,967			—			—			23,967
Other comprehensive income, net of tax	—			—			13,249			—			13,249
Cash dividends declared	—			(12,903		)	—			—			(12,903		)
Reissuance of treasury stock for common share awards	(2,821		)	—			—			2,821			—
Reissuance of treasury stock for deferred compensation plan for Boards of Directors	—			—			—			53			53
Repurchase of treasury stock in connection with employee incentive plan and under compensation plan for Boards of Directors	—			—			—			(684		)	(684		)
Common shares issued under dividend reinvestment plan	384			—			—			—			384
Common shares issued under compensation plan for Boards of Directors	52			—			—			157			209
Common shares issued under employee stock purchase plan	28			—			—			86			114
Stock-based compensation	2,056			—			—			—			2,056
Issuance of common shares related to merger with First Prestonsburg Bancshares Inc.	32,437			—			—			—			32,437
Balance, June 30, 2019	$	418,950		$	171,410		$	316		$	(11,654	)	$	579,022

See Notes to the Unaudited Consolidated Financial Statements

6

PEOPLES BANCORP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Six Months Ended
	June 30,
(Dollars in thousands)	2019			2018
Net cash provided by operating activities	$	18,821		$	27,499
Investing activities:
Available-for-sale investment securities:
Purchases	(116,433		)	(81,441		)
Proceeds from sales	72,481			14,489
Proceeds from principal payments, calls and prepayments	70,728			60,088
Held-to-maturity investment securities:
Proceeds from principal payments	1,984			2,627
Other investment securities:
Purchases	(376		)	(1,089		)
Proceeds from sales	3,872			7,111
Proceeds from insurance claim	26			—
Net decrease (increase) in loans held for investment	29,219			(92,582		)
Net expenditures for premises and equipment	(1,233		)	(2,721		)
Proceeds from sales of other real estate owned	143			265
Business acquisitions, net of cash received	7,795			4,695
Investment in limited partnership and tax credit funds	(44		)	(399		)
Net cash provided by (used in) investing activities	68,162			(88,957		)
Financing activities:
Net (decrease) increase in non-interest-bearing deposits	(23,318		)	364
Net increase in interest-bearing deposits	173,571			19,705
Net (decrease) increase in short-term borrowings	(207,329		)	66,412
Payments on long-term borrowings	(849		)	(1,062		)
Cash dividends paid	(12,467		)	(10,001		)
Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock	(684		)	(1,143		)
Proceeds from issuance of common shares	6			15
Contingent consideration payments made after a business combination	(102		)	(224		)
Net cash (used in) provided by financing activities	(71,172		)	74,066
Net increase in cash and cash equivalents	15,811			12,608
Cash and cash equivalents at beginning of period	77,612			72,194
Cash and cash equivalents at end of period	$	93,423		$	84,802
Supplemental cash flow information:
Interest paid	13,765			8,765
Income taxes paid	6,150			6,065
Supplemental noncash disclosures:
Transfers from loans to other real estate owned	49			16

See Notes to the Unaudited Consolidated Financial Statements

7

PEOPLES BANCORP INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Summary of Significant Accounting Policies

Basis of Presentation: The accompanying Unaudited Consolidated Financial Statements of Peoples Bancorp Inc. and its subsidiaries ("Peoples" refers to Peoples Bancorp Inc. and its consolidated subsidiaries collectively, except where the context indicates the reference relates solely to Peoples Bancorp Inc.) have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and the instructions for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, these financial statements do not contain all of the information and footnotes required by US GAAP for annual financial statements and should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (“Peoples' 2018 Form 10-K”).

The accounting and reporting policies followed in the presentation of the accompanying Unaudited Consolidated Financial Statements are consistent with those described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2018 Form 10-K, as updated by the information contained in this Form 10-Q.  Management has evaluated all significant events and transactions that occurred after June 30, 2019 for potential recognition or disclosure in these unaudited consolidated financial statements.  In the opinion of management, these unaudited consolidated financial statements reflect all adjustments necessary to present fairly such information for the periods and at the dates indicated.  Such adjustments are normal and recurring in nature.  Intercompany accounts and transactions have been eliminated.  The Consolidated Balance Sheet at December 31, 2018, contained herein, has been derived from the audited Consolidated Balance Sheet included in Peoples’ 2018 Form 10-K. 

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year, due in part to seasonal variations and unusual or infrequently occurring items.

New Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by Peoples as of the required effective dates. The following accounting pronouncements should be read in conjunction with "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2018 Form 10-K.

Accounting Standards Update ("ASU") 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. This accounting guidance will be effective for interim and annual reporting periods beginning after December 15, 2019 (effective January 1, 2020 for Peoples). Peoples early adopted this new accounting guidance as of January 1, 2019, and it will be incorporated in the October 1, 2019 annual goodwill and intangible assets impairment analysis, but it is not expected to have a material impact on Peoples' consolidated financial statements.

ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This accounting guidance replaces the current "incurred loss" model for recognizing credit losses with an "expected loss" model, referred to as the Current Expected Credit Loss ("CECL") model. Under the CECL model, Peoples will be required to present certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity investment securities, at the net amount expected to be collected. ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, and should be accounted for according to Topic 842.

The measurement of expected credit losses is to be based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This measurement will take place at the time the financial asset is first added to the balance sheet and periodically thereafter. This differs significantly from the "incurred loss" model required under current US GAAP, which delays recognition until it is probable a loss has been incurred. Accordingly, Peoples expects that the adoption of the CECL model will materially affect how the allowance for loan losses is determined and could require significant increases to the allowance for loan losses. Moreover, the CECL model may create more volatility in the level of Peoples' allowance for loan losses. If required to materially increase the level of allowance for loan losses for any reason, such increase could adversely affect Peoples' business, financial condition and results of operations.

8

The CECL standard will become effective for interim and annual reporting periods beginning after December 15, 2019 (effective January 1, 2020 for Peoples). Peoples has a committee that meets regularly to monitor progress and oversee the project. Peoples has implemented a third-party software solution, and is utilizing the tool to run test calculations throughout 2019 in anticipation of the full implementation at the beginning of 2020. Peoples has engaged consultants to assist with the completion of certain aspects of the project plan. Peoples will complete model validation during 2019, and is currently refining the economic forecasting process, documenting accounting policies, reviewing business processes and evaluating potential changes to the control environment. Peoples intends to complete a test run of its process, inclusive of the model, by the end of the third quarter of 2019, pending any unforeseen circumstances or significant changes to the requirements. Peoples expects to recognize a one-time cumulative-effect adjustment to the allowance for loan loss provision, and related tax effect, as of the beginning of the first reporting period in which the new standard is effective, consistent with regulatory expectations set forth in interagency guidance issued at the end of 2016. The impact of the adoption will depend on relevant data at the adoption date, including the characteristics of the loan portfolio, macroeconomic conditions and forecasts. Peoples has not yet determined the magnitude of any such one-time cumulative-effect adjustment or of the overall impact of the new standard on Peoples' financial condition or results of operations.

Note 2 Fair Value of Assets and Liabilities

Fair value represents the amount expected to be received to sell an asset or paid to transfer a liability in its principal or most advantageous market in an orderly transaction between market participants at the measurement date. In accordance with fair value accounting guidance, Peoples measures, records and reports various types of assets and liabilities at fair value on either a recurring or a non-recurring basis in the Consolidated Financial Statements. Those assets and liabilities are presented below in the sections entitled “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis” and “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis.”

Depending on the nature of the asset or liability, Peoples uses various valuation methodologies and assumptions to estimate fair value. The measurement of fair value under US GAAP uses a hierarchy, which is described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10‑K.

Assets and liabilities are assigned to a level within the fair value hierarchy based on the lowest level of significant input used to measure fair value. Assets and liabilities may change levels within the fair value hierarchy due to market conditions or other circumstances. Those transfers are recognized on the date of the event that prompted the transfer. There were no transfers of assets or liabilities required to be measured at fair value on a recurring basis between levels of the fair value hierarchy during the periods presented.

Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis

The following table provides the fair value for assets and liabilities required to be measured and reported at fair value on a recurring basis on the Consolidated Balance Sheets by level in the fair value hierarchy.

	Recurring Fair Value Measurements at Reporting Date
	June 30, 2019						December 31, 2018
(Dollars in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Available-for-sale investment securities:
Obligations of:
U.S. government sponsored agencies	$	—	$	19,051	$	—	$	—	$	—	$	—
States and political subdivisions	—		125,418		—		—		88,587		—
Residential mortgage-backed securities	—		748,132		—		—		692,608		—
Commercial mortgage-backed securities	—		22,664		—		—		6,707		—
Bank-issued trust preferred securities	—		4,099		—		—		3,989		—
Total available-for-sale securities	—		919,364		—		—		791,891		—
Equity investment securities	111		188		—		94		183		—
Derivative assets (a)	—		9,972		—		—		4,544		—
Liabilities:
Derivative liabilities (b)	$	—	$	14,020	$	—	$	—	$	3,562	$	—

(a) Included in other assets on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

(b) Included in accrued expenses and other liabilities on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

9

Available-for-Sale Investment Securities:The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, LIBOR yield curves, credit spreads and prices from market makers and live trading systems (Level 2). Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

Equity Investment Securities:The fair values of Peoples' equity investment securities are obtained from quoted prices in active exchange markets for identical assets or liabilities (Level 1) or quoted prices in less active markets (Level 2).

Derivative Assets and Liabilities: Derivative assets and liabilities are recognized on the Consolidated Balance Sheets at their fair value within other assets and accrued expenses and other liabilities, respectively. The fair value for derivative instruments is determined based on market prices, broker-dealer quotations on similar products, or other related input parameters (Level 2).

Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy.

	Non-Recurring Fair Value Measurements at Reporting Date
	June 30, 2019						December 31, 2018
(Dollars in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Impaired loans	$	—	$	—	$	32,952	$	—	$	—	$	24,129
Other real estate owned ("OREO")	—		—		123		—		—		94

Impaired Loans: Impaired loans are measured and reported at fair value when the amounts to be received are less than the carrying value of the loans. One of the allowable methods for determining the amount of impairment is estimating fair value using the fair value of the collateral for collateral-dependent loans. Management’s determination of the fair value for these loans uses a market approach representing the estimated net proceeds to be received from the sale of the collateral based on observable market prices or the market value provided by independent, licensed or certified appraisers (Level 3), less estimated selling costs. At June 30, 2019, impaired loans with an aggregate principal balance of $43.2 million were outstanding and reported at fair value of $33.0 million.  For the three and six months ended June 30, 2019, Peoples recognized an increase of $223,000 and $830,000 in the specific reserve on impaired loans, through the allowance for loan losses.

Other Real Estate Owned: OREO, included in other assets on the Consolidated Balance Sheets, is comprised primarily of commercial and residential real estate properties acquired by Peoples in satisfaction of a loan. OREO obtained in satisfaction of a loan is recorded at the lower of cost or estimated fair value, less estimated costs to sell the property. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is based on recent real estate appraisals and is updated at least annually. These appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales approach and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available (Level 3).

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Financial Instruments Not Required to be Measured or Reported at Fair Value

The following table provides the carrying amount for each class of assets and liabilities and the fair value for certain financial instruments that are not required to be measured or reported at fair value on the Consolidated Balance Sheets.

	Fair Value Measurements of Other Financial Instruments
(Dollars in thousands)	Fair Value Hierarchy Level	June 30, 2019				December 31, 2018
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	1	$	93,423	$	93,423	$	77,612	$	77,612
Held-to-maturity investment securities:
Obligations of:
States and political subdivisions	2	4,398		4,880		4,403		4,896
Residential mortgage-backed securities	2	23,335		23,451		29,044		28,603
Commercial mortgage-backed securities	2	7,106		7,416		3,514		3,464
Total held-to-maturity securities		34,839		35,747		36,961		36,963
Other investment securities:
Federal Home Loan Bank ("FHLB") stock	2	29,257		29,257		29,367		29,367
Federal Reserve Bank ("FRB") stock	2	12,294		12,294		12,294		12,294
Nonqualified deferred compensation	2	1,293		1,293		987		987
Other investment securities	2	365		365		60		60
Other investment securities (a)		43,209		43,209		42,708		42,708
Net loans	3	2,812,176		3,076,717		2,708,583		2,907,537
Loans held for sale	2	5,928		6,353		5,470		5,492
Bank owned life insurance	3	69,909		69,909		68,934		68,934
Servicing rights (b)	3	2,571		3,617		2,655		4,568
Liabilities:
Deposits	2	$	3,363,613	$	3,335,686	$	2,955,465	$	2,953,452
Short-term borrowings	2	186,457		187,337		356,198		349,994
Long-term borrowings	2	85,691		84,933		109,644		107,696

(a) Other investment securities, as reported on the Unaudited Consolidated Balance Sheets, also includes equity investment securities for 2018, which are reported in the Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis table above.

(b) Included in other intangible assets on the Unaudited Consolidated Balance Sheets. Servicing rights are carried at the lower of cost or market value.

 For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument.  These instruments include cash and cash equivalents, demand and other non-maturity deposits, and overnight borrowings.  Peoples used the following methods and assumptions in estimating the fair value of the following financial instruments:

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, balances due from other banks, interest-bearing deposits in other banks, federal funds sold and other short-term investments with original maturities of ninety days or less. The carrying amount for cash and due from banks is a reasonable estimate of fair value. (Level 1).

Held-to-Maturity Investment Securities:The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, LIBOR yield curves, credit spreads and prices from market makers and live trading systems (Level 2). Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

Other Investment Securities: Other investment securities are measured at their respective redemption values due to restrictions placed on their transferability (Level 2).

Net Loans: The fair value of portfolio loans assumes sale of the notes to a third-party financial investor. Accordingly, this value is not necessarily the value to Peoples if the notes were held to maturity.  Peoples considered interest rate, credit and market factors in estimating the fair value of loans (Level 3). Fair values for loans are

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estimated using a discounted cash flow methodology. The discount rates take into account interest rates currently being offered to customers for loans with similar terms, the credit risk associated with the loan and other market factors, including liquidity.

Loans Held for Sale:Loans originated and intended to be sold in the secondary market, generally 1-4 family residential loans, are carried, in aggregate, at the lower of cost or estimated fair value. The use of a valuation model using quoted prices of similar instruments are significant inputs in arriving at the fair value (Level 2).

Bank Owned Life Insurance: Peoples' bank owned life insurance policies are recorded at their cash surrender value (Level 3). Peoples recognizes tax-exempt income from the periodic increases in the cash surrender value of these policies and from death benefits.

Servicing Rights: The fair value of the servicing rights is determined by using a discounted cash flow model, which estimates the present value of the future net cash flows of the servicing portfolio based on various factors, such as servicing costs, expected prepayment speeds and discount rates (Level 3).

Deposits: The fair value of fixed maturity certificates of deposit ("CDs") is estimated using a discounted cash flow calculation based on current rates offered for deposits of similar remaining maturities (Level 2).

Short-term Borrowings: The fair value of short-term borrowings is estimated using discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 

Long-term Borrowings: The fair value of long-term borrowings is estimated using a discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 

Certain financial assets and financial liabilities that are not required to be measured or reported at fair value can be subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  These financial assets and liabilities include the following: customer relationships, deposit base, banking center networks, and other information required to compute Peoples’ aggregate fair value that are not included in the above information.  Accordingly, the above fair values are not intended to represent the aggregate fair value of Peoples.

Note 3 Investment Securities

Available-for-sale

The following table summarizes Peoples' available-for-sale investment securities:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2019
Obligations of:
U.S. government sponsored agencies	$	18,606	$	445	$	—		$	19,051
States and political subdivisions	122,809		2,721		(112		)	125,418
Residential mortgage-backed securities	742,164		8,770		(2,802		)	748,132
Commercial mortgage-backed securities	22,656		148		(140		)	22,664
Bank-issued trust preferred securities	4,196		100		(197		)	4,099
Total available-for-sale securities	$	910,431	$	12,184	$	(3,251	)	$	919,364
December 31, 2018
Obligations of:
States and political subdivisions	$	88,358	$	787	$	(558	)	$	88,587
Residential mortgage-backed securities	705,289		2,720		(15,401		)	692,608
Commercial mortgage-backed securities	6,812		—		(105		)	6,707
Bank-issued trust preferred securities	4,196		75		(282		)	3,989
Total available-for-sale securities	$	804,655	$	3,582	$	(16,346	)	$	791,891

The unrealized losses related to residential mortgage-backed securities at June 30, 2019 and December 31, 2018, were attributed to changes in market interest rates and spreads since the securities were purchased.

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The gross gains and gross losses realized by Peoples from sales of available-for-sale securities for the periods ended June 30 were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross gains realized	$	30		$	3		$	60		$	5
Gross losses realized	87			150			87			151
Net losses realized	$	(57	)	$	(147	)	$	(27	)	$	(146	)

The cost of investment securities sold, and any resulting gain or loss, was based on the specific identification method and recognized as of the trade date.

The following table presents a summary of available-for-sale investment securities that had an unrealized loss:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
June 30, 2019
Obligations of:
States and political subdivisions	$	—	$	—	—	$	8,020	$	112	5	$	8,020	$	112
Residential mortgage-backed securities	17,932		154		7	226,208		2,648		77	244,140		2,802
Commercial mortgage-backed securities	—		—		—	6,380		140		5	6,380		140
Bank-issued trust preferred securities	—		—		—	1,803		197		2	1,803		197
Total	$	17,932	$	154	7	$	242,411	$	3,097	89	$	260,343	$	3,251
December 31, 2018
Obligations of:
States and political subdivisions	$	10,173	$	18	17	$	19,918	$	540	20	$	30,091	$	558
Residential mortgage-backed securities	47,562		226		50	517,335		15,175		170	564,897		15,401
Commercial mortgage-backed securities	—		—		—	6,707		105		3	6,707		105
Bank-issued trust preferred securities	—		—		—	1,718		282		2	1,718		282
Total	$	57,735	$	244	67	$	545,678	$	16,102	195	$	603,413	$	16,346

Management systematically evaluates available-for-sale investment securities for other-than-temporary declines in fair value on a quarterly basis.  At June 30, 2019, management concluded no individual securities were other-than-temporarily impaired since Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery. Further, the unrealized losses at both June 30, 2019 and December 31, 2018 were largely attributable to changes in market interest rates and spreads since the securities were purchased.

At June 30, 2019, approximately 99% of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S. government sponsored agencies. The remaining 1%, or two positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004. Both of these positions had a fair value of less than 90% of their book value, with an aggregate book and fair value of $211,000 and $147,000, respectively. Management analyzed the underlying credit quality of these securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities.

The unrealized losses with respect to the two bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at June 30, 2019 were primarily attributable to the subordinated nature of the debt.

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The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at June 30, 2019.  The weighted-average yields are based on the amortized cost.  In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.  

(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
U.S. government sponsored agencies	$	—		$	2,984		$	14,644		$	978		$	18,606
States and political subdivisions	4,234			31,186			44,207			43,182			122,809
Residential mortgage-backed securities	1			1,919			60,647			679,597			742,164
Commercial mortgage-backed securities	—			17,107			1,848			3,701			22,656
Bank-issued trust preferred securities	—			—			4,196			—			4,196
Total available-for-sale securities	$	4,235		$	53,196		$	125,542		$	727,458		$	910,431
Fair value
Obligations of:
U.S. government sponsored agencies	$	—		$	3,041		$	15,011		$	999		$	19,051
States and political subdivisions	4,236			31,477			45,518			44,187			125,418
Residential mortgage-backed securities	1			1,934			60,507			685,690			748,132
Commercial mortgage-backed securities	—			17,195			1,904			3,565			22,664
Bank-issued trust preferred securities	—			—			4,099			—			4,099
Total available-for-sale securities	$	4,237		$	53,647		$	127,039		$	734,441		$	919,364
Total weighted-average yield	2.36		%	2.52		%	2.77		%	2.93		%	2.88		%

Held-to-Maturity

The following table summarizes Peoples’ held-to-maturity investment securities:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2019
Obligations of:
States and political subdivisions	$	4,398	$	482	$	—		$	4,880
Residential mortgage-backed securities	23,335		256		(140		)	23,451
Commercial mortgage-backed securities	7,106		310		—			7,416
Total held-to-maturity securities	$	34,839	$	1,048	$	(140	)	$	35,747
December 31, 2018
Obligations of:
States and political subdivisions	$	4,403	$	493	$	—		$	4,896
Residential mortgage-backed securities	29,044		191		(632		)	28,603
Commercial mortgage-backed securities	3,514		—		(50		)	3,464
Total held-to-maturity securities	$	36,961	$	684	$	(682	)	$	36,963

There were no gross gains or gross losses realized by Peoples from sales of held-to-maturity securities for any of the three and six months ended June 30, 2019 and 2018.

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The following table presents a summary of held-to-maturity investment securities that had an unrealized loss:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
June 30, 2019
Residential mortgage-backed securities	$	—	$	—	—	$	11,639	$	140	3	$	11,639	$	140
Total	$	—	$	—	—	$	11,639	$	140	3	$	11,639	$	140
December 31, 2018
Residential mortgage-backed securities	$	—	$	—	—	$	13,102	$	632	5	$	13,102	$	632
Commercial mortgage-backed securities	—		—		—	3,464		50		1	3,464		50
Total	$	—	$	—	—	$	16,566	$	682	6	$	16,566	$	682

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at June 30, 2019.  The weighted-average yields are based on the amortized cost.  In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date. 

(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
States and political subdivisions	$	305		$	—		$	2,984		$	1,109		$	4,398
Residential mortgage-backed securities	—			—			4,002			19,333			23,335
Commercial mortgage-backed securities	—			410			3,893			2,803			7,106
Total held-to-maturity securities	$	305		$	410		$	10,879		$	23,245		$	34,839
Fair value
Obligations of:
States and political subdivisions	$	307		$	—		$	3,458		$	1,115		$	4,880
Residential mortgage-backed securities	—			—			4,070			19,381			23,451
Commercial mortgage-backed securities	—			412			4,196			2,808			7,416
Total held-to-maturity securities	$	307		$	412		$	11,724		$	23,304		$	35,747
Total weighted-average yield	2.62		%	2.29		%	1.49		%	2.81		%	2.83		%

Other Investment Securities

Peoples' other investment securities on the Unaudited Consolidated Balance Sheet consist largely of shares of FHLB of Cincinnati and FRB of Cleveland stock, and other equity investment securities.

The following table summarizes the carrying value of Peoples' other investment securities:

(Dollars in thousands)	June 30, 2019		December 31, 2018
FHLB stock	$	29,257	$	29,367
FRB stock	12,294		12,294
Nonqualified deferred compensation	1,293		987
Equity investment securities	299		277
Other investment securities	365		60
Total other investment securities	$	43,508	$	42,985

Peoples redeemed $1.1 million during the second quarter of 2019 and $1.8 million during the first quarter of 2019 of FHLB stock to be in compliance with requirements of the FHLB of Cincinnati.

During the three and six months ended June 30, 2019, Peoples recorded the change in the fair value of equity investment securities held at June 30, 2019 in other non-interest income, resulting in unrealized gains of zero and $22,000, respectively. During the three and six months ended June 30, 2018, Peoples recorded the change in the fair value of equity investment securities held at June 30, 2018 in other non-interest income, resulting in unrealized losses of $658,000 and $198,000,

15

respectively. Net realized gains on sales of equity investment securities, included in other non-interest income during the first six months of 2019, consisted of a realized gain of $787,000 related to the sale of restricted Class B Visa stock, which had been held at a carrying cost and fair value of zero due to the litigation liability associated with the stock.

At June 30, 2019, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies. There were no equity investment securities of a single issuer that exceeded 10% of Peoples' stockholders' equity.

Pledged Securities

Peoples had pledged available-for-sale investment securities with carrying values of $499.5 million and $430.0 million at June 30, 2019 and December 31, 2018, respectively, and held-to-maturity investment securities with carrying values of $14.6 million and $16.9 million at June 30, 2019 and December 31, 2018, respectively, to secure public and trust department deposits, and repurchase agreements in accordance with federal and state requirements.  Peoples also pledged available-for-sale investment securities with carrying values of $54.3 million and $60.1 million at June 30, 2019 and December 31, 2018, respectively, and held-to-maturity securities with carrying values of $15.6 million and $16.7 million at June 30, 2019 and December 31, 2018, respectively, to secure additional borrowing capacity at the FHLB and the FRB.

Note 4 Loans

Peoples' loan portfolio consists of various types of loans originated primarily as a result of lending opportunities within Peoples' primary market areas of northeastern, central, southwestern and southeastern Ohio, west central West Virginia, and central and eastern Kentucky. Acquired loans consist of loans purchased in 2012 or thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals and increases in lines of credit). 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)	June 30, 2019		December 31, 2018
Originated loans:
Commercial real estate, construction	$	102,904	$	124,013
Commercial real estate, other	641,061		632,200
Commercial real estate	743,965		756,213
Commercial and industrial	548,460		530,207
Residential real estate	299,173		296,860
Home equity lines of credit	90,374		93,326
Consumer, indirect	419,595		407,167
Consumer, direct	72,209		71,674
Consumer	491,804		478,841
Deposit account overdrafts	676		583
Total originated loans	$	2,174,452	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	6,775	$	12,404
Commercial real estate, other	201,909		184,711
Commercial real estate	208,684		197,115
Commercial and industrial	51,506		35,537
Residential real estate	348,439		296,937
Home equity lines of credit	41,262		40,653
Consumer, indirect	90		136
Consumer, direct	9,100		2,370
Consumer	9,190		2,506
Total acquired loans	$	659,081	$	572,748
Total loans	$	2,833,533	$	2,728,778

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Peoples has acquired various loans through business combinations for which there was, at acquisition, evidence of deterioration of credit quality since origination, and for which it was probable that all contractually required payments would not be collected. The carrying amounts of these purchased credit impaired loans included in the loan balances above are summarized as follows:

(Dollars in thousands)	June 30, 2019		December 31, 2018
Commercial real estate	$	13,116	$	11,955
Commercial and industrial	4,479		1,287
Residential real estate	23,509		20,062
Consumer	640		58
Total outstanding balance	$	41,744	$	33,362
Net carrying amount	$	28,125	$	22,475

Changes in the accretable yield for purchased credit impaired loans for the six months ended June 30 were as follows:

(Dollars in thousands)	June 30, 2019			June 30, 2018
Balance, beginning of period	$	8,955		$	6,704
Additions:
ASB Financial Corp.	—			2,415
First Prestonsburg Bancshares Inc.	3,853			—
Accretion	(1,148		)	(897		)
Balance, June 30	$	11,660		$	8,222

The fair value of newly acquired loans is determined at the time of acquisition and Peoples completes annual re-estimations of cash flows on acquired purchased credit impaired loans in August of each year. At the end of each quarter, Peoples evaluates factors to determine if a material change has occurred in acquired purchased credit impaired loans, and if a re-estimation is needed. Factors evaluated to determine if a re-estimation is needed include changes in: risk ratings, maturity dates, charge-offs, payoffs, nonaccrual status, loans that have become past due and actual cash flows compared to the projected cash flows from the last re-estimation. Peoples evaluates these changes quarterly and compares the current status or activity to those at the previous cash flow re-estimation date, and the related materiality of the changes. As of June 30, 2019, these changes, when compared to the total loan portfolio and the factors at the last re-estimation date, would not have a material impact on amounts recorded since the last re-estimation. Peoples completed a re-estimation of cash flows on purchased credit impaired loans in August 2018.

Cash flows expected to be collected on purchased credit impaired loans are estimated by incorporating several key assumptions, similar to the initial estimate of fair value. These key assumptions include probability of default and the amount of actual prepayments after the acquisition date. Prepayments affect the estimated life of the loans and could change the amount of interest income and possibly the principal expected to be collected. In re-forecasting future estimated cash flows, credit loss expectations are adjusted as necessary.

Pledged Loans

Peoples pledges certain loans secured by 1-4 family and multifamily residential mortgages under a blanket collateral agreement to secure borrowings from the FHLB of Cincinnati. The amount of loans pledged under this blanket collateral agreement totaled $488.4 million and $505.7 million at June 30, 2019 and December 31, 2018, respectively. Peoples also pledges commercial loans to secure borrowings with the FRB of Cleveland. The outstanding balances of these loans totaled $153.0 million and $180.9 million at June 30, 2019 and December 31, 2018, respectively.

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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 recorded investments in loans on nonaccrual status and loans delinquent for 90 days or more and accruing were as follows:

	Nonaccrual Loans				Loans 90+ Days Past Due and Accruing
(Dollars in thousands)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Originated loans:
Commercial real estate, construction	$	688	$	710	$	—	$	—
Commercial real estate, other	6,241		6,565		—		786
Commercial real estate	6,929		7,275		—		786
Commercial and industrial	2,044		1,673		—		—
Residential real estate	3,816		4,105		438		398
Home equity lines of credit	452		596		53		7
Consumer, indirect	535		480		—		—
Consumer, direct	12		56		—		—
Consumer	547		536		—		—
Total originated loans	$	13,788	$	14,185	$	491	$	1,191
Acquired loans:
Commercial real estate, construction	$	—	$	—	$	230	$	—
Commercial real estate, other	308		319		557		15
Commercial real estate	308		319		787		15
Commercial and industrial	36		36		261		18
Residential real estate	1,716		1,921		1,853		1,032
Home equity lines of credit	742		637		—		—
Consumer, direct	1		—		57		—
Total acquired loans	$	2,803	$	2,913	$	2,958	$	1,065
Total loans	$	16,591	$	17,098	$	3,449	$	2,256

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The following table presents the aging of the recorded investment in past due loans:

	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
June 30, 2019
Originated loans:
Commercial real estate, construction	$	—	$	—	$	688	$	688	$	102,216	$	102,904
Commercial real estate, other	—		—		6,050		6,050		635,011		641,061
Commercial real estate	—		—		6,738		6,738		737,227		743,965
Commercial and industrial	606		3		1,937		2,546		545,914		548,460
Residential real estate	1,391		1,177		2,478		5,046		294,127		299,173
Home equity lines of credit	387		18		461		866		89,508		90,374
Consumer, indirect	3,024		216		111		3,351		416,244		419,595
Consumer, direct	306		17		2		325		71,884		72,209
Consumer	3,330		233		113		3,676		488,128		491,804
Deposit account overdrafts	—		—		—		—		676		676
Total originated loans	$	5,714	$	1,431	$	11,727	$	18,872	$	2,155,580	$	2,174,452
Acquired loans:
Commercial real estate, construction	$	—	$	—	$	230	$	230	$	6,545	$	6,775
Commercial real estate, other	661		728		773		2,162		199,747		201,909
Commercial real estate	661		728		1,003		2,392		206,292		208,684
Commercial and industrial	488		60		297		845		50,661		51,506
Residential real estate	1,685		2,075		2,700		6,460		341,979		348,439
Home equity lines of credit	228		109		563		900		40,362		41,262
Consumer, indirect	—		—		—		—		90		90
Consumer, direct	88		52		57		197		8,903		9,100
Consumer	88		52		57		197		8,993		9,190
Total acquired loans	$	3,150	$	3,024	$	4,620	$	10,794	$	648,287	$	659,081
Total loans	$	8,864	$	4,455	$	16,347	$	29,666	$	2,803,867	$	2,833,533

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	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
December 31, 2018
Originated loans:
Commercial real estate, construction	$	—	$	—	$	710	$	710	$	123,303	$	124,013
Commercial real estate, other	12		736		7,151		7,899		624,301		632,200
Commercial real estate	12		736		7,861		8,609		747,604		756,213
Commercial and industrial	1,678		3,520		1,297		6,495		523,712		530,207
Residential real estate	4,457		1,319		2,595		8,371		288,489		296,860
Home equity lines of credit	531		30		431		992		92,334		93,326
Consumer, indirect	3,266		488		165		3,919		403,248		407,167
Consumer, direct	308		50		42		400		71,274		71,674
Consumer	3,574		538		207		4,319		474,522		478,841
Deposit account overdrafts	—		—		—		—		583		583
Total originated loans	$	10,252	$	6,143	$	12,391	$	28,786	$	2,127,244	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	511	$	—	$	—	$	511	$	11,893	$	12,404
Commercial real estate, other	523		457		233		1,213		183,498		184,711
Commercial real estate	1,034		457		233		1,724		195,391		197,115
Commercial and industrial	111		13		18		142		35,395		35,537
Residential real estate	6,124		1,823		1,885		9,832		287,105		296,937
Home equity lines of credit	238		233		534		1,005		39,648		40,653
Consumer, indirect	—		—		—		—		136		136
Consumer, direct	23		6		—		29		2,341		2,370
Consumer	23		6		—		29		2,477		2,506
Total acquired loans	$	7,530	$	2,532	$	2,670	$	12,732	$	560,016	$	572,748
Total loans	$	17,782	$	8,675	$	15,061	$	41,518	$	2,687,260	$	2,728,778

Delinquency trends remained stable, as 99.0% of Peoples' portfolio was considered “current” at June 30, 2019, compared to 98.5% at December 31, 2018.

Credit Quality Indicators

As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 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. A description of the general characteristics of the risk grades used by Peoples is as 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 grade 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 loan. They are characterized by the distinct possibility that Peoples will sustain some loss if the deficiencies 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

20

current 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 the loan 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 loan 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. 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 based upon the most recent analysis performed:

	Pass Rated (Grades 1 - 4)		Special Mention (Grade 5)		Substandard (Grade 6)		Doubtful (Grade 7)		Not Rated		Total Loans
(Dollars in thousands)
June 30, 2019
Originated loans:
Commercial real estate, construction	$	100,231	$	—	$	1,431	$	—	$	1,242	$	102,904
Commercial real estate, other	622,966		7,673		10,416		6		—		641,061
Commercial real estate	723,197		7,673		11,847		6		1,242		743,965
Commercial and industrial	525,738		5,807		16,915		—		—		548,460
Residential real estate	13,752		201		14,682		249		270,289		299,173
Home equity lines of credit	17		—		—		—		90,357		90,374
Consumer, indirect	—		—		—		—		419,595		419,595
Consumer, direct	24		—		—		—		72,185		72,209
Consumer	24		—		—		—		491,780		491,804
Deposit account overdrafts	—		—		—		—		676		676
Total originated loans	$	1,262,728	$	13,681	$	43,444	$	255	$	854,344	$	2,174,452
Acquired loans:
Commercial real estate, construction	$	4,338	$	1,636	$	801	$	—	$	—	$	6,775
Commercial real estate, other	178,425		12,700		10,693		91		—		201,909
Commercial real estate	182,763		14,336		11,494		91		—		208,684
Commercial and industrial	43,171		3,265		5,038		32		—		51,506
Residential real estate	17,634		2,686		2,564		130		325,425		348,439
Home equity lines of credit	81		—		—		—		41,181		41,262
Consumer, indirect	1		—		—		—		89		90
Consumer, direct	19		—		—		—		9,081		9,100
Consumer	20		—		—		—		9,170		9,190
Total acquired loans	$	243,669	$	20,287	$	19,096	$	253	$	375,776	$	659,081
Total loans	$	1,506,397	$	33,968	$	62,540	$	508	$	1,230,120	$	2,833,533

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	Pass Rated (Grades 1 - 4)		Special Mention (Grade 5)		Substandard (Grade 6)		Doubtful (Grade 7)		Not Rated		Total Loans
(Dollars in thousands)
December 31, 2018
Originated loans:
Commercial real estate, construction	$	121,457	$	—	$	1,472	$	—	$	1,084	$	124,013
Commercial real estate, other	612,099		10,898		9,203		—		—		632,200
Commercial real estate	733,556		10,898		10,675		—		1,084		756,213
Commercial and industrial	476,290		45,990		7,692		—		235		530,207
Residential real estate	14,229		500		11,971		409		269,751		296,860
Home equity lines of credit	453		—		—		—		92,873		93,326
Consumer, indirect	8		—		—		—		407,159		407,167
Consumer, direct	30		—		—		—		71,644		71,674
Consumer	38		—		—		—		478,803		478,841
Deposit account overdrafts	—		—		—		—		583		583
Total originated loans	$	1,224,566	$	57,388	$	30,338	$	409	$	843,329	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	8,976	$	1,795	$	1,633	$	—	$	—	$	12,404
Commercial real estate, other	169,260		7,241		8,114		96		—		184,711
Commercial real estate	178,236		9,036		9,747		96		—		197,115
Commercial and industrial	32,471		2,008		1,058		—		—		35,537
Residential real estate	17,370		1,938		2,033		137		275,459		296,937
Home equity lines of credit	33		—		—		—		40,620		40,653
Consumer, indirect	4		—		—		—		132		136
Consumer, direct	31		—		—		—		2,339		2,370
Consumer	35		—		—		—		2,471		2,506
Total acquired loans	$	228,145	$	12,982	$	12,838	$	233	$	318,550	$	572,748
Total loans	$	1,452,711	$	70,370	$	43,176	$	642	$	1,161,879	$	2,728,778

In the first six months of 2019, Peoples' classified loans, which are loans categorized as substandard or doubtful, increased compared to the balances at December 31, 2018 mostly due to downgrades during the period combined with loans acquired in the First Prestonsburg merger, which were partially offset by paydowns on classified loans. At June 30, 2019, criticized loans, which are those categorized as special mention, substandard or doubtful, declined compared to the balance at December 31, 2018, largely due to the upgrade of two commercial relationships, partially offset by loans acquired in the First Prestonsburg merger.

At June 30, 2019, Peoples had a total of $2.2 million of loans secured by residential real estate mortgages that were in the process of foreclosure.

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Impaired Loans

The following table summarizes loans classified as impaired:

	Unpaid Principal Balance		Recorded Investment				Total Recorded Investment				Average Recorded Investment		Interest Income Recognized
			With Allowance		Without Allowance				Related Allowance
(Dollars in thousands)
June 30, 2019
Commercial real estate, construction	$	1,793	$	—	$	1,706	$	1,706	$	—	$	1,728	$	29
Commercial real estate, other	15,546		4,753		10,296		15,049		520		14,722		250
Commercial real estate	17,339		4,753		12,002		16,755		520		16,450		279
Commercial and industrial	4,265		1,485		2,731		4,216		449		3,226		47
Residential real estate	22,195		387		23,170		23,557		53		22,086		629
Home equity lines of credit	1,469		419		1,051		1,470		68		1,343		40
Consumer, indirect	445		96		356		452		23		413		15
Consumer, direct	464		49		415		464		18		207		9
Consumer	909		145		771		916		41		620		24
Total	$	46,177	$	7,189	$	39,725	$	46,914	$	1,131	$	43,725	$	1,019
December 31, 2018
Commercial real estate, construction	$	2,376	$	—	$	2,376	$	2,376	$	—	$	1,732	$	74
Commercial real estate, other	15,464		274		14,946		15,220		119		14,043		455
Commercial real estate	17,840		274		17,322		17,596		119		15,775		529
Commercial and industrial	3,305		790		2,436		3,226		157		2,423		72
Residential real estate	25,990		644		24,034		24,678		154		22,769		1,134
Home equity lines of credit	2,291		424		1,869		2,293		73		1,832		109
Consumer, indirect	496		—		503		503		—		278		15
Consumer, direct	79		22		57		79		6		63		20
Consumer	575		22		560		582		6		341		35
Total	$	50,001	$	2,154	$	46,221	$	48,375	$	509	$	43,140	$	1,879

Peoples' impaired loans shown in the table above included loans that were classified as troubled debt restructurings ("TDRs").

In assessing whether or not a borrower is experiencing financial difficulties, Peoples considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (i) the borrower is currently in payment default on any of the borrower's debt; (ii) a payment default is probable in the foreseeable future without the modification; (iii) the borrower has declared or is in the process of declaring bankruptcy; and (iv) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification.

Peoples considers all aspects of the modification to loan terms to determine whether a concession has been granted to the borrower. Key factors considered by Peoples include the borrower's ability to access funds at a market rate for debt with similar risk characteristics, the significance of the modification relative to the unpaid principal balance or collateral value of the debt, and the significance of a delay in the timing of payments relative to the original contractual terms of the loan. The most common concessions granted by Peoples generally include one or more modifications to the terms of the loan, such as (i) a reduction in the interest rate for the remaining life of the loan, (ii) an extension of the maturity date at an interest rate lower than the current market rate for new loans with similar risk, (iii) a temporary period of interest-only payments, and (iv) a reduction in the contractual payment amount for either a short period or the remaining term of the loan.

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The following table summarizes the loans that were modified as a TDR during the three months ended June 30:

		Three Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2019
Originated loans:
Residential real estate	1	$	37	$	37	$	37
Home equity lines of credit	2	60		60		60
Consumer, indirect	7	110		110		110
Consumer, direct	3	41		41		41
Consumer	10	151		151		151
Total originated loans	13	$	248	$	248	$	248
Acquired loans:
Commercial real estate, other	7	$	725	$	699	$	700
Commercial and industrial	4	1,259		1,259		1,259
Residential real estate	35	1,823		1,823		1,823
Home equity lines of credit	7	113		113		113
Consumer, direct	16	340		340		340
Total acquired loans	69	$	4,260	$	4,234	$	4,235
June 30, 2018
Originated loans:
Residential real estate	5	$	717	$	717	$	717
Home equity lines of credit	3	61		61		61
Consumer, indirect	14	230		230		230
Consumer, direct	5	27		27		27
Consumer	19	257		257		257
Total originated loans	27	$	1,035	$	1,035	$	1,035
Acquired loans:
Residential real estate	11	$	720	$	720	$	720
Home equity lines of credit	4	86		86		86
Consumer, direct	3	57		57		57
Total acquired loans	18	$	863	$	863	$	863
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period-end are not reported.

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		Six Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2019
Originated loans:
Commercial and industrial	2	$	38	$	38	$	35
Residential real estate	3	436		440		437
Home equity lines of credit	4	139		139		139
Consumer, indirect	8	123		123		123
Consumer, direct	5	69		69		67
Consumer	13	192		192		190
Total originated loans	22	$	805	$	809	$	801
Acquired loans:
Commercial real estate, other	7	$	724	$	699	$	700
Commercial and industrial	4	1,259		1,259		1,259
Residential real estate	36	1,847		1,847		1,842
Home equity lines of credit	9	179		179		178
Consumer, direct	16	340		340		340
Total acquired loans	72	$	4,349	$	4,324	$	4,319
June 30, 2018
Originated loans:
Residential real estate	7	$	910	$	910	$	911
Home equity lines of credit	3	61		61		61
Consumer, indirect	21	316		316		302
Consumer, direct	7	31		31		31
Consumer	28	347		347		333
Total originated loans	38	$	1,318	$	1,318	$	1,305
Acquired loans:
Commercial real estate, other	1	$	50	$	50	$	48
Residential real estate	13	989		989		989
Home equity lines of credit	4	86		86		86
Consumer, direct	3	57		57		57
Total acquired loans	21	$	1,182	$	1,182	$	1,180
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

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The following table presents those acquired loans modified in a TDR during the year that subsequently defaulted (i.e., were 90 days or more past due following a modification) during the six-month periods ended June 30:

	June 30, 2019					June 30, 2018
(Dollars in thousands)	Number of Contracts	Recorded Investment (a)		Impact on the Allowance for Loan Losses		Number of Contracts	Recorded Investment (a)		Impact on the Allowance for Loan Losses
Acquired loans:
Consumer, direct	1	$	34	$	—	—	$	—	$	—
Total	1	$	34	$	—	—	$	—	$	—
(a) The amount shown is inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Peoples did not have any originated loans that were modified as a TDR during the last twelve months that subsequently defaulted. Peoples had no commitments to lend additional funds to the related debtors whose terms have been modified in a TDR.

Allowance for Originated Loan Losses

Changes in the allowance for originated loan losses for the six months ended June 30 were as follows:

(Dollars in thousands)	Commercial Real Estate			Commercial and Industrial			Residential Real Estate			Home Equity Lines of Credit			Consumer Indirect			Consumer Direct			Deposit Account Overdrafts			Total
Balance, January 1, 2019	$	8,003		$	6,178		$	1,214		$	618		$	3,214		$	351		$	81		$	19,659
Charge-offs	(153		)	(63		)	(176		)	(9		)	(819		)	(96		)	(349		)	(1,665		)
Recoveries	12			2,012			133			2			162			40			106			2,467
Net (charge-offs) recoveries	(141		)	1,949			(43		)	(7		)	(657		)	(56		)	(243		)	802
Provision for (recoveries of) loan losses	383			(930		)	13			(13		)	615			47			248			363
Balance, June 30, 2019	$	8,245		$	7,197		$	1,184		$	598		$	3,172		$	342		$	86		$	20,824
Balance, January 1, 2018	$	7,797		$	5,813		$	904		$	693		$	2,944		$	464		$	70		$	18,685
Charge-offs	(849		)	(38		)	(227		)	(57		)	(1,479		)	(219		)	(420		)	(3,289		)
Recoveries	43			—			67			9			272			84			116			591
Net charge-offs	(806		)	(38		)	(160		)	(48		)	(1,207		)	(135		)	(304		)	(2,698		)
Provision for (recovery of) loan losses	1,280			(410		)	261			(27		)	1,602			136			329			3,171
Balance, June 30, 2018	$	8,271		$	5,365		$	1,005		$	618		$	3,339		$	465		$	95		$	19,158

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The following table details the recorded investment and allowance for originated loan losses disaggregated based on impairment method:

(Dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Residential Real Estate		Home Equity Lines of Credit		Consumer Indirect		Consumer Direct		Deposit Account Overdrafts		Total
June 30, 2019
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	520	$	449	$	53	$	68	$	23	$	18	$	—	$	1,131
Loans collectively evaluated for impairment	7,725		6,748		1,131		530		3,149		324		86		19,693
Ending balance	$	8,245	$	7,197	$	1,184	$	598	$	3,172	$	342	$	86	$	20,824
Recorded investment in:
Loans individually evaluated for impairment	$	16,755	$	4,216	$	23,557	$	1,470	$	452	$	464	$	—	$	46,914
Loans collectively evaluated for impairment	727,210		544,244		275,616		88,904		419,143		71,745		676		2,127,538
Ending balance	$	743,965	$	548,460	$	299,173	$	90,374	$	419,595	$	72,209	$	676	$	2,174,452
December 31, 2018
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	119	$	157	$	154	$	73	$	—	$	6	$	—	$	509
Loans collectively evaluated for impairment	7,884		6,021		1,060		545		3,214		345		81		19,150
Ending balance	$	8,003	$	6,178	$	1,214	$	618	$	3,214	$	351	$	81	$	19,659
Recorded investment in:
Loans individually evaluated for impairment	$	17,596	$	3,226	$	24,678	$	2,293	$	503	$	79	$	—	$	48,375
Loans collectively evaluated for impairment	738,617		526,981		272,182		91,033		406,664		71,595		583		2,107,655
Ending balance	$	756,213	$	530,207	$	296,860	$	93,326	$	407,167	$	71,674	$	583	$	2,156,030
June 30, 2018
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	1	$	191	$	47	$	14	$	31	$	45	$	—	$	329
Loans collectively evaluated for impairment	8,270		5,174		958		604		3,308		420		95		18,829
Ending balance	$	8,271	$	5,365	$	1,005	$	618	$	3,339	$	465	$	95	$	19,158
Recorded investment in:
Loans individually evaluated for impairment	$	19,162	$	3,173	$	26,497	$	1,736	$	441	$	150	$	—	$	51,159
Loans collectively evaluated for impairment	737,051		468,097		273,437		88,221		372,943		71,395		860		2,012,004
Ending balance	$	756,213	$	471,270	$	299,934	$	89,957	$	373,384	$	71,545	$	860	$	2,063,163

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Allowance for Loan Losses for Acquired Loans

Acquired loans are recorded at their fair value as of the acquisition date with no valuation allowance, and monitored for changes in credit quality and subsequent increases or decreases in expected cash flows. Decreases in expected cash flows of acquired purchased credit impaired loans are recognized as an impairment, with the amount of the expected loss included in management's evaluation of the appropriateness of the allowance for loan losses. The methods utilized to estimate the required allowance for loan losses for non-impaired acquired loans are similar to those utilized for originated loans; however, Peoples records a provision for loan losses only when the computed allowance exceeds the remaining fair value adjustment.

The following table presents activity in the allowance for loan losses for acquired loans:

	Three Months Ended				Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2018		June 30, 2019			June 30, 2018
Non-impaired loans:
Balance, beginning of period	$	380	$	—	$	383		$	—
Charge-offs	—		—		(3		)	—
Balance, end of period	$	380	$	—	$	380		$	—
Purchased credit impaired loans:
Balance, beginning of period	$	153	$	108	$	153		$	108
Balance, end of period	$	153	$	108	$	153		$	108

The allowance for loan losses for non-impaired acquired loans was established at December 31, 2018.

Note 5 Long-Term Borrowings

The following table summarizes Peoples' long-term borrowings:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Balance		Weighted- Average Rate		Balance		Weighted- Average Rate
FHLB putable, non-amortizing, fixed-rate advances	$	65,000	2.18	%	$	85,000	2.05	%
FHLB amortizing, fixed-rate advances	13,324		1.73	%	17,361		2.09	%
Junior subordinated debt securities	7,367		7.34	%	7,283		7.83	%
Total long-term borrowings	$	85,691	2.55	%	$	109,644	2.44	%

Peoples continually evaluates its overall balance sheet position given the interest rate environment. During the first six months of 2019, no additional borrowings were entered into, and two long-term FHLB non-amortizing advances totaling $20.0 million were reclassified to short-term borrowings as the maturity became less than one year.

As of June 30, 2019, Peoples had one remaining FHLB putable option-based advance. The FHLB has the option, at its sole discretion, to terminate the advance after the initial fixed rate period of three months, requiring full repayment of the advance by Peoples prior to the stated maturity. If the advance is terminated prior to maturity, the FHLB will offer Peoples replacement funding at the then-prevailing rate on an advance product then offered by the FHLB, subject to normal FHLB credit and collateral requirements. Peoples is required to make quarterly interest payments.

The amortizing, fixed-rate FHLB advances have a fixed rate for the term of each advance, with maturities ranging from eight to thirteen years. These advances require monthly principal and interest payments, with some having a constant prepayment rate requiring an additional principal payment annually. These advances are not eligible for optional prepayment prior to maturity.

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The aggregate minimum annual retirements of long-term borrowings in future periods are as follows:

(Dollars in thousands)	Balance		Weighted-Average Rate
Six months ending December 31, 2019	$	2,568	1.48	%
Year ending December 31, 2020	2,555		1.35	%
Year ending December 31, 2021	21,979		1.74	%
Year ending December 31, 2022	16,521		1.95	%
Year ending December 31, 2023	1,157		1.06	%
Thereafter	40,911		3.41	%
Total long-term borrowings	$	85,691	2.55	%

Effective April 3, 2019, Peoples terminated the Credit Agreement, dated as of March 4, 2016, between Peoples, as Borrower, and Raymond James Bank, N.A., as Lender (the "RJB Credit Agreement"), with a revolving line of credit in the maximum aggregate principal amount of $15.0 million. As of the termination date, April 3, 2019, and December 31, 2018, there were no borrowings outstanding under the RJB Credit Agreement. Additional information regarding the RJB Credit Agreement can be found in "Note 9 Long-Term Borrowings" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10-K.

Note 6 Stockholders’ Equity

The following table details the progression in Peoples’ common shares and treasury stock during the six months ended June 30, 2019:

	Common Stock	Treasury Stock
Shares at December 31, 2018	20,124,378	601,289
Changes related to stock-based compensation awards:
Release of restricted common shares	—	17,481
Cancellation of restricted common shares	—	3,465
Grant of restricted common shares	—	(122,286	)
Grant of common shares	—	(4,680	)
Changes related to deferred compensation plan for Boards of Directors:
Purchase of treasury stock	—	3,834
Disbursed out of treasury stock	—	(2,187	)
Common shares issued under dividend reinvestment plan	12,400	—
Common shares issued under compensation plan for Boards of Directors	—	(3,490	)
Common shares issued under employee stock purchase plan	—	(3,624	)
Issuance of common shares related to the merger with First Prestonsburg Bancshares Inc.	1,005,478	—
Shares at June 30, 2019	21,142,256	489,802

Under its Amended Articles of Incorporation, Peoples is authorized to issue up to 50,000 preferred shares, in one or more series, having such voting powers, designations, preferences, rights, qualifications, limitations and restrictions as determined by Peoples' Board of Directors. At June 30, 2019, Peoples had no preferred shares issued or outstanding.

The following table details the cash dividends declared per common share during 2019 and the comparable period of 2018:

	2019		2018
First quarter	$	0.30	$	0.26
Second quarter	0.34		0.28
Third quarter	0.34		0.28
Total dividends declared	$	0.98	$	0.82

Accumulated Other Comprehensive Income (Loss)

The following table details the change in the components of Peoples’ accumulated other comprehensive income (loss) for the six months ended June 30, 2019:

(Dollars in thousands)	Unrealized Gain (Loss) on Securities			Unrecognized Net Pension and Postretirement Costs			Unrealized Gain (Loss) on Cash Flow Hedge			Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2018	$	(10,082	)	$	(3,711	)	$	860		$	(12,933	)
Reclassification adjustments to net income:
Realized gain on sale of securities, net of tax	21			—			—			21
Other comprehensive income (loss), net of reclassifications and tax	17,121			31			(3,924		)	13,228
Balance, June 30, 2019	$	7,060		$	(3,680	)	$	(3,064	)	$	316

Note 7 Employee Benefit Plans

Peoples sponsors a noncontributory defined benefit pension plan that covers substantially all employees hired before January 1, 2010.  The plan provides retirement benefits based on an employee’s years of service and compensation.  For employees hired before January 1, 2003, the amount of postretirement benefit is based on the employee’s average monthly compensation over the highest five consecutive years out of the employee’s last ten years with Peoples while an eligible employee.  For employees hired on or after January 1, 2003, the amount of postretirement benefit is based on 2% of the employee’s annual compensation during the years 2003 through 2009, plus accrued interest. Effective January 1, 2010, the pension plan was closed to new entrants.  Effective March 1, 2011, the accrual of pension plan benefits for all participants was frozen. Peoples recognized this freeze as a curtailment as of December 31, 2010 and March 1, 2011, under the terms of the pension plan. Effective July 1, 2013, a participant in the pension plan who is employed by Peoples may elect to receive or to commence receiving such person's retirement benefits as of the later of such person's normal retirement date or the first day of the month first following the date such person makes an election to receive his or her retirement benefits.

Peoples also provides post-retirement health and life insurance benefits to certain former employees and directors. Only those individuals who retired before January 27, 2012 were eligible for life insurance benefits. As of January 1, 2011, all retirees who desire to participate in the Peoples Bank medical plan do so by electing COBRA, which provides up to 18 months of coverage; retirees over the age of 65 also have the option to pay to participate in a group Medicare supplemental plan. Peoples only pays 100% of the cost for those individuals who retired before January 1, 1993. For all others, the retiree is responsible for most, if not all, of the cost of the health benefits.  Peoples’ policy is to fund the cost of the benefits as they arise.

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The following tables detail the components of the net periodic cost for the plans described above:

	Pension Benefits
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Interest cost	$	110		$	105		$	219		$	210
Expected return on plan assets	(196		)	(146		)	(391		)	(293		)
Amortization of net loss	20			27			39			55
Net periodic income	$	(66	)	$	(14	)	$	(133	)	$	(28	)

	Postretirement Benefits
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Interest cost	$	1		$	1		$	2		$	2
Amortization of prior service cost	(1		)	—			(1		)	—
Amortization of net loss	—			(1		)	(2		)	(3		)
Net periodic income	$	—		$	—		$	(1	)	$	(1	)

There were no settlement charges recorded during any of the three and six months ended June 30, 2019 and June 30, 2018 under the noncontributory defined benefit pension plan.

Note 8 Earnings Per Common Share

The calculations of basic and diluted earnings per common share were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands, except per common share data)	2019		2018		2019		2018
Distributed earnings allocated to common shareholders	$	6,935	$	5,407	$	12,711	$	10,123
Undistributed earnings allocated to common shareholders	2,568		2,427		11,067		9,389
Net earnings allocated to common shareholders	$	9,503	$	7,834	$	23,778	$	19,512
Weighted-average common shares outstanding	20,277,028		19,160,728		19,824,035		18,646,266
Effect of potentially dilutive common shares	165,338		132,653		148,315		126,903
Total weighted-average diluted common shares outstanding	20,442,366		19,293,381		19,972,350		18,773,169
Earnings per common share:
Basic	$	0.47	$	0.41	$	1.20	$	1.05
Diluted	$	0.46	$	0.41	$	1.19	$	1.04
Anti-dilutive common shares excluded from calculation:
Restricted shares	87		—		46		32

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Note 9 Derivative Financial Instruments

Peoples utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Derivatives and Hedging Activities - Risk Management Objective of Using Derivatives

Peoples is exposed to certain risks arising from both its business operations and economic conditions. Peoples principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Peoples manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities, and through the use of derivative financial instruments. Specifically, Peoples enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or expected cash amounts, the values of which are determined by interest rates. Peoples’ derivative financial instruments are used to manage differences in the amount, timing and duration of Peoples' known or expected cash receipts and its known or expected cash payments principally related to certain variable rate borrowings. Peoples also has interest rate derivatives that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in Peoples' assets or liabilities. Peoples manages a matched book with respect to customer-related derivative financial instruments in order to minimize its net risk exposure resulting from such transactions.

Cash Flow Hedges of Interest Rate Risk

Peoples' objectives in using interest rate derivatives are to add stability to interest income and expense, and to manage its exposure to interest rate movements. To accomplish these objectives, Peoples has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for Peoples making fixed payments. As of June 30, 2019, Peoples had entered into fifteen interest rate swap contracts with an aggregate notional value of $140.0 million. Peoples will pay a fixed rate of interest for up to ten years while receiving a floating rate component of interest equal to the three-month LIBOR rate. The interest received on the floating rate component is intended to offset the interest paid on rolling three-month FHLB advances or rolling three-month brokered certificates of deposit, which will continue to be rolled through the life of the swaps. Amounts reported in accumulated other comprehensive income (loss) ("AOCI"), related to derivatives will be reclassified to interest income or expense as interest payments are made or received on Peoples' variable-rate assets or liabilities. During the three and six months ended June 30, 2019, Peoples had reclassifications of gains to interest expense of $70,000 and $153,000, respectively, and during the three and six months ended June 30, 2018, Peoples had reclassifications of gains to interest expense of $28,000 and $16,000, respectively.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of each derivative is reported in AOCI (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. Peoples assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transaction. The reset dates and the payment dates on the 90-day advances or brokered certificates of deposit used to fund the swaps are matched to the reset dates and payment dates on the receipt of the 3-month LIBOR floating portion of the swaps to ensure effectiveness of the cash flow hedge. Effectiveness is measured by ensuring that reset dates and payment dates are matched. The amount of pre-tax AOCI for Peoples' cash flow hedges was $3.9 million at June 30, 2019.

The following table summarizes information about the interest rate swaps designated as cash flow hedges:

(Dollars in thousands)	June 30, 2019			December 31, 2018
Notional amount	$	140,000		$	110,000
Weighted average pay rates	2.27		%	2.37		%
Weighted average receive rates	1.80		%	2.57		%
Weighted average maturity	5.6 years			6.2 years
Unrealized gains	$	3,879		$	860

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The following table presents net losses or gains recorded in AOCI and in the Unaudited Consolidated Statements of Income related to the cash flow hedges:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Dollars in thousands)	2019		2018			2019			2018
Amount of loss (gain) recognized in AOCI, pre-tax	$	2,994	$	(529	)	$	4,661		$	(1,907	)
Amount of (gain) loss recognized in earnings	$	—	$	—		$	(19	)	$	30

The following table reflects the cash flow hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in other assets:
Interest rate swaps related to debt	$	35,000	$	316	$	60,000	$	2,093
Total included in other assets	$	35,000	$	316	$	60,000	$	2,093
Included in accrued expenses and other liabilities:
Interest rate swaps related to debt	$	105,000	$	4,363	$	50,000	$	1,111
Total included in accrued expenses and other liabilities	$	105,000	$	4,363	$	50,000	$	1,111

At June 30, 2019, Peoples had $14.4 million and no amount of cash pledged at December 31, 2018, against interest rate swaps related to debt, however, the counterparties had pledged no amount of cash and $130,000, respectively.

Non-Designated Hedges

Peoples maintains an interest rate protection program for commercial loan customers, which was established in 2010. Under this program, Peoples originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples on terms that match the terms of the loan. By entering into the interest rate swap with the customer, Peoples Bank effectively provides the customer with a fixed rate loan while creating a variable rate asset for Peoples Bank. Peoples Bank offsets its exposure in the swap by entering into an offsetting interest rate swap with an unaffiliated institution. These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative. Peoples had interest rate swaps associated with commercial loans with a gross notional value of $492.0 million and fair value of $9.7 million of equally offsetting assets and liabilities at June 30, 2019, and a gross notional value of $453.4 million and fair value of $2.5 million of equally offsetting assets and liabilities at December 31, 2018. These interest rate swaps did not have a material impact on Peoples' results of operation or financial condition.

The following table reflects the non-designated hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in other assets:
Interest rate swaps related to commercial loans	$	245,996	$	9,656	$	226,662	$	2,451
Total included in other assets	$	245,996	$	9,656	$	226,662	$	2,451
Included in accrued expenses and other liabilities:
Interest rate swaps related to commercial loans	$	245,996	$	9,656	$	226,662	$	2,451
Total included in accrued expenses and other liabilities	$	245,996	$	9,656	$	226,662	$	2,451

Peoples had no cash pledged against interest rate swaps related to commercial loans.

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Note 10 Stock-Based Compensation 

Under the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan (the "2006 Equity Plan"), Peoples may grant, among other awards, nonqualified stock options, incentive stock options, restricted common stock awards, stock appreciation rights ("SARs"), performance units and unrestricted common share awards to employees and non-employee directors. The total number of common shares available under the 2006 Equity Plan is 891,340.  The maximum number of common shares that can be issued for incentive stock options is 500,000 common shares. Prior to 2007, Peoples granted nonqualified and incentive stock options to employees and nonqualified stock options to non-employee directors under the 2006 Equity Plan and predecessor plans.  Since February 2009, Peoples has granted restricted common shares to employees, and periodically to non-employee directors, subject to the terms and conditions prescribed by the 2006 Equity Plan. Additionally, in 2018 and 2019, the Board of Directors granted unrestricted common shares to non-employee directors and to all full-time and part-time employees who did not already participate in the 2006 Equity Plan. In general, common shares issued in connection with stock-based awards are issued from treasury shares to the extent available.  If no treasury shares are available, common shares are issued from authorized but unissued common shares.

Restricted Common Shares

Under the 2006 Equity Plan, Peoples may award restricted common shares to officers, key employees and non-employee directors.  Since 2018, common shares awarded to non-employee directors have vested immediately upon grant with no restrictions. Restrictions on restricted common shares awarded to employees typically expire after periods ranging from one to three years. In the first six months of 2019, Peoples granted an aggregate of 117,200 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date provided that in order for the restricted common shares to vest in full, Peoples must have reported positive net income and maintained a well capitalized status by regulatory standards for each of the three fiscal years preceding the vesting date. During the first six months of 2019, Peoples granted, to certain key employees, an aggregate of 5,086 restricted common shares subject to time-based vesting with restrictions that will lapse three years after the grant date.

The following table summarizes the changes to Peoples’ restricted common shares for the six months ended June 30, 2019:

	Time-Based Vesting			Performance-Based Vesting
	Number of Common Shares	Weighted-Average Grant Date Fair Value		Number of Common Shares	Weighted-Average Grant Date Fair Value
Outstanding at January 1	43,679	$	29.64	175,772	$	31.08
Awarded	5,086	32.05		117,200	32.20
Released	17,500	21.69		33,400	17.86
Forfeited	2,852	37.79		613	34.50
Outstanding at June 30	28,413	$	34.16	258,959	$	33.29

For the six months ended June 30, 2019, the total intrinsic value for restricted common shares released was $1.6 million compared to $3.2 million for the six months ended June 30, 2018.

Performance Unit Awards

Under the 2006 Equity Plan, Peoples may grant performance unit awards to officers, key employees and non-employee directors.  On July 26, 2017, Peoples granted a total of seven performance unit awards to individuals who were then serving as officers, with a maximum aggregate dollar amount of $1.3 million represented by the performance units subject to such awards and each performance unit representing $1.00. As of June 30, 2019, one of seven performance unit awards had been forfeited as one of the individuals granted a performance unit award left Peoples before meeting the minimum service requirement to retain the performance unit award. The performance unit awards granted cover the performance period beginning January 1, 2018 and ending on December 31, 2019, and are subject to two performance goals. Twenty-five percent of the performance units subject to each award will vest if, but only if, the related company-specific target performance goal is achieved. The remaining 75% of the performance units subject to each award will vest based on the relative performance of Peoples compared to a defined peer group (measured by percentile ranking) with respect to the related maximum performance goal. If, for the performance period, the target level of achievement for the first performance goal and/or the maximum level of achievement for the second performance goal is not reached, the dollar amount represented by the performance units associated with each performance goal will be adjusted to reflect the level of performance achieved. After the vesting date, the participant will receive that number of common shares of Peoples equal to (i) the aggregate number of

33

the participant's performance units (and equivalent dollar value of such performance units) that vested based on the performance achieved under both performance goals (ii) divided by the fair market value of a common share of Peoples on the date the performance units are deemed to have vested (which will be the last day of the performance period) and rounded down to the nearest whole common share.

Stock-Based Compensation

Peoples recognizes stock-based compensation, which is included as a component of Peoples’ salaries and employee benefit costs, for restricted common shares and performance unit awards, as well as purchases made by participants in the employee stock purchase plan. For restricted common shares, Peoples recognizes stock-based compensation based on the estimated fair value of the awards on the grant date, for the portion of awards that is expected to vest over the vesting period. For performance unit awards, Peoples recognizes stock-based compensation over the performance period, based on the portion of the awards that is expected to vest based on the expected level of achievement of the two performance goals. Peoples also has an employee stock purchase plan whereby employees can purchase Peoples' common shares at a discount of up to 15%. The following table summarizes the amount of stock-based compensation expense and related tax benefit recognized for each period:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Total stock-based compensation expense	$	930		$	424		$	2,138		$	1,510
Recognized tax benefit	(195		)	(89		)	(449		)	(317		)
Net expense recognized	$	735		$	335		$	1,689		$	1,193

Restricted common shares were the primary form of stock-based compensation awards granted by Peoples in the three and six months ended June 30, 2019 and 2018. The fair value of restricted common share awards on the grant date is the market price of Peoples' common shares. Total unrecognized stock-based compensation expense related to unvested awards was $3.6 million at June 30, 2019, which will be recognized over a weighted-average period of 2.1 years. On February 14, 2018, an aggregate of 11,112 unrestricted common shares were granted as a one-time special award to all full-time and part-time employees who did not already participate in the 2006 Equity Plan, with a related stock-based compensation expense of $388,000 being recognized. On June 3, 2019, an aggregate of 880 unrestricted common shares were granted as a one-time special award to all full-time and part-time First Prestonsburg employees, with a related stock-based compensation expense of $27,000 being recognized. For the three and six months ended June 30, 2019, Peoples recorded $11,000 and $50,000, respectively, of stock-based compensation associated with the performance unit awards and for the three and six months ended June 30, 2018 recorded $81,000 and $125,000, respectively. Additionally, Peoples recognized $16,000 and $32,000 of stock-based compensation associated with the employee stock purchase plan, based on purchases by employees thereunder, in the three and six months ended June 30, 2019, respectively, and $14,000 and $28,000 for the three and six months ended June 30, 2018, respectively.

Unrestricted common shares awarded to non-employee directors are included as a component of Peoples' other non-interest expense. On January 31, 2019, Peoples granted, to non-employee directors, an aggregate of 3,200 unrestricted common shares, which resulted in an additional $102,000 of stock-based compensation expense being recognized. On January 31, 2018, Peoples granted, to non-employee directors, an aggregate of 3,600 unrestricted common shares, which resulted in an additional $128,000 of stock-based compensation expense being recognized.

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Note 11 Revenue

The following table details Peoples' revenue from contracts with customers:

	Three Months Ended				Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Insurance income:
Commission and fees from sale of insurance policies (a)	$	3,306	$	3,193	$	6,339	$	6,382
Fees related to third-party administration services (a)	178		173		347		292
Performance-based commissions (b)	2		3		1,421		1,350
Trust and investment income (a)	3,401		3,232		6,513		6,300
Electronic banking income:
Interchange income (a)	2,747		2,520		5,190		4,784
Promotional and usage income (a)	520		265		1,064		786
Deposit account service charges:
Ongoing maintenance fees for deposit accounts (a)	1,012		646		1,764		1,321
Transactional-based fees (b)	1,965		1,742		3,554		3,187
Commercial loan swap fees (b)	516		146		662		262
Other non-interest income transactional-based fees (b)	253		262		424		543
Total	$	13,900	$	12,182	$	27,278	$	25,207
Timing of revenue recognition:
Services transferred over time	$	11,164	$	10,029	$	21,217	$	19,865
Services transferred at a point in time	2,736		2,153		6,061		5,342
Total	$	13,900	$	12,182	$	27,278	$	25,207

(a) Services transferred over time.

(b) Services transferred at a point in time.

Peoples records contract assets for income that has been recognized over a period of time for fulfillment of performance obligations, but has not yet been received related to electronic banking income. This income typically relates to bonuses for which Peoples is eligible, but will not receive until a certain time in the future. Peoples records contract liabilities for payments received for commission income related to the sale of insurance policies, for which the performance obligations have not yet been fulfilled. The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled, which is over the insurance policy period. Peoples also records contract liabilities for bonuses received related to electronic banking income, for which income is recognized during the period in which the performance obligations are fulfilled.

The following table details the change in Peoples' contract assets and contract liabilities for the period ended June 30, 2019:

	Contract Assets			Contract Liabilities
(Dollars in thousands)
Balance, January 1, 2019	$	207		$	5,055
Additional income receivable	183			—
Additional deferred income	—			4,013
Receipt of income previously receivable	(11		)	—
Recognition of income previously deferred	—			(3,521		)
Balance, June 30, 2019	$	379		$	5,547

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Note 12 Acquisitions

On April 12, 2019, Peoples completed the merger with First Prestonsburg Bancshares Inc. ("First Prestonsburg"). First Prestonsburg merged into Peoples and First Prestonsburg's wholly-owned subsidiary, First Commonwealth Bank of Prestonsburg, Inc. ("First Commonwealth"), which operates nine full-service branches located in eastern and central Kentucky, merged into Peoples Bank. Consideration of $32.4 million was paid by Peoples in the form of 12.512 common shares of Peoples stock to shareholders of First Prestonsburg for each share of First Prestonsburg common stock they owned, which resulted in the issuance of 1,005,478 common shares of Peoples stock. In addition, immediately prior to the closing of the merger, First Prestonsburg paid a special cash distribution of $140.30 per share (for an aggregate amount of $11.3 million) which was deemed part of the purchase price to its shareholders. As a result, First Prestonsburg shareholders received a total purchase price of $43.7 million.

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The following table provides the preliminary purchase price calculation as of the date of acquisition for the First Prestonsburg acquisition, and the assets acquired and liabilities assumed at their estimated fair values.

(Dollars in thousands, except per share data)
Consideration
Common shares	80,362
Number of common shares of Peoples issued for each common share of acquired company	12.512
Price per Peoples common share, based on closing date	$	32.26
Common share consideration	$	32,437
Net Assets at Fair Value
Assets
Cash and due from banks	$	4,998
Interest-bearing deposits in other banks	2,798
Total cash and cash equivalents	7,796
Available-for-sale investment securities	137,658
Other investment securities	3,068
Total investment securities	140,726
Total loans	130,407
Bank premises and equipment, net of accumulated depreciation	8,255
Other intangible assets	4,234
Other assets	2,677
Total assets	$	294,095
Liabilities
Deposits:
Non-interest-bearing	$	40,089
Interest-bearing	217,151
Total deposits	257,240
Short-term borrowings	14,400
Accrued expenses and other liabilities	2,065
Total liabilities	$	273,705
Net assets	$	20,390
Goodwill	$	12,047

The estimated fair values presented in the above table reflect certain fair value estimates made as of the date of acquisition. Adjustments to acquisition date estimated fair values are recorded in the period in which the adjustment is determined and, as a result, previously recorded results may change.

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Acquired loans are reported net of the unamortized fair value adjustment. The following table details the fair value adjustment for acquired loans as of the acquisition date:

(Dollars in thousands)	First Prestonsburg
Non-impaired Loans
Contractual cash flows	$	168,903
Nonaccretable difference	19,756
Expected cash flows	149,147
Accretable yield	27,789
Fair value	$	121,358
Credit Impaired Loans
Contractual cash flows	$	17,706
Nonaccretable difference	4,804
Expected cash flows	12,902
Accretable yield	3,853
Fair value	$	9,049

Peoples recorded non-interest expense related to acquisitions of $6.8 million and $7.0 million for the three and six months ended June 30, 2019, respectively. Total non-interest income declined due to losses of $253,000 associated with the First Prestonsburg merger. For each of the three and six months ended June 30, 2019, salaries and employee benefit costs included $2.4 million, related to change in control agreements, retention and severance bonuses, and regular payroll and taxes after conversion. Professional fees related to the acquisition included $562,000 and $620,000 for the three and six months ended June 30, 2019, respectively, and other non-interest expenses included $3.7 million and $3.8 million (mainly contract termination fees) for the three and six months ended June 30, 2019, respectively.

Note 13 Leases

Peoples leases certain banking facilities and equipment under various agreements with original terms providing for fixed monthly payments over periods generally ranging from two to twenty years.  Certain leases contain renewal options and rent escalation clauses calling for rent increases over the term of the lease.  Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term. At June 30, 2019, Peoples did not have any finance leases or any significant lessor agreements.

Peoples elected certain practical expedients, in accordance with Accounting Standards Codification ("ASC") 842. Peoples elected to recognize a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019 for the implementation of ASU 2016-02. Peoples also made an accounting policy election to account for each separate lease component of a contract and its associated non-lease components as a single lease component for all leases subject to ASC 842.

The table below details Peoples' lease expense, which is included in net occupancy and equipment expense in the Unaudited Consolidated Statements of Income:

	Three Months Ended		Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2019
Operating lease expense	$	311	618
Short-term lease expense	32		62
Total lease expense	$	343	$	680

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The following table details the right-of-use asset, the lease liability and other information related to Peoples' operating leases:

(Dollars in thousands)	June 30, 2019
Right-of-use asset:
Other assets	$	6,661
Lease liability:
Accrued expenses and other liabilities	$	6,839
Other information:
Weighted-average remaining lease term	13.1 years
Weighted-average discount rate	2.46		%

The increased right-of-use asset and lease liability at June 30, 2019 were due to acquired leases associated with the First Prestonsburg merger.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands)	Balance
Six months ending December 31, 2019	$	10
Year ending December 31, 2020	112
Year ending December 31, 2021	148
Year ending December 31, 2022	700
Year ending December 31, 2023	63
Thereafter	5,806
Total lease liability	$	6,839

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ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

The following data should be read in conjunction with the Unaudited Consolidated Financial Statements and Management’s Discussion and Analysis that follows:

	At or For the Three Months Ended						At or For the Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Operating Data (a)
Total interest income	$	43,621		$	37,769		$	84,197		$	70,995
Total interest expense	7,572			4,961			14,234			8,828
Net interest income	36,049			32,808			69,963			62,167
Provision for loan losses	626			1,188			363			3,171
Net loss on investment securities	(57		)	(147		)	(27		)	(146		)
Net loss on asset disposals and other transactions	(293		)	(405		)	(475		)	(331		)
Total non-interest income excluding net gains and losses	15,639			13,807			31,220			28,701
Total non-interest expense	38,876			35,971			70,736			64,192
Net income	9,598			7,892			23,967			19,633
Balance Sheet Data (a)
Total investment securities	$	997,711		$	876,765		$	997,711		$	876,765
Loans, net of deferred fees and costs ("total loans")	2,833,533			2,686,491			2,833,533			2,686,491
Allowance for loan losses	21,357			19,266			21,357			19,266
Goodwill and other intangible assets	176,763			163,953			176,763			163,953
Total assets	4,276,376			3,972,091			4,276,376			3,972,091
Non-interest-bearing deposits	643,058			585,861			643,058			585,861
Other interest-bearing deposits	2,394,398			2,363,398			2,394,398			2,363,398
Brokered certificates of deposits	326,157			211,062			326,157			211,062
Short-term borrowings	186,457			360,727			186,457			360,727
Junior subordinated debentures held by subsidiary trust	7,367			7,195			7,367			7,195
Other long-term borrowings	85,691			113,085			85,691			113,085
Total stockholders' equity	579,022			499,339			579,022			499,339
Tangible assets (b)	4,099,613			3,808,138			4,099,613			3,808,138
Tangible equity (b)	402,259			335,386			402,259			335,386
Per Common Share Data (a)
Earnings per common share – basic	$	0.47		$	0.41		$	1.20		$	1.05
Earnings per common share – diluted	0.46			0.41			1.19			1.04
Cash dividends declared per common share	0.34			0.28			0.64			0.54
Book value per common share (c)	27.98			25.57			27.98			25.57
Tangible book value per common share (b)(c)	$	19.44		$	17.17		$	19.44		$	17.17
Weighted-average number of common shares outstanding – basic	20,277,028			19,160,728			19,824,035			18,646,266
Weighted-average number of common shares outstanding – diluted	20,442,366			19,283,381			19,972,350			18,773,169
Common shares outstanding at end of period	20,696,041			19,528,952			20,696,041			19,528,952
Closing stock price at end of period	$	32.26		$	37.78		$	32.26		$	37.78

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	At or For the Three Months Ended						At or For the Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Significant Ratios (a)
Return on average stockholders' equity (d)	6.81		%	6.46		%	8.87		%	8.39		%
Return on average tangible equity (d)(e)	10.55		%	10.47		%	13.49		%	13.21		%
Return on average assets (d)	0.91		%	0.81		%	1.17		%	1.06		%
Return on average assets adjusted for non-core items (d)(f)	1.44		%	1.35		%	1.47		%	1.34		%
Average stockholders' equity to average assets	13.33		%	12.57		%	13.24		%	12.60		%
Average total loans to average deposits	86.37		%	89.57		%	87.81		%	88.37		%
Net interest margin (d)(g)	3.77		%	3.74		%	3.78		%	3.70		%
Efficiency ratio (h)	73.24		%	74.96		%	68.09		%	68.53		%
Efficiency ratio adjusted for non-core items (i)	60.21		%	62.03		%	61.19		%	61.73		%
Pre-provision net revenue to total average assets (j)	1.21		%	1.10		%	1.49		%	1.44		%
Dividend payout ratio	73.30		%	69.27		%	53.84		%	52.15		%
Total investment securities as percentage of total assets (c)	23.33		%	22.07		%	23.33		%	22.07		%
Asset Quality Ratios (a)
Nonperforming loans as a percent of total loans (c)(k)	0.71		%	0.67		%	0.71		%	0.67		%
Nonperforming assets as a percent of total assets (c)(k)	0.47		%	0.46		%	0.47		%	0.46		%
Nonperforming assets as a percent of total loans and OREO (c)(k)	0.71		%	0.67		%	0.71		%	0.67		%
Criticized loans as a percent of total loans (c)(l)	3.42		%	4.50		%	3.42		%	4.50		%
Classified loans as a percent of total loans (c)(m)	2.23		%	2.07		%	2.23		%	2.07		%
Allowance for loan losses as a percent of total loans (c)	0.75		%	0.72		%	0.75		%	0.72		%
Allowance for loan losses as a percent of nonperforming loans (c)(k)	106.57		%	106.77		%	106.57		%	106.77		%
Provision for loan losses as a percent of average total loans	0.09		%	0.18		%	0.03		%	0.26		%
Net charge-offs (recoveries) as a percentage of average total loans	0.03		%	0.11		%	(0.06		)%	0.22		%
Capital Information (a)(c)
Common equity tier 1 capital ratio (n)	14.16		%	13.03		%	14.16		%	13.03		%
Tier 1 risk-based capital ratio	14.41		%	13.29		%	14.41		%	13.29		%
Total risk-based capital ratio (tier 1 and tier 2)	15.14		%	13.99		%	15.14		%	13.99		%
Leverage ratio	10.26		%	9.73		%	10.26		%	9.73		%
Common equity tier 1 capital	$	410,979		$	358,987		$	410,979		$	358,987
Tier 1 capital	418,347			366,182			418,347			366,182
Total capital (tier 1 and tier 2)	439,704			385,448			439,704			385,448
Total risk-weighted assets	$	2,903,387		$	2,755,112		$	2,903,387		$	2,755,112
Total stockholders' equity to total assets	13.54		%	12.57		%	13.54		%	12.57		%
Tangible equity to tangible assets (b)	9.81		%	9.07		%	9.81		%	9.07		%

(a) Reflects the impact of the acquisition of First Prestonsburg Bancshares Inc. ("First Prestonsburg") beginning April 12, 2019, and of ASB Financial Corp. ("ASB") beginning April 13, 2018.

(b) These amounts represent non-US GAAP financial measures since they exclude the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on total stockholders’ equity and total assets.  Additional information regarding the calculation of these non-US GAAP financial measures can be found under the caption “Capital/Stockholders’ Equity.”

(c) Data presented as of the end of the period indicated.

(d) Ratios are presented on an annualized basis.

(e) Return on average tangible equity represents a non-US GAAP financial measures since it excludes the after-tax impact of amortization of other intangible assets from earnings and it excludes the balance sheet impact of goodwill and other intangible assets acquired through acquisitions on total stockholders’ equity. Additional information regarding the calculation of this non-US GAAP financial measure can be found under the caption “Return on Average Tangible Equity Ratio.”

(f) Return on average assets adjusted for non-core itemsrepresents a non-US GAAP financial measure since it excludes the impact of the Tax Cuts and Jobs Act on the remeasurement of deferred tax assets and deferred tax liabilities, and the after-tax impact of all gains and/or losses, core banking system conversion revenue and expenses, acquisition-related expenses, pension settlement charges, and other non-recurring expenses in earnings. Additional information regarding the calculation of this non-US GAAP financial measure can be found under the caption "Return on Average Assets Adjusted for Non-Core Items."

(g) Information presented on a fully tax-equivalent basis.

(h) The efficiency ratio is defined as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income (excluding all gains and losses). This amount represents a non-US GAAP financial measure since it

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excludes amortization of other intangible assets, and all gains and/or losses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this non-US GAAP financial measure can be found under the caption “Efficiency Ratio.”

(i) The efficiency ratio adjusted for non-core items is defined as core non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus core non-interest income excluding all gains and losses. This amount represents a non-US GAAP financial measure since it excludes the impact of all gains and/or losses, and acquisition-related expenses included in earnings, and uses fully tax-equivalent net interest income. Additional information regarding the calculation of this non-US GAAP financial measure can be found under the caption “Efficiency Ratio.”

(j) Pre-provision net revenue is defined as net interest income plus total non-interest income (excluding all gains and losses) minus total non-interest expense. This ratio represents a non-US GAAP financial measure since it excludes the provision for loan losses and all gains and/or losses included in earnings. This measure is a key metric used by federal bank regulatory agencies in their evaluation of capital adequacy for financial institutions.  Additional information regarding the calculation of this non-US GAAP financial measure can be found under the caption “Pre-Provision Net Revenue.”

(k) Nonperforming loans include loans 90+ days past due and accruing, renegotiated loans and nonaccrual loans. Nonperforming assets include nonperforming loans and other real estate owned.

(l) Includes loans categorized as special mention, substandard and doubtful.

(m) Includes loans categorized as substandard and doubtful.

(n) Peoples' capital conservation buffer was 7.14% at June 30, 2019 and 5.99% at June 30, 2018, compared to 2.50% for the fully phased-in capital conservation buffer required at January 1, 2019.

Forward-Looking Statements

Certain statements in this Form 10-Q, which are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are identified by the fact they are not historical facts and include words such as "anticipate," "estimate," "may," "feel," "expect," "believe," "plan," "will," "will likely," "would," "should," "could," "project," "goal," "target," "potential," "seek," "intend," and similar expressions.

These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to:

(1) the success, impact, and timing of the implementation of Peoples' business strategies, including the successful integration of the business of First Prestonsburg, and the expansion of consumer lending activity;

(2) risks and uncertainties associated with Peoples' entry into new geographic markets and risks resulting from Peoples' inexperience in these new geographic markets;

(3) Peoples' ability to integrate future acquisitions, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected;

(4) competitive pressures among financial institutions, or from non-financial institutions, which may increase significantly, including product and pricing pressures, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Peoples' ability to attract, develop and retain qualified professionals;

(5) changes in the interest rate environment due to economic conditions and/or the fiscal policies of the United States ("U.S.") government and the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which may adversely impact interest rates, interest margins, loan demand and interest rate sensitivity;

(6) uncertainty regarding the nature, timing, cost, and effect of legislative or regulatory changes or actions, promulgated and to be promulgated by governmental and regulatory agencies in the state of Ohio, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Consumer Financial Protection Bureau, which may subject Peoples, its subsidiaries, or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses, including in particular the rules and regulations promulgated and to be promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Basel III regulatory capital reform;

(7) the effects of easing restrictions on participants in the financial services industry;

(8) local, regional, national and international economic conditions (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations) and the impact these conditions may have on Peoples, its customers and its counterparties, and Peoples' assessment of the impact, which may be different than anticipated;

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(9) the existence or exacerbation of general geopolitical instability and uncertainty;

(10) changes in policy and other regulatory and legal developments, and uncertainty or speculation pending the enactment of such changes;

(11) Peoples may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Peoples' current shareholders;

(12) changes in prepayment speeds, loan originations, levels of nonperforming assets, delinquent loans and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated;

(13) adverse changes in economic conditions and/or activities, including, but not limited to, continued economic uncertainty in the U.S., the European Union (including the uncertainty surrounding the actions to be taken to implement the referendum by British voters to exit the European Union), Asia, and other areas, which could decrease sales volumes, add volatility to the global stock markets, and increase loan delinquencies and defaults;

(14) deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses;

(15) Peoples may have more credit risk and higher credit losses to the extent loans are concentrated by location or industry of the borrowers or collateral;

(16) changes in accounting standards, policies, estimates or procedures, including the new current expected credit loss rule issued by the Financial Accounting Standards Board in June 2016, which will require banks to record, at the time of origination, credit losses expected throughout the life of the asset portfolio on loans and held-to-maturity securities, as opposed to the current practice of recording losses when it is probable that a loss event has occurred, which may adversely affect Peoples' reported financial condition or results of operations;

(17) Peoples' assumptions and estimates used in applying critical accounting policies, which may prove unreliable, inaccurate or not predictive of actual results;

(18) the discontinuation of the London Inter-Bank Offered Rate and other reference rates may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies;

(19) adverse changes in the conditions and trends in the financial markets, including political developments, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities;

(20) the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;

(21) Peoples' ability to receive dividends from its subsidiaries;

(22) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity;

(23) the impact of larger or similar-sized financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity;

(24) the costs and effects of new federal and state laws, and other regulatory and legal developments, including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations;

(25) Peoples' ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Peoples' third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss;

(26) Peoples' ability to anticipate and respond to technological changes, and Peoples' reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Peoples' primary core banking system provider, which can impact Peoples' ability to respond to customer needs and meet competitive demands;

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(27) operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Peoples and its subsidiaries are highly dependent;

(28) changes in consumer spending, borrowing and saving habits, whether due to tax reform legislation, changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions, legislative or regulatory initiatives, or other factors, which may be different than anticipated;

(29) the adequacy of Peoples' internal controls and risk management program in the event of changes in strategic, reputational, market, economic, operational, cyber security, compliance, legal, asset/liability repricing, liquidity, credit and interest rate risks associated with Peoples' business;

(30) the impact on Peoples' businesses, personnel, facilities, or systems, related to fraud, theft, or violence;

(31) the impact on Peoples' businesses, as well as on the risks described above, of various domestic or international widespread natural or other disasters, pandemics, cyber attacks, civil unrest, military or terrorist activities or international conflicts;

(32) Peoples' continued ability to grow deposits; and

(33) other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples’ reports filed with the Securities and Exchange Commission (the "SEC"), including those risk factors included in the disclosures under the heading "ITEM 1A. RISK FACTORS" of Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and under the heading "ITEM 1A. RISK FACTORS" in Part II of this Form 10-Q.

All forward-looking statements speak only as of the filing date of this Form 10-Q and are expressly qualified in their entirety by the cautionary statements.  Although management believes the expectations in these forward-looking statements are based on reasonable assumptions within the bounds of management’s knowledge of Peoples’ business and operations, it is possible that actual results may differ materially from these projections.  Additionally, Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the filing date of this Form 10-Q or to reflect the occurrence of unanticipated events except as may be required by applicable legal requirements.  Copies of documents filed with the SEC are available free of charge at the SEC’s website at www.sec.gov and/or from Peoples' website – www.peoplesbancorp.com under the “Investor Relations” section.

This discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements, and Notes thereto, contained in Peoples’ 2018 Form 10-K, as well as the Unaudited Consolidated Financial Statements, Notes to the Unaudited Consolidated Financial Statements, ratios, statistics and discussions contained elsewhere in this Form 10-Q.

Business Overview

The following discussion and analysis of Peoples’ Unaudited Consolidated Financial Statements is presented to provide insight into management’s assessment of the financial condition and results of operations.

Peoples offers diversified financial products and services through 89 locations, including 79 full-service bank branches, and 86 Automated Teller Machines ("ATMs") in northeastern, central, southwestern and southeastern Ohio, west central West Virginia, and central and eastern Kentucky through its financial service units – Peoples Bank and Peoples Insurance Agency, LLC ("Peoples Insurance"), a subsidiary of Peoples Bank.  Peoples Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the "ODFI"), the Federal Reserve Bank ("FRB") of Cleveland and the Federal Deposit Insurance Corporation (the "FDIC"). Peoples Bank is also subject to regulations of the Consumer Financial Protection Bureau (the "CFPB") which regulates consumer financial products and services and certain financial services providers. Peoples Insurance is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states in which Peoples Insurance may do business.

Peoples’ products and services include traditional banking products, such as deposit accounts, lending products and trust services.  Peoples provides services through traditional offices, ATMs, mobile banking and telephone and internet-based banking.  Peoples also offers a complete array of insurance products and makes available custom-tailored fiduciary, employee benefit plan and asset management services.  Brokerage services are offered by Peoples exclusively through an unaffiliated registered broker-dealer located at Peoples Bank's offices.

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Critical Accounting Policies

The accounting and reporting policies of Peoples conform to US GAAP and to general practices within the financial services industry.  The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could materially differ from those estimates.  Management has identified the accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to understanding Peoples’ Unaudited Consolidated Financial Statements, and Management’s Discussion and Analysis at June 30, 2019, which were unchanged from the policies disclosed in Peoples’ 2018 Form 10-K.

 Summary of Recent Transactions and Events

The following is a summary of recent transactions and events that have impacted or are expected to impact Peoples’ results of operations or financial condition: 

◦ On April 12, 2019, Peoples completed the previously-announced merger with First Prestonsburg. First Prestonsburg merged into Peoples and First Prestonsburg's wholly-owned subsidiary, First Commonwealth Bank of Prestonsburg, Inc., which operated nine full-service bank branches in central and eastern Kentucky, merged into Peoples Bank. Total purchase price of $43.7 million was paid in the merger, of which $11.3 million was in the form of a special cash dividend paid by First Prestonsburg to shareholders of First Prestonsburg prior to the merger with the remainder being paid in the form of an aggregate of 1,005,478 Peoples common shares by Peoples. The merger added $130.4 million of total loans and $257.2 million of total deposits at the acquisition date, after preliminary fair value adjustments. Peoples also recorded $4.2 million of other intangible assets and $12.0 million of goodwill. These amounts reflect information available through the date of the filing of this Quarterly Report on Form 10-Q. Refer to "Note 12 Acquisitions" of the Notes to the Unaudited Consolidated Financial Statements for additional information.

◦ At the close of business on April 13, 2018, Peoples completed the merger with ASB. ASB merged into Peoples, and ASB's wholly-owned subsidiary, American Savings Bank, fsb, which operated seven full-service bank branches and two loan production offices in southern Ohio and eastern Kentucky, merged into Peoples Bank. Under the terms of the merger agreement, Peoples paid total consideration of $41.5 million. The merger added $239.2 million of total loans and loans held for sale in the aggregate, and $198.6 million of total deposits at the acquisition date, after acquisition accounting adjustments. Peoples also recorded $2.6 million of other intangible assets and $18.1 million of goodwill.

◦ During the second quarter of 2019, Peoples incurred $7.0 million of acquisition-related costs, compared to $253,000 in the first quarter of 2019, and $6.3 million in the second quarter of 2018. During the first six months of 2019, Peoples incurred $7.3 million of acquisition-related costs, compared to $6.4 million during the first six months of 2018. The acquisition costs in 2019 and 2018 were primarily related to the First Prestonsburg and ASB mergers, respectively, and were primarily related to fees associated with early termination of contracts, severance costs and write-offs associated with assets acquired.

◦ During the second quarter of 2019, Peoples entered into $30.0 million of interest rate swaps, with a notional value in aggregate of $30.0 million, which became effective immediately and will mature between 2023 and 2026, with interest rates ranging from 1.89% to 1.91%. For additional information regarding Peoples' interest rate swaps, refer to "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

◦ During the first quarter of 2019, Peoples recognized a $1.8 million recovery on a previously charged-off commercial loan.

◦ During the second quarter of 2019, Peoples closed one full-service bank branch located in West Virginia when the lease expired in June 2019. During the first quarter of 2019, Peoples closed one insurance office located in Ohio when the lease for the location expired at the end of January 2019 and one full-service bank branch located in West Virginia when the lease for the location expired in March 2019. Employees at the closed locations were relocated to other branches or offices.

◦ On April 22, 2019, Peoples Bank signed an agreement to open a Federal Funds liquidity facility with Canadian Imperial Bank of Commerce, which either party may cancel at any time. The $20.0 million line increases Peoples Bank's contingent liquidity and will serve to help manage Peoples Bank's daily liquidity needs. As of June 30, 2019, Peoples Bank had not borrowed under the agreement.

◦ On April 3, 2019, Peoples entered into a Loan Agreement (the “U.S. Bank Loan Agreement”) with U.S. Bank National Association. The U.S. Bank Loan Agreement has a one-year term and provides Peoples with a revolving line of credit in the maximum aggregate principal amount of $20.0 million that may be used: (i) for working capital

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purposes; (ii) to finance dividends or other distributions (other than stock dividends and stock splits) on or in respect of Peoples’ capital stock and redemptions, repurchases or other acquisitions of any of Peoples’ capital stock permitted under the U.S. Bank Loan Agreement and (iii) to finance acquisitions permitted under the U.S. Bank Loan Agreement.

◦ Effective April 3, 2019, Peoples terminated the Credit Agreement, dated as of March 4, 2016 between Peoples, as Borrower, and Raymond James Bank, N.A., as Lender (the "RJB Credit Agreement"), with a revolving line of credit in the maximum aggregate principal amount of $15.0 million.

◦ During the first quarter of 2019, Peoples sold its restricted Class B Visa stock, which had been held at a carrying cost and fair value of zero due to the litigation liability associated with the stock, resulting in a gain of $787,000 recorded in other non-interest income.

◦ Multiple items impacted Peoples' income tax expense during 2018, primarily as a result of the Tax Cuts and Jobs Act, which lowered the statutory federal corporate income tax rate to 21% as of January 1, 2018, from a previous rate of 35%. There were no similar items in 2019.

▪ Beginning on January 1, 2018, Peoples began recognizing income tax expense at the 21% statutory federal corporate income tax rate.

▪ During the fourth quarter of 2018, Peoples finalized the remeasurement of its net deferred tax assets and liabilities at the new statutory federal corporate income tax rate of 21%, which resulted in a reduction to income tax expense of $705,000 in 2018. The final adjustment was mainly due to Peoples' contribution of $3.2 million to Peoples' defined benefit pension plan during 2018.

▪ During 2018, Peoples released a valuation allowance, which reduced income tax expense by $0.8 million. The valuation allowance was related to a historical tax credit that Peoples had invested in during 2015. Peoples sold $6.7 million of equity investment securities in the second quarter of 2018, which resulted in a capital gain for tax purposes. This capital gain was large enough to offset an anticipated future capital loss, which is expected to be recognized due to the structure of the historical tax credit investment, resulting in the release of the valuation allowance.

◦ During the fourth quarter of 2018, Peoples incurred $91,000 in pension settlement costs due to the aggregate amount of lump-sum distributions to participants in Peoples' defined benefit pension plan exceeding the threshold for recognizing such charges during the period. There were no such costs during the first or second quarters of 2019 or the first or second quarters of 2018.

◦ On July 31, 2018, Peoples entered into $50.0 million of interest rate swaps, which became effective immediately and will mature between 2021 and 2028, with interest rates ranging from 2.92% to 3.00%. Additionally, the three interest rate swaps acquired with the ASB acquisition matured in July of 2018. These swaps locked in funding rates for $40.0 million, in notional value, in FHLB advances that matured in 2018, which had interest rates ranging from 3.57% to 3.92%. For additional information regarding Peoples' interest rate swaps, refer to "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

◦ On January 1, 2018, Peoples adopted ASU 2016-01, resulting in the reclassification of $7.8 million of equity investment securities from available-for-sale investment securities to other investment securities and the reclassification of $5.0 million in net unrealized gains on equity investment securities from accumulated other comprehensive loss to retained earnings.

◦ The Federal Reserve Board began tightening monetary policy in December 2015 by raising the benchmark Federal Funds Target Rate. Since then, the rate has increased several times from a range of 0.25% to 0.50% to its current range of 2.25% to 2.50%. Market participants are now expecting two eases this year and potentially one early next year. While recent economic numbers have been fairly strong, the Federal Reserve Board is contemplating lowering rates in order to prevent the economy from slipping into what many investors believe is a long-overdue recession. The Federal Reserve Board has also indicated it would pause reducing its balance sheet beginning in September 2019 as planned. As a result, interest rates will likely remain rather low throughout the rest of 2019. Peoples is closely monitoring interest rates, both foreign and domestic; and potential impacts of changes in interest rates to Peoples' operations.

The impact of these transactions and events, where material, is discussed in the applicable sections of this Management’s Discussion and Analysis of Results of Operations and Financial Condition.

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EXECUTIVE SUMMARY

Peoples recorded net income of $9.6 million for the second quarter of 2019, representing earnings per diluted common share of $0.46, compared to $14.4 million, or $0.73 per diluted common share, for the first quarter of 2019, and $7.9 million, or $0.41 per diluted share, for the second quarter of 2018. During the second quarter of 2019, earnings per diluted common share were negatively impacted by $0.28 per share for acquisition-related costs. During the first quarter of 2019, earnings per diluted common share were positively impacted by $0.07 per share for the recovery on a previously charged-off commercial loan and by $0.03 per share for income related to the sale of restricted Class B Visa stock, partially offset by the negative impact of $0.01 per share for acquisition-related costs. During the second quarter of 2018, earnings per diluted common share were negatively impacted by $0.25 per share in acquisition-related costs, and were positively impacted by $0.04 per share due to the release of a tax valuation allowance.

During the first six months of 2019, net income was $24.0 million, or $1.19 per diluted share, compared to $19.6 million, or $1.04 per diluted common share, for the same period in 2018. The increased earnings were primarily due to increases in net interest income, deposit account service charges, and electronic banking income, which were partially offset by increased salaries and employee benefit costs, and other non-interest expenses, which were impacted by the First Prestonsburg and ASB mergers, in 2019 compared to 2018. Acquisition-related costs negatively impacted earnings per diluted common share by $0.29 and $0.27 during the first six months of 2019 and 2018, respectively.

Net interest income increased to $36.0 million for the second quarter of 2019, up 6% compared to $33.9 million for the first quarter of 2019, and increased by 10% compared to $32.8 million for the second quarter of 2018. Net interest margin was 3.77% for the second quarter of 2019, compared to 3.80% for the first quarter of 2019, and 3.74% for the second quarter of 2018. The slight decline in net interest margin during the quarter was driven by higher costs for time deposits and governmental deposits, which more than offset increased loan yields, driven by the First Prestonsburg merger. Compared to the first quarter of 2019, net interest income was positively impacted by the merger of First Prestonsburg. The increase in net interest income compared to the second quarter of 2018 was driven by higher yields on loans combined with the impact of First Prestonsburg earning assets. These were partially offset by higher deposit costs due to increased competition for deposits, combined with additional interest expense related to the acquired First Prestonsburg deposits.

For the second quarter of 2019, accretion income from acquisitions, net of amortization expense, was $1.2 million, compared to $722,000 for the first quarter of 2019 and $523,000 for the second quarter of 2018, which added 13 basis points, 8 basis points, and 6 basis points, respectively, to net interest margin. The growth in net accretion income compared to the first quarter of 2019 and the second quarter of 2018 was due to the First Prestonsburg merger, specifically the loan discount that was accreted during the quarter.

For the first six months of 2019, net interest income was $70.0 million, and net interest margin was 3.78%, compared to $62.2 million and 3.70%, respectively, during the same period in 2018. The increases were driven by higher interest income on loans due to a combination of loan growth, which was primarily the result of the First Prestonsburg and ASB acquisitions, and higher yields from interest rate increases. The interest income from higher average loan balances outpaced interest expense from deposits, which increased due to the recent acquisitions and increased competition for deposits. The first six months of 2018 benefited from proceeds of $589,000 received on investment securities that had been previously written down due to other-than-temporary impairment ("OTTI"), which added 3 basis points to net interest margin.

Accretion income, net of amortization expense, from acquisitions was $1.9 million for the first six months of 2019 and $1.1 million for the first six months of 2018, which added 10 basis points and 6 basis points, respectively, to net interest margin. The growth in net accretion income compared to the first six months of 2018 was largely due to the First Prestonsburg acquisition.

During the first quarter of 2019, Peoples recorded a provision for loan losses of $626,000, compared to a recovery of loan losses of $263,000 for the first quarter of 2019 and a provision for loan losses of $1.2 million for the second quarter of 2018. Net charge-offs for the second quarter of 2019 were $208,000, or 0.03% of average total loans, compared to net recoveries of $1.0 million, or 0.15% of average total loans, for the linked quarter and net charge-offs of $720,000, or 0.11% of average total loans, for the second quarter of 2018. Net recoveries during the first quarter of 2019 were driven by a $1.8 million recovery recorded on a previously charged-off commercial loan. Given the low net charge-offs in the current quarter, combined with originated loan balances remaining stable during the second quarter of 2019, the provision for loan losses during each of the current and linked quarter was lower than historical trends. Provision for loan losses during the first six months of 2019 was $363,000, compared to $3.2 million for the first six months of 2018. Net recoveries for the first six months of 2019 were $799,000, compared to net charge-offs of $2.7 million for the first six months of 2018. The first six months of 2019 included the $1.8 million recovery recorded on a previously charged-off commercial loan. The first six months of 2018 included a charge-off of $827,000 on an acquired commercial loan relationship.

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For the second quarter of 2019, total non-interest income declined $140,000, or 1%, compared to the first quarter of 2019 and was up $2.0 million, or 15%, from the second quarter of 2018. The first quarter of 2019 included $1.4 million of annual performance-based insurance commissions, which are primarily received in the first quarter each year. Additionally, other non-interest income in the first quarter of 2019 included $787,000 of income related to the sale of restricted Class B Visa stock. During the second quarter of 2019, these two items were largely offset by increases in a number of categories, including income from deposit account service charges, commercial loan swap fee income, trust and investment income, electronic banking income, and mortgage banking income. The increase in total non-interest income from the second quarter of 2018 was driven by increases in all non-interest income categories, with the exception of bank owned life insurance, which had a slight decrease. For the first six months of 2019, total non-interest income grew 9%, as most categories of non-interest income increased, including income from deposit account service charges, electronic banking income, mortgage banking income, and commercial loan swap fee income.

Total non-interest expense increased $7.0 million, or 22%, in the second quarter of 2019 compared to the first quarter of 2019 and grew $2.9 million, or 8%, compared to the second quarter of 2018. The increase compared to the linked quarter was primarily due to acquisition-related expenses of First Prestonsburg, coupled with the ongoing cost of running the First Prestonsburg operations. The growth in total non-interest expense compared to the second quarter of 2018 was led by higher salaries and employee benefit costs, partially offset by a decline in professional fees. Base salaries, stock-based compensation, and medical insurance were the main contributors to the increase in salaries and employee benefit costs, which were impacted by employees that have been added in the last twelve months from acquisitions and for future growth, as well as higher medical claims. Base salaries were also impacted by annual merit increases, which included the implementation of a $15 per hour minimum wage throughout the company, which began being phased in during 2018 and will be largely implemented by January 1, 2020. Professional fees declined 22% compared to the second quarter of 2018, primarily due to consulting work performed during the second quarter of 2018 which was not repeated in 2019.

During the first six months of 2019, total non-interest expense increased 10% compared to 2018. This increase was led by higher salaries and employee benefit costs, partially offset by a decline in professional fees. Salaries and employee benefit costs were up primarily due to higher base salaries, medical insurance and stock-based compensation. Base salaries were impacted by the First Prestonsburg and ASB acquisitions, annual merit increases, which included the implementation of a $15 per hour minimum wage throughout the company, and employees that have been added in the last twelve months for future growth. The increase in medical insurance was driven by higher medical claims. Stock-based compensation increased as a result of the employees that have been added in the last twelve months from recent acquisitions and for future growth. Professional fees declined 24% compared to the first six months of 2018, mostly due to consulting work performed during the first six months of 2018 which was not repeated in 2019.

Peoples' efficiency ratio, calculated as total non-interest expense less amortization of other intangible assets divided by fully tax-equivalent ("FTE") net interest income, plus total non-interest income, excluding all gains and losses, for the second quarter of 2019 was 73.2%, compared to 62.7% for the first quarter of 2019 and 75.0% for the second quarter of 2018. The efficiency ratio increased compared to the linked quarter, driven by higher acquisition-related expenses. The efficiency ratio, when adjusted for non-core items, was 60.2% for the second quarter of 2019, compared to 62.2% for the first quarter of 2019 and 62.0% for the second quarter of 2018. During the first six months of 2019, the efficiency ratio was 68.1%, compared to 68.5% for the same period in 2018. The efficiency ratio, when adjusted for non-core items, during the first six months of 2019 was 61.2% and was 61.7% for the first six months of 2018.

Income tax expense was $2.2 million for the second quarter of 2019, compared to $3.4 million for the linked quarter and $1.0 million for the second quarter of 2018. The decline in income tax expense compared to the linked quarter was due to lower pre-tax income. The current quarter included a tax benefit of $59,000 recorded for the vesting of restricted stock during the current quarter, compared to a tax benefit of $133,000 in the linked quarter. The vesting of a majority of stock awards granted by Peoples occurs annually in the first quarter. The increase in income tax expense compared to the second quarter of 2018 was primarily due to higher pre-tax income. For the first six months of 2019, Peoples recorded income tax expense of $5.6 million, compared to $3.4 million for the same period in the prior year. The year-over-year increase in income tax expense was primarily due to higher pre-tax income. The first six months of 2019 included a tax benefit of $192,000 recorded for the vesting of restricted stock during the period. The first six months of 2018 also included an $805,000 valuation allowance release, as well as a tax benefit of $296,000 recorded for the vesting of restricted stock during the period.

At June 30, 2019, total assets were $4.28 billion, compared to $3.99 billion at December 31, 2018. The 7% increase compared to December 31, 2018 was primarily due to the First Prestonsburg merger, which added $294.1 million of assets, including $130.4 million in total loans, after preliminary fair value adjustments.

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Total liabilities were $3.70 billion at June 30, 2019, up $226.0 million since December 31, 2018. The increase in liabilities during the first six months of 2019 was primarily due to an increase in deposits of $408.1 million, partially offset by a decline in borrowings of $193.7 million. The growth in deposits compared to December 31, 2018, was mostly due to acquired First Prestonsburg deposit balances, which totaled $232.2 million at June 30, 2019. Retail certificates of deposit ("CDs") grew $102.9 million, of which $65.3 million was from First Prestonsburg. Governmental deposit and brokered CDs were up $64.4 million and $62.3 million, respectively, compared to December 31, 2018.

At June 30, 2019, total stockholders' equity was $579.0 million, an increase of $58.9 million, compared to December 31, 2018. The increase in total stockholders' equity was mostly due to the $32.4 million of common shares issued in connection with the First Prestonsburg merger, net income of $9.6 million and other comprehensive income of $7.8 million, partially offset by dividends paid of $7.0 million.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income, the amount by which interest income exceeds interest expense, remains Peoples' largest source of revenue.  The amount of net interest income earned by Peoples each quarter is affected by various factors, including changes in market interest rates due to the Federal Reserve Board’s monetary policy, the level and degree of pricing competition for both loans and deposits in Peoples’ markets, and the amount and composition of Peoples' earning assets and interest-bearing liabilities. 

Net interest margin, which is calculated by dividing FTE net interest income by average interest-earning assets, serves as an important measurement of the net revenue stream generated by the volume, mix and pricing of interest-earning assets and interest-bearing liabilities.  FTE net interest income is calculated by increasing interest income to convert tax-exempt income earned on obligations of states and political subdivisions to the pre-tax equivalent of taxable income using a federal corporate income tax rate of 21%.  

The following table details the calculation of FTE net interest income:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Net interest income	$	36,049	33,914		$	32,808	$	69,963	$	62,167
Taxable equivalent adjustments	267		200		223		467		450
Fully tax-equivalent net interest income	$	36,316	$	34,114	$	33,033	$	70,430	$	62,617

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The following tables detail Peoples’ average balance sheets for the periods presented:

	For the Three Months Ended
	June 30, 2019							March 31, 2019							June 30, 2018
(Dollars in thousands)	Average Balance			Income/ Expense		Yield/Cost		Average Balance			Income/ Expense		Yield/Cost		Average Balance			Income/ Expense		Yield/Cost
Short-term investments	$	27,979		$	263	3.77	%	$	16,247		$	176	4.39	%	$	10,815		$	56	2.00	%
Investment securities (a)(b):
Taxable (c)	874,427			6,006		2.75	%	780,721			5,847		3.00	%	793,497			5,868		2.96	%
Nontaxable	118,241			923		3.12	%	83,319			680		3.26	%	96,991			804		3.32	%
Total investment securities	992,668			6,929		2.79	%	864,040			6,527		3.03	%	890,488			6,672		3.00	%
Loans (b)(d):
Commercial real estate, construction	124,334			1,655		5.27	%	131,683			1,732		5.26	%	118,206			1,438		4.81	%
Commercial real estate, other	833,991			11,322		5.37	%	806,181			10,596		5.26	%	840,677			10,434		4.91	%
Commercial and industrial	599,432			8,081		5.33	%	578,954			7,681		5.31	%	503,364			6,216		4.89	%
Residential real estate (e)	646,978			7,918		4.90	%	603,253			6,927		4.59	%	600,799			6,749		4.49	%
Home equity lines of credit	132,395			2,006		6.08	%	131,089			1,860		5.75	%	131,970			1,701		5.17	%
Consumer, indirect	412,986			4,255		4.13	%	409,975			4,088		4.04	%	359,941			3,498		3.90	%
Consumer, direct	80,442			1,459		7.27	%	73,457			1,189		6.56	%	72,820			1,230		6.77	%
Total loans	2,830,558			36,696		5.20	%	2,734,592			34,073		5.00	%	2,627,777			31,266		4.73	%
Allowance for loan losses	(21,311		)					(20,406		)					(19,071		)
Net loans	2,809,247			36,696		5.20	%	2,714,186			34,073		5.04	%	2,608,706			31,266		4.77	%
Total earning assets	3,829,894			43,888		4.56	%	3,594,473			40,776		4.55	%	3,510,009			37,994		4.31	%
Goodwill and other intangible assets	175,169							161,673							161,600
Other assets	234,716							229,475							226,348
Total assets	$	4,239,779						$	3,985,621						$	3,897,957
Deposits:
Savings accounts	$	523,295		$	110	0.08	%	$	472,656		$	91	0.08	%	$	477,167		$	69	0.06	%
Governmental deposit accounts	331,607			848		1.03	%	297,537			557		0.76	%	312,999			273		0.35	%
Interest-bearing demand accounts	603,494			231		0.15	%	569,472			247		0.18	%	581,600			202		0.14	%
Money market accounts	414,307			654		0.63	%	395,324			531		0.54	%	393,580			323		0.33	%
Retail certificates of deposit	477,530			2,079		1.75	%	396,977			1,417		1.45	%	395,304			1,242		1.26	%
Brokered certificates of deposit	272,693			1,797		2.64	%	314,163			2,001		2.58	%	187,387			992		2.13	%
Total interest-bearing deposits	2,622,926			5,719		0.87	%	2,446,129			4,844		0.80	%	2,348,037			3,101		0.53	%
Borrowed funds:
Short-term FHLB advances	193,963			1,140		2.36	%	198,643			1,115		2.28	%	225,635			966		1.72	%
Repurchase agreements and other	46,631			93		0.80	%	46,111			58		0.50	%	85,188			209		0.98	%
Total short-term borrowings	240,594			1,233		2.06	%	244,754			1,173		1.94	%	310,823			1,175		1.52	%
Long-term FHLB advances	96,519			491		2.04	%	100,930			508		2.04	%	114,287			559		1.96	%
Other borrowings	7,346			129		7.02	%	7,304			137		7.50	%	7,766			126		6.49	%
Total long-term borrowings	103,865			620		2.39	%	108,234			645		2.41	%	122,053			685		2.25	%
Total borrowed funds	344,459			1,853		2.16	%	352,988			1,818		2.09	%	432,876			1,860		1.72	%
Total interest-bearing liabilities	2,967,385			7,572		1.02	%	2,799,117			6,662		0.96	%	2,780,913			4,961		0.71	%
Non-interest-bearing deposits	654,468							613,924							585,800
Other liabilities	52,934							48,384							41,368
Total liabilities	3,674,787							3,461,425							3,408,081
Total stockholders’ equity	564,992							524,196							489,876
Total liabilities and stockholders’ equity	$	4,239,779						$	3,985,621						$	3,897,957
Interest rate spread (b)				$	36,316	3.54	%				$	34,114	3.59	%				$	33,033	3.60	%
Net interest margin (b)						3.77	%						3.80	%						3.74	%

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	For the Six Months Ended
	June 30, 2019							June 30, 2018
(Dollars in thousands)	Average Balance			Income/ Expense		Yield/Cost		Average Balance			Income/ Expense		Yield/Cost
Short-term investments	$	22,145		$	439	4.00	%	$	11,052		$	106	1.93	%
Investment securities (a)(b):
Taxable	827,831			11,853		2.86	%	784,628			11,555		2.95	%
Nontaxable	100,876			1,603		3.18	%	97,062			1,618		3.33	%
Total investment securities	928,707			13,456		2.90	%	881,690			13,173		2.99	%
Loans (b)(c):
Commercial real estate, construction	127,988			3,387		5.26	%	118,396			2,771		4.66	%
Commercial real estate, other	820,163			21,918		5.32	%	803,085			19,558		4.84	%
Commercial and industrial	589,249			15,762		5.32	%	491,643			11,787		4.77	%
Residential real estate (d)	625,236			14,845		4.75	%	546,558			12,058		4.41	%
Home equity lines of credit	131,746			3,866		5.92	%	120,360			2,972		4.98	%
Consumer, indirect	411,489			8,343		4.09	%	351,581			6,628		3.80	%
Consumer, other	76,969			2,648		6.94	%	70,633			2,392		6.83	%
Total loans	2,782,840			70,769		5.07	%	2,502,256			58,166		4.64	%
Less: Allowance for loan losses	(20,861		)					(18,878		)
Net loans	2,761,979			70,769		5.12	%	2,483,378			58,166		4.68	%
Total earning assets	3,712,831			84,664		4.55	%	3,376,120			71,445		4.23	%
Intangible assets	168,458							152,943
Other assets	232,114							219,268
Total assets	$	4,113,403						$	3,748,331
Deposits:
Savings accounts	$	498,115		$	201	0.08	%	$	465,091		$	133	0.06	%
Governmental deposit accounts	314,666			1,405		0.90	%	302,286			490		0.33	%
Interest-bearing demand accounts	586,577			478		0.16	%	574,465			423		0.15	%
Money market accounts	404,868			1,185		0.59	%	380,834			549		0.29	%
Retail certificates of deposit	437,476			3,496		1.61	%	366,923			2,007		1.10	%
Brokered certificates of deposit	293,313			3,798		2.61	%	172,101			1,712		2.01	%
Total interest-bearing deposits	2,535,015			10,563		0.84	%	2,261,700			5,314		0.47	%
Borrowed funds:
Short-term FHLB advances	196,290			2,255		2.32	%	185,195			1,629		1.77	%
Repurchase agreements and other	46,373			151		0.65	%	93,634			514		1.10	%
Total short-term borrowings	242,663			2,406		2.00	%	278,829			2,143		1.55	%
Long-term FHLB advances	98,712			999		2.04	%	116,628			1,123		1.94	%
Other borrowings	7,325			266		7.26	%	7,439			248		6.67	%
Total long-term borrowings	106,037			1,265		2.40	%	124,067			1,371		2.22	%
Total borrowed funds	348,700			3,671		2.12	%	402,896			3,514		1.75	%
Total interest-bearing liabilities	2,883,715			14,234		0.99	%	2,664,596			8,828		0.67	%
Non-interest-bearing deposits	634,308							569,711
Other liabilities	50,674							41,872
Total liabilities	3,568,697							3,276,179
Total stockholders’ equity	544,706							472,152
Total liabilities and stockholders’ equity	$	4,113,403						$	3,748,331
Interest rate spread (b)				$	70,430	3.56	%				$	62,617	3.56	%
Net interest margin (b)						3.78	%						3.70	%

(a) Average balances are based on carrying value.

(b) Interest income and yields are presented on a fully tax-equivalent basis using a 21% statutory federal corporate income tax rate.

(c) Interest income and yield presented for the second quarter of 2018 include $248,000 of proceeds on an investment security for which an other-than-temporary-impairment had been recorded in previous years. Interest income and yield presented for the first six months of 2018 include $589,000 of proceeds on an investment security for which an other-than-temporary-impairment had been recorded in previous years.

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(d) Average balances include nonaccrual, impaired loans and loans held for sale. Interest income includes interest earned and received on nonaccrual loans prior to the loans being placed on nonaccrual status. Loan fees included in interest income were immaterial for all periods presented.

(e) Loans held for sale are included in the average loan balance listed. Related interest income on loans originated for sale prior to the loan being sold is included in loan interest income.

The following table provides an analysis of the changes in FTE net interest income:

	Three Months Ended June 30, 2019 Compared to																		Compared to
(Dollars in thousands)	March 31, 2019									June 30, 2018									June 30, 2018
Increase (decrease) in:	Rate			Volume			Total (a)			Rate			Volume			Total (a)			Rate			Volume			Total (a)
INTEREST INCOME:
Short-term investments	$	(155	)	$	242		$	87		$	74		$	133		$	207		$	169		$	164		$	333
Investment Securities (b):
Taxable	(2,234		)	2,393			159			(1,908		)	2,046			138			282			16			298
Nontaxable	(191		)	434			243			(271		)	390			119			(14		)	(1		)	(15		)
Total investment income	(2,425		)	2,827			402			(2,179		)	2,436			257			268			15			283
Loans (b):
Commercial real estate, construction	11			(88		)	(77		)	140			77			217			380			236			616
Commercial real estate, other	280			446			726			1,424			(536		)	888			1,937			423			2,360
Commercial and industrial	50			350			400			604			1,261			1,865			1,464			2,511			3,975
Residential real estate	471			520			991			629			540			1,169			965			1,822			2,787
Home equity lines of credit	124			22			146			299			6			305			595			299			894
Consumer, indirect	125			42			167			219			538			757			527			1,188			1,715
Consumer, direct	145			125			270			85			144			229			236			20			256
Total loan income	1,206			1,417			2,623			3,400			2,030			5,430			6,104			6,499			12,603
Total interest income	$	(1,374	)	$	4,486		$	3,112		$	1,295		$	4,599		$	5,894		$	6,541		$	6,678		$	13,219
INTEREST EXPENSE:
Deposits:
Savings accounts	$	8		$	11		$	19		$	34		$	7		$	41		$	58		$	10		$	68
Governmental deposit accounts	220			71			291			558			17			575			894			21			915
Interest-bearing demand accounts	(92		)	76			(16		)	21			8			29			46			9			55
Money market accounts	94			29			123			313			18			331			599			37			636
Retail certificates of deposit	334			328			662			544			293			837			1,051			438			1,489
Brokered certificates of deposit	291			(495		)	(204		)	281			524			805			626			1,460			2,086
Total deposit cost	855			20			875			1,751			867			2,618			3,274			1,975			5,249
Borrowed funds:
Short-term borrowings	180			(120		)	60			886			(828		)	58			679			(416		)	263
Long-term borrowings	(13		)	(12		)	(25		)	136			(201		)	(65		)	171			(277		)	(106		)
Total borrowed funds cost	167			(132		)	35			1,022			(1,029		)	(7		)	850			(693		)	157
Total interest expense	1,022			(112		)	910			2,773			(162		)	2,611			4,124			1,282			5,406
Net interest income	$	(2,396	)	$	4,598		$	2,202		$	(1,478	)	$	4,761		$	3,283		$	2,417		$	5,396		$	7,813

(a) The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the dollar amounts of the changes in each.

(b) Interest income and yields are presented on a fully tax-equivalent basis using a 21% statutory federal corporate income tax rate.

Net interest income was $36.0 million for the second quarter of 2019, an increase of 6% compared to the linked quarter. Net interest margin was 3.77% for the second quarter of 2019, compared to 3.80% for the linked quarter. The slight decline in net interest margin during the quarter was driven by higher costs for time deposits and governmental deposits, which more than offset increased loan yields, driven by the acquisition of First Prestonsburg. Compared to the first quarter of 2019, net interest income was positively impacted by the acquisition of First Prestonsburg.

Accretion income, net of amortization expense, from acquisitions was $1.2 million for the second quarter of 2019 and $722,000 for the first quarter of 2019, which added 13 basis points and 8 basis points, respectively, to net interest margin.

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The growth in accretion income compared to the first quarter of 2019 was due to the First Prestonsburg acquisition, specifically the loan discount that was accreted during the quarter.

Net interest income for the current quarter increased $3.2 million, or 10%, over the second quarter of 2018. Net interest margin increased 3 basis points compared to 3.74% for the second quarter of 2018. The increase in net interest income compared to the second quarter of 2018 was driven by higher yields on loans combined with the impact of acquired First Prestonsburg loans. These were partially offset by higher deposit costs due to increased competition for deposits, combined with additional interest expense related to the acquired First Prestonsburg deposits. The second quarter of 2018 also benefited from proceeds of $248,000 received on an investment security that had been previously written down due to an OTTI, which added 3 basis points to the net interest margin. Peoples recorded no similar proceeds during the current quarter.

Accretion income, net of amortization expense, from acquisitions was $1.2 million for the second quarter of 2019 and $523,000 for the second quarter of 2018, which added 13 basis points and 6 basis points, respectively, to net interest margin. The increase in accretion income compared to the second quarter of 2018 was due to the First Prestonsburg acquisition.

For the first six months of 2019, net interest income grew 13% compared to 2018, and net interest margin grew 8 basis points to 3.78%. The increases were driven by higher interest income on loans due to a combination of loan growth, which was primarily the result of the First Prestonsburg and ASB acquisitions, and higher yields from interest rate increases. The increase in interest income due to loan growth outpaced higher deposit costs, which were due to the recent acquisitions and increased competition for deposits. The first six months of 2018 benefited from proceeds of $589,000 received on investment securities that had been previously written down due to OTTI, which added 3 basis points to net interest margin. Peoples recorded no similar proceeds during the first six months of 2019.

Accretion income, net of amortization expense, from acquisitions was $1.9 million for the first six months of 2019 and $1.1 million for the first six months of 2018, which added 10 basis points and 6 basis points, respectively, to net interest margin. The growth in accretion income compared to the first six months of 2018 was largely due to the First Prestonsburg acquisition.

Additional information regarding changes in the Unaudited Consolidated Balance Sheets can be found under appropriate captions of the “FINANCIAL CONDITION” section of this discussion. Additional information regarding Peoples' interest rate risk and the potential impact of interest rate changes on Peoples' results of operations and financial condition can be found later in this discussion under the caption "FINANCIAL CONDITION - Interest Rate Sensitivity and Liquidity."

Provision for (Recovery of) Loan Losses

The following table details Peoples’ provision for (recovery of) loan losses:

	Three Months Ended									Six Months Ended
	June 30, 2019			March 31, 2019			June 30, 2018			June 30,
(Dollars in thousands)										2019			2018
Provision for (recovery of) other loan losses	$	475		$	(360	)	$	1,000		$	115		$	2,842
Provision for checking account overdrafts	151			97			188			248			329
Provision for (recovery of) loan losses	$	626		$	(263	)	$	1,188		$	363		$	3,171
As a percentage of average total loans (a)	0.09		%	(0.04		)%	0.18		%	0.03		%	0.26		%
(a) Presented on an annualized basis.

The provision for, or recovery of, loan losses recorded represents the amount needed to maintain the appropriate level of the allowance for loan losses based on management’s formal quarterly analysis of the loan portfolio and procedural methodology that estimates the amount of probable credit losses. This process considers various factors that affect losses, such as changes in Peoples’ loan quality, historical loss experience, current economic conditions, and other environmental factors such as changes in real estate market conditions, unemployment, and the economic impact of tariffs.

The provision for loan losses during the second quarter and the first six months of 2019 was lower than historical trends, given low gross charge-offs and high recoveries combined with originated loan balances remaining stable during the first six months of 2019. Net charge-offs for the second quarter of 2019 were $208,000, or 0.03% of average total loans, compared to net recoveries of $1.0 million, or 0.15% of average total loans, for the linked quarter and $720,000, or 0.11% of average total loans, for the second quarter of 2018. Net recoveries during the first quarter of 2019 were driven by a $1.8 million recovery recorded on a previously charged-off commercial loan. Gross charge-offs were $665,000, or 0.09% of average total loans, for the second quarter of 2019, compared to $1.0 million, or 0.15% of average total loans, for the first quarter of 2019, and

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$1.0 million, or 0.15% of average total loans, for the second quarter of 2018. Net recoveries for the first six months of 2019 were $799,000, compared to net charge-offs of $2.7 million for the first six months of 2018. The first six months of 2018 included a charge-off of $827,000 on an acquired commercial loan relationship. Gross charge-offs were $1.7 million, or 0.12% of average total loans, for the first six months of 2019, compared to $3.3 million, or 0.26% of average total loans, for the first six months of 2018.

Additional information regarding changes in the allowance for loan losses and loan credit quality can be found later in this discussion under the caption “FINANCIAL CONDITION - Allowance for Loan Losses.”

Net (Losses) Gains Included in Total Non-Interest Income

Net gains and net losses include gains and losses on investment securities, and on asset disposals and other transactions, which are recognized in total non-interest income. The following table details Peoples’ net gains and net losses:

	Three Months Ended									Six Months Ended
	June 30, 2019			March 31, 2019			June 30, 2018			June 30,
(Dollars in thousands)										2019			2018
Net (loss) gain on investment securities	$	(57	)	$	30		$	(147	)	$	(27	)	$	(146	)
Net (loss) gain on asset disposals and other transactions:
Net loss on other assets	$	(274	)	$	(157	)	$	(330	)	$	(431	)	$	(251	)
Net (loss) gain on OREO	(24		)	(25		)	14			(49		)	9
Net loss on debt extinguishment	—			—			(13		)	—			(13		)
Net gain (loss) on other transactions	5			—			(76		)	5			(76		)
Net loss on asset disposals and other transactions	$	(293	)	$	(182	)	$	(405	)	$	(475	)	$	(331	)

During the second quarter of 2019, losses included $253,000 of write-offs of fixed assets acquired from First Prestonsburg. During the first quarter of 2019, net loss on other assets was primarily due to $118,000 of market value write-downs related to closed offices that were held for sale. During the second quarter of 2018, net loss on other assets included losses of $192,000 related to fixed assets acquired from ASB and $147,000 of market value write-downs related to closed offices that were held for sale.

Net losses during the year-to-date period through June 30, 2019 were driven by the write-offs of fixed assets acquired from First Prestonsburg, combined with market value write-downs related to closed offices that were held for sale. For the year-to-date period in 2018, the second quarter losses on fixed asset disposals, loss on investment securities, and market value write-downs on properties held for sale were partially offset by net gains related to repossessed assets recorded in the first quarter of 2018.

Total Non-Interest Income, Excluding Net Gains and Losses

Insurance income comprised the largest portion of the second quarter 2019 total non-interest income.  The following table details Peoples' insurance income:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Property and casualty insurance commissions	$	2,680	$	2,674	$	2,597	$	5,354	$	5,242
Performance-based commissions	2		1,419		3		1,421		1,350
Life and health insurance commissions	626		359		596		985		1,140
Other fees and charges	178		169		173		347		292
Insurance income	$	3,486	$	4,621	$	3,369	$	8,107	$	8,024

The decline in revenue related to performance-based commissions is due to annual performance-based insurance commissions, which are primarily recognized in the first quarter of each year and are a core component of insurance income.

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Life and health insurance commissions were low in the first six months of 2019 primarily due to an increase in deferred revenue.

Peoples' fiduciary and brokerage revenues continued to be based primarily upon the value of assets under administration and management, with additional income generated from transaction commissions, cross-selling of products and additional retirement plan services business. Fiduciary and brokerage income for the second quarter of 2019 increased compared to the first quarter of 2019 and the second quarter of 2018 primarily due to higher market values of accounts. The following tables detail Peoples’ trust and investment income and related assets under administration and management:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Fiduciary	$	1,837	$	1,636	$	1,767	$	3,473	$	3,374
Brokerage	1,038		965		989		2,003		1,952
Employee benefits	526		511		476		1,037		974
Trust and investment income	$	3,401	$	3,112	$	3,232	$	6,513	$	6,300

	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
(Dollars in thousands)
Trust assets under administration and management	$	1,501,110	$	1,471,422	$	1,384,113	$	1,489,810	$	1,454,009
Brokerage assets under administration and management	887,745		863,286		849,188		914,172		881,839
Total assets under administration and management	$	2,388,855	$	2,334,708	$	2,233,301	$	2,403,982	$	2,335,848
Quarterly average	$	2,356,121	$	2,312,098	$	2,316,201	$	2,378,676	$	2,331,529

Peoples' electronic banking ("e-banking") services include ATM and debit cards, direct deposit services, internet and mobile banking, and remote deposit capture and serve as alternative delivery channels to traditional sales offices for providing services to clients. The following table details Peoples' e-banking income:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Interchange fees	$	2,747	$	2,443	$	2,520	$	5,190	$	4,784
Promotional and usage income	520		544		265		1,064		786
E-banking income	$	3,267	$	2,987	$	2,785	$	6,254	$	5,570

Peoples' e-banking revenue is derived largely from ATM and debit cards, as other services are mainly provided at no charge to the customers. The amount of e-banking income is largely dependent on the timing and volume of customer activity. The increases in e-banking income in all comparisons were the result of the increased usage of debit cards by more customers, which includes the impact of additional cardholders obtained in the merger with First Prestonsburg.

Deposit account service charges are based on the recovery of costs associated with services provided. The following table details Peoples' deposit account service charges:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Overdraft and non-sufficient funds fees	$	1,746	$	1,433	$	1,584	$	3,179	$	3,023
Account maintenance fees	1,012		752		646		1,764		1,321
Other fees and charges	219		156		158		375		164
Deposit account service charges	$	2,977	$	2,341	$	2,388	$	5,318	$	4,508

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The amount of deposit account service charges, particularly fees for overdrafts and non-sufficient funds, is largely dependent on the timing and volume of customer activity. Management periodically evaluates its cost recovery fees to ensure they are reasonable based on operational costs and similar to fees charged in Peoples' markets by competitors. Income from deposit account service charges were up compared to the linked quarter, due to a combination of the additional accounts acquired from First Prestonsburg and a new deposit account fee schedule that was implemented in March 2019. Income from deposit account service charges for the first six months of 2019 were up compared to a year ago primarily due to the ASB and First Prestonsburg acquisitions, coupled with changes in fee schedules.

The following table details the other items included within Peoples' total non-interest income:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Mortgage banking income	$	1,000	$	788	$	969	$	1,788	$	1,320
Bank owned life insurance income	490		485		497		975		965
Commercial loan swap fees	516		146		146		662		262
Other non-interest income	502		1,101		421		1,603		1,752

Mortgage banking income is comprised mostly of net gains from the origination and sale of real estate loans in the secondary market, and servicing income for loans sold with servicing retained. As a result, the amount of income recognized by Peoples is largely dependent on customer demand and long-term interest rates for residential real estate loans offered in the secondary market. The increase in mortgage banking income from the first quarter of 2019 was mainly due to customer demand which is typically seasonally low in the first quarter of each year. For the first six months of 2019, compared to the same period in 2018, the increase in mortgage banking income was largely attributable to gains on sale of real estate loans originated by the mortgage origination operation acquired as part of the ASB acquisition.

In the second quarter of 2019, Peoples sold approximately $24.9 million in loans to the secondary market with servicing retained and sold approximately $11.4 million in loans with servicing released, compared to approximately $13.7 million and $10.9 million, respectively, in the linked quarter. For the first six months of 2019, Peoples sold approximately $38.6 million in loans to the secondary market with servicing retained and sold approximately $22.3 million in loans with servicing released, compared to approximately $29.2 million and $13.6 million, respectively, in the first six months of 2018. The volume of sales has a direct impact on the amount of mortgage banking income.

Commercial loan swap fees are largely dependent on timing, interest rates, and volume of customer activity. The increase in all comparisons was driven by a combination of an increase in the average size of each transaction and higher customer demand, given the current rate environment and the favorable longer term rates that customers can lock in by utilizing a swap.

Compared to the linked quarter, other non-interest income declined primarily due to lower income from equity investment securities, which was down $809,000. During the first quarter of 2019, Peoples recognized $787,000 of income related to the sale of restricted Class B Visa stock, which had been held at a carrying cost and fair value of zero due to the litigation liability associated with the stock. Other non-interest income for the first six months of 2019 was down compared to the same period of 2018, due to a decrease in Small Business Administration income of $550,000 and declines in various other small items, partially offset by an increase in income from equity investment securities of $585,000.

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Non-Interest Expense

Salaries and employee benefit costs remain Peoples' largest non-interest expense, accounting for over one-half of total non-interest expense.  The following table details Peoples' salaries and employee benefit costs:

	Three Months Ended									Six Months Ended
	June 30, 2019			March 31, 2019			June 30, 2018			June 30,
(Dollars in thousands)										2019			2018
Base salaries and wages	$	14,353		$	11,874		$	12,656		$	26,227		$	23,028
Employee benefits	1,966			2,690			1,485			4,656			3,028
Sales-based and incentive compensation	3,096			2,609			3,003			5,705			5,239
Payroll taxes and other employment costs	1,208			1,377			1,036			2,585			2,220
Stock-based compensation	930			1,208			424			2,138			1,510
Deferred personnel costs	(729		)	(556		)	(579		)	(1,285		)	(1,010		)
Salaries and employee benefit costs	$	20,824		$	19,202		$	18,025		$	40,026		$	34,015
Full-time equivalent employees:
Actual at end of period	918			859			862			918			862
Average during the period	906			869			844			891			820

The increase in full-time equivalent employees in the second quarter of 2019 and the first six months of 2019 compared to previous periods was mainly due to additional employees from the First Prestonsburg acquisition and, in comparison to the 2018 periods, employees that were added in the last twelve months from acquisitions and for future growth.

The increase in base salaries and wages for the second quarter of 2019 compared to the linked quarter was primarily due to acquisition-related expenses of $2.2 million (mainly severance and change in control costs). Compared to the second quarter of 2018, base salaries and wages increased due to a combination of employees that have been added in the last twelve months from acquisitions and for future growth, annual merit increases, which included the implementation of a $15 per hour minimum wage throughout the company, and an increase in acquisition-related expenses of $594,000. The $15 per hour minimum wage began being phased in during 2018 and is expected to be largely implemented by January 1, 2020. For the first six months of 2019 compared to the same period of 2018, the increase was impacted by the First Prestonsburg and ASB acquisitions, as well as the employees that have been added in the last twelve months for future growth.

The decline in employee benefits for the second quarter of 2019, compared to the linked quarter, was primarily due to lower medical insurance costs of $817,000. Medical insurance costs in the linked quarter included annual contributions to employee health benefit accounts resulting in an expense of $450,000. These contributions occur primarily in the first quarter of each year. Compared to the second quarter of 2018, the increase in employee benefits was driven by higher medical insurance costs due primarily to higher medical claims and the increase in the number of plan participants, which was impacted by the First Prestonsburg acquisition. The increase in employee benefits in the six-month periods comparison was impacted by the First Prestonsburg and ASB acquisitions, and included an increase in medical insurance costs of $1.3 million.

The increase in sales-based and incentive compensation for the second quarter of 2019, compared to the linked quarter, was due to higher sales-based compensation from insurance, mortgage banking and retail lines of business. The increase in sales-based and incentive compensation for the second quarter of 2019, compared to the second quarter of 2018, was due to higher sales-based compensation from the mortgage banking and retail lines of business. Compared to the first six months of 2018, the increase in sales-based and incentive compensation for the first six months of 2019 was driven by higher sales-based compensation from mortgage banking. The increase in mortgage banking growth compared to the first six months of 2018 was largely attributable to the mortgage origination operation acquired as part of the ASB acquisition.

The increases in payroll taxes and other employment costs for periods in 2019 compared to those in 2018 primarily reflected the increases in base salaries and wages.

Stock-based compensation declined compared to the linked quarter due largely to annual stock grants, which occur primarily in the first quarter of each year. The majority of the grants are expensed over the three-year vesting period, with the exception of those made to retirement eligible grantees. Stock grants to retirement eligible grantees are expensed either immediately or over a shorter period than three years. The $1.2 million of stock-based compensation for the first quarter of 2019 included $469,000 of expense related to stock grants to retirement eligible individuals, and $128,000 of expense related

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to the annual vesting of prior stock grants. The increase in stock-based compensation compared to the 2018 periods was driven by higher expense related to stock grants made to retirement eligible grantees combined with Peoples' improved performance during recent years.

Peoples' net occupancy and equipment expense was comprised of the following:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Depreciation	$	1,494	$	1,249	$	1,248	$	2,743	$	2,466
Repairs and maintenance costs	715		770		659		1,485		1,507
Net rent expense	250		288		235		538		444
Property taxes, utilities and other costs	673		671		661		1,344		1,252
Net occupancy and equipment expense	$	3,132	$	2,978	$	2,803	$	6,110	$	5,669

Net occupancy and equipment expense for the second quarter of 2019 increased primarily due to costs related to the addition of nine full-service bank branches from the First Prestonsburg acquisition and ongoing increased operating costs associated with the expanded footprint. These increases were partially offset by a reduction in ATM repairs and maintenance costs driven by a new vendor contract. For the first six months of 2019, the increase in net occupancy and equipment expense was driven by additional costs related to the First Prestonsburg and ASB acquisitions, partially offset by a reduction in ATM repairs and maintenance costs driven by the new vendor contract.

The following table details the other items included in total non-interest expense:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Professional fees	$	2,344	$	1,276	$	3,022	$	3,620	$	4,740
Electronic banking expense	1,693		1,577		1,407		3,270		2,857
Data processing and software expense	1,567		1,545		1,359		3,112		2,681
Amortization of other intangible assets	824		694		861		1,518		1,615
Franchise tax expense	772		705		614		1,477		1,258
Marketing expense	490		594		656		1,084		981
FDIC insurance expense	381		371		416		752		782
Foreclosed real estate and other loan expenses	469		255		338		724		550
Communication expense	317		278		300		595		644
Other non-interest expense	6,063		2,519		6,170		8,448		8,400

Professional fees increased $1.1 million, or 84%, from the first quarter of 2019, driven by acquisition-related expenses of $562,000 in the current quarter, up from $58,000 in the first quarter of 2019, combined with additional audit and consulting work performed during second quarter of 2019. Professional fees were down compared to the second quarter of 2018, primarily due to consulting work performed during the second quarter of 2018 which was not duplicated in 2019. Professional fees were down compared to the first six months of 2018, mainly due to lower legal expenses and consulting work performed during the first six months of 2018 which was not duplicated in 2019.

Electronic banking expense was up in each comparison due to an increase in customer accounts and customer usage of mobile and online banking tools, which were impacted by the First Prestonsburg and ASB mergers.

Data processing and software expense increased $208,000, or 15%, from the second quarter of 2018, and $431,000, or 16%, compared to the first six months of 2018. The increases were driven by upgrades and overall growth, which included: the implementation of enhanced functionalities for Peoples' core banking system, including making certain mobile banking tools available to customers; increases in customer accounts and customer usage of mobile and online banking tools; software upgrades; and additional network capacity and security features. Data processing and software expense included $91,000 of acquisition-related expenses in the first six months of 2019, and $59,000 in the first six months of 2018.

Peoples' amortization of other intangible assets is driven by acquisition-related activity. Amortization of other intangible assets for the second quarter of 2019 was up compared to the first quarter of 2019 as a result of the core deposit intangible asset related to the acquisition of First Prestonsburg.

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Marketing expense was down $104,000, or 18%, for the second quarter of 2019, compared to the first quarter of 2019, and down $166,000, or 25%, compared to the second quarter of 2018, due to the timing of product marketing campaigns.

The increase in other non-interest expense of $3.5 million for the second quarter of 2019 compared to the linked quarter, was primarily due to acquisition-related expenses of $3.7 million (mainly contract termination fees) in the current quarter compared to $54,000 in the linked quarter.

Income Tax Expense

Income tax expense was $2.2 million for the second quarter of 2019, compared to $3.4 million for the linked quarter and $1.0 million for the second quarter of 2018. The decline in income tax expense compared to the linked quarter was due to lower pre-tax income. The current quarter included a tax benefit of $59,000 recorded for the vesting of restricted stock during the current quarter, compared to a tax benefit of $133,000 in the linked quarter. The vesting of a majority of stock awards granted by Peoples occurs annually in the first quarter. The increase in income tax expense compared to the second quarter of 2018 was due to higher pre-tax income combined with the release of a valuation allowance during the second quarter of 2018 of $805,000.

For the first six months of 2019, Peoples recorded income tax expense of $5.6 million, compared to $3.4 million for the same period in the prior year, and the effective tax rate for the first six months of 2019 was 18.9%, compared to 14.7% for the first six months of 2018. The year-over-year increase in income tax expense was primarily due to higher pre-tax income combined with the release of a valuation allowance during the first six months of 2018 of $805,000. The first six months of 2019 included a tax benefit of $192,000 recorded for the vesting of restricted stock during the period, compared to a tax benefit of $296,000 in the first six months of 2018.

Additional information regarding income taxes can be found in "Note 12 Income Taxes" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10-K.

Pre-Provision Net Revenue (non-US GAAP)

Pre-provision net revenue ("PPNR") has become a key financial measure used by state and federal bank regulatory agencies when assessing the capital adequacy of financial institutions. PPNR is defined as net interest income plus total non-interest income (excluding all gains and losses) minus total non-interest expense while excluding the recovery of, or provision for, loan losses and all gains and losses included in earnings. As a result, PPNR represents the earnings capacity that can be either retained in order to build capital or used to absorb unexpected losses and preserve existing capital. This ratio represents a non-US GAAP financial measure since it excludes the provision for loan losses and all gains and/or losses included in earnings.

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The following table provides a reconciliation of this non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Consolidated Financial Statements for the periods presented:    

	Three Months Ended									Six Months Ended
	June 30, 2019			March 31, 2019			June 30, 2018			June 30,
(Dollars in thousands)										2019			2018
Pre-provision net revenue:
Income before income taxes	$	11,836		$	17,746		$	8,904		$	29,582		$	23,028
Add: provision for loan losses	626			—			1,188			363			3,171
Add: loss on debt extinguishment	—			—			13			—			13
Add: net loss on OREO	24			25			—			49			—
Add: net loss on investment securities	57			—			147			27			146
Add: net loss on other assets	274			157			330			431			251
Add: net loss on other transactions	—			—			76			—			76
Less: net gain on OREO	—			—			14			—			9
Less: recovery of loan losses	—			263			—			—			—
Less: net gain on investment securities	—			30			—			—			—
Less: gain on other transactions	5						—			5			—
Pre-provision net revenue	$	12,812		$	17,635		$	10,644		$	30,447		$	26,676
Total average assets	$	4,239,779		$	3,985,621		$	3,897,957		$	4,113,403		$	3,748,331
Pre-provision net revenue to total average assets (a)	1.21		%	1.79		%	1.10		%	1.49		%	1.44		%
(a) Presented on an annualized basis.

Pre-provision net revenue and the ratio of pre-provision net revenue to total average assets decreased in the second quarter of 2019 compared to the linked quarter, due primarily to decreased income before income taxes mainly as a result of acquisition-related expenses of $6.8 million. Compared to the second quarter of 2018, the increase in pre-provision net revenue and pre-provision net revenue to total average assets was driven by higher net interest income. Pre-provision net revenue and the ratio of pre-provision net revenue to total average assets for the first six months of 2019, compared to the first six months of 2018, increased primarily due to higher income before income taxes, as both periods were impacted by acquisition-related expenses.

Core Non-Interest Expense (non-US GAAP)

Core non-interest expense is a financial measures used to evaluate Peoples' recurring expense stream. This measure is non-US GAAP since it excludes the impact of all acquisition-related expenses.

The following tables provide reconciliations of this non-US GAAP measure to the amounts reported in Peoples' Unaudited Consolidated Financial Statements for the periods presented:

	Three Months Ended						Six Months Ended
	June 30, 2019		March 31, 2019		June 30, 2018		June 30,
(Dollars in thousands)							2019		2018
Core non-interest expense:
Total non-interest expense	$	38,876	$	31,860	$	35,971	$	70,736	$	64,192
Less: acquisition-related expenses	6,770		253		6,056		7,023		6,205
Core non-interest expense	$	32,106	$	31,607	$	29,915	$	63,713	$	57,987

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Efficiency Ratio (non-US GAAP)

The efficiency ratio is a key financial measure used to monitor performance. The efficiency ratio is calculated as total non-interest expense (less amortization of other intangible assets) as a percentage of fully tax-equivalent net interest income plus total non-interest income excluding net gains and losses. This measure is non-US GAAP since it excludes amortization of other intangible assets and all gains and/or losses included in earnings, and uses fully tax-equivalent net interest income.

The following table provides a reconciliation of this non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Consolidated Financial Statements for the periods presented:

	Three Months Ended									Six Months Ended
	June 30, 2019			March 31, 2019			June 30, 2018			June 30,
(Dollars in thousands)										2019			2018
Efficiency ratio:
Total non-interest expense	$	38,876		$	31,860		$	35,971		$	70,736		$	64,192
Less: amortization of other intangible assets	824			694			861			1,518			1,615
Adjusted total non-interest expense	$	38,052		$	31,166		$	35,110		$	69,218		$	62,577
Total non-interest income	$	15,289		$	15,429		$	13,255		$	30,718		$	28,224
Less: net (loss) gain on investment securities	(57		)	30			(147		)	(27		)	(146		)
Less: net loss on asset disposals and other transactions	(293		)	(182		)	(405		)	(475		)	(331		)
Total non-interest income excluding net gains and losses	$	15,639		$	15,581		$	13,807		$	31,220		$	28,701
Net interest income	$	36,049		$	33,914		$	32,808		$	69,963		$	62,167
Add: fully tax-equivalent adjustment (a)	267			200			225			467			450
Net interest income on a fully tax-equivalent basis	$	36,316		$	34,114		$	33,033		$	70,430		$	62,617
Adjusted revenue	$	51,955		$	49,695		$	46,840		$	101,650		$	91,318
Efficiency ratio	73.24		%	62.71		%	74.96		%	68.09		%	68.53		%
Efficiency ratio adjusted for non-core items:
Core non-interest expense	$	32,106		$	31,607		$	29,915		$	63,713		$	57,987
Less: amortization of other intangible assets	824			694			861			1,518			1,615
Adjusted core non-interest expense	$	31,282		$	30,913		$	29,054		$	62,195		$	56,372
Total non-interest income excluding net gains and losses	$	15,639		$	15,581		$	13,807		$	31,220		$	28,701
Net interest income on a fully tax-equivalent basis	36,316			34,114			33,033			70,430			62,617
Adjusted revenue	$	51,955		$	49,695		$	46,840		$	101,650		$	91,318
Efficiency ratio adjusted for non-core items	60.21		%	62.21		%	62.03		%	61.19		%	61.73		%

(a) Based on a 21% statutory federal corporate income tax rate.

The increase in the efficiency ratio compared to the linked quarter was driven by an increase in acquisition-related expenses of $6.5 million. The efficiency ratio adjusted for non-core items declined compared to both the linked quarter and the second quarter of 2018, mostly due to higher net interest income. Management is targeting an efficiency ratio of 59% to 61% for the full year of 2019, after excluding acquisition-related expenses and other non-core acquisition-related expenses.

Return on Average Assets Adjusted for Non-Core Items (non-US GAAP)

In addition to return on average assets, management uses return on average assets adjusted for non-core items to monitor performance. The return on average assets ratio adjusted for non-core items represents a non-US GAAP financial measure since it excludes the after-tax impact of all gains and losses, and acquisition-related expenses.

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The following table provides a reconciliation of this non-US GAAP financial measure to the amounts reported in Peoples' Unaudited Consolidated Financial Statements for the periods presented:

	Three Months Ended									Six Months Ended
	June 30, 2019			March 31, 2019			June 30, 2018			June 30,
(Dollars in thousands)										2019			2018
Annualized net income adjusted for non-core items:
Net income	$	9,598		$	14,369		$	7,892		$	23,967		$	19,633
Add: net loss on investment securities	57			—			147			27			146
Less: tax effect of net loss on investment securities (a)	12			—			31			6			31
Less: net gain on investment securities	—			30			—			—			—
Add: tax effect of net gain on investment securities (a)	—			6			—			—			—
Add: net loss on asset disposals and other transactions	293			182			405			475			331
Less: tax effect of net loss on asset disposals and other transactions (a)	62			38			85			100			70
Add: acquisition-related expenses	6,770			253			6,056			7,023			6,205
Less: tax effect of acquisition-related expenses (a)	1,422			53			1,272			1,475			1,303
Net income adjusted for non-core items	$	15,222		$	14,689		$	13,112		$	29,911		$	24,911
Days in the quarter	91			90			91			181			181
Days in the year	365			365			365			365			365
Annualized net income	$	38,497		$	58,274		$	31,655		$	48,331		$	39,591
Annualized net income adjusted for non-core items	$	61,055		$	59,572		$	52,592		$	60,318		$	50,235
Return on average assets:
Annualized net income	$	38,497		$	58,274		$	31,655		$	48,331		$	39,591
Total average assets	4,239,779			3,985,621			3,897,957			4,113,403			3,748,331
Return on average assets	0.91		%	1.46		%	0.81		%	1.17		%	1.06		%
Return on average assets adjusted for non-core items:
Annualized net income adjusted for non-core items	$	61,055		$	59,572		$	52,592		$	60,318		$	50,235
Total average assets	4,239,779			3,985,621			3,897,957			4,113,403			3,748,331
Return on average assets adjusted for non-core items	1.44		%	1.49		%	1.35		%	1.47		%	1.34		%

(a) Based on a 21% statutory federal corporate income tax rate.

The return on average assets declined in the second quarter of 2019 compared to the linked quarter, driven by an increase in acquisition-related expenses of $6.5 million compared to the linked quarter, combined with higher average assets which resulted from the First Prestonsburg merger. Compared to the second quarter of 2018, the increase in return on average assets was driven by higher net interest income, non-interest income, and a lower provision for loan losses, partially offset by an increase in average assets. The return on average assets increased in the first six months of 2019 compared to the same period of 2018, driven by higher net interest income, a lower provision for loan losses, and higher non-interest income compared to the linked quarter, partially offset by an increase in average assets, all of which were impacted by the First Prestonsburg and ASB mergers.

The return on average assets adjusted for non-core items declined in the second quarter of 2019 compared to the linked quarter, driven by the increase in average assets, combined with relatively unchanged non-interest income. Compared to the second quarter of 2018, the increase in return on average assets adjusted for non-core items was driven by higher net interest income, non-interest income, and a lower provision for loan losses, partially offset by an increase in average assets. The return on average assets adjusted for non-core items increased in the first six months of 2019 compared to the same period of 2018, driven by higher net interest income, a lower provision for loan losses, and higher non-interest income compared to the

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linked quarter, partially offset by an increase in average assets, all of which were impacted by the First Prestonsburg and ASB mergers.

Return on Average Tangible Equity (non-US GAAP)

The return on average tangible equity ratio is a key financial measure used to monitor performance. The return on tangible equity is calculated as net income (less after-tax impact of amortization of other intangible assets) divided by tangible equity. The return on tangible equity is calculated as net income (less the after-tax impact of amortization of other intangible assets) divided by tangible equity. This measure is non-US GAAP since it excludes amortization of other intangible assets from earnings and the impact of goodwill and other intangible assets acquired through acquisitions on total stockholders' equity.

	Three Months Ended									Six Months Ended
	June 30, 2019			March 31, 2019			June 30, 2018			June 30,
(Dollars in thousands)										2019			2018
Annualized net income excluding amortization of other intangible assets:
Net income	$	9,598		$	14,369		$	7,892		$	23,967		$	19,633
Add: amortization of other intangible assets	824			694			861			1,518			1,615
Less: tax effect of amortization of other intangible assets (a)	173			146			181			319			339
Net income excluding amortization of other intangible assets	$	10,249		$	14,917		$	8,572		$	25,166		$	20,909
Days in the quarter	91			90			91			181			181
Days in the year	365			365			365			365			365
Annualized net income	$	38,497		$	58,274		$	31,655		$	48,331		$	39,591
Annualized net income excluding amortization of other intangible assets	$	41,109		$	60,497		$	34,382		$	50,749		$	42,165
Average tangible equity:
Total average stockholders' equity	$	564,992		$	524,196		$	489,876		$	544,706		$	472,152
Less: average goodwill and other intangible assets	175,169			161,673			161,600			168,458			152,943
Average tangible equity	$	389,823		$	362,523		$	328,276		$	376,248		$	319,209
Return on average stockholders' equity ratio:
Annualized net income	$	38,497		$	58,274		$	31,655		$	48,331		$	39,591
Average stockholders' equity	$	564,992		$	524,196		$	489,876		$	544,706		$	472,152
Return on average stockholders' equity	6.81		%	11.12		%	6.46		%	8.87		%	8.39		%
Return on average tangible equity ratio:
Annualized net income excluding amortization of other intangible assets	$	41,109		$	60,497		$	34,382		$	50,749		$	42,165
Average tangible equity	$	389,823		$	362,523		$	328,276		$	376,248		$	319,209
Return on average tangible equity	10.55		%	16.69		%	10.47		%	13.49		%	13.21		%

(a) Based on a 21% statutory federal corporate income tax rate.

The return on average stockholders' equity and on average tangible stockholders' equity ratios were impacted by the First Prestonsburg acquisition, which created increases in capital and decreased income for the second quarter of 2019 due to the acquisition-related costs. The return on average stockholders' equity and on average tangible stockholders' equity ratios increased in the first six months of 2019 compared to the first six months of 2018, reflecting an increase in net income, which was partially offset by dividends declared and paid during the period.

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FINANCIAL CONDITION

Cash and Cash Equivalents

At June 30, 2019, Peoples' interest-bearing deposits in other banks increased $20.9 million from December 31, 2018. The total cash and cash equivalent balance included $19.8 million of excess cash reserves being maintained at the FRB of Cleveland at June 30, 2019, compared to $11.2 million at December 31, 2018. The amount of excess cash reserves maintained is dependent upon Peoples' daily liquidity position, which is driven primarily by changes in deposit and loan balances.

Through the first six months of 2019, Peoples' total cash and cash equivalents increased $15.8 million as Peoples' net cash provided used in financing activities of $71.2 million was less than the sum of net cash provided by investing and operating activities of $68.2 million and $18.8 million, respectively. Peoples' investing activities reflected a net decrease of $29.2 million in loans and $145.2 million in net proceeds from sales, principal payments, calls and prepayments on available-for-sale and held-to-maturity investment securities, which were partially offset by purchases of $116.4 million in available-for-sale investment securities. Financing activities included a $207.3 million decrease in short-term borrowings, as well as $12.5 million of cash dividends paid, offset partially by a net increase of $150.3 million in deposits.

Further information regarding the management of Peoples' liquidity position can be found later in this discussion under “Interest Rate Sensitivity and Liquidity.”

Investment Securities

The following table provides information regarding Peoples’ investment portfolio:

(Dollars in thousands)	June 30, 2019		March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Available-for-sale securities, at fair value:
Obligations of:
U.S. Treasury and government agencies	$	—	$	—		$	—		$	—		$	43
U.S. government sponsored agencies	19,051		—			—			—			—
States and political subdivisions	125,418		84,827			88,587			93,790			96,913
Residential mortgage-backed securities	748,132		706,976			692,608			688,656			688,002
Commercial mortgage-backed securities	22,664		6,649			6,707			6,713			6,799
Bank-issued trust preferred securities	4,099		4,118			3,989			4,166			4,167
Total fair value	$	919,364	$	802,570		$	791,891		$	793,325		$	795,924
Total amortized cost	$	910,431	$	806,641		$	804,655		$	819,431		$	816,217
Net unrealized gain (loss)	$	8,933	$	(4,071	)	$	(12,764	)	$	(26,106	)	$	(20,293	)
Held-to-maturity securities, at amortized cost:
Obligations of:
States and political subdivisions	$	4,398	$	4,401		$	4,403		$	4,451		$	4,530
Residential mortgage-backed securities	23,335		28,348			29,044			29,765			30,668
Commercial mortgage-backed securities	7,106		2,857			3,514			3,574			3,636
Total amortized cost	$	34,839	$	35,606		$	36,961		$	37,790		$	38,834
Other investment securities	$	43,508	$	41,449		$	42,985		$	43,044		$	42,007
Total investment securities:
Amortized cost	$	988,778	$	883,696		$	884,601		$	900,265		$	897,058
Carrying value	$	997,711	$	879,625		$	871,837		$	874,159		$	876,765

During the second quarter of 2019, Peoples acquired, in the First Prestonsburg acquisition, investment securities totaling $140.7 million and subsequently sold approximately $65.1 million of acquired available-for-sale investment securities. In April and May of 2019, $53.7 million in proceeds were reinvested. Available-for-sale residential mortgage-backed securities

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were up at March 31, 2019, compared to December 31, 2018, primarily due to an increase in fair value driven by overall declines in market interest rates during the quarter. At December 31, 2018, the amortized cost of available-for-sale securities declined compared to September 30, 2018, as securities matured and were not replaced.

Additional information regarding Peoples' investment portfolio can be found in "Note 3 Investment Securities" of the Notes to the Unaudited Consolidated Financial Statements.

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Loans

The following table provides information regarding outstanding loan balances:

(Dollars in thousands)	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Gross originated loans:
Commercial real estate, construction	$	102,904		$	116,992		$	124,013		$	103,562		$	107,255
Commercial real estate, other	641,061			630,679			632,200			630,720			650,512
Commercial real estate	743,965			747,671			756,213			734,282			757,767
Commercial and industrial	548,460			558,070			530,207			510,591			471,270
Residential real estate	299,173			297,667			296,860			299,768			299,934
Home equity lines of credit	90,374			90,831			93,326			92,892			89,957
Consumer, indirect	419,595			410,172			407,167			396,701			373,384
Consumer, direct	72,209			69,710			71,674			72,601			71,545
Consumer	491,804			479,882			478,841			469,302			444,929
Deposit account overdrafts	676			518			583			649			860
Total originated loans	$	2,174,452		$	2,174,639		$	2,156,030		$	2,107,484		$	2,064,717
Gross acquired loans (a):
Commercial real estate, construction	$	6,775		$	7,966		$	12,404		$	13,050		$	14,780
Commercial real estate, other	201,909			171,785			184,711			191,993			207,195
Commercial real estate	208,684			179,751			197,115			205,043			221,975
Commercial and industrial	51,506			34,837			35,537			41,188			40,938
Residential real estate	348,439			308,137			296,937			308,178			309,629
Home equity lines of credit	41,262			38,084			40,653			42,961			45,933
Consumer, indirect	90			111			136			161			198
Consumer, direct	9,100			2,021			2,370			2,712			3,101
Consumer	9,190			2,132			2,506			2,873			3,299
Total acquired loans	$	659,081		$	562,941		$	572,748		$	600,243		$	621,774
Total loans	$	2,833,533		$	2,737,580		$	2,728,778		$	2,707,727		$	2,686,491
Average total loans	$	2,830,558		$	2,734,592		$	2,718,620		$	2,717,200		$	2,627,777
Average allowance for loan losses	(21,311		)	(20,406		)	(20,079		)	(19,584		)	(19,071		)
Average loans, net of average allowance for loan losses	$	2,809,247		$	2,714,186		$	2,698,541		$	2,697,616		$	2,608,706
Percent of loans to total loans:
Commercial real estate, construction	3.9		%	4.6		%	5.1		%	4.3		%	4.5		%
Commercial real estate, other	29.7		%	29.3		%	29.9		%	30.4		%	31.9		%
Commercial real estate	33.6		%	33.9		%	35.0		%	34.7		%	36.4		%
Commercial and industrial	21.2		%	21.7		%	20.7		%	20.3		%	19.1		%
Residential real estate	22.9		%	22.1		%	21.8		%	22.5		%	22.7		%
Home equity lines of credit	4.6		%	4.7		%	4.9		%	5.0		%	5.1		%
Consumer, indirect	14.8		%	15.0		%	14.9		%	14.7		%	13.9		%
Consumer, direct	2.9		%	2.6		%	2.7		%	2.8		%	2.8		%
Consumer	17.7		%	17.6		%	17.6		%	17.5		%	16.7		%
Deposit account overdrafts (b)	NM			NM			NM			NM			NM
Total percentage	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%
Residential real estate loans being serviced for others	$	473,443		$	464,575		$	461,256		$	458,999		$	451,391

(a) Includes all loans acquired, and related loan discount recorded as part of acquisition accounting, in 2012 or thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals and increases in lines of credit).

(b) Not meaningful.

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As of June 30, 2019, balances in loan accounts acquired from First Prestonsburg totaled $125.3 million, including $52.1 million in residential real estate loans, $42.4 million in commercial real estate loans, $7.4 million in consumer, direct loans, $17.7 million in commercial and industrial loans, and $5.8 million in home equity lines of credit.

Period-end total loan balances at June 30, 2019 increased $96.0 million compared to March 31, 2019, $104.8 million compared to December 31, 2018, and $147.0 million compared to June 30, 2018. Originated loan balances declined $187,000 compared to March 31, 2019, and increased $18.4 million compared to December 31, 2018, and $109.7 million compared to June 30, 2018. Loan originations during the first half of 2019 were higher than in recent years for the same period, however, significantly higher loan paydowns experienced during the first half of 2019 minimized the impact of the increased production on loan growth for all comparison periods. Compared to period-end total loan balances at March 31, 2019, originated commercial and industrial loan balances declined $9.6 million, partially offset by growth in originated consumer indirect loans of $9.4 million.

Commercial and industrial loan balances grew $18.3 million compared to December 31, 2018. Growth in residential real estate loans of $71.2 million was driven by the First Prestonsburg acquisition, combined with the purchase of $19.0 million of 1-4 family first lien mortgages, during the first quarter of 2019.

Compared to June 30, 2018, originated loan growth of $109.7 million, or 5%, was led by an increase in commercial and industrial loans of $77.2 million, or 16%, and indirect consumer lending growth of $46.2 million, or 12%.

Loan Concentration

Peoples categorizes its commercial loans according to standard industry classifications and monitors for concentrations in a single industry or multiple industries that could be impacted by changes in economic conditions in a similar manner. Peoples' commercial lending activities continue to be spread over a diverse range of businesses from all sectors of the economy, with no single industry comprising over 10% of Peoples' total loan portfolio.

Loans secured by commercial real estate, including commercial construction loans, continued to comprise the largest portion of Peoples' loan portfolio. The following table provides information regarding the largest concentrations of commercial real estate loans within the loan portfolio at June 30, 2019:

(Dollars in thousands)	Outstanding Balance		Loan Commitments		Total Exposure		% of Total
Commercial real estate, construction:
Assisted living facilities and nursing homes	$	17,745	$	29,268	$	47,013	23.7	%
Apartment complexes	15,767		14,818		30,585		15.4	%
Educational services	8,538		19,895		28,433		14.3	%
Office buildings	15,775		7,702		23,477		11.8	%
Mixed used facility	17,729		4,902		22,631		11.4	%
Industrial	8,271		—		8,271		4.2	%
Child care	5,930		95		6,025		3.0	%
Retail	1,797		4,035		5,832		2.9	%
Warehouse	4,280		1,333		5,613		2.9	%
Residential property	2,465		2,714		5,179		2.6	%
Other (a)	11,382		4,057		15,439		7.8	%
Total commercial real estate, construction	$	109,679	$	88,819	$	198,498	100.0	%

(a) All other outstanding balances are less than 2% of the total loan portfolio.

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(Dollars in thousands)	Outstanding Balance		Loan Commitments		Total Exposure		% of Total
Commercial real estate, other:
Office buildings and complexes:
Owner occupied	$	73,617	$	1,822	$	75,439	8.6	%
Non-owner occupied	52,739		4,591		57,330		6.5	%
Total office buildings and complexes	126,356		6,413		132,769		15.1	%
Mixed-use facilities:
Owner occupied	36,567		864		37,431		4.3	%
Non-owner occupied	71,527		785		72,312		8.2	%
Total mixed-use facilities	108,094		1,649		109,743		12.5	%
Apartment complexes	77,535		849		78,384		8.9	%
Retail facilities:
Owner occupied	29,202		714		29,916		3.5	%
Non-owner occupied	39,602		98		39,700		4.5	%
Total retail facilities	68,804		812		69,616		8.0	%
Industrial facilities:
Owner occupied	46,056		127		46,183		5.2	%
Non-owner occupied	16,782		1,088		17,870		2.0	%
Total light industrial facilities	62,838		1,215		64,053		7.2	%
Warehouse facilities	56,048		4,898		60,946		6.9	%
Lodging and lodging related	30,901		—		30,901		3.5	%
Assisted living facilities and nursing homes	30,915		282		31,197		3.5	%
Land only	16,383		2,177		18,560		2.1	%
Other (a)	265,096		18,693		283,788		32.3	%
Total commercial real estate, other	$	842,970	$	36,988	$	879,957	100.0	%

(a) All other outstanding balances are less than 2% of the total loan portfolio.

Peoples' commercial lending activities continue to focus on lending opportunities inside its primary and secondary market areas within Ohio, West Virginia and Kentucky. In all other states, the aggregate outstanding balances of commercial loans in each state were not material at either June 30, 2019 or December 31, 2018.

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Allowance for Loan Losses

The amount of the allowance for loan losses at the end of each period represents management's estimate of expected losses from existing loans based upon its quarterly analysis of the loan portfolio. While this process involves allocations being made to specific loans and pools of loans, the entire allowance is available for all losses incurred within the loan portfolio.

The following details management's allocation of the allowance for loan losses:

(Dollars in thousands)	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Commercial real estate	$	8,245		$	8,297		$	8,003		$	7,966		$	8,271
Commercial and industrial	7,197			6,743			6,178			6,138			5,365
Total commercial	15,442			15,040			14,181			14,104			13,636
Residential real estate	1,184			1,213			1,214			999			1,005
Home equity lines of credit	598			608			618			708			618
Consumer, indirect	3,172			3,133			3,214			3,423			3,339
Consumer, direct	342			351			351			395			465
Consumer	3,514			3,484			3,565			3,818			3,804
Deposit account overdrafts	86			61			81			95			95
Originated allowance for loan losses	20,824			20,406			19,659			19,724			19,158
Acquired allowance for loan losses	533			533			536			155			108
Allowance for loan losses	$	21,357		$	20,939		$	20,195		$	19,879		$	19,266
As a percent of total loans	0.75		%	0.76		%	0.74		%	0.73		%	0.72		%

At June 30, 2019, the allowance for loan losses was $21.4 million, compared to $20.2 million at December 31, 2018 and $19.3 million at June 30, 2018. The ratio of the allowance for loan losses as a percent of total loans was 0.75% at June 30, 2019, compared to 0.74% at December 31, 2018 and 0.72% at June 30, 2018. The ratio includes all acquired loans, from both First Prestonsburg and previous acquisitions since 2012, of $659.1 million and allowance for acquired loan losses of $533,000. The increase in the allowance for loan losses over time was mainly the result of loan growth. The increase during the first quarter of 2019 was also impacted by the specific reserve on a non-accrual loan.

The significant allocations of allowance for loan losses to commercial loans reflect the higher credit risk associated with this type of lending and the size of this loan category in relationship to the entire loan portfolio. The allowance allocated to the residential real estate and consumer loan categories is based upon Peoples' allowance methodology for homogeneous pools of loans. The fluctuations in these allocations have been directionally consistent with the changes in loan quality, loss experience and loan balances in these categories.

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The following table summarizes Peoples’ net charge-offs and recoveries:

	Three Months Ended
(Dollars in thousands)	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Gross charge-offs:
Commercial real estate, other	$	43		$	113		$	—		$	—		$	7
Commercial and industrial	—			63			—			—			7
Residential real estate	67			109			64			66			82
Home equity lines of credit	—			9			40			10			20
Consumer, indirect	346			473			548			488			550
Consumer, direct	33			63			61			78			109
Consumer	379			536			609			566			659
Deposit account overdrafts	176			173			234			311			215
Total gross charge-offs	$	665		$	1,003		$	947		$	953		$	990
Recoveries:
Commercial real estate, other	$	2		$	10		$	2		$	15		$	28
Commercial and industrial	228			1,784			8			10			—
Residential real estate	102			31			133			32			41
Home equity lines of credit	1			1			2			3			2
Consumer, indirect	47			115			71			131			138
Consumer, direct	27			13			25			31			15
Consumer	74			128			96			162			153
Deposit account overdrafts	50			56			45			44			46
Total recoveries	$	457		$	2,010		$	286		$	266		$	270
Net charge-offs (recoveries):
Commercial real estate, other	$	41		$	103		$	(2	)	$	(15	)	$	(21	)
Commercial and industrial	(228		)	(1,721		)	(8		)	(10		)	7
Residential real estate	(35		)	78			(69		)	34			41
Home equity lines of credit	(1		)	8			38			7			18
Consumer, indirect	299			358			477			357			412
Consumer, direct	6			50			36			47			94
Consumer	305			408			513			404			506
Deposit account overdrafts	126			117			189			267			169
Total net charge-offs (recoveries)	$	208		$	(1,007	)	$	661		$	687		$	720
Ratio of net charge-offs to average total loans (annualized):
Commercial real estate	0.01		%	0.02		%	—		%	—		%	—		%
Commercial and industrial	(0.03		)%	(0.26		)%	—		%	—		%	—		%
Residential real estate	—		%	0.01		%	(0.01		)%	—		%	0.01		%
Home equity lines of credit	—		%	—		%	—		%	—		%	—		%
Consumer, indirect	0.03		%	0.05		%	0.07		%	0.05		%	0.06		%
Consumer, other	—		%	0.01		%	0.01		%	0.01		%	0.01		%
Consumer	0.03		%	0.06		%	0.08		%	0.06		%	0.07		%
Deposit account overdrafts	0.02		%	0.02		%	0.03		%	0.04		%	0.03		%
Total	0.03		%	(0.15		)%	0.10		%	0.10		%	0.11		%

Each with "--%" not meaningful.

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During the second quarter of 2019, net charge-offs remained low, as gross charge-offs were down compared to prior periods. The net recoveries during the first quarter of 2019 were driven by the recognition of a $1.8 million recovery on a previously charged-off commercial loan. During the third and fourth quarters of 2018, the net charge-offs decreased as Peoples' asset quality remained stable.

The following table details Peoples’ nonperforming assets: 

(Dollars in thousands)	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Loans 90+ days past due and accruing:
Commercial real estate, construction	$	230	$	—	$	—	$	401	$	—
Commercial real estate, other	557		15		801		60		615
Commercial real estate	787		15		801		461		615
Commercial and industrial	261		50		18		—		—
Residential real estate	2,291		963		1,430		1,338		1,308
Home equity lines of credit	53		42		7		84		6
Consumer, indirect	—		4		—		2		—
Consumer, direct	57		—		—		—		46
Consumer	57		4		—		2		46
Total loans 90+ days past due and accruing	$	3,449	$	1,074	$	2,256	$	1,885	$	1,975
Nonaccrual loans:
Commercial real estate, construction	$	688	$	703	$	710	$	725	$	725
Commercial real estate, other	6,427		6,459		6,730		6,751		6,422
Commercial real estate	7,115		7,162		7,440		7,476		7,147
Commercial and industrial	1,748		1,719		1,304		939		1,265
Residential real estate	3,868		4,479		4,075		3,725		3,770
Home equity lines of credit	1,001		1,065		1,023		796		681
Consumer, indirect	383		440		324		286		221
Consumer, direct	13		17		56		14		12
Consumer	396		457		380		300		233
Total nonaccrual loans	$	14,128	$	14,882	$	14,222	$	13,236	$	13,096
Nonaccrual troubled debt restructurings ("TDRs"):
Commercial real estate, other	$	122	$	127	$	154	$	186	$	236
Commercial and industrial	332		332		405		430		436
Residential real estate	1,664		1,389		1,951		2,087		2,132
Home equity lines of credit	193		195		210		160		71
Consumer, indirect	152		159		156		119		93
Consumer, direct	—		5		—		17		5
Consumer	152		164		156		136		98
Total nonaccrual TDRs	$	2,463	$	2,207	$	2,876	$	2,999	$	2,973
Total nonperforming loans ("NPLs")	$	20,040	$	18,163	$	19,354	$	18,120	$	18,044
OREO:
Residential	$	123	$	81	$	94	$	106	$	63
Total OREO	$	123	$	81	$	94	$	106	$	63
Total nonperforming assets ("NPAs")	$	20,163	$	18,244	$	19,448	$	18,226	$	18,107
Criticized loans (a)	$	97,016	$	89,812	$	114,188	$	118,703	$	120,809
Classified loans (b)	63,048		47,327		43,818		49,058		55,596

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(Dollars in thousands)	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Asset Quality Ratios:
NPLs as a percent of total loans (c)(d)	0.71	%	0.66	%	0.71	%	0.67	%	0.67	%
NPAs as a percent of total assets (c)(d)	0.47	%	0.45	%	0.49	%	0.46	%	0.46	%
NPAs as a percent of total loans and OREO (c)(d)	0.71	%	0.67	%	0.71	%	0.67	%	0.67	%
Allowance for loan losses as a percent of NPLs (c)	106.57	%	115.28	%	104.35	%	109.71	%	106.77	%
Criticized loans as a percent of total loans (a)(c)	3.42	%	3.28	%	4.18	%	4.38	%	4.50	%
Classified loans as a percent of total loans (b)(c)	2.23	%	1.73	%	1.61	%	1.81	%	2.07	%

(a) Includes loans categorized as special mention, substandard or doubtful.

(b) Includes loans categorized as substandard or doubtful.

(c) Data presented as of the end of the period indicated.

(d) Nonperforming loans include loans 90+ days past due and accruing, troubled debt restructurings and nonaccrual loans. Nonperforming assets include nonperforming loans and OREO.

Nonperforming assets increased $1.9 million, or 11%, compared to March 31, 2019, and were up $2.1 million, or 11%, compared to June 30, 2018. The increase compared to March 31, 2019, was partially due to acquired loans from First Prestonsburg, which comprised $0.7 million of nonperforming assets at June 30, 2019, with the remainder due to smaller relationships that have become 90+ days past due and are still accruing. Classified loans, which are those categorized as substandard or doubtful, increased $15.7 million, or 33%, compared to March 31, 2019, and were up $7.5 million, or 13%, from June 30, 2018. The increase in classified loans was largely related to acquired First Prestonsburg loans, coupled with downgrades of two commercial loan relationships totaling $8.5 million during the second quarter of 2019. Criticized loans, which are those categorized as special mention, substandard or doubtful, increased $7.2 million, or 8%, compared to March 31, 2019, and decreased $23.8 million, or 20%, compared to June 30, 2018. The increase in criticized loans was largely related to acquired First Prestonsburg loans.

Deposits

The following table details Peoples’ deposit balances:

(Dollars in thousands)	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Non-interest-bearing deposits (a)	$	643,058	$	628,464	$	607,877	$	617,447	$	585,861
Interest-bearing deposits:
Interest-bearing demand accounts (a)	610,464		572,316		573,702		547,172		570,359
Savings accounts	526,746		477,824		468,500		473,240		480,615
Retail certificates of deposit ("CDs")	497,221		404,186		394,335		402,309		406,214
Money market deposit accounts	428,213		403,642		379,878		391,377		389,893
Governmental deposit accounts	331,754		363,636		267,319		344,320		305,255
Brokered CDs	326,157		287,345		263,854		265,258		211,062
Total interest-bearing deposits	2,720,555		2,508,949		2,347,588		2,423,676		2,363,398
Total deposits	$	3,363,613	$	3,137,413	$	2,955,465	$	3,041,123	$	2,949,259

(a) The sum of amounts presented is considered total demand deposits.

As of June 30, 2019, the balances in deposit accounts acquired from First Prestonsburg totaled $232.2 million, including $65.3 million of retail CDs, $62.8 million of interest-bearing demand accounts, $55.7 million of savings accounts, $33.4 million of non-interest-bearing demand accounts, and $15.1 million of money market accounts.

At June 30, 2019, period-end deposits increased $226.2 million, or 7%, compared to March 31, 2019, $408.1 million, or 14%, compared to December 31, 2018, and $414.4 million, or 14%, compared to June 30, 2018. Compared to the linked quarter, the growth was driven by the First Prestonsburg acquisition, partially offset by a seasonal decline of $31.9 million in governmental deposits, which are typically higher during the first quarter of each year. During the second quarter of 2019, Peoples issued $30.0 million of 90-day brokered CDs to fund three $10.0 million interest rate swaps with a notional value in the aggregate of $30.0 million during the second quarter of 2019. The swaps will pay a fixed rate of interest while receiving three-month LIBOR, which offsets the rate on the brokered CDs.

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Total demand deposit accounts comprised 37% of total deposits at June 30, 2019, compared to 38% of total deposits at March 31, 2019, 40% at December 31, 2018, 38% at September 30, 2018, and 39% at June 30, 2018. Peoples continues its deposit strategy of growing low-cost core deposits, such as checking and savings accounts and retail CDs when possible, and relying on higher-cost, non-core deposits, such as brokered CDs when deposits are not available in Peoples' footprint.

Borrowed Funds

The following table details Peoples’ short-term and long-term borrowings:

(Dollars in thousands)	June 30, 2019		March 31, 2019		December 31, 2018			September 30, 2018			June 30, 2018
Short-term borrowings:
FHLB overnight borrowings	$	—	$	24,000	$	165,000		$	102,000		$	173,000
FHLB 90-day advances	117,200		110,000		110,000			100,000			13,000
Current portion of long-term FHLB advances	23,129		13,188		30,000			30,000			98,566
Retail repurchase agreements	46,128		44,175		51,202			64,840			76,177
Unamortized debt issuance cost (a)	—		—		(4		)	(10		)	(16		)
Total short-term borrowings	$	186,457	$	191,363	$	356,198		$	296,830		$	360,727
Long-term borrowings:
FHLB advances	$	78,324	$	98,670	$	102,361		$	103,860		$	105,890
Junior subordinated debt securities	7,367		7,325		7,283			7,239			7,195
Total long-term borrowings	$	85,691	$	105,995	$	109,644		$	111,099		$	113,085
Total borrowed funds	$	272,148	$	297,358	$	465,842		$	407,929		$	473,812

(a) Unamortized debt issuance cost is related to the cost associated with the Credit Agreement with Raymond James Bank, N.A. which was a short-term obligation as of March 31, 2019.

Peoples' short-term FHLB advances generally consist of overnight borrowings maintained in connection with the management of Peoples' daily liquidity position. Borrowed funds, in total, which include overnight borrowings, are mainly a function of loan growth and changes in total deposit balances. Overnight borrowings as of June 30, 2019 declined $24 million compared to March 31, 2019, primarily due to the increase in deposit balances during the quarter. As of June 30, 2019, Peoples had fifteen effective interest rate swaps, with an aggregate notional value of $140.0 million, $110.0 million of which was funded by FHLB 90-day advances, which are expected to extend every 90 days through the maturity dates of the swaps. The remaining $30.0 million of interest rate swaps was funded by 90-day brokered CDs, which will also be extended every 90 days through the maturity dates of the swaps. Peoples continually evaluates the overall balance sheet position given the interest rate environment. Long-term FHLB advances declined at June 30, 2019 compared to March 31, 2019 due to transfers to short-term borrowings. At March 31, 2019 compared to December 31, 2018, long-term FHLB advances declined due to principal payments.

Additional information regarding Peoples' interest rate swaps can be found in "Note 9 Derivative Financial Instruments" of the Notes to the Unconsolidated Financial Statements.

Capital/Stockholders’ Equity

At June 30, 2019, capital levels for both Peoples and Peoples Bank remained substantially higher than the minimum amounts needed to be considered "well capitalized" institutions under applicable banking regulations. These higher capital levels reflect Peoples' desire to maintain a strong capital position. In order to avoid limitations on dividends, equity repurchases and compensation, Peoples must exceed the three minimum required ratios by at least the capital conservation buffer. The capital conservation buffer was phased in from 0.625% beginning January 1, 2016 to 2.50% by January 1, 2019, and applies to the common equity tier 1 ("CET1") ratio, the tier 1 capital ratio and the total risk-based capital ratio. At June 30, 2019, Peoples had a capital conservation buffer of 7.14%, compared to 2.50% for the fully phased-in capital conservation buffer required at January 1, 2019. As such, Peoples exceeded the minimum ratios including the capital conservation buffer at June 30, 2019.

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The following table details Peoples' risk-based capital levels and corresponding ratios:

(Dollars in thousands)	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Capital Amounts:
Common Equity Tier 1	$	410,979		$	389,393		$	378,855		$	367,537		$	358,987
Tier 1	418,347			396,719			386,138			374,776			366,182
Total (Tier 1 and Tier 2)	439,704			417,657			406,333			394,655			385,448
Net risk-weighted assets	$	2,903,387		$	2,788,934		$	2,782,995		$	2,764,951		$	2,755,112
Capital Ratios:
Common Equity Tier 1	14.16		%	13.96		%	13.61		%	13.29		%	13.03		%
Tier 1	14.41		%	14.22		%	13.87		%	13.55		%	13.29		%
Total (Tier 1 and Tier 2)	15.14		%	14.98		%	14.60		%	14.27		%	13.99		%
Leverage ratio	10.26		%	10.31		%	9.99		%	9.69		%	9.73		%

Peoples' capital ratios at June 30, 2019 increased compared to the linked quarter due to earnings during the second quarter of 2019, which exceeded the dividends declared and paid during the quarter by $2.6 million. The capital ratios at June 30, 2019 were also impacted by the increase in risk-weighted assets, which was largely attributable to the First Prestonsburg merger. The capital ratios increased at March 31, 2019 compared to December 31, 2018 due to increased equity as earnings exceeded the dividends declared. Peoples' capital ratios at December 31, 2018 increased compared to September 30, 2018 due primarily to increased earnings, which was largely driven by loan growth. The capital ratios increased at September 30, 2018 compared to June 30, 2018 due to increased equity as earnings exceeded the dividends declared, while net risk-weighted assets decreased slightly in relation to some large payoffs that were higher volatility commercial real estate loans. The leverage ratio at September 30, 2018 decreased slightly compared to June 30, 2018 due to the increase in average assets in the third quarter of 2018 compared to the second quarter as ASB was acquired on April 13, 2018.

In addition to traditional capital measurements, management uses tangible capital measures to evaluate the adequacy of Peoples' stockholders' equity. Such ratios represent non-US GAAP financial measures since their calculation removes the impact of goodwill and other intangible assets acquired through acquisitions on amounts reported in the Unaudited Consolidated Balance Sheets. Management believes this information is useful to investors since it facilitates the comparison of Peoples' operating performance, financial condition and trends to peers, especially those without a similar level of intangible assets to that of Peoples. Further, intangible assets generally are difficult to convert into cash, especially during a financial crisis, and could decrease substantially in value should there be deterioration in the overall franchise value. As a result, tangible equity represents a conservative measure of the capacity for Peoples to incur losses but remain solvent.

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The following table reconciles the calculation of these non-US GAAP financial measures to amounts reported in Peoples' Unaudited Consolidated Financial Statements:

(Dollars in thousands)	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Tangible equity:
Total stockholders' equity	$	579,022		$	535,121		$	520,140		$	504,290		$	499,339
Less: goodwill and other intangible assets	176,763			161,242			162,085			163,401			163,953
Tangible equity	$	402,259		$	373,879		$	358,055		$	340,889		$	335,386
Tangible assets:
Total assets	$	4,276,376		$	4,017,119		$	3,991,454		$	4,003,089		$	3,972,091
Less: goodwill and other intangible assets	176,763			161,242			162,085			163,401			163,953
Tangible assets	$	4,099,613		$	3,855,877		$	3,829,369		$	3,839,688		$	3,808,138
Tangible book value per common share:
Tangible equity	$	402,259		$	373,879		$	358,055		$	340,889		$	335,386
Common shares outstanding	20,696,041			19,681,692			19,565,029			19,550,014			19,528,952
Tangible book value per common share	$	19.44		$	19.00		$	18.30		$	17.44		$	17.17
Tangible equity to tangible assets ratio:
Tangible equity	$	402,259		$	373,879		$	358,055		$	340,889		$	335,386
Tangible assets	$	4,099,613		$	3,855,877		$	3,829,369		$	3,839,688		$	3,808,138
Tangible equity to tangible assets	9.81		%	9.70		%	9.35		%	8.88		%	8.81		%

The increase in the tangible equity to tangible assets ratio at June 30, 2019 compared to March 31, 2019, was due largely to the issuance of equity in the form of common shares in connection with the First Prestonsburg merger combined with higher retained earnings and other comprehensive income during the second quarter of 2019, offset partially by higher tangible assets attributable primarily to the First Prestonsburg merger. The increase in the tangible equity to tangible assets ratio compared to December 31, 2018, as well as previous periods, was the result of higher retained earnings, combined with an increase in the market value of available-for-sale investment securities.

Interest Rate Sensitivity and Liquidity

While Peoples is exposed to various business risks, the risks relating to interest rate sensitivity and liquidity are major risks that can materially impact future results of operations and financial condition due to their complexity and dynamic nature. The objective of Peoples' asset-liability management function is to measure and manage these risks in order to optimize net interest income within the constraints of prudent capital adequacy, liquidity and safety. This objective requires Peoples to focus on interest rate risk exposure and adequate liquidity through its management of the mix of assets and liabilities, their related cash flows and the rates earned and paid on those assets and liabilities. Ultimately, the asset-liability management function is intended to guide management in the acquisition and disposition of earning assets and selection of appropriate funding sources.

Interest Rate Risk

Interest rate risk ("IRR") is one of the most significant risks arising in the normal course of business of financial services companies like Peoples. IRR is the potential for economic loss due to future interest rate changes that can impact the earnings stream, as well as market values, of financial assets and liabilities. Peoples' exposure to IRR is due primarily to differences in the maturity or repricing of earning assets and interest-bearing liabilities. In addition, other factors, such as prepayments of loans and investment securities, or early withdrawal of deposits, can affect Peoples' exposure to IRR and increase interest costs or reduce revenue streams.

Peoples has assigned overall management of IRR to its Asset-Liability Committee (the “ALCO”), which has established an IRR management policy that sets minimum requirements and guidelines for monitoring and managing the level of IRR. The methods used by ALCO to assess IRR remain largely unchanged from those disclosed in Peoples' 2018 Form 10-K.

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The following table shows the estimated changes in net interest income and the economic value of equity based upon a standard, parallel shock analysis with balances held constant (dollars in thousands):

Increase (Decrease) in Interest Rate	Estimated Increase (Decrease) in Net Interest Income										Estimated (Decrease) Increase in Economic Value of Equity
(in Basis Points)	June 30, 2019					December 31, 2018					June 30, 2019					December 31, 2018
300	$	13,557		10.1	%	$	7,351		5.5	%	$	(11,969	)	(1.1	)%	$	(22,088	)	(2.1	)%
200	11,046			8.3	%	5,780			4.3	%	24,680			2.2	%	(7,191		)	(0.7	)%
100	7,478			5.6	%	3,588			2.7	%	25,125			2.2	%	3,926			0.4	%
(100)	(11,962		)	(9.0	)%	(9,075		)	(6.8	)%	(41,465		)	(3.7	)%	(44,512		)	(4.2	)%
(200)	(23,702		)	(17.7	)%	(23,712		)	(17.6	)%	(95,175		)	(8.5	)%	(130,769		)	(12.4	)%

Estimated changes in net interest income and economic value of equity are partially driven by assumptions regarding the rate at which non-maturity deposits will reprice given a move in short-term interest rates. Peoples takes a historically conservative approach when determining what repricing rates (deposit betas) are used in modeling interest rate risk. These assumptions are monitored closely by Peoples and are updated at least annually. The actual deposit betas experienced recently by Peoples in the repricing of non-maturity deposits are lower than those used in Peoples’ current interest rate risk modeling. Peoples has benefited from this trend in the current interest rate and competitor environment as it has provided for growth in Peoples’ net interest income. However, in recent months, Peoples has experienced more pressure on margin expansion and rate competition in its markets.

Peoples considers other interest rate scenarios in addition to analyzing the impact of parallel yield curve shifts. This includes various flattening and steepening scenarios in which short-term and long-term rates move in different directions with varying magnitude. Peoples believes these scenarios to be more reflective of how interest rates change versus the severe parallel rate shocks described above. At June 30, 2019, the U.S. Treasury and LIBOR swap curves were inverted for certain tenors. Given the shape of market yield curves at June 30, 2019, consideration of the bull steepener scenario yields insights which were not captured by parallel shifts. The key insight presented by the bull steepener scenario highlights the risk to net interest income when long-term yields remain constant while short-term rates fall. In such a scenario, Peoples’ funding costs, which are correlated with short-term rates, decline, while asset yields correlated with long-term rates remain constant.

At June 30, 2019, Peoples' consolidated balance sheet was positioned to benefit from rising interest rates in terms of potential impact on net interest income. The table above illustrates this point as changes to net interest income increase in the rising rate scenarios. The increase in asset sensitivity from December 31, 2018 was largely attributable to the high balance of governmental deposits. Peoples’ overnight FHLB borrowing position, which had declined substantially from December 31, 2018 to June 30, 2019 as a result of increased public funds deposits, ultimately led to a decline in liability sensitivity in the first half of the year. The increased public funds deposit balances are expected to decline through September 2019. While parallel interest rate shock scenarios are useful in assessing the level of interest rate risk inherent in the balance sheet, interest rates typically move in a non-parallel manner with differences in the timing, direction, and magnitude of changes in short-term and long-term interest rates. Thus, any benefit that might occur as a result of the Federal Reserve increasing short-term interest rates in the future could be offset by an inverse movement in long-term interest rates.

Peoples has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for Peoples making fixed payments. As of June 30, 2019, Peoples had entered into fifteen interest rate swap contracts, with an aggregate notional value of $140.0 million. Additional information regarding Peoples' interest rate swaps can be found in "Note 14 Derivative Financial Instruments" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10-K and "Note 9 Derivative Financial Instruments" of the Notes to the Unconsolidated Financial Statements included in this Form 10-Q.

Liquidity

In addition to IRR management, another major objective of the ALCO is to maintain a sufficient level of liquidity. The methods used by the ALCO to monitor and evaluate the adequacy of Peoples Bank's liquidity position remain unchanged from those disclosed in Peoples' 2018 Form 10-K.

At June 30, 2019, Peoples Bank had liquid assets of $261.9 million, which represented 5.6% of total assets and unfunded loan commitments. This amount exceeded the minimum level by $168.2 million, or 3.6% of total loans and

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unfunded commitments, currently required under Peoples' liquidity policy. Peoples also had an additional $115.0 million of unpledged investment securities not included in the measurement of liquid assets.

Management believes the current balance of cash and cash equivalents, and anticipated cash flows from the investment portfolio, along with the availability of other funding sources, will allow Peoples to meet anticipated cash obligations, as well as special needs and off-balance sheet commitments.

Off-Balance Sheet Activities and Contractual Obligations

In the normal course of business, Peoples is a party to financial instruments with off-balance sheet risk necessary to meet the financing needs of Peoples' customers. These financial instruments include commitments to extend credit and standby letters of credit. The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Balance Sheets. The contract amounts of these instruments express the extent of involvement Peoples has in these financial instruments.

Loan Commitments and Standby Letters of Credit

Loan commitments are made to accommodate the financial needs of Peoples' customers. Standby letters of credit are instruments issued by Peoples Bank guaranteeing the beneficiary payment by Peoples Bank in the event of default by Peoples Bank's customer in the performance of an obligation or service. Historically, most loan commitments and standby letters of credit expire unused. Peoples Bank's exposure to credit loss in the event of nonperformance by the counter-party to the financial instrument for loan commitments and standby letters of credit is represented by the contractual amount of those instruments. Peoples Bank uses the same underwriting standards in making commitments and conditional obligations as it does for on-balance sheet instruments. The amount of collateral obtained is based on management's credit evaluation of the customer. Collateral held varies, but may include accounts receivable, inventory, property, plant, and equipment, and income-producing commercial properties.

Peoples Bank routinely engages in activities that involve, to varying degrees, elements of risk that are not reflected in whole or in part in the Consolidated Financial Statements. These activities are part of Peoples Bank's normal course of business and include traditional off-balance sheet credit-related financial instruments, interest rate contracts and commitments to make additional capital contributions in low-income housing tax credit investments. Traditional off-balance sheet credit-related financial instruments continue to represent the most significant off-balance sheet exposure.

The following table details the total contractual amount of loan commitments and standby letters of credit:

(Dollars in thousands)	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Home equity lines of credit	$	106,456	$	103,343	$	101,265	$	101,651	$	103,975
Unadvanced construction loans	95,266		80,916		74,734		71,836		87,477
Other loan commitments	360,872		308,103		314,271		324,059		319,519
Loan commitments	$	562,594	$	492,362	$	490,270	$	497,546	$	510,971
Standby letters of credit	$	14,658	$	12,371	$	10,214	$	9,979	$	20,354

Management does not anticipate that Peoples Bank’s current off-balance sheet activities will have a material impact on its future results of operations and financial condition based on historical experience and recent trends.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by this Item 3 is provided under the caption “Interest Rate Sensitivity and Liquidity” under “ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in this Quarterly Report on Form 10-Q, and is incorporated herein by reference.

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ITEM 4 CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Peoples' management, with the participation of Peoples' President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer, has evaluated the effectiveness of Peoples’ disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2019.  Based upon that evaluation, Peoples’ President and Chief Executive Officer and Peoples’ Executive Vice President, Chief Financial Officer and Treasurer have concluded that:

(a) information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q and other reports Peoples files or submits under the Exchange Act would be accumulated and communicated to Peoples’ management, including its President and Chief Executive Officer and its Executive Vice President, Chief Financial Officer and Treasurer, as appropriate to allow timely decisions regarding required disclosure;

(b) information required to be disclosed by Peoples in this Quarterly Report on Form 10-Q and other reports Peoples files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and

(c) Peoples’ disclosure controls and procedures were effective as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control Over Financial Reporting

There were no changes in Peoples' internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during Peoples' fiscal quarter ended June 30, 2019, that have materially affected, or are reasonably likely to materially affect, Peoples’ internal control over financial reporting.

PART II

ITEM 1 LEGAL PROCEEDINGS

In the ordinary course of their respective businesses or operations, Peoples or one of its subsidiaries may be named as a plaintiff, a defendant, or a party to a legal proceeding or any of their respective properties may be subject to various pending and threatened legal proceedings and various actual and potential claims.  In view of the inherent difficulty of predicting the outcome of such matters, Peoples cannot state what the eventual outcome of any such matters will be. However, based on management's current knowledge and after consultation with legal counsel, management believes these proceedings will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of Peoples.

ITEM 1A RISK FACTORS

Peoples has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for Peoples making fixed payments. As of June 30, 2019, Peoples had entered into fifteen interest rate swap contracts, which were effective with an aggregate notional value of $140.0 million. Although Peoples expects that each of the hedging relationships will continue to be highly effective as described above, it has not assumed that there will be no ineffectiveness in the hedging relationships. Additional information regarding Peoples' interest rate swaps can be found in "Note 14 Derivative Financial Instruments" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10-K and "Note 9 Derivative Financial Instruments" of the Notes to the Unconsolidated Financial Statements in this Form 10-Q.

There have been no other material changes from those risk factors previously disclosed in “ITEM 1A. RISK FACTORS” of Part I of Peoples’ 2018 Form 10-K.  Those risk factors are not the only risks Peoples faces.  Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially adversely affect Peoples’ business, financial condition and/or operating results.

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ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table details repurchases by Peoples and purchases by “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, of Peoples’ common shares during the three months ended June 30, 2019:

Period	(a) Total Number of Common Shares Purchased	(b) Average Price Paid per Common Share		(c) Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs(1)	(d) Maximum Number ( or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs(1)
April 1-30, 2019	—	$	—	—	$	15,049,184
May 1-31, 2019 (2) (3)	3,728	32.60		—	15,049,184
June 1-30, 2019 (2) (3)	2,724	31.23		—	15,049,184
Total	6,452	$	32.02	—	$	15,049,184

(1) On November 3, 2015, Peoples announced that on that same date, Peoples' Board of Directors authorized a share repurchase program authorizing Peoples to purchase up to $20.0 million of its outstanding common shares. No common shares were purchased under this share repurchase program during the three months ended June 30, 2019.

(2) Information reported includes 3,160 common shares and 2,239 common shares withheld to pay income taxes associated with restricted common shares which vested during May and June, respectively.

(3) Information reported includes 568 common shares and 485 common shares purchased in open market transactions during May and June, respectively, by Peoples Bank under the Rabbi Trust Agreement. The Rabbi Trust Agreement establishes a rabbi trust that holds assets to provide funds for the payment of the benefits under the Peoples Bancorp Inc. Third Amended and Restated Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 OTHER INFORMATION

None

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ITEM 6 EXHIBITS

Exhibit Number	Description	Exhibit Location
2.1	Agreement and Plan of Merger, dated as of October 23, 2017, between Peoples Bancorp Inc. and ASB Financial Corp.+	Included as Annex A to the definitive proxy statement/prospectus which forms a part of the Registration Statement of Peoples Bancorp Inc. ("Peoples") on Form S-4/A (Registration No. 333-222054)
2.2	Agreement and Plan of Merger, dated as of October 29, 2018, as amended on December 18, 2018, between Peoples Bancorp Inc. and First Prestonsburg Bancshares Inc.+	Included as Annex A to the definitive proxy statement/prospectus which forms a part of the Registration Statement of Peoples on Form S-4/A (Registration No. 333-228745)
3.1(a)	Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on May 3, 1993) P	Incorporated herein by reference to Exhibit 3(a) to Peoples' Registration Statement on Form 8-B filed July 20, 1993 (File No. 0-16772)
3.1(b)	Certificate of Amendment to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on April 22, 1994)	Incorporated herein by reference to Exhibit 3.1(b) to Peoples' Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017 (File No. 0-16772) ("Peoples' September 30, 2017 Form 10-Q")
3.1(c)	Certificate of Amendment to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on April 9, 1996)	Incorporated herein by reference to Exhibit 3.1(c) to Peoples' September 30, 2017 Form 10-Q
3.1(d)	Certificate of Amendment to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on April 23, 2003)	Incorporated herein by reference to Exhibit 3(a) to Peoples’ Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 (File No. 0-16772) (“Peoples’ March 31, 2003 Form 10-Q”)
3.1(e)	Certificate of Amendment by Shareholders to the Amended Articles of Incorporation of Peoples Bancorp Inc. (as filed with the Ohio Secretary of State on January 22, 2009)	Incorporated herein by reference to Exhibit 3.1 to Peoples’ Current Report on Form 8-K dated and filed on January 23, 2009 (File No. 0-16772)
3.1(f)	Certificate of Amendment by Directors to Articles filed with the Secretary of State of the State of Ohio on January 28, 2009, evidencing adoption of amendments by the Board of Directors of Peoples Bancorp Inc. to Article FOURTH of Amended Articles of Incorporation to establish express terms of Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each without par value, of Peoples Bancorp Inc.	Incorporated herein by reference to Exhibit 3.1 to Peoples’ Current Report on Form 8-K dated and filed on February 2, 2009 (File No. 0-16772)
3.1(g)	Amended Articles of Incorporation of Peoples Bancorp Inc. (This document represents the Amended Articles of Incorporation of Peoples Bancorp Inc. in compiled form incorporating all amendments. The compiled document has not been filed with the Ohio Secretary of State.)	Incorporated herein by reference to Exhibit 3.1(g) to Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (File No. 0-16772)
3.2(a)	Code of Regulations of Peoples Bancorp Inc. P	Incorporated herein by reference to Exhibit 3(b) to Peoples’ Registration Statement on Form 8-B filed on July 20, 1993 (File No. 0-16772)
3.2(b)	Certified Resolutions Regarding Adoption of Amendments to Sections 1.03, 1.04, 1.05, 1.06, 1.08, 1.10, 2.03(C), 2.07, 2.08, 2.10 and 6.02 of the Code of Regulations of Peoples Bancorp Inc. by shareholders on April 10, 2003	Incorporated herein by reference to Exhibit 3(c) to Peoples’ March 31, 2003 Form 10-Q
3.2(c)	Certificate regarding adoption of amendments to Sections 3.01, 3.03, 3.04, 3.05, 3.06, 3.07, 3.08 and 3.11 of the Code of Regulations of Peoples Bancorp Inc. by shareholders on April 8, 2004	Incorporated herein by reference to Exhibit 3(a) to Peoples’ Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 (File No. 0-16772)
+Schedules and exhibits were omitted pursuant to Item 601(b)(2) of SEC Regulation S-K, as in effect at the time of filing of the Agreement and Plan of Merger. A copy of any omitted schedules or exhibits will be furnished supplementally to the SEC upon request. P Filed the exhibit with the SEC in paper originally and has not been filed with the SEC in electronic format.

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Exhibit Number	Description	Exhibit Location
3.2(d)	Certificate regarding adoption of amendments to Sections 2.06, 2.07, 3.01 and 3.04 of Peoples Bancorp Inc.’s Code of Regulations by the shareholders on April 13, 2006	Incorporated herein by reference to Exhibit 3.1 to Peoples’ Current Report on Form 8-K dated and filed on April 14, 2006 (File No. 0-16772)
3.2(e)	Certificate regarding adoption of an amendment to Section 2.01 of Peoples Bancorp Inc.’s Code of Regulations by the shareholders on April 22, 2010	Incorporated herein by reference to Exhibit 3.2(e) to Peoples’ Quarterly Report on Form 10-Q/A (Amendment No. 1) for the quarterly period ended June 30, 2010 (File No. 0-16772)
3.2(f)	Certificate regarding Adoption of Amendment to Division (D) of Section 2.02 of Code of Regulations of Peoples Bancorp Inc. by the Shareholders at the Annual Meeting of Shareholders on April 26, 2018	Incorporated herein by reference to Exhibit 3.1 to Peoples' Current Report on Form 8-K dated and filed on June 28, 2018 (File No. 0-16772) ("Peoples' June 28, 2018 Form 8-K")
3.2(g)	Code of Regulations of Peoples Bancorp Inc. (This document represents the Code of Regulations of Peoples Bancorp Inc. in compiled form incorporating all amendments.)	Incorporated herein by reference to Exhibit 3.2 to Peoples' June 28, 2018 Form 8-K
10.1	Loan Agreement, made and entered into as of April 3, 2019, between Peoples Bancorp Inc., as Borrower, and U.S. Bank National Association, as Lender	Incorporated herein by reference to Exhibit 10.1 to Peoples' Current Report on Form 8-K dated and filed on April 9, 2019 (File No. 0-16772) ("Peoples' April 9, 2019 Form 8-K")
10.2	Revolving Credit Note issued by Peoples Bancorp Inc. on April 3, 2019 to U.S. Bank National Association in the principal amount of $20,000,000	Incorporated herein by reference to Exhibit 10.2 to Peoples' April 9, 2019 Form 8-K
10.3	Peoples Bancorp Inc. Amended and Restated Nonqualified Deferred Compensation Plan (adopted effective July 11, 2019)	Filed herewith
31.1	Rule 13a-14(a)/15d-14(a) Certifications [President and Chief Executive Officer]	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certifications [Executive Vice President, Chief Financial Officer and Treasurer]	Filed herewith
32	Section 1350 Certifications	Furnished herewith
101.INS	XBRL Instance Document	Submitted electronically herewith #
101.SCH	XBRL Taxonomy Extension Schema Document	Submitted electronically herewith #
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Submitted electronically herewith #
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Submitted electronically herewith #
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Submitted electronically herewith #
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Submitted electronically herewith #
# Attached as Exhibit 101 to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 of Peoples Bancorp Inc. are the following documents formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets (Unaudited) at June 30, 2019 and December 31, 2018; (ii) Consolidated Statements of Income (Unaudited) for the three and six months ended June 30, 2019 and 2018; (iii) Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2019 and 2018; (iv) Consolidated Statement of Stockholders' Equity (Unaudited) for the six months ended June 30, 2019; (v) Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended March 31, 2019 and 2018; and (vi) Notes to the Unaudited Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			PEOPLES BANCORP INC.
Date:	August 1, 2019	By: /s/	CHARLES W. SULERZYSKI
			Charles W. Sulerzyski
			President and Chief Executive Officer
Date:	August 1, 2019	By: /s/	JOHN C. ROGERS
			John C. Rogers
			Executive Vice President,
			Chief Financial Officer and Treasurer

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EX-10.3

EXHIBIT 10.3

Peoples Bancorp Inc.

AMENDED AND RESTATED

NONQUALIFIED DEFERRED COMPENSATION PLAN

1.00Purpose

As of the Effective Date, the Company adopts this Plan for the purpose of providing deferred compensation to a select group of management and highly compensated employees. This Plan is an unfunded arrangement and is intended to be exempt from the participation, vesting, funding and fiduciary requirements set forth in Title I of ERISA.

2.00Definitions

Whenever used in this Plan, the following terms have the meanings given to them in this Article 2.00, unless another meaning is expressly provided elsewhere in this Plan. Also, the form of any term will include all of its other forms.

2.01 Account: The bookkeeping account established for each Participant under Section 6.01 of this Plan.

2.02 Affiliate: Any entity that, along with the Company, would be considered a single employer under Code §§414(b) and 414(c).

2.03 Beneficiary: The person or persons designated by a Participant to receive any portion of such Participant’s benefit under the Qualified Plan that is unpaid at the time of the Participant’s death. If a Participant has not made an effective designation of a Beneficiary or Beneficiaries, the Participant’s Beneficiary will be his or her surviving spouse or, if there is no surviving spouse, the Participant’s estate.

2.04 Board: The Board of Directors of the Company.

2.05 Cause: With respect to any Participant, “cause” as defined in any employment (or similar) agreement then in effect between the Participant and the Company or any of its Affiliates or, if not defined therein, the occurrence of any of the following: (a) gross negligence or gross neglect of duties; (b) commission of a felony or of a gross misdemeanor involving moral turpitude in connection with the Participant’s employment with the Company or any of its Affiliates; (c) fraud, disloyalty, dishonesty or willful violation of any law, rule or regulation or any significant policy of the Company or any of its Affiliates committed in connection with the Participant’s employment; or (d) issuance of an order for removal of the Participant by any agency which regulates the activities of the Company or any of its Affiliates. Any determination of “Cause” under this Plan shall be made by the Committee in its sole discretion.

2.06 Code: The Internal Revenue Code of 1986, as amended.

2.07 Committee: The Compensation Committee of the Board or a subcommittee thereof appointed by the Board to administer this Plan pursuant to Article 10.00.

2.08 Company: Peoples Bancorp Inc. and its successors.

2.09 Compensation: A Participant’s “Compensation” as defined under the Qualified Plan calculated without regard to the compensation limit under Code §401(a)(17); provided, however, that for the 2013 Plan Year, Compensation shall exclude all equity awards.

2.10 Deferral Election Form: The form each Eligible Employee and Participant, as the case may be, must complete to defer Compensation under this Plan.

2.11 [reserved]

2.12 Discretionary Contribution: A contribution made by the Company or any of its Affiliates that is credited to a Participant’s Account in accordance with the terms of Section 4.03 of this Plan.

2.13 Distribution Election Form: The form each Eligible Employee and Participant, as the case may be, must complete to designate the form of distribution of his or her Plan Benefit or may complete to change a prior designation as to the form of distribution of his or her Plan Benefit.

2.14 Effective Date: This amendment and restatement is effective on July 11, 2019. This Plan was originally effective on July 25, 2013.

2.15 Eligible Employee: Each person employed by the Company or any of its Affiliates who (a) is a highly compensated employee or a member of a select group of management (both within the meaning of Title I of ERISA) of the Company or any of its Affiliates, as determined by the Committee in its sole discretion, and (b) is designated as an Eligible Employee by the Committee. The designation of an employee as an Eligible Employee for any particular Plan Year shall not confer upon such employee any right to be designated as an Eligible Employee for any future Plan Year.

2.16 ERISA: The Employee Retirement Income Security Act of 1974, as amended.

2.17 Participant: An Eligible Employee who becomes a participant in this Plan as described in Article 3.00.

2.18 Plan: The Peoples Bancorp Inc. Nonqualified Deferred Compensation Plan, as amended from time to time.

2.19 Plan Benefit: The vested portion of a Participant’s Account as of any Valuation Date.

2.20 Plan Year: Each calendar year or portion thereof during which this Plan is in effect.

2.21 Qualified Plan: The Peoples Bancorp Inc. Retirement Savings Plan, as amended from time to time.

2.22 Retirement: A Termination by a Participant, other than due to death, on or after attaining 65 years of age and completing at least 10 years of service with the Company and its Affiliates.

2.23 Statutory Limits: The compensation limit under Code §401(a)(17), the limit on maximum annual additions under Code §415(c), and the limit on elective deferrals under Code §402(g).

2.24 Termination: A “separation from service” within the meaning of Code §409A and Treasury Regulation §1.409A-1(h).

2.25 Unforeseeable Emergency: A severe financial hardship to a Participant within the meaning of Code §409A resulting from: (a) an illness or accident of the Participant or the Participant’s spouse, Beneficiary or dependent (as defined in Code §152, without regard to Code §§152(b)(1), (b)(2) and

(d)(1)(B)); (b) loss of the Participant’s property due to casualty; or (c) other similar or extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

2.26 Valuation Date: The last day of each calendar month or any other date or dates fixed by the Committee for the valuation and adjustment of an Account.

3.00Participation

3.01 Commencement of Participation. Subject to Section 3.02 of this Plan, each Eligible Employee shall become a Participant on the date on which the Eligible Employee executes and submits an effective Deferral Election Form.

3.02 Loss of Eligible Employee Status. A Participant who is no longer an Eligible Employee shall not be permitted to submit a Deferral Election Form and shall no longer be eligible for Discretionary Contributions. All deferrals then in effect for such Participant shall cease as of the earlier to occur of (a) the Participant’s Termination, or (b) the end of the Plan Year in which the Participant is determined to no longer be an Eligible Employee. Amounts credited to the Account of a Participant who is no longer an Eligible Employee shall continue to be administered in accordance with the terms and conditions of this Plan and shall be distributed as provided in Article 7.00.

4.00Deferrals and Contributions

4.01Deferrals.

(a) Deferral Elections - In General.

(i) A Participant may elect to defer Compensation under this Plan by submitting a signed Deferral Election Form to the Committee within the deadlines imposed by this Plan and set forth in Section 4.01(b). Any deferral election made by a Participant for a Plan Year shall be irrevocable after the expiration of the applicable deadline described in Section 4.01(b); provided, however, that a cessation of deferrals shall be allowed if the Participant suffers an Unforeseeable Emergency, becomes Disabled, or to the extent permitted by Treasury Regulation §1.409A-3(j)(4)(viii).

(ii) Amounts deferred under this Plan shall not be made available to the Participant, except as provided in Article 7.00, and shall reduce the Compensation payable to the Participant in the year of the deferral in accordance with the provisions of the applicable Deferral Election Form; provided, however, that all such amounts shall be subject to the rights of the general creditors of the Company and its Affiliates as provided in Article 12.00 of this Plan.

(b) Timing of Deferral Elections. A deferral election under this Plan shall be effective only if it is made in a timely manner as follows:

(i) In General. Except as permitted under subsections (ii) and (iii) of this Section 4.01(b), a Deferral Election Form must be submitted to the Committee by the last day of the Plan Year preceding the Plan Year in which services giving rise to the Compensation to be deferred are to be performed.

(ii) First Year of Eligibility. Notwithstanding the foregoing, if and to the extent permitted by the Committee, during the first Plan Year in which an Eligible Employee is eligible

to participate in this Plan, the Eligible Employee may submit a Deferral Election Form to the Committee no later than thirty (30) days after the date on which the Eligible Employee becomes so eligible, with respect to Compensation to be earned for services performed after such election is made; provided, however, that this subsection (ii) shall not apply if, at such time, the Eligible Employee also is eligible to participate in any other arrangement that, along with this Plan, is treated as a single nonqualified deferred compensation plan under Code §409A and the Treasury Regulations promulgated thereunder.

(iii) Performance-Based Compensation. Notwithstanding the foregoing and to the extent permitted by the Committee, a Deferral Election Form with respect to any performance-based compensation (within the meaning of Code §409A) may be submitted by an Eligible Employee or a Participant, as the case may be, by the date that is not later than six months before the end of the performance period with respect to which the performance-based compensation is based; provided that in no event may an election to defer be made after such performance-based compensation has become readily ascertainable.

(c) Additional Requirements for Deferral Elections. Deferrals made pursuant to a Deferral Election Form must be made in whole percentages and subject to such other limitations as the Committee may impose from time to time in its sole discretion.

4.02 Discretionary Contributions. The Company or one of its Affiliates, as applicable, shall make Discretionary Contributions to the Account of a Participant in such amount that would have been made pursuant to the Qualified Plan as matching contributions had all amounts elected to be deferred under this Plan pursuant to Section 4.01 been deferred under the Qualified Plan and as if the Statutory Limits did not exist. Such Discretionary Contributions shall be credited to the Accounts of Participants during the first calendar quarter following the last day of the Plan Year with respect to which the related Compensation was deferred.

4.03Crediting of Deferrals and Discretionary Contributions.

(a) Deferrals. Deferrals of Compensation, if any, shall be credited to a Participant’s Account as soon as administratively practicable following each payroll period.

(b) Discretionary Contributions. Any Discretionary Contribution shall be credited to a Participant’s Account on the date of such Discretionary Contribution.

5.00Vesting

5.01 Deferrals of Compensation. A Participant shall be one hundred percent (100%) vested in the portion of his or her Account attributable to deferrals of Compensation under Section 4.01 of this Plan and any deemed earnings or losses on the investment of such deferrals.

5.02 Discretionary Contributions. Except as otherwise provided in Section 5.03 of this Plan, a Participant shall have a vested right to the portion of his or her Account attributable to any Discretionary Contribution and any deemed earnings and losses on the investment of such Discretionary Contribution in accordance with the vesting schedule under the Qualified Plan.

5.03 Accelerated Vesting Upon Occurrence of Certain Events. Notwithstanding the foregoing, a Participant shall become fully vested in all amounts credited to his or her Account upon the Participant’s Retirement or, if earlier, death.

5.04 Amounts Not Vested. Any amounts credited to a Participant’s Account that are not vested upon his or her Termination shall be forfeited.

6.00Accounts

6.01 Establishment of Accounts. The Committee shall establish and maintain an Account for each Participant. Each Participant’s Account shall be credited with, to the extent applicable, any deferrals of Compensation and Discretionary Contributions, and the Participant’s allocable share of any deemed earnings or losses on the foregoing. Each Participant’s Account shall be reduced by any distributions made from such Account plus, subject to Article 8.00 of this Plan and to the extent permitted by applicable law, any federal, state and local tax withholding as may be required by law.

6.02 Establishment of Subaccounts. Within each Participant’s Account, separate subaccounts shall be maintained to the extent necessary for the administration of the Plan.

6.03Earnings or Losses on Accounts.

(a) Each Participant’s Account shall be credited with earnings or interest as though such Account were invested in such investments and under such criteria as the Committee may determine in its sole discretion. The Company may also permit the Participant to direct the deemed investment of the Account in such investments as the Company may make available for this purpose from time to time. The Company assumes no responsibility or liability with respect to any loss or expense that may arise, result or be incurred from any deemed investment of the Account. Any costs or expenses incurred by the Company in the deemed investment of the Account shall be debited against the Account. The Account shall be credited with earnings or debited for losses, as the case may be, based on its deemed investment pursuant to Section 6.03(b).

(b) As of each Valuation Date, each Participant’s Account will be credited with earnings and charged with losses equal to the amount by which the Account would have been credited or charged since the prior Valuation Date had the Participant’s Account been invested as described in Section 6.03(a) of this Plan.

(c) For purposes of clarity, neither the Company nor any of its Affiliates shall have any obligation to invest any funds in accordance with the deemed investment elections described in this Section 6.03. Participants’ Accounts shall merely be bookkeeping entries on the books of the Company and its Affiliates, as applicable, and no Participant or Beneficiary shall obtain any property right or interest in any investment or any other particular assets of the Company or any of its Affiliates.

7.00Distribution of Plan Benefits

7.01 Distributions Upon Termination (Other than Death).

(a) Except as otherwise provided in this Section 7.01, a Participant may elect to have distribution of his or her Plan Benefit paid in up to ten (10) substantially equal annual installments beginning on the January 1 immediately following the Participant’s Termination and on each

January 1 thereafter by submitting a valid Distribution Election Form in accordance with Section 7.01(b). If no election is made, the Participant’s Plan Benefit shall be distributed in a single lump sum on the January 1st immediately following the Participant’s Termination.

(b) An election to receive annual installments under this Section 7.01 must be made on a signed Distribution Election Form that is submitted to the Committee no later than thirty (30) days after the date on which the Participant first becomes eligible to participate in this Plan, with respect to any deferral of Compensation or Discretionary Contribution made or credited for services performed after such election is made. For purposes of the preceding sentence, an Eligible Employee shall be first eligible to participate in this Plan only if the Eligible Employee is not eligible to participate in any other arrangement that, along with this Plan, is treated as a single nonqualified deferred compensation plan under Code §409A and the Treasury Regulations promulgated thereunder.

(i) The election described in this Section 7.01(b) shall be subject to the terms and conditions specified in this Plan and in the Distribution Election Form and, except as provided in Section 7.01(b)(iii) of this Plan, shall be irrevocable once made.

(ii) A Participant may elect to change the form of distribution (based on the alternatives described in Section 7.01(a) of this Plan) by submitting a new Distribution Election Form to the Committee; provided, however, that: (A) such change may not take effect until at least twelve (12) months after the date on which such election is made; (B) the payment with respect to which such change is made must be deferred (other than a distribution upon death) for a period of not less than five (5) years from the date such payment would otherwise have been paid (or, in the case of installment payments, from the date the first amount was scheduled to be paid); and (C) such change must be made not less than twelve (12) months before the date the payment is scheduled to be paid (or, in the case of installment payments, from the date the first amount was scheduled to be paid).

(iii) Once a Participant’s Plan Benefit is or begins to be distributed, no further changes to the distribution of such Plan Benefit shall be permitted. For purposes of this Section 7.01, if the right to any payments would constitute the right to a “series of installment payments” within the meaning of Code §409A, then such payments shall be treated as a single payment within the meaning of Code §409A.

(c) Notwithstanding any provision in the Plan to the contrary, the Committee, in its sole discretion, may require a lump sum distribution of a Participant’s Plan Benefit if: (a) the distribution results in the termination and liquidation of the entirety of the Participant’s interest under this Plan and all agreements, methods, programs or other arrangements with respect to which deferrals of compensation are treated as having been deferred under a single nonqualified deferred compensation plan under Code §409A; and (b) the aggregate distribution under the arrangements is not greater than $15,000.

(d) Notwithstanding any provision in this Plan to the contrary, any Plan Benefit payable to a Participant who is a “specified employee” (as defined in Code §409A) of the Company or any of its Affiliates upon the Participant’s Termination shall not be (or begin to be) distributed until six months after the date on which the Participant Terminates (or, if earlier, the date on which the Participant dies). The first payment to be made shall include the cumulative amount, if any, of any amounts that would otherwise have been paid in accordance with the Participant’s

Distribution Election Form but for the fact that such amounts could not be paid during such postponement period.

7.02 Distributions Upon Death.

(a) Notwithstanding anything in this Plan to the contrary, if a Participant dies before his or her Plan Benefit has begun to be distributed or has been fully distributed, the Plan Benefit will be distributed to the Participant’s Beneficiary in a lump sum within ninety (90) days after the date of the Participant’s death.

(b) If a Participant dies after the Participant’s Termination and after his or her Plan Benefit has been fully distributed, no additional benefit will be due to such Participant or his or her Beneficiary under this Plan.

7.03 Termination for Cause. Notwithstanding anything in this Plan to the contrary, if a Participant is Terminated by the Company for Cause, all Discretionary Contributions and any deemed earnings on the foregoing credited to the Participant’s Account (whether or not vested) shall be forfeited as of the date of such Termination.

7.04 Unforeseeable Emergency. A Participant may request a distribution of his or her Plan Benefit upon the occurrence of an Unforeseeable Emergency. As a condition of receiving a distribution under this Section 7.04, the Participant must file a signed, written application with the Committee specifying the nature of the Unforeseeable Emergency, the amount needed to address the Unforeseeable Emergency and supplying any other information that the Committee, in its discretion, may need to ensure the conditions specified in this Section 7.04 are satisfied. The Committee shall, in its sole discretion, determine whether an Unforeseeable Emergency exists. If the Committee determines that an Unforeseeable Emergency exists, the Company or one of its Affiliates, as applicable, shall distribute an amount to the Participant that shall not be greater than the amount reasonably necessary, in the Committee’s determination, to satisfy the emergency need (which may include the amount necessary to pay any federal, state, local or foreign income taxes or penalties reasonably anticipated to result from the distribution) or, if less, the value of the Participant’s Plan Benefit as of the Valuation Date immediately preceding the distribution date. A distribution on account of an Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, or by liquidation of the Participant’s assets, to the extent that the liquidation of such assets would not cause a severe financial hardship.

7.05 Full Discharge. Once the Participant’s Plan Benefit has been fully distributed, none of the Company, its Affiliates, the Board, the Committee, their delegates or this Plan will have any further liability under this Plan to the Participant or the Participant’s Beneficiary.

8.00Tax Withholding

The Company or any of its Affiliates, as applicable, shall withhold from other amounts owed to a Participant or require the Participant to remit to the Company or the Affiliate, as applicable, an amount sufficient to satisfy federal, state and local tax withholding requirements with respect to any Plan Benefit or the vesting, payment or cancellation of any Plan Benefit.

9.00Claims Procedure

9.01 Filing Claims. Any Participant or Beneficiary (a “claimant”) who believes that he or she is entitled to an unpaid Plan Benefit may file a written notification of his or her claim with the Committee.

9.02 Notification to Claimant. If the claim is wholly or partially denied, the Committee will, within a reasonable period of time, and in any event within ninety (90) days of the receipt of such claim, provide the claimant with written notice of the denial setting forth in a manner calculated to be understood by the claimant:

(a) The specific reason or reasons for which the claim was denied;

(b) Specific reference to pertinent Plan provisions, rules, procedures or protocols upon which the Committee relied to deny the claim;

(c) A description of any additional material or information that the claimant may file to perfect the claim and an explanation of why this material or information is necessary; and

(d) An explanation of this Plan’s claims review procedure and the time limits applicable to such procedure and a statement of the claimant’s right to bring a civil action under ERISA §502(a) following an adverse determination upon review.

If special circumstances require the extension of the time period described above, the claimant will be notified before the end of the initial period of the circumstances requiring the extension and the date by which the Committee expects to reach a decision. Any extension for deciding a claim will not be for more than an additional ninety (90) day period.

9.03 Review Procedure. If a claim has been wholly or partially denied, the affected claimant, or his or her authorized representative may:

(a) Request that the Committee reconsider its initial denial by filing a written appeal within sixty (60) days after receiving written notice that all or part of the initial claim was denied;

(b) Review pertinent documents and other material upon which the Committee relied when denying the initial claim; and

(c) Submit a written description of the reasons for which the claimant disagrees with the Committee’s initial adverse decision.

An appeal of an initial denial of benefits and all supporting material must be made in writing within the time periods described above and directed to the Committee. The Committee is solely responsible for reviewing all benefit claims and appeals and taking all appropriate steps to implement its decision.

The Committee’s decision on review will be sent to the claimant in writing and will include:

(i) Specific reason or reasons for the decision;

(ii) Specific references to pertinent Plan provisions upon which the decision was based;

(iii) The claimant’s ability to review and receive copies of all documents relating to the claimant’s claim for benefits, free of charge;

(iv) An explanation of any voluntary review procedures describing the steps to be taken by a claimant who wishes to submit the claimant’s claims for review and the time limits applicable to such procedures; and

(v) A statement of the claimant’s right to bring a civil action under ERISA §502(a).

The Committee will consider all information submitted by the claimant, regardless of whether the information was part of the original claim. The Committee’s decision on review will be made not later than sixty (60) days after the Committee’s receipt of the request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered as soon as possible, but not later than one hundred twenty (120) days after the Committee’s receipt of the request for review. This notice to the claimant will indicate the special circumstances requiring the extension and the date by which the Committee expects to render a decision and will be provided to the claimant prior to the expiration of the initial sixty (60) day period.

To the extent permitted by law, the decision of the Committee (if no review is properly requested) or the decision of the review official on review, as the case may be, will be final and binding on all parties. No legal action for benefits under this Plan may be brought unless and until the claimant has exhausted his or her remedies under this Article 9.00.

10.00Administration

10.01Administration.

(a) The Committee is expressly empowered to interpret this Plan, determine all questions arising in the administration, interpretation and application of this Plan; employ actuaries, accountants, counsel and other persons the Committee deems necessary in connection with the administration of this Plan, request any information from the Company or any of its Affiliates the Committee deems necessary to determine whether the Company or any Affiliate would be considered insolvent or subject to a proceeding in bankruptcy, and take all other necessary and proper actions to fulfill its duties under this Plan.

(b) The Committee shall not be liable for any actions by it hereunder, unless due to its own negligence, willful misconduct or lack of good faith.

(c) The Committee (and any delegate under Section 10.01(d) of this Plan) shall be indemnified and saved harmless by the Company from and against all personal liability to which the Committee (and such delegate) may be subject by reason of any act done or omitted to be done in its official capacity as administrator in good faith in the administration of this Plan, including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense upon the request of the Committee (or such delegate).

(d) In exercising its authority under this Plan, the Committee may allocate all or any part of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by the Committee. Any such allocation or delegation may be revoked at any time.

10.02Compensation and Expenses.

(a) The Committee and any delegate under Section 10.01(d) of this Plan will serve without compensation for services provided to this Plan. The Company and, if applicable, its Affiliates, will furnish the Committee and any delegate under Section 10.01(d) of this Plan with all clerical or other assistance necessary to perform their respective duties.

(b) The Company and its Affiliates will pay most expenses of administering this Plan. However, any costs or expenses incurred by the Company or an Affiliate in connection with the

recordkeeping and deemed investment of the Account, including any costs under a services agreement with an Affiliate, may be debited against the Account.

10.03Effect of Committee Action.

(a) All actions taken and all determinations made by the Committee in good faith will be final and binding upon all Participants, Beneficiaries, the Company and its Affiliates and any other person interested in this Plan. To the extent the Committee has been granted discretionary authority under this Plan, its prior exercise of this authority will not obligate the Committee to exercise its authority in a like fashion thereafter.

(b) This Plan will be interpreted by the Committee in accordance with its terms and their intended meaning. The construction and interpretation of the provisions of this Plan are vested with the Committee, in its absolute discretion, including, without limitation, the determination of benefits and eligibility. All decisions, determinations and interpretations will be final, conclusive and binding upon all persons having an interest in this Plan.

11.00Amendments and Termination

The Committee may, at any time, in its sole discretion, amend, modify, or suspend this Plan, in whole or in part, except that no such amendment, modification, or suspension shall have any retroactive effect to reduce any amounts allocated to a Participant’s Account without the Participant’s consent. The Board may, at any time, in its sole discretion terminate this Plan, in whole or in part, except that no such termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s Account without the Participant’s consent. In the event that this Plan is terminated, the distribution of the amounts credited to a Participant’s Account shall not be accelerated but shall be paid at such time and in such manner as determined under the terms of this Plan immediately prior to termination as if this Plan had not been terminated; provided, however, that the Company, in its sole discretion, may distribute a Participant’s Plan Benefit in accordance with Treasury Regulation §1.409A-3(j)(4)(ix).

12.00Prohibition Against Funding

This Plan is an unfunded, unsecured promise by the Company and its Affiliates to pay only those Plan Benefits that are accrued by Participants under the terms of this Plan. Neither the Company nor any of its Affiliates shall be required to segregate any assets into a fund established exclusively to pay Plan Benefits. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA. The Participants and their Beneficiaries have only the rights of general unsecured creditors and do not have any interest in or right to any specific asset of the Company or any of its Affiliates. The Company or one of its Affiliates, as applicable, shall be designated the owner and beneficiary of any investment acquired in connection with obligations under this Plan.

13.00Miscellaneous

13.01 No Contract. The adoption and maintenance of this Plan shall not be deemed to constitute a contract of employment or otherwise between the Company or any of its Affiliates and any employee or Participant or other person, or to be consideration for, or an inducement or condition of, any employment. Nothing contained herein shall be deemed to give any employee or Participant or other person the right to be retained in the service of the Company or any of its Affiliates or to interfere with the right of the Company or any of its Affiliates (which right is expressly reserved) to discharge, with or without Cause, any employee or Participant or other person at any time without any liability

for any claim either against this Plan (except to the extent provided herein) or against the Company or any of its Affiliates.

13.02 No Alienation. The right of a Participant or any other person to receive Plan Benefits may not be assigned, transferred, pledged or encumbered except as provided in the Participant’s designation of a Beneficiary, by will or by applicable laws of descent and distribution. Any attempt to assign, transfer, pledge or encumber a Plan Benefit will be null and void and of no legal effect. Any action taken (or attempted to be taken) contrary to the provisions of this Section 13.02 will be null and void and of no effect whatsoever; the Company, its Affiliates and the Committee may disregard such action (or attempted action) and will not in any manner be bound by it; and they, and each of them, will suffer no liability by doing so. If any Participant or other person acts (or attempts to take any action) contrary to this Section 13.02, the Company, its Affiliates and the Committee will be reimbursed and indemnified on demand out of the interest of such Participant in this Plan for any loss, cost or expense incurred as a result of disregarding or acting in disregard of that action (or attempted action).

13.03 Governing Law. This Plan, and applicable forms associated with this Plan, will be governed by and construed in accordance with the laws of the United States and, to the extent applicable, the laws of the State of Ohio, excluding any conflicts of laws principles.

13.04 Headings. Headings and subheadings in this Plan document are inserted for convenience of reference only. They constitute no part of this Plan.

13.05 Illegal or Invalid Provision. If any provision of this Plan is held to be illegal or invalid for any reason, this Plan will be construed and enforced as if the offending provision had not been included in this Plan. However, that determination will not affect the legality or validity of the remaining parts of this Plan.

13.06 Coordination with Other Plans. A Participant’s or his or her Beneficiary’s rights to any Plan Benefits will be determined solely by reference to the terms of this Plan document and will be unaffected by any other document or agreement between the Participant or the Beneficiary and the Company or any of its Affiliates.

13.07 Code §409A. Although the Company makes no guarantee with respect to the treatment of payment or benefits under this Plan, this Plan is intended to comply with the requirements of Code §409A and the Treasury Regulations promulgated thereunder, and the Company will interpret, apply and administer this Plan in accordance with this intent. The Company may accelerate the time or schedule of a distribution to a Participant or the Participant’s Beneficiary at any time this Plan fails to meet the requirements of Code §409A. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code §409A. Notwithstanding the foregoing, none of the Company, its Affiliates, the Board or the Committee or their delegates shall have any liability to a Participant for failure to comply with the requirements of Code §409A.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officer, effective as of the Effective Date.

	PEOPLES BANCORP INC.
By: /s/	CAROL SCHNEEBERGER
	Carol Schneeberger
	Executive Vice President, Chief Administrative Officer

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Charles W. Sulerzyski, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, of Peoples Bancorp Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 1, 2019	By:/s/	CHARLES W. SULERZYSKI
			Charles W. Sulerzyski
			President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, John C. Rogers, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, of Peoples Bancorp Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 1, 2019	By:/s/	JOHN C. ROGERS
			John C. Rogers
			Executive Vice President,
			Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO SECTION 1350

OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE*

In connection with the Quarterly Report of Peoples Bancorp Inc. (“Peoples Bancorp”) on Form 10-Q for the quarterly period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles W. Sulerzyski, President and Chief Executive Officer of Peoples Bancorp, and I, John C. Rogers, Executive Vice President, Chief Financial Officer and Treasurer of Peoples Bancorp, certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of Peoples Bancorp and its subsidiaries.

Date:	August 1, 2019	By: /s/	CHARLES W. SULERZYSKI
			Charles W. Sulerzyski
			President and Chief Executive Officer

Date:	August 1, 2019	By:/s/	JOHN C. ROGERS
			John C. Rogers
			Executive Vice President,
			Chief Financial Officer and Treasurer

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 31, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	PEOPLES BANCORP INC.
Entity Central Index Key	0000318300
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,698,571

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Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 56,731	$ 61,775
Interest-bearing deposits in other banks	36,692	15,837
Total cash and cash equivalents	93,423	77,612
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	919,364	791,891
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	34,839	36,961
Other investment securities	43,508	42,985
Total investment securities	997,711	871,837
Loans, net of deferred fees and costs (a)	2,833,533	2,728,778
Allowance for loan losses	(21,357)	(20,195)
Net loans	2,812,176	2,708,583
Loans held for sale	5,928	5,470
Bank owned life insurance	64,451	56,542
Bank owned life insurance	69,909	68,934
Goodwill	163,292	151,245
Other intangible assets	13,471	10,840
Other assets	56,015	40,391
Total assets	4,276,376	3,991,454
Liabilities
Non-interest-bearing	643,058	607,877
Interest-bearing	2,720,555	2,347,588
Total deposits	3,363,613	2,955,465
Short-term borrowings	186,457	356,198
Long-term borrowings	85,691	109,644
Accrued expenses and other liabilities	61,593	50,007
Total liabilities	3,697,354	3,471,314
Stockholders’ equity
Preferred stock, no par value, 50,000 shares authorized, no shares issued at June 30, 2019 and December 31, 2018	0	0
Common stock, no par value, 24,000,000 shares authorized, 21,142,256 shares issued at June 30, 2019 and 20,124,378 shares issued at December 31, 2018, including shares in treasury	418,950	386,814
Retained earnings	171,410	160,346
Accumulated other comprehensive income (loss), net of deferred income taxes	316	(12,933)
Treasury stock, at cost, 489,802 shares at June 30, 2019 and 601,289 shares at December 31, 2018	(11,654)	(14,087)
Total stockholders’ equity	579,022	520,140
Total liabilities and stockholders’ equity	$ 4,276,376	$ 3,991,454

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets
Available-for-sale investment securities at amortized cost	$ 910,431	$ 804,655
Held-to-maturity investment securities at fair value	$ 35,747	$ 36,963
Stockholders’ equity
Preferred stock - shares authorized	50,000	50,000
Preferred stock - shares issued	0	0
Common stock - shares authorized	24,000,000	24,000,000
Common stock - shares issued	21,142,256	20,124,378
Treasury stock - shares	489,802	601,289

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Interest income:
Interest and fees on loans	$ 36,660	$ 31,250	$ 70,713	$ 58,131
Interest and dividends on taxable investment securities	5,969	5,830	11,779	11,480
Interest on tax-exempt investment securities	729	635	1,266	1,278
Other interest income	263	54	439	106
Total interest income	43,621	37,769	84,197	70,995
Interest expense:
Interest on deposits	5,719	3,101	10,563	5,314
Interest on short-term borrowings	1,233	1,175	2,406	2,143
Interest on long-term borrowings	620	685	1,265	1,371
Total interest expense	7,572	4,961	14,234	8,828
Net interest income	36,049	32,808	69,963	62,167
Provision for loan losses	626	1,188	363	3,171
Net interest income after provision for loan losses	35,423	31,620	69,600	58,996
Non-interest income:
Insurance income	3,486	3,369	8,107	8,024
Mortgage banking income	1,000	969	1,788	1,320
Bank owned life insurance income	490	497	975	965
Net loss on investment securities	(57)	(147)	(27)	(146)
Net loss on asset disposals and other transactions	(293)	(405)	(475)	(331)
Other non-interest income	502	421	1,603	1,752
Total non-interest income	15,289	13,255	30,718	28,224
Non-interest expense:
Salaries and employee benefit costs	20,824	18,025	40,026	34,015
Net occupancy and equipment expense	3,132	2,803	6,110	5,669
Professional fees	2,344	3,022	3,620	4,740
Electronic banking expense	1,693	1,407	3,270	2,857
Data processing and software expense	1,567	1,359	3,112	2,681
Amortization of other intangible assets	824	861	1,518	1,615
Franchise tax expense	772	614	1,477	1,258
Marketing expense	490	656	1,084	981
FDIC insurance expense	381	416	752	782
Foreclosed real estate and other loan expenses	469	338	724	550
Communication expense	317	300	595	644
Other non-interest expense	6,063	6,170	8,448	8,400
Total non-interest expense	38,876	35,971	70,736	64,192
Income before income taxes	11,836	8,904	29,582	23,028
Income tax expense	2,238	1,012	5,615	3,395
Net income	$ 9,598	$ 7,892	$ 23,967	$ 19,633
Earnings per common share - basic	$ 0.47	$ 0.41	$ 1.20	$ 1.05
Earnings per common share - diluted	$ 0.46	$ 0.41	$ 1.19	$ 1.04
Weighted-average number of common shares outstanding - basic	20,277,028	19,160,728	19,824,035	18,646,266
Weighted-average number of common shares outstanding - diluted	20,442,366	19,293,381	19,972,350	18,773,169
Cash dividends declared	$ 7,035	$ 5,466	$ 12,903	$ 10,237
Cash dividends declared per common share	$ 0.34	$ 0.28	$ 0.64	$ 0.54
Fiduciary and Trust [Member]
Non-interest income:
Revenue from Contract with Customer, Including Assessed Tax	$ 3,401	$ 3,232	$ 6,513	$ 6,300
Credit and Debit Card [Member]
Non-interest income:
Revenue from Contract with Customer, Including Assessed Tax	3,267	2,785	6,254	5,570
Deposit Account [Member]
Non-interest income:
Revenue from Contract with Customer, Including Assessed Tax	2,977	2,388	5,318	4,508
Interest Rate Swap [Member] | transaction fee [Member]
Non-interest income:
Revenue from Contract with Customer, Including Assessed Tax	$ 516	$ 146	$ 662	$ 262

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 9,598	$ 7,892	$ 23,967	$ 19,633
Available-for-sale investment securities:
Gross unrealized holding gain (loss) arising during the period	12,947	(2,661)	21,672	(12,774)
Related tax (expense) benefit	(2,719)	559	(4,551)	3,737
Less: reclassification adjustment for net gain included in net income	(57)	(147)	(27)	(146)
Related tax benefit	12	31	6	31
Amounts reclassified out of accumulated other comprehensive loss per ASU 2016-01 (a)	0	0	0	(5,020)	[1]
Net effect on other comprehensive income (loss)	10,273	(1,986)	17,142	(13,942)
Defined benefit plans:
Net gain arising during the period	0	0	2	0
Amortization of unrecognized loss and service cost on benefit plans	20	26	37	52
Related tax expense	(4)	(5)	(8)	(11)
Net effect on other comprehensive income	16	21	31	41
Cash flow hedges:
Net (loss) gain arising during the period	(3,134)	537	(4,967)	1,915
Related tax benefit (expense)	658	(113)	1,043	(402)
Net effect on other comprehensive (loss) income	(2,476)	424	(3,924)	1,513
Total other comprehensive income (loss), net of tax	7,813	(1,541)	13,249	(12,388)
Total comprehensive income	$ 17,411	$ 6,351	$ 37,216	$ 7,245

[1] As of January 1, 2018, Peoples adopted ASU 2016-01, which resulted in the reclassification of $5.0 million in net unrealized gains on equity investment securities from accumulated other comprehensive loss to retained earnings.

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Consolidated Statement of Shareholders' Equity - 6 months ended Jun. 30, 2019 - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Restricted Shares	Restricted Shares Common Stock	Restricted Shares Treasury Stock	FIRST PRESTONSBURG BANCSHARES INC. [Member] Common Stock
Balance, December 31, 2018 at Dec. 31, 2018	$ 520,140	$ 386,814	$ 160,346	$ (12,933)	$ (14,087)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	23,967		23,967
Other comprehensive income, net of tax	13,249			13,249
Cash dividends declared	(12,903)		(12,903)
Reissuance of treasury stock for deferred compensation plan for Boards of Directors						$ 0	$ (2,821)	$ 2,821
Reissuance of treasury stock for deferred compensation plan for Boards of Directors	53				53
Repurchase of treasury stock in connection with employee incentive plan and under compensation plan for Boards of Directors	(684)				(684)
Common shares issued under dividend reinvestment plan	384	384
Common shares issued under compensation plan for Boards of Directors	209	52			157
Stock Issued During Period, Value, Employee Stock Purchase Plan	114	28			86
Share-based Compensation	2,056	2,056
Stock Issued During Period, Value, Acquisitions	32,437								$ 32,437
Balance, June 30, 2019 at Jun. 30, 2019	$ 579,022	$ 418,950	$ 171,410	$ 316	$ (11,654)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Statement of Cash Flows [Abstract]
Net cash provided by operating activities	$ 18,821	$ 27,499
Available-for-sale investment securities:
Purchases	(116,433)	(81,441)
Proceeds from sales	72,481	14,489
Proceeds from principal payments, calls and prepayments	70,728	60,088
Held-to-maturity investment securities:
Proceeds from principal payments	1,984	2,627
Other investment securities:
Purchases	(376)	(1,089)
Proceeds from sales	3,872	7,111
Proceeds from insurance claim	26	0
Net decrease (increase) in loans held for investment	29,219	(92,582)
Net expenditures for premises and equipment	(1,233)	(2,721)
Proceeds from sales of other real estate owned	143	265
Business acquisitions, net of cash received	(7,795)	(4,695)
Investment in limited partnership and tax credit funds	(44)	(399)
Net cash provided by (used in) investing activities	68,162	(88,957)
Financing activities:
Net (decrease) increase in non-interest-bearing deposits	(23,318)	364
Net increase in interest-bearing deposits	173,571	19,705
Net (decrease) increase in short-term borrowings	(207,329)	66,412
Payments on long-term borrowings	(849)	(1,062)
Cash dividends paid	(12,467)	(10,001)
Repurchase of treasury stock in connection with employee incentive program and compensation plan for Boards of Directors to be held as treasury stock	(684)	(1,143)
Proceeds from issuance of common shares	6	15
Contingent consideration payments made after a business combination	(102)	(224)
Net cash (used in) provided by financing activities	(71,172)	74,066
Net increase in cash and cash equivalents	15,811	12,608
Cash and cash equivalents at beginning of period	77,612	72,194
Cash and cash equivalents at end of period	$ 93,423	$ 84,802

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Consolidated Statements of Cash Flows Supplemental Information - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Supplemental Cash Flow Elements [Abstract]
Interest paid	$ 13,765	$ 8,765
Income taxes paid	6,150	6,065
Transfers from loans to other real estate owned	$ 49	$ 16

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation: The accompanying Unaudited Consolidated Financial Statements of Peoples Bancorp Inc. and its subsidiaries ("Peoples" refers to Peoples Bancorp Inc. and its consolidated subsidiaries collectively, except where the context indicates the reference relates solely to Peoples Bancorp Inc.) have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and the instructions for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, these financial statements do not contain all of the information and footnotes required by US GAAP for annual financial statements and should be read in conjunction with Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (“Peoples' 2018 Form 10-K”).

The accounting and reporting policies followed in the presentation of the accompanying Unaudited Consolidated Financial Statements are consistent with those described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2018 Form 10-K, as updated by the information contained in this Form 10-Q.  Management has evaluated all significant events and transactions that occurred after June 30, 2019 for potential recognition or disclosure in these unaudited consolidated financial statements.  In the opinion of management, these unaudited consolidated financial statements reflect all adjustments necessary to present fairly such information for the periods and at the dates indicated.  Such adjustments are normal and recurring in nature.  Intercompany accounts and transactions have been eliminated.  The Consolidated Balance Sheet at December 31, 2018, contained herein, has been derived from the audited Consolidated Balance Sheet included in Peoples’ 2018 Form 10-K. 

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year, due in part to seasonal variations and unusual or infrequently occurring items.

New Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by Peoples as of the required effective dates. The following accounting pronouncements should be read in conjunction with "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2018 Form 10-K.

Accounting Standards Update ("ASU") 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. This accounting guidance will be effective for interim and annual reporting periods beginning after December 15, 2019 (effective January 1, 2020 for Peoples). Peoples early adopted this new accounting guidance as of January 1, 2019, and it will be incorporated in the October 1, 2019 annual goodwill and intangible assets impairment analysis, but it is not expected to have a material impact on Peoples' consolidated financial statements.

ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This accounting guidance replaces the current "incurred loss" model for recognizing credit losses with an "expected loss" model, referred to as the Current Expected Credit Loss ("CECL") model. Under the CECL model, Peoples will be required to present certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity investment securities, at the net amount expected to be collected. ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, and should be accounted for according to Topic 842.

The measurement of expected credit losses is to be based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This measurement will take place at the time the financial asset is first added to the balance sheet and periodically thereafter. This differs significantly from the "incurred loss" model required under current US GAAP, which delays recognition until it is probable a loss has been incurred. Accordingly, Peoples expects that the adoption of the CECL model will materially affect how the allowance for loan losses is determined and could require significant increases to the allowance for loan losses. Moreover, the CECL model may create more volatility in the level of Peoples' allowance for loan losses. If required to materially increase the level of allowance for loan losses for any reason, such increase could adversely affect Peoples' business, financial condition and results of operations.

The CECL standard will become effective for interim and annual reporting periods beginning after December 15, 2019 (effective January 1, 2020 for Peoples). Peoples has a committee that meets regularly to monitor progress and oversee the project. Peoples has implemented a third-party software solution, and is utilizing the tool to run test calculations throughout 2019 in anticipation of the full implementation at the beginning of 2020. Peoples has engaged consultants to assist with the completion of certain aspects of the project plan. Peoples will complete model validation during 2019, and is currently refining the economic forecasting process, documenting accounting policies, reviewing business processes and evaluating potential changes to the control environment. Peoples intends to complete a test run of its process, inclusive of the model, by the end of the third quarter of 2019, pending any unforeseen circumstances or significant changes to the requirements. Peoples expects to recognize a one-time cumulative-effect adjustment to the allowance for loan loss provision, and related tax effect, as of the beginning of the first reporting period in which the new standard is effective, consistent with regulatory expectations set forth in interagency guidance issued at the end of 2016. The impact of the adoption will depend on relevant data at the adoption date, including the characteristics of the loan portfolio, macroeconomic conditions and forecasts. Peoples has not yet determined the magnitude of any such one-time cumulative-effect adjustment or of the overall impact of the new standard on Peoples' financial condition or results of operations.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Assets and Liabilities

Fair value represents the amount expected to be received to sell an asset or paid to transfer a liability in its principal or most advantageous market in an orderly transaction between market participants at the measurement date. In accordance with fair value accounting guidance, Peoples measures, records and reports various types of assets and liabilities at fair value on either a recurring or a non-recurring basis in the Consolidated Financial Statements. Those assets and liabilities are presented below in the sections entitled “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis” and “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis.”

Depending on the nature of the asset or liability, Peoples uses various valuation methodologies and assumptions to estimate fair value. The measurement of fair value under US GAAP uses a hierarchy, which is described in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10‑K.

Assets and liabilities are assigned to a level within the fair value hierarchy based on the lowest level of significant input used to measure fair value. Assets and liabilities may change levels within the fair value hierarchy due to market conditions or other circumstances. Those transfers are recognized on the date of the event that prompted the transfer. There were no transfers of assets or liabilities required to be measured at fair value on a recurring basis between levels of the fair value hierarchy during the periods presented.

Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis

The following table provides the fair value for assets and liabilities required to be measured and reported at fair value on a recurring basis on the Consolidated Balance Sheets by level in the fair value hierarchy.

	Recurring Fair Value Measurements at Reporting Date
	June 30, 2019						December 31, 2018
(Dollars in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Available-for-sale investment securities:
Obligations of:
U.S. government sponsored agencies	$	—	$	19,051	$	—	$	—	$	—	$	—
States and political subdivisions	—		125,418		—		—		88,587		—
Residential mortgage-backed securities	—		748,132		—		—		692,608		—
Commercial mortgage-backed securities	—		22,664		—		—		6,707		—
Bank-issued trust preferred securities	—		4,099		—		—		3,989		—
Total available-for-sale securities	—		919,364		—		—		791,891		—
Equity investment securities	111		188		—		94		183		—
Derivative assets (a)	—		9,972		—		—		4,544		—
Liabilities:
Derivative liabilities (b)	$	—	$	14,020	$	—	$	—	$	3,562	$	—

(a) Included in other assets on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

(b) Included in accrued expenses and other liabilities on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

Available-for-Sale Investment Securities:The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, LIBOR yield curves, credit spreads and prices from market makers and live trading systems (Level 2). Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

Equity Investment Securities:The fair values of Peoples' equity investment securities are obtained from quoted prices in active exchange markets for identical assets or liabilities (Level 1) or quoted prices in less active markets (Level 2).

Derivative Assets and Liabilities: Derivative assets and liabilities are recognized on the Consolidated Balance Sheets at their fair value within other assets and accrued expenses and other liabilities, respectively. The fair value for derivative instruments is determined based on market prices, broker-dealer quotations on similar products, or other related input parameters (Level 2).

Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy.

	Non-Recurring Fair Value Measurements at Reporting Date
	June 30, 2019						December 31, 2018
(Dollars in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Impaired loans	$	—	$	—	$	32,952	$	—	$	—	$	24,129
Other real estate owned ("OREO")	—		—		123		—		—		94

Impaired Loans: Impaired loans are measured and reported at fair value when the amounts to be received are less than the carrying value of the loans. One of the allowable methods for determining the amount of impairment is estimating fair value using the fair value of the collateral for collateral-dependent loans. Management’s determination of the fair value for these loans uses a market approach representing the estimated net proceeds to be received from the sale of the collateral based on observable market prices or the market value provided by independent, licensed or certified appraisers (Level 3), less estimated selling costs. At June 30, 2019, impaired loans with an aggregate principal balance of $43.2 million were outstanding and reported at fair value of $33.0 million.  For the three and six months ended June 30, 2019, Peoples recognized an increase of $223,000 and $830,000 in the specific reserve on impaired loans, through the allowance for loan losses.

Other Real Estate Owned: OREO, included in other assets on the Consolidated Balance Sheets, is comprised primarily of commercial and residential real estate properties acquired by Peoples in satisfaction of a loan. OREO obtained in satisfaction of a loan is recorded at the lower of cost or estimated fair value, less estimated costs to sell the property. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is based on recent real estate appraisals and is updated at least annually. These appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales approach and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available (Level 3).

Financial Instruments Not Required to be Measured or Reported at Fair Value

The following table provides the carrying amount for each class of assets and liabilities and the fair value for certain financial instruments that are not required to be measured or reported at fair value on the Consolidated Balance Sheets.

	Fair Value Measurements of Other Financial Instruments
(Dollars in thousands)	Fair Value Hierarchy Level	June 30, 2019				December 31, 2018
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	1	$	93,423	$	93,423	$	77,612	$	77,612
Held-to-maturity investment securities:
Obligations of:
States and political subdivisions	2	4,398		4,880		4,403		4,896
Residential mortgage-backed securities	2	23,335		23,451		29,044		28,603
Commercial mortgage-backed securities	2	7,106		7,416		3,514		3,464
Total held-to-maturity securities		34,839		35,747		36,961		36,963
Other investment securities:
Federal Home Loan Bank ("FHLB") stock	2	29,257		29,257		29,367		29,367
Federal Reserve Bank ("FRB") stock	2	12,294		12,294		12,294		12,294
Nonqualified deferred compensation	2	1,293		1,293		987		987
Other investment securities	2	365		365		60		60
Other investment securities (a)		43,209		43,209		42,708		42,708
Net loans	3	2,812,176		3,076,717		2,708,583		2,907,537
Loans held for sale	2	5,928		6,353		5,470		5,492
Bank owned life insurance	3	69,909		69,909		68,934		68,934
Servicing rights (b)	3	2,571		3,617		2,655		4,568
Liabilities:
Deposits	2	$	3,363,613	$	3,335,686	$	2,955,465	$	2,953,452
Short-term borrowings	2	186,457		187,337		356,198		349,994
Long-term borrowings	2	85,691		84,933		109,644		107,696

(a) Other investment securities, as reported on the Unaudited Consolidated Balance Sheets, also includes equity investment securities for 2018, which are reported in the Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis table above.

(b) Included in other intangible assets on the Unaudited Consolidated Balance Sheets. Servicing rights are carried at the lower of cost or market value.

 For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument.  These instruments include cash and cash equivalents, demand and other non-maturity deposits, and overnight borrowings.  Peoples used the following methods and assumptions in estimating the fair value of the following financial instruments:

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, balances due from other banks, interest-bearing deposits in other banks, federal funds sold and other short-term investments with original maturities of ninety days or less. The carrying amount for cash and due from banks is a reasonable estimate of fair value. (Level 1).

Held-to-Maturity Investment Securities:The fair values used by Peoples are obtained from an independent pricing service and represent either quoted market prices for the identical securities (Level 1) or fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, LIBOR yield curves, credit spreads and prices from market makers and live trading systems (Level 2). Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided, and challenges prices when management believes a material discrepancy in pricing exists.

Other Investment Securities: Other investment securities are measured at their respective redemption values due to restrictions placed on their transferability (Level 2).

Net Loans: The fair value of portfolio loans assumes sale of the notes to a third-party financial investor. Accordingly, this value is not necessarily the value to Peoples if the notes were held to maturity.  Peoples considered interest rate, credit and market factors in estimating the fair value of loans (Level 3). Fair values for loans are estimated using a discounted cash flow methodology. The discount rates take into account interest rates currently being offered to customers for loans with similar terms, the credit risk associated with the loan and other market factors, including liquidity.

Loans Held for Sale:Loans originated and intended to be sold in the secondary market, generally 1-4 family residential loans, are carried, in aggregate, at the lower of cost or estimated fair value. The use of a valuation model using quoted prices of similar instruments are significant inputs in arriving at the fair value (Level 2).

Bank Owned Life Insurance: Peoples' bank owned life insurance policies are recorded at their cash surrender value (Level 3). Peoples recognizes tax-exempt income from the periodic increases in the cash surrender value of these policies and from death benefits.

Servicing Rights: The fair value of the servicing rights is determined by using a discounted cash flow model, which estimates the present value of the future net cash flows of the servicing portfolio based on various factors, such as servicing costs, expected prepayment speeds and discount rates (Level 3).

Deposits: The fair value of fixed maturity certificates of deposit ("CDs") is estimated using a discounted cash flow calculation based on current rates offered for deposits of similar remaining maturities (Level 2).

Short-term Borrowings: The fair value of short-term borrowings is estimated using discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 

Long-term Borrowings: The fair value of long-term borrowings is estimated using a discounted cash flow analysis based on rates currently available to Peoples for borrowings with similar terms (Level 2). 

Certain financial assets and financial liabilities that are not required to be measured or reported at fair value can be subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  These financial assets and liabilities include the following: customer relationships, deposit base, banking center networks, and other information required to compute Peoples’ aggregate fair value that are not included in the above information.  Accordingly, the above fair values are not intended to represent the aggregate fair value of Peoples.

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Investment Securities

6 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

Available-for-sale

The following table summarizes Peoples' available-for-sale investment securities:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2019
Obligations of:
U.S. government sponsored agencies	$	18,606	$	445	$	—		$	19,051
States and political subdivisions	122,809		2,721		(112		)	125,418
Residential mortgage-backed securities	742,164		8,770		(2,802		)	748,132
Commercial mortgage-backed securities	22,656		148		(140		)	22,664
Bank-issued trust preferred securities	4,196		100		(197		)	4,099
Total available-for-sale securities	$	910,431	$	12,184	$	(3,251	)	$	919,364
December 31, 2018
Obligations of:
States and political subdivisions	$	88,358	$	787	$	(558	)	$	88,587
Residential mortgage-backed securities	705,289		2,720		(15,401		)	692,608
Commercial mortgage-backed securities	6,812		—		(105		)	6,707
Bank-issued trust preferred securities	4,196		75		(282		)	3,989
Total available-for-sale securities	$	804,655	$	3,582	$	(16,346	)	$	791,891

The unrealized losses related to residential mortgage-backed securities at June 30, 2019 and December 31, 2018, were attributed to changes in market interest rates and spreads since the securities were purchased.

The gross gains and gross losses realized by Peoples from sales of available-for-sale securities for the periods ended June 30 were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross gains realized	$	30		$	3		$	60		$	5
Gross losses realized	87			150			87			151
Net losses realized	$	(57	)	$	(147	)	$	(27	)	$	(146	)

The cost of investment securities sold, and any resulting gain or loss, was based on the specific identification method and recognized as of the trade date.

The following table presents a summary of available-for-sale investment securities that had an unrealized loss:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
June 30, 2019
Obligations of:
States and political subdivisions	$	—	$	—	—	$	8,020	$	112	5	$	8,020	$	112
Residential mortgage-backed securities	17,932		154		7	226,208		2,648		77	244,140		2,802
Commercial mortgage-backed securities	—		—		—	6,380		140		5	6,380		140
Bank-issued trust preferred securities	—		—		—	1,803		197		2	1,803		197
Total	$	17,932	$	154	7	$	242,411	$	3,097	89	$	260,343	$	3,251
December 31, 2018
Obligations of:
States and political subdivisions	$	10,173	$	18	17	$	19,918	$	540	20	$	30,091	$	558
Residential mortgage-backed securities	47,562		226		50	517,335		15,175		170	564,897		15,401
Commercial mortgage-backed securities	—		—		—	6,707		105		3	6,707		105
Bank-issued trust preferred securities	—		—		—	1,718		282		2	1,718		282
Total	$	57,735	$	244	67	$	545,678	$	16,102	195	$	603,413	$	16,346

Management systematically evaluates available-for-sale investment securities for other-than-temporary declines in fair value on a quarterly basis.  At June 30, 2019, management concluded no individual securities were other-than-temporarily impaired since Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery. Further, the unrealized losses at both June 30, 2019 and December 31, 2018 were largely attributable to changes in market interest rates and spreads since the securities were purchased.

At June 30, 2019, approximately 99% of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S. government sponsored agencies. The remaining 1%, or two positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004. Both of these positions had a fair value of less than 90% of their book value, with an aggregate book and fair value of $211,000 and $147,000, respectively. Management analyzed the underlying credit quality of these securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities.

The unrealized losses with respect to the two bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at June 30, 2019 were primarily attributable to the subordinated nature of the debt.

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at June 30, 2019.  The weighted-average yields are based on the amortized cost.  In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.  

(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
U.S. government sponsored agencies	$	—		$	2,984		$	14,644		$	978		$	18,606
States and political subdivisions	4,234			31,186			44,207			43,182			122,809
Residential mortgage-backed securities	1			1,919			60,647			679,597			742,164
Commercial mortgage-backed securities	—			17,107			1,848			3,701			22,656
Bank-issued trust preferred securities	—			—			4,196			—			4,196
Total available-for-sale securities	$	4,235		$	53,196		$	125,542		$	727,458		$	910,431
Fair value
Obligations of:
U.S. government sponsored agencies	$	—		$	3,041		$	15,011		$	999		$	19,051
States and political subdivisions	4,236			31,477			45,518			44,187			125,418
Residential mortgage-backed securities	1			1,934			60,507			685,690			748,132
Commercial mortgage-backed securities	—			17,195			1,904			3,565			22,664
Bank-issued trust preferred securities	—			—			4,099			—			4,099
Total available-for-sale securities	$	4,237		$	53,647		$	127,039		$	734,441		$	919,364
Total weighted-average yield	2.36		%	2.52		%	2.77		%	2.93		%	2.88		%

Held-to-Maturity

The following table summarizes Peoples’ held-to-maturity investment securities:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2019
Obligations of:
States and political subdivisions	$	4,398	$	482	$	—		$	4,880
Residential mortgage-backed securities	23,335		256		(140		)	23,451
Commercial mortgage-backed securities	7,106		310		—			7,416
Total held-to-maturity securities	$	34,839	$	1,048	$	(140	)	$	35,747
December 31, 2018
Obligations of:
States and political subdivisions	$	4,403	$	493	$	—		$	4,896
Residential mortgage-backed securities	29,044		191		(632		)	28,603
Commercial mortgage-backed securities	3,514		—		(50		)	3,464
Total held-to-maturity securities	$	36,961	$	684	$	(682	)	$	36,963

There were no gross gains or gross losses realized by Peoples from sales of held-to-maturity securities for any of the three and six months ended June 30, 2019 and 2018.

The following table presents a summary of held-to-maturity investment securities that had an unrealized loss:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
June 30, 2019
Residential mortgage-backed securities	$	—	$	—	—	$	11,639	$	140	3	$	11,639	$	140
Total	$	—	$	—	—	$	11,639	$	140	3	$	11,639	$	140
December 31, 2018
Residential mortgage-backed securities	$	—	$	—	—	$	13,102	$	632	5	$	13,102	$	632
Commercial mortgage-backed securities	—		—		—	3,464		50		1	3,464		50
Total	$	—	$	—	—	$	16,566	$	682	6	$	16,566	$	682

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at June 30, 2019.  The weighted-average yields are based on the amortized cost.  In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date. 

(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
States and political subdivisions	$	305		$	—		$	2,984		$	1,109		$	4,398
Residential mortgage-backed securities	—			—			4,002			19,333			23,335
Commercial mortgage-backed securities	—			410			3,893			2,803			7,106
Total held-to-maturity securities	$	305		$	410		$	10,879		$	23,245		$	34,839
Fair value
Obligations of:
States and political subdivisions	$	307		$	—		$	3,458		$	1,115		$	4,880
Residential mortgage-backed securities	—			—			4,070			19,381			23,451
Commercial mortgage-backed securities	—			412			4,196			2,808			7,416
Total held-to-maturity securities	$	307		$	412		$	11,724		$	23,304		$	35,747
Total weighted-average yield	2.62		%	2.29		%	1.49		%	2.81		%	2.83		%

Other Investment Securities

Peoples' other investment securities on the Unaudited Consolidated Balance Sheet consist largely of shares of FHLB of Cincinnati and FRB of Cleveland stock, and other equity investment securities.

The following table summarizes the carrying value of Peoples' other investment securities:

(Dollars in thousands)	June 30, 2019		December 31, 2018
FHLB stock	$	29,257	$	29,367
FRB stock	12,294		12,294
Nonqualified deferred compensation	1,293		987
Equity investment securities	299		277
Other investment securities	365		60
Total other investment securities	$	43,508	$	42,985

Peoples redeemed $1.1 million during the second quarter of 2019 and $1.8 million during the first quarter of 2019 of FHLB stock to be in compliance with requirements of the FHLB of Cincinnati.

During the three and six months ended June 30, 2019, Peoples recorded the change in the fair value of equity investment securities held at June 30, 2019 in other non-interest income, resulting in unrealized gains of zero and $22,000, respectively. During the three and six months ended June 30, 2018, Peoples recorded the change in the fair value of equity investment securities held at June 30, 2018 in other non-interest income, resulting in unrealized losses of $658,000 and $198,000, respectively. Net realized gains on sales of equity investment securities, included in other non-interest income during the first six months of 2019, consisted of a realized gain of $787,000 related to the sale of restricted Class B Visa stock, which had been held at a carrying cost and fair value of zero due to the litigation liability associated with the stock.

At June 30, 2019, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies. There were no equity investment securities of a single issuer that exceeded 10% of Peoples' stockholders' equity.

Pledged Securities

Peoples had pledged available-for-sale investment securities with carrying values of $499.5 million and $430.0 million at June 30, 2019 and December 31, 2018, respectively, and held-to-maturity investment securities with carrying values of $14.6 million and $16.9 million at June 30, 2019 and December 31, 2018, respectively, to secure public and trust department deposits, and repurchase agreements in accordance with federal and state requirements.  Peoples also pledged available-for-sale investment securities with carrying values of $54.3 million and $60.1 million at June 30, 2019 and December 31, 2018, respectively, and held-to-maturity securities with carrying values of $15.6 million and $16.7 million at June 30, 2019 and December 31, 2018, respectively, to secure additional borrowing capacity at the FHLB and the FRB.

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Loans

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Loans

Loans

Peoples' loan portfolio consists of various types of loans originated primarily as a result of lending opportunities within Peoples' primary market areas of northeastern, central, southwestern and southeastern Ohio, west central West Virginia, and central and eastern Kentucky. Acquired loans consist of loans purchased in 2012 or thereafter. Loans that were acquired and subsequently re-underwritten are reported as originated upon execution of such credit actions (for example, renewals and increases in lines of credit). 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)	June 30, 2019		December 31, 2018
Originated loans:
Commercial real estate, construction	$	102,904	$	124,013
Commercial real estate, other	641,061		632,200
Commercial real estate	743,965		756,213
Commercial and industrial	548,460		530,207
Residential real estate	299,173		296,860
Home equity lines of credit	90,374		93,326
Consumer, indirect	419,595		407,167
Consumer, direct	72,209		71,674
Consumer	491,804		478,841
Deposit account overdrafts	676		583
Total originated loans	$	2,174,452	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	6,775	$	12,404
Commercial real estate, other	201,909		184,711
Commercial real estate	208,684		197,115
Commercial and industrial	51,506		35,537
Residential real estate	348,439		296,937
Home equity lines of credit	41,262		40,653
Consumer, indirect	90		136
Consumer, direct	9,100		2,370
Consumer	9,190		2,506
Total acquired loans	$	659,081	$	572,748
Total loans	$	2,833,533	$	2,728,778

Peoples has acquired various loans through business combinations for which there was, at acquisition, evidence of deterioration of credit quality since origination, and for which it was probable that all contractually required payments would not be collected. The carrying amounts of these purchased credit impaired loans included in the loan balances above are summarized as follows:

(Dollars in thousands)	June 30, 2019		December 31, 2018
Commercial real estate	$	13,116	$	11,955
Commercial and industrial	4,479		1,287
Residential real estate	23,509		20,062
Consumer	640		58
Total outstanding balance	$	41,744	$	33,362
Net carrying amount	$	28,125	$	22,475

Changes in the accretable yield for purchased credit impaired loans for the six months ended June 30 were as follows:

(Dollars in thousands)	June 30, 2019			June 30, 2018
Balance, beginning of period	$	8,955		$	6,704
Additions:
ASB Financial Corp.	—			2,415
First Prestonsburg Bancshares Inc.	3,853			—
Accretion	(1,148		)	(897		)
Balance, June 30	$	11,660		$	8,222

The fair value of newly acquired loans is determined at the time of acquisition and Peoples completes annual re-estimations of cash flows on acquired purchased credit impaired loans in August of each year. At the end of each quarter, Peoples evaluates factors to determine if a material change has occurred in acquired purchased credit impaired loans, and if a re-estimation is needed. Factors evaluated to determine if a re-estimation is needed include changes in: risk ratings, maturity dates, charge-offs, payoffs, nonaccrual status, loans that have become past due and actual cash flows compared to the projected cash flows from the last re-estimation. Peoples evaluates these changes quarterly and compares the current status or activity to those at the previous cash flow re-estimation date, and the related materiality of the changes. As of June 30, 2019, these changes, when compared to the total loan portfolio and the factors at the last re-estimation date, would not have a material impact on amounts recorded since the last re-estimation. Peoples completed a re-estimation of cash flows on purchased credit impaired loans in August 2018.

Cash flows expected to be collected on purchased credit impaired loans are estimated by incorporating several key assumptions, similar to the initial estimate of fair value. These key assumptions include probability of default and the amount of actual prepayments after the acquisition date. Prepayments affect the estimated life of the loans and could change the amount of interest income and possibly the principal expected to be collected. In re-forecasting future estimated cash flows, credit loss expectations are adjusted as necessary.

Pledged Loans

Peoples pledges certain loans secured by 1-4 family and multifamily residential mortgages under a blanket collateral agreement to secure borrowings from the FHLB of Cincinnati. The amount of loans pledged under this blanket collateral agreement totaled $488.4 million and $505.7 million at June 30, 2019 and December 31, 2018, respectively. Peoples also pledges commercial loans to secure borrowings with the FRB of Cleveland. The outstanding balances of these loans totaled $153.0 million and $180.9 million at June 30, 2019 and December 31, 2018, respectively.

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 recorded investments in loans on nonaccrual status and loans delinquent for 90 days or more and accruing were as follows:

	Nonaccrual Loans				Loans 90+ Days Past Due and Accruing
(Dollars in thousands)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Originated loans:
Commercial real estate, construction	$	688	$	710	$	—	$	—
Commercial real estate, other	6,241		6,565		—		786
Commercial real estate	6,929		7,275		—		786
Commercial and industrial	2,044		1,673		—		—
Residential real estate	3,816		4,105		438		398
Home equity lines of credit	452		596		53		7
Consumer, indirect	535		480		—		—
Consumer, direct	12		56		—		—
Consumer	547		536		—		—
Total originated loans	$	13,788	$	14,185	$	491	$	1,191
Acquired loans:
Commercial real estate, construction	$	—	$	—	$	230	$	—
Commercial real estate, other	308		319		557		15
Commercial real estate	308		319		787		15
Commercial and industrial	36		36		261		18
Residential real estate	1,716		1,921		1,853		1,032
Home equity lines of credit	742		637		—		—
Consumer, direct	1		—		57		—
Total acquired loans	$	2,803	$	2,913	$	2,958	$	1,065
Total loans	$	16,591	$	17,098	$	3,449	$	2,256

The following table presents the aging of the recorded investment in past due loans:

	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
June 30, 2019
Originated loans:
Commercial real estate, construction	$	—	$	—	$	688	$	688	$	102,216	$	102,904
Commercial real estate, other	—		—		6,050		6,050		635,011		641,061
Commercial real estate	—		—		6,738		6,738		737,227		743,965
Commercial and industrial	606		3		1,937		2,546		545,914		548,460
Residential real estate	1,391		1,177		2,478		5,046		294,127		299,173
Home equity lines of credit	387		18		461		866		89,508		90,374
Consumer, indirect	3,024		216		111		3,351		416,244		419,595
Consumer, direct	306		17		2		325		71,884		72,209
Consumer	3,330		233		113		3,676		488,128		491,804
Deposit account overdrafts	—		—		—		—		676		676
Total originated loans	$	5,714	$	1,431	$	11,727	$	18,872	$	2,155,580	$	2,174,452
Acquired loans:
Commercial real estate, construction	$	—	$	—	$	230	$	230	$	6,545	$	6,775
Commercial real estate, other	661		728		773		2,162		199,747		201,909
Commercial real estate	661		728		1,003		2,392		206,292		208,684
Commercial and industrial	488		60		297		845		50,661		51,506
Residential real estate	1,685		2,075		2,700		6,460		341,979		348,439
Home equity lines of credit	228		109		563		900		40,362		41,262
Consumer, indirect	—		—		—		—		90		90
Consumer, direct	88		52		57		197		8,903		9,100
Consumer	88		52		57		197		8,993		9,190
Total acquired loans	$	3,150	$	3,024	$	4,620	$	10,794	$	648,287	$	659,081
Total loans	$	8,864	$	4,455	$	16,347	$	29,666	$	2,803,867	$	2,833,533

	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
December 31, 2018
Originated loans:
Commercial real estate, construction	$	—	$	—	$	710	$	710	$	123,303	$	124,013
Commercial real estate, other	12		736		7,151		7,899		624,301		632,200
Commercial real estate	12		736		7,861		8,609		747,604		756,213
Commercial and industrial	1,678		3,520		1,297		6,495		523,712		530,207
Residential real estate	4,457		1,319		2,595		8,371		288,489		296,860
Home equity lines of credit	531		30		431		992		92,334		93,326
Consumer, indirect	3,266		488		165		3,919		403,248		407,167
Consumer, direct	308		50		42		400		71,274		71,674
Consumer	3,574		538		207		4,319		474,522		478,841
Deposit account overdrafts	—		—		—		—		583		583
Total originated loans	$	10,252	$	6,143	$	12,391	$	28,786	$	2,127,244	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	511	$	—	$	—	$	511	$	11,893	$	12,404
Commercial real estate, other	523		457		233		1,213		183,498		184,711
Commercial real estate	1,034		457		233		1,724		195,391		197,115
Commercial and industrial	111		13		18		142		35,395		35,537
Residential real estate	6,124		1,823		1,885		9,832		287,105		296,937
Home equity lines of credit	238		233		534		1,005		39,648		40,653
Consumer, indirect	—		—		—		—		136		136
Consumer, direct	23		6		—		29		2,341		2,370
Consumer	23		6		—		29		2,477		2,506
Total acquired loans	$	7,530	$	2,532	$	2,670	$	12,732	$	560,016	$	572,748
Total loans	$	17,782	$	8,675	$	15,061	$	41,518	$	2,687,260	$	2,728,778

Delinquency trends remained stable, as 99.0% of Peoples' portfolio was considered “current” at June 30, 2019, compared to 98.5% at December 31, 2018.

Credit Quality Indicators

As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 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. A description of the general characteristics of the risk grades used by Peoples is as 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 grade 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 loan. They are characterized by the distinct possibility that Peoples will sustain some loss if the deficiencies 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 current 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 the loan 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 loan 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. 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 based upon the most recent analysis performed:

	Pass Rated (Grades 1 - 4)		Special Mention (Grade 5)		Substandard (Grade 6)		Doubtful (Grade 7)		Not Rated		Total Loans
(Dollars in thousands)
June 30, 2019
Originated loans:
Commercial real estate, construction	$	100,231	$	—	$	1,431	$	—	$	1,242	$	102,904
Commercial real estate, other	622,966		7,673		10,416		6		—		641,061
Commercial real estate	723,197		7,673		11,847		6		1,242		743,965
Commercial and industrial	525,738		5,807		16,915		—		—		548,460
Residential real estate	13,752		201		14,682		249		270,289		299,173
Home equity lines of credit	17		—		—		—		90,357		90,374
Consumer, indirect	—		—		—		—		419,595		419,595
Consumer, direct	24		—		—		—		72,185		72,209
Consumer	24		—		—		—		491,780		491,804
Deposit account overdrafts	—		—		—		—		676		676
Total originated loans	$	1,262,728	$	13,681	$	43,444	$	255	$	854,344	$	2,174,452
Acquired loans:
Commercial real estate, construction	$	4,338	$	1,636	$	801	$	—	$	—	$	6,775
Commercial real estate, other	178,425		12,700		10,693		91		—		201,909
Commercial real estate	182,763		14,336		11,494		91		—		208,684
Commercial and industrial	43,171		3,265		5,038		32		—		51,506
Residential real estate	17,634		2,686		2,564		130		325,425		348,439
Home equity lines of credit	81		—		—		—		41,181		41,262
Consumer, indirect	1		—		—		—		89		90
Consumer, direct	19		—		—		—		9,081		9,100
Consumer	20		—		—		—		9,170		9,190
Total acquired loans	$	243,669	$	20,287	$	19,096	$	253	$	375,776	$	659,081
Total loans	$	1,506,397	$	33,968	$	62,540	$	508	$	1,230,120	$	2,833,533

	Pass Rated (Grades 1 - 4)		Special Mention (Grade 5)		Substandard (Grade 6)		Doubtful (Grade 7)		Not Rated		Total Loans
(Dollars in thousands)
December 31, 2018
Originated loans:
Commercial real estate, construction	$	121,457	$	—	$	1,472	$	—	$	1,084	$	124,013
Commercial real estate, other	612,099		10,898		9,203		—		—		632,200
Commercial real estate	733,556		10,898		10,675		—		1,084		756,213
Commercial and industrial	476,290		45,990		7,692		—		235		530,207
Residential real estate	14,229		500		11,971		409		269,751		296,860
Home equity lines of credit	453		—		—		—		92,873		93,326
Consumer, indirect	8		—		—		—		407,159		407,167
Consumer, direct	30		—		—		—		71,644		71,674
Consumer	38		—		—		—		478,803		478,841
Deposit account overdrafts	—		—		—		—		583		583
Total originated loans	$	1,224,566	$	57,388	$	30,338	$	409	$	843,329	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	8,976	$	1,795	$	1,633	$	—	$	—	$	12,404
Commercial real estate, other	169,260		7,241		8,114		96		—		184,711
Commercial real estate	178,236		9,036		9,747		96		—		197,115
Commercial and industrial	32,471		2,008		1,058		—		—		35,537
Residential real estate	17,370		1,938		2,033		137		275,459		296,937
Home equity lines of credit	33		—		—		—		40,620		40,653
Consumer, indirect	4		—		—		—		132		136
Consumer, direct	31		—		—		—		2,339		2,370
Consumer	35		—		—		—		2,471		2,506
Total acquired loans	$	228,145	$	12,982	$	12,838	$	233	$	318,550	$	572,748
Total loans	$	1,452,711	$	70,370	$	43,176	$	642	$	1,161,879	$	2,728,778

In the first six months of 2019, Peoples' classified loans, which are loans categorized as substandard or doubtful, increased compared to the balances at December 31, 2018 mostly due to downgrades during the period combined with loans acquired in the First Prestonsburg merger, which were partially offset by paydowns on classified loans. At June 30, 2019, criticized loans, which are those categorized as special mention, substandard or doubtful, declined compared to the balance at December 31, 2018, largely due to the upgrade of two commercial relationships, partially offset by loans acquired in the First Prestonsburg merger.

At June 30, 2019, Peoples had a total of $2.2 million of loans secured by residential real estate mortgages that were in the process of foreclosure.

Impaired Loans

The following table summarizes loans classified as impaired:

	Unpaid Principal Balance		Recorded Investment				Total Recorded Investment				Average Recorded Investment		Interest Income Recognized
			With Allowance		Without Allowance				Related Allowance
(Dollars in thousands)
June 30, 2019
Commercial real estate, construction	$	1,793	$	—	$	1,706	$	1,706	$	—	$	1,728	$	29
Commercial real estate, other	15,546		4,753		10,296		15,049		520		14,722		250
Commercial real estate	17,339		4,753		12,002		16,755		520		16,450		279
Commercial and industrial	4,265		1,485		2,731		4,216		449		3,226		47
Residential real estate	22,195		387		23,170		23,557		53		22,086		629
Home equity lines of credit	1,469		419		1,051		1,470		68		1,343		40
Consumer, indirect	445		96		356		452		23		413		15
Consumer, direct	464		49		415		464		18		207		9
Consumer	909		145		771		916		41		620		24
Total	$	46,177	$	7,189	$	39,725	$	46,914	$	1,131	$	43,725	$	1,019
December 31, 2018
Commercial real estate, construction	$	2,376	$	—	$	2,376	$	2,376	$	—	$	1,732	$	74
Commercial real estate, other	15,464		274		14,946		15,220		119		14,043		455
Commercial real estate	17,840		274		17,322		17,596		119		15,775		529
Commercial and industrial	3,305		790		2,436		3,226		157		2,423		72
Residential real estate	25,990		644		24,034		24,678		154		22,769		1,134
Home equity lines of credit	2,291		424		1,869		2,293		73		1,832		109
Consumer, indirect	496		—		503		503		—		278		15
Consumer, direct	79		22		57		79		6		63		20
Consumer	575		22		560		582		6		341		35
Total	$	50,001	$	2,154	$	46,221	$	48,375	$	509	$	43,140	$	1,879

Peoples' impaired loans shown in the table above included loans that were classified as troubled debt restructurings ("TDRs").

In assessing whether or not a borrower is experiencing financial difficulties, Peoples considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (i) the borrower is currently in payment default on any of the borrower's debt; (ii) a payment default is probable in the foreseeable future without the modification; (iii) the borrower has declared or is in the process of declaring bankruptcy; and (iv) the borrower's projected cash flow is insufficient to satisfy contractual payments due under the original terms of the loan without a modification.

Peoples considers all aspects of the modification to loan terms to determine whether a concession has been granted to the borrower. Key factors considered by Peoples include the borrower's ability to access funds at a market rate for debt with similar risk characteristics, the significance of the modification relative to the unpaid principal balance or collateral value of the debt, and the significance of a delay in the timing of payments relative to the original contractual terms of the loan. The most common concessions granted by Peoples generally include one or more modifications to the terms of the loan, such as (i) a reduction in the interest rate for the remaining life of the loan, (ii) an extension of the maturity date at an interest rate lower than the current market rate for new loans with similar risk, (iii) a temporary period of interest-only payments, and (iv) a reduction in the contractual payment amount for either a short period or the remaining term of the loan.

The following table summarizes the loans that were modified as a TDR during the three months ended June 30:

		Three Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2019
Originated loans:
Residential real estate	1	$	37	$	37	$	37
Home equity lines of credit	2	60		60		60
Consumer, indirect	7	110		110		110
Consumer, direct	3	41		41		41
Consumer	10	151		151		151
Total originated loans	13	$	248	$	248	$	248
Acquired loans:
Commercial real estate, other	7	$	725	$	699	$	700
Commercial and industrial	4	1,259		1,259		1,259
Residential real estate	35	1,823		1,823		1,823
Home equity lines of credit	7	113		113		113
Consumer, direct	16	340		340		340
Total acquired loans	69	$	4,260	$	4,234	$	4,235
June 30, 2018
Originated loans:
Residential real estate	5	$	717	$	717	$	717
Home equity lines of credit	3	61		61		61
Consumer, indirect	14	230		230		230
Consumer, direct	5	27		27		27
Consumer	19	257		257		257
Total originated loans	27	$	1,035	$	1,035	$	1,035
Acquired loans:
Residential real estate	11	$	720	$	720	$	720
Home equity lines of credit	4	86		86		86
Consumer, direct	3	57		57		57
Total acquired loans	18	$	863	$	863	$	863
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period-end are not reported.

		Six Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2019
Originated loans:
Commercial and industrial	2	$	38	$	38	$	35
Residential real estate	3	436		440		437
Home equity lines of credit	4	139		139		139
Consumer, indirect	8	123		123		123
Consumer, direct	5	69		69		67
Consumer	13	192		192		190
Total originated loans	22	$	805	$	809	$	801
Acquired loans:
Commercial real estate, other	7	$	724	$	699	$	700
Commercial and industrial	4	1,259		1,259		1,259
Residential real estate	36	1,847		1,847		1,842
Home equity lines of credit	9	179		179		178
Consumer, direct	16	340		340		340
Total acquired loans	72	$	4,349	$	4,324	$	4,319
June 30, 2018
Originated loans:
Residential real estate	7	$	910	$	910	$	911
Home equity lines of credit	3	61		61		61
Consumer, indirect	21	316		316		302
Consumer, direct	7	31		31		31
Consumer	28	347		347		333
Total originated loans	38	$	1,318	$	1,318	$	1,305
Acquired loans:
Commercial real estate, other	1	$	50	$	50	$	48
Residential real estate	13	989		989		989
Home equity lines of credit	4	86		86		86
Consumer, direct	3	57		57		57
Total acquired loans	21	$	1,182	$	1,182	$	1,180
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

The following table presents those acquired loans modified in a TDR during the year that subsequently defaulted (i.e., were 90 days or more past due following a modification) during the six-month periods ended June 30:

	June 30, 2019					June 30, 2018
(Dollars in thousands)	Number of Contracts	Recorded Investment (a)		Impact on the Allowance for Loan Losses		Number of Contracts	Recorded Investment (a)		Impact on the Allowance for Loan Losses
Acquired loans:
Consumer, direct	1	$	34	$	—	—	$	—	$	—
Total	1	$	34	$	—	—	$	—	$	—
(a) The amount shown is inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Peoples did not have any originated loans that were modified as a TDR during the last twelve months that subsequently defaulted. Peoples had no commitments to lend additional funds to the related debtors whose terms have been modified in a TDR.

Allowance for Originated Loan Losses

Changes in the allowance for originated loan losses for the six months ended June 30 were as follows:

(Dollars in thousands)	Commercial Real Estate			Commercial and Industrial			Residential Real Estate			Home Equity Lines of Credit			Consumer Indirect			Consumer Direct			Deposit Account Overdrafts			Total
Balance, January 1, 2019	$	8,003		$	6,178		$	1,214		$	618		$	3,214		$	351		$	81		$	19,659
Charge-offs	(153		)	(63		)	(176		)	(9		)	(819		)	(96		)	(349		)	(1,665		)
Recoveries	12			2,012			133			2			162			40			106			2,467
Net (charge-offs) recoveries	(141		)	1,949			(43		)	(7		)	(657		)	(56		)	(243		)	802
Provision for (recoveries of) loan losses	383			(930		)	13			(13		)	615			47			248			363
Balance, June 30, 2019	$	8,245		$	7,197		$	1,184		$	598		$	3,172		$	342		$	86		$	20,824
Balance, January 1, 2018	$	7,797		$	5,813		$	904		$	693		$	2,944		$	464		$	70		$	18,685
Charge-offs	(849		)	(38		)	(227		)	(57		)	(1,479		)	(219		)	(420		)	(3,289		)
Recoveries	43			—			67			9			272			84			116			591
Net charge-offs	(806		)	(38		)	(160		)	(48		)	(1,207		)	(135		)	(304		)	(2,698		)
Provision for (recovery of) loan losses	1,280			(410		)	261			(27		)	1,602			136			329			3,171
Balance, June 30, 2018	$	8,271		$	5,365		$	1,005		$	618		$	3,339		$	465		$	95		$	19,158

The following table details the recorded investment and allowance for originated loan losses disaggregated based on impairment method:

(Dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Residential Real Estate		Home Equity Lines of Credit		Consumer Indirect		Consumer Direct		Deposit Account Overdrafts		Total
June 30, 2019
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	520	$	449	$	53	$	68	$	23	$	18	$	—	$	1,131
Loans collectively evaluated for impairment	7,725		6,748		1,131		530		3,149		324		86		19,693
Ending balance	$	8,245	$	7,197	$	1,184	$	598	$	3,172	$	342	$	86	$	20,824
Recorded investment in:
Loans individually evaluated for impairment	$	16,755	$	4,216	$	23,557	$	1,470	$	452	$	464	$	—	$	46,914
Loans collectively evaluated for impairment	727,210		544,244		275,616		88,904		419,143		71,745		676		2,127,538
Ending balance	$	743,965	$	548,460	$	299,173	$	90,374	$	419,595	$	72,209	$	676	$	2,174,452
December 31, 2018
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	119	$	157	$	154	$	73	$	—	$	6	$	—	$	509
Loans collectively evaluated for impairment	7,884		6,021		1,060		545		3,214		345		81		19,150
Ending balance	$	8,003	$	6,178	$	1,214	$	618	$	3,214	$	351	$	81	$	19,659
Recorded investment in:
Loans individually evaluated for impairment	$	17,596	$	3,226	$	24,678	$	2,293	$	503	$	79	$	—	$	48,375
Loans collectively evaluated for impairment	738,617		526,981		272,182		91,033		406,664		71,595		583		2,107,655
Ending balance	$	756,213	$	530,207	$	296,860	$	93,326	$	407,167	$	71,674	$	583	$	2,156,030
June 30, 2018
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	1	$	191	$	47	$	14	$	31	$	45	$	—	$	329
Loans collectively evaluated for impairment	8,270		5,174		958		604		3,308		420		95		18,829
Ending balance	$	8,271	$	5,365	$	1,005	$	618	$	3,339	$	465	$	95	$	19,158
Recorded investment in:
Loans individually evaluated for impairment	$	19,162	$	3,173	$	26,497	$	1,736	$	441	$	150	$	—	$	51,159
Loans collectively evaluated for impairment	737,051		468,097		273,437		88,221		372,943		71,395		860		2,012,004
Ending balance	$	756,213	$	471,270	$	299,934	$	89,957	$	373,384	$	71,545	$	860	$	2,063,163

Allowance for Loan Losses for Acquired Loans

Acquired loans are recorded at their fair value as of the acquisition date with no valuation allowance, and monitored for changes in credit quality and subsequent increases or decreases in expected cash flows. Decreases in expected cash flows of acquired purchased credit impaired loans are recognized as an impairment, with the amount of the expected loss included in management's evaluation of the appropriateness of the allowance for loan losses. The methods utilized to estimate the required allowance for loan losses for non-impaired acquired loans are similar to those utilized for originated loans; however, Peoples records a provision for loan losses only when the computed allowance exceeds the remaining fair value adjustment.

The following table presents activity in the allowance for loan losses for acquired loans:

	Three Months Ended				Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2018		June 30, 2019			June 30, 2018
Non-impaired loans:
Balance, beginning of period	$	380	$	—	$	383		$	—
Charge-offs	—		—		(3		)	—
Balance, end of period	$	380	$	—	$	380		$	—
Purchased credit impaired loans:
Balance, beginning of period	$	153	$	108	$	153		$	108
Balance, end of period	$	153	$	108	$	153		$	108

The allowance for loan losses for non-impaired acquired loans was established at December 31, 2018.

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Long-Term Borrowings

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Long-Term Borrowings

Long-Term Borrowings

The following table summarizes Peoples' long-term borrowings:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Balance		Weighted- Average Rate		Balance		Weighted- Average Rate
FHLB putable, non-amortizing, fixed-rate advances	$	65,000	2.18	%	$	85,000	2.05	%
FHLB amortizing, fixed-rate advances	13,324		1.73	%	17,361		2.09	%
Junior subordinated debt securities	7,367		7.34	%	7,283		7.83	%
Total long-term borrowings	$	85,691	2.55	%	$	109,644	2.44	%

Peoples continually evaluates its overall balance sheet position given the interest rate environment. During the first six months of 2019, no additional borrowings were entered into, and two long-term FHLB non-amortizing advances totaling $20.0 million were reclassified to short-term borrowings as the maturity became less than one year.

As of June 30, 2019, Peoples had one remaining FHLB putable option-based advance. The FHLB has the option, at its sole discretion, to terminate the advance after the initial fixed rate period of three months, requiring full repayment of the advance by Peoples prior to the stated maturity. If the advance is terminated prior to maturity, the FHLB will offer Peoples replacement funding at the then-prevailing rate on an advance product then offered by the FHLB, subject to normal FHLB credit and collateral requirements. Peoples is required to make quarterly interest payments.

The amortizing, fixed-rate FHLB advances have a fixed rate for the term of each advance, with maturities ranging from eight to thirteen years. These advances require monthly principal and interest payments, with some having a constant prepayment rate requiring an additional principal payment annually. These advances are not eligible for optional prepayment prior to maturity.

The aggregate minimum annual retirements of long-term borrowings in future periods are as follows:

(Dollars in thousands)	Balance		Weighted-Average Rate
Six months ending December 31, 2019	$	2,568	1.48	%
Year ending December 31, 2020	2,555		1.35	%
Year ending December 31, 2021	21,979		1.74	%
Year ending December 31, 2022	16,521		1.95	%
Year ending December 31, 2023	1,157		1.06	%
Thereafter	40,911		3.41	%
Total long-term borrowings	$	85,691	2.55	%

Effective April 3, 2019, Peoples terminated the Credit Agreement, dated as of March 4, 2016, between Peoples, as Borrower, and Raymond James Bank, N.A., as Lender (the "RJB Credit Agreement"), with a revolving line of credit in the maximum aggregate principal amount of $15.0 million. As of the termination date, April 3, 2019, and December 31, 2018, there were no borrowings outstanding under the RJB Credit Agreement. Additional information regarding the RJB Credit Agreement can be found in "Note 9 Long-Term Borrowings" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10-K.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

The following table details the progression in Peoples’ common shares and treasury stock during the six months ended June 30, 2019:

	Common Stock	Treasury Stock
Shares at December 31, 2018	20,124,378	601,289
Changes related to stock-based compensation awards:
Release of restricted common shares	—	17,481
Cancellation of restricted common shares	—	3,465
Grant of restricted common shares	—	(122,286	)
Grant of common shares	—	(4,680	)
Changes related to deferred compensation plan for Boards of Directors:
Purchase of treasury stock	—	3,834
Disbursed out of treasury stock	—	(2,187	)
Common shares issued under dividend reinvestment plan	12,400	—
Common shares issued under compensation plan for Boards of Directors	—	(3,490	)
Common shares issued under employee stock purchase plan	—	(3,624	)
Issuance of common shares related to the merger with First Prestonsburg Bancshares Inc.	1,005,478	—
Shares at June 30, 2019	21,142,256	489,802

Under its Amended Articles of Incorporation, Peoples is authorized to issue up to 50,000 preferred shares, in one or more series, having such voting powers, designations, preferences, rights, qualifications, limitations and restrictions as determined by Peoples' Board of Directors. At June 30, 2019, Peoples had no preferred shares issued or outstanding.

The following table details the cash dividends declared per common share during 2019 and the comparable period of 2018:

	2019		2018
First quarter	$	0.30	$	0.26
Second quarter	0.34		0.28
Third quarter	0.34		0.28
Total dividends declared	$	0.98	$	0.82

Accumulated Other Comprehensive Income (Loss)

The following table details the change in the components of Peoples’ accumulated other comprehensive income (loss) for the six months ended June 30, 2019:

(Dollars in thousands)	Unrealized Gain (Loss) on Securities			Unrecognized Net Pension and Postretirement Costs			Unrealized Gain (Loss) on Cash Flow Hedge			Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2018	$	(10,082	)	$	(3,711	)	$	860		$	(12,933	)
Reclassification adjustments to net income:
Realized gain on sale of securities, net of tax	21			—			—			21
Other comprehensive income (loss), net of reclassifications and tax	17,121			31			(3,924		)	13,228
Balance, June 30, 2019	$	7,060		$	(3,680	)	$	(3,064	)	$	316

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Peoples sponsors a noncontributory defined benefit pension plan that covers substantially all employees hired before January 1, 2010.  The plan provides retirement benefits based on an employee’s years of service and compensation.  For employees hired before January 1, 2003, the amount of postretirement benefit is based on the employee’s average monthly compensation over the highest five consecutive years out of the employee’s last ten years with Peoples while an eligible employee.  For employees hired on or after January 1, 2003, the amount of postretirement benefit is based on 2% of the employee’s annual compensation during the years 2003 through 2009, plus accrued interest. Effective January 1, 2010, the pension plan was closed to new entrants.  Effective March 1, 2011, the accrual of pension plan benefits for all participants was frozen. Peoples recognized this freeze as a curtailment as of December 31, 2010 and March 1, 2011, under the terms of the pension plan. Effective July 1, 2013, a participant in the pension plan who is employed by Peoples may elect to receive or to commence receiving such person's retirement benefits as of the later of such person's normal retirement date or the first day of the month first following the date such person makes an election to receive his or her retirement benefits.

Peoples also provides post-retirement health and life insurance benefits to certain former employees and directors. Only those individuals who retired before January 27, 2012 were eligible for life insurance benefits. As of January 1, 2011, all retirees who desire to participate in the Peoples Bank medical plan do so by electing COBRA, which provides up to 18 months of coverage; retirees over the age of 65 also have the option to pay to participate in a group Medicare supplemental plan. Peoples only pays 100% of the cost for those individuals who retired before January 1, 1993. For all others, the retiree is responsible for most, if not all, of the cost of the health benefits.  Peoples’ policy is to fund the cost of the benefits as they arise.

The following tables detail the components of the net periodic cost for the plans described above:

	Pension Benefits
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Interest cost	$	110		$	105		$	219		$	210
Expected return on plan assets	(196		)	(146		)	(391		)	(293		)
Amortization of net loss	20			27			39			55
Net periodic income	$	(66	)	$	(14	)	$	(133	)	$	(28	)

	Postretirement Benefits
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Interest cost	$	1		$	1		$	2		$	2
Amortization of prior service cost	(1		)	—			(1		)	—
Amortization of net loss	—			(1		)	(2		)	(3		)
Net periodic income	$	—		$	—		$	(1	)	$	(1	)

There were no settlement charges recorded during any of the three and six months ended June 30, 2019 and June 30, 2018 under the noncontributory defined benefit pension plan.

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The calculations of basic and diluted earnings per common share were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands, except per common share data)	2019		2018		2019		2018
Distributed earnings allocated to common shareholders	$	6,935	$	5,407	$	12,711	$	10,123
Undistributed earnings allocated to common shareholders	2,568		2,427		11,067		9,389
Net earnings allocated to common shareholders	$	9,503	$	7,834	$	23,778	$	19,512
Weighted-average common shares outstanding	20,277,028		19,160,728		19,824,035		18,646,266
Effect of potentially dilutive common shares	165,338		132,653		148,315		126,903
Total weighted-average diluted common shares outstanding	20,442,366		19,293,381		19,972,350		18,773,169
Earnings per common share:
Basic	$	0.47	$	0.41	$	1.20	$	1.05
Diluted	$	0.46	$	0.41	$	1.19	$	1.04
Anti-dilutive common shares excluded from calculation:
Restricted shares	87		—		46		32

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Derivative Financial Instruments (Notes)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging [Text Block]

Peoples utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Derivatives and Hedging Activities - Risk Management Objective of Using Derivatives

Peoples is exposed to certain risks arising from both its business operations and economic conditions. Peoples principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Peoples manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities, and through the use of derivative financial instruments. Specifically, Peoples enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or expected cash amounts, the values of which are determined by interest rates. Peoples’ derivative financial instruments are used to manage differences in the amount, timing and duration of Peoples' known or expected cash receipts and its known or expected cash payments principally related to certain variable rate borrowings. Peoples also has interest rate derivatives that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in Peoples' assets or liabilities. Peoples manages a matched book with respect to customer-related derivative financial instruments in order to minimize its net risk exposure resulting from such transactions.

Cash Flow Hedges of Interest Rate Risk

Peoples' objectives in using interest rate derivatives are to add stability to interest income and expense, and to manage its exposure to interest rate movements. To accomplish these objectives, Peoples has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for Peoples making fixed payments. As of June 30, 2019, Peoples had entered into fifteen interest rate swap contracts with an aggregate notional value of $140.0 million. Peoples will pay a fixed rate of interest for up to ten years while receiving a floating rate component of interest equal to the three-month LIBOR rate. The interest received on the floating rate component is intended to offset the interest paid on rolling three-month FHLB advances or rolling three-month brokered certificates of deposit, which will continue to be rolled through the life of the swaps. Amounts reported in accumulated other comprehensive income (loss) ("AOCI"), related to derivatives will be reclassified to interest income or expense as interest payments are made or received on Peoples' variable-rate assets or liabilities. During the three and six months ended June 30, 2019, Peoples had reclassifications of gains to interest expense of $70,000 and $153,000, respectively, and during the three and six months ended June 30, 2018, Peoples had reclassifications of gains to interest expense of $28,000 and $16,000, respectively.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of each derivative is reported in AOCI (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. Peoples assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transaction. The reset dates and the payment dates on the 90-day advances or brokered certificates of deposit used to fund the swaps are matched to the reset dates and payment dates on the receipt of the 3-month LIBOR floating portion of the swaps to ensure effectiveness of the cash flow hedge. Effectiveness is measured by ensuring that reset dates and payment dates are matched. The amount of pre-tax AOCI for Peoples' cash flow hedges was $3.9 million at June 30, 2019.

The following table summarizes information about the interest rate swaps designated as cash flow hedges:

(Dollars in thousands)	June 30, 2019			December 31, 2018
Notional amount	$	140,000		$	110,000
Weighted average pay rates	2.27		%	2.37		%
Weighted average receive rates	1.80		%	2.57		%
Weighted average maturity	5.6 years			6.2 years
Unrealized gains	$	3,879		$	860

The following table presents net losses or gains recorded in AOCI and in the Unaudited Consolidated Statements of Income related to the cash flow hedges:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Dollars in thousands)	2019		2018			2019			2018
Amount of loss (gain) recognized in AOCI, pre-tax	$	2,994	$	(529	)	$	4,661		$	(1,907	)
Amount of (gain) loss recognized in earnings	$	—	$	—		$	(19	)	$	30

The following table reflects the cash flow hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in other assets:
Interest rate swaps related to debt	$	35,000	$	316	$	60,000	$	2,093
Total included in other assets	$	35,000	$	316	$	60,000	$	2,093
Included in accrued expenses and other liabilities:
Interest rate swaps related to debt	$	105,000	$	4,363	$	50,000	$	1,111
Total included in accrued expenses and other liabilities	$	105,000	$	4,363	$	50,000	$	1,111

At June 30, 2019, Peoples had $14.4 million and no amount of cash pledged at December 31, 2018, against interest rate swaps related to debt, however, the counterparties had pledged no amount of cash and $130,000, respectively.

Non-Designated Hedges

Peoples maintains an interest rate protection program for commercial loan customers, which was established in 2010. Under this program, Peoples originates variable rate loans with interest rate swaps, where the customer enters into an interest rate swap with Peoples on terms that match the terms of the loan. By entering into the interest rate swap with the customer, Peoples Bank effectively provides the customer with a fixed rate loan while creating a variable rate asset for Peoples Bank. Peoples Bank offsets its exposure in the swap by entering into an offsetting interest rate swap with an unaffiliated institution. These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative. Peoples had interest rate swaps associated with commercial loans with a gross notional value of $492.0 million and fair value of $9.7 million of equally offsetting assets and liabilities at June 30, 2019, and a gross notional value of $453.4 million and fair value of $2.5 million of equally offsetting assets and liabilities at December 31, 2018. These interest rate swaps did not have a material impact on Peoples' results of operation or financial condition.

The following table reflects the non-designated hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in other assets:
Interest rate swaps related to commercial loans	$	245,996	$	9,656	$	226,662	$	2,451
Total included in other assets	$	245,996	$	9,656	$	226,662	$	2,451
Included in accrued expenses and other liabilities:
Interest rate swaps related to commercial loans	$	245,996	$	9,656	$	226,662	$	2,451
Total included in accrued expenses and other liabilities	$	245,996	$	9,656	$	226,662	$	2,451

Peoples had no cash pledged against interest rate swaps related to commercial loans.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation 

Under the Peoples Bancorp Inc. Third Amended and Restated 2006 Equity Plan (the "2006 Equity Plan"), Peoples may grant, among other awards, nonqualified stock options, incentive stock options, restricted common stock awards, stock appreciation rights ("SARs"), performance units and unrestricted common share awards to employees and non-employee directors. The total number of common shares available under the 2006 Equity Plan is 891,340.  The maximum number of common shares that can be issued for incentive stock options is 500,000 common shares. Prior to 2007, Peoples granted nonqualified and incentive stock options to employees and nonqualified stock options to non-employee directors under the 2006 Equity Plan and predecessor plans.  Since February 2009, Peoples has granted restricted common shares to employees, and periodically to non-employee directors, subject to the terms and conditions prescribed by the 2006 Equity Plan. Additionally, in 2018 and 2019, the Board of Directors granted unrestricted common shares to non-employee directors and to all full-time and part-time employees who did not already participate in the 2006 Equity Plan. In general, common shares issued in connection with stock-based awards are issued from treasury shares to the extent available.  If no treasury shares are available, common shares are issued from authorized but unissued common shares.

Restricted Common Shares

Under the 2006 Equity Plan, Peoples may award restricted common shares to officers, key employees and non-employee directors.  Since 2018, common shares awarded to non-employee directors have vested immediately upon grant with no restrictions. Restrictions on restricted common shares awarded to employees typically expire after periods ranging from one to three years. In the first six months of 2019, Peoples granted an aggregate of 117,200 restricted common shares subject to performance-based vesting to officers and key employees with restrictions that will lapse three years after the grant date provided that in order for the restricted common shares to vest in full, Peoples must have reported positive net income and maintained a well capitalized status by regulatory standards for each of the three fiscal years preceding the vesting date. During the first six months of 2019, Peoples granted, to certain key employees, an aggregate of 5,086 restricted common shares subject to time-based vesting with restrictions that will lapse three years after the grant date.

The following table summarizes the changes to Peoples’ restricted common shares for the six months ended June 30, 2019:

	Time-Based Vesting			Performance-Based Vesting
	Number of Common Shares	Weighted-Average Grant Date Fair Value		Number of Common Shares	Weighted-Average Grant Date Fair Value
Outstanding at January 1	43,679	$	29.64	175,772	$	31.08
Awarded	5,086	32.05		117,200	32.20
Released	17,500	21.69		33,400	17.86
Forfeited	2,852	37.79		613	34.50
Outstanding at June 30	28,413	$	34.16	258,959	$	33.29

For the six months ended June 30, 2019, the total intrinsic value for restricted common shares released was $1.6 million compared to $3.2 million for the six months ended June 30, 2018.

Performance Unit Awards

Under the 2006 Equity Plan, Peoples may grant performance unit awards to officers, key employees and non-employee directors.  On July 26, 2017, Peoples granted a total of seven performance unit awards to individuals who were then serving as officers, with a maximum aggregate dollar amount of $1.3 million represented by the performance units subject to such awards and each performance unit representing $1.00. As of June 30, 2019, one of seven performance unit awards had been forfeited as one of the individuals granted a performance unit award left Peoples before meeting the minimum service requirement to retain the performance unit award. The performance unit awards granted cover the performance period beginning January 1, 2018 and ending on December 31, 2019, and are subject to two performance goals. Twenty-five percent of the performance units subject to each award will vest if, but only if, the related company-specific target performance goal is achieved. The remaining 75% of the performance units subject to each award will vest based on the relative performance of Peoples compared to a defined peer group (measured by percentile ranking) with respect to the related maximum performance goal. If, for the performance period, the target level of achievement for the first performance goal and/or the maximum level of achievement for the second performance goal is not reached, the dollar amount represented by the performance units associated with each performance goal will be adjusted to reflect the level of performance achieved. After the vesting date, the participant will receive that number of common shares of Peoples equal to (i) the aggregate number of the participant's performance units (and equivalent dollar value of such performance units) that vested based on the performance achieved under both performance goals (ii) divided by the fair market value of a common share of Peoples on the date the performance units are deemed to have vested (which will be the last day of the performance period) and rounded down to the nearest whole common share.

Stock-Based Compensation

Peoples recognizes stock-based compensation, which is included as a component of Peoples’ salaries and employee benefit costs, for restricted common shares and performance unit awards, as well as purchases made by participants in the employee stock purchase plan. For restricted common shares, Peoples recognizes stock-based compensation based on the estimated fair value of the awards on the grant date, for the portion of awards that is expected to vest over the vesting period. For performance unit awards, Peoples recognizes stock-based compensation over the performance period, based on the portion of the awards that is expected to vest based on the expected level of achievement of the two performance goals. Peoples also has an employee stock purchase plan whereby employees can purchase Peoples' common shares at a discount of up to 15%. The following table summarizes the amount of stock-based compensation expense and related tax benefit recognized for each period:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Total stock-based compensation expense	$	930		$	424		$	2,138		$	1,510
Recognized tax benefit	(195		)	(89		)	(449		)	(317		)
Net expense recognized	$	735		$	335		$	1,689		$	1,193

Restricted common shares were the primary form of stock-based compensation awards granted by Peoples in the three and six months ended June 30, 2019 and 2018. The fair value of restricted common share awards on the grant date is the market price of Peoples' common shares. Total unrecognized stock-based compensation expense related to unvested awards was $3.6 million at June 30, 2019, which will be recognized over a weighted-average period of 2.1 years. On February 14, 2018, an aggregate of 11,112 unrestricted common shares were granted as a one-time special award to all full-time and part-time employees who did not already participate in the 2006 Equity Plan, with a related stock-based compensation expense of $388,000 being recognized. On June 3, 2019, an aggregate of 880 unrestricted common shares were granted as a one-time special award to all full-time and part-time First Prestonsburg employees, with a related stock-based compensation expense of $27,000 being recognized. For the three and six months ended June 30, 2019, Peoples recorded $11,000 and $50,000, respectively, of stock-based compensation associated with the performance unit awards and for the three and six months ended June 30, 2018 recorded $81,000 and $125,000, respectively. Additionally, Peoples recognized $16,000 and $32,000 of stock-based compensation associated with the employee stock purchase plan, based on purchases by employees thereunder, in the three and six months ended June 30, 2019, respectively, and $14,000 and $28,000 for the three and six months ended June 30, 2018, respectively.

Unrestricted common shares awarded to non-employee directors are included as a component of Peoples' other non-interest expense. On January 31, 2019, Peoples granted, to non-employee directors, an aggregate of 3,200 unrestricted common shares, which resulted in an additional $102,000 of stock-based compensation expense being recognized. On January 31, 2018, Peoples granted, to non-employee directors, an aggregate of 3,600 unrestricted common shares, which resulted in an additional $128,000 of stock-based compensation expense being recognized.

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Revenue (Notes)

6 Months Ended

Jun. 30, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue

The following table details Peoples' revenue from contracts with customers:

	Three Months Ended				Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Insurance income:
Commission and fees from sale of insurance policies (a)	$	3,306	$	3,193	$	6,339	$	6,382
Fees related to third-party administration services (a)	178		173		347		292
Performance-based commissions (b)	2		3		1,421		1,350
Trust and investment income (a)	3,401		3,232		6,513		6,300
Electronic banking income:
Interchange income (a)	2,747		2,520		5,190		4,784
Promotional and usage income (a)	520		265		1,064		786
Deposit account service charges:
Ongoing maintenance fees for deposit accounts (a)	1,012		646		1,764		1,321
Transactional-based fees (b)	1,965		1,742		3,554		3,187
Commercial loan swap fees (b)	516		146		662		262
Other non-interest income transactional-based fees (b)	253		262		424		543
Total	$	13,900	$	12,182	$	27,278	$	25,207
Timing of revenue recognition:
Services transferred over time	$	11,164	$	10,029	$	21,217	$	19,865
Services transferred at a point in time	2,736		2,153		6,061		5,342
Total	$	13,900	$	12,182	$	27,278	$	25,207

(a) Services transferred over time.

(b) Services transferred at a point in time.

Peoples records contract assets for income that has been recognized over a period of time for fulfillment of performance obligations, but has not yet been received related to electronic banking income. This income typically relates to bonuses for which Peoples is eligible, but will not receive until a certain time in the future. Peoples records contract liabilities for payments received for commission income related to the sale of insurance policies, for which the performance obligations have not yet been fulfilled. The contract liabilities are recognized as income over time, during the period in which the performance obligations are fulfilled, which is over the insurance policy period. Peoples also records contract liabilities for bonuses received related to electronic banking income, for which income is recognized during the period in which the performance obligations are fulfilled.

The following table details the change in Peoples' contract assets and contract liabilities for the period ended June 30, 2019:

	Contract Assets			Contract Liabilities
(Dollars in thousands)
Balance, January 1, 2019	$	207		$	5,055
Additional income receivable	183			—
Additional deferred income	—			4,013
Receipt of income previously receivable	(11		)	—
Recognition of income previously deferred	—			(3,521		)
Balance, June 30, 2019	$	379		$	5,547

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Acquisitions (Notes)

6 Months Ended

Jun. 30, 2019

Acquisitions [Abstract]

Business Combination Disclosure [Text Block]

Acquisitions

On April 12, 2019, Peoples completed the merger with First Prestonsburg Bancshares Inc. ("First Prestonsburg"). First Prestonsburg merged into Peoples and First Prestonsburg's wholly-owned subsidiary, First Commonwealth Bank of Prestonsburg, Inc. ("First Commonwealth"), which operates nine full-service branches located in eastern and central Kentucky, merged into Peoples Bank. Consideration of $32.4 million was paid by Peoples in the form of 12.512 common shares of Peoples stock to shareholders of First Prestonsburg for each share of First Prestonsburg common stock they owned, which resulted in the issuance of 1,005,478 common shares of Peoples stock. In addition, immediately prior to the closing of the merger, First Prestonsburg paid a special cash distribution of $140.30 per share (for an aggregate amount of $11.3 million) which was deemed part of the purchase price to its shareholders. As a result, First Prestonsburg shareholders received a total purchase price of $43.7 million.

The following table provides the preliminary purchase price calculation as of the date of acquisition for the First Prestonsburg acquisition, and the assets acquired and liabilities assumed at their estimated fair values.

(Dollars in thousands, except per share data)
Consideration
Common shares	80,362
Number of common shares of Peoples issued for each common share of acquired company	12.512
Price per Peoples common share, based on closing date	$	32.26
Common share consideration	$	32,437
Net Assets at Fair Value
Assets
Cash and due from banks	$	4,998
Interest-bearing deposits in other banks	2,798
Total cash and cash equivalents	7,796
Available-for-sale investment securities	137,658
Other investment securities	3,068
Total investment securities	140,726
Total loans	130,407
Bank premises and equipment, net of accumulated depreciation	8,255
Other intangible assets	4,234
Other assets	2,677
Total assets	$	294,095
Liabilities
Deposits:
Non-interest-bearing	$	40,089
Interest-bearing	217,151
Total deposits	257,240
Short-term borrowings	14,400
Accrued expenses and other liabilities	2,065
Total liabilities	$	273,705
Net assets	$	20,390
Goodwill	$	12,047

The estimated fair values presented in the above table reflect certain fair value estimates made as of the date of acquisition. Adjustments to acquisition date estimated fair values are recorded in the period in which the adjustment is determined and, as a result, previously recorded results may change.

Acquired loans are reported net of the unamortized fair value adjustment. The following table details the fair value adjustment for acquired loans as of the acquisition date:

(Dollars in thousands)	First Prestonsburg
Non-impaired Loans
Contractual cash flows	$	168,903
Nonaccretable difference	19,756
Expected cash flows	149,147
Accretable yield	27,789
Fair value	$	121,358
Credit Impaired Loans
Contractual cash flows	$	17,706
Nonaccretable difference	4,804
Expected cash flows	12,902
Accretable yield	3,853
Fair value	$	9,049

Peoples recorded non-interest expense related to acquisitions of $6.8 million and $7.0 million for the three and six months ended June 30, 2019, respectively. Total non-interest income declined due to losses of $253,000 associated with the First Prestonsburg merger. For each of the three and six months ended June 30, 2019, salaries and employee benefit costs included $2.4 million, related to change in control agreements, retention and severance bonuses, and regular payroll and taxes after conversion. Professional fees related to the acquisition included $562,000 and $620,000 for the three and six months ended June 30, 2019, respectively, and other non-interest expenses included $3.7 million and $3.8 million (mainly contract termination fees) for the three and six months ended June 30, 2019, respectively.

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Leases (Notes)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Peoples leases certain banking facilities and equipment under various agreements with original terms providing for fixed monthly payments over periods generally ranging from two to twenty years.  Certain leases contain renewal options and rent escalation clauses calling for rent increases over the term of the lease.  Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term. At June 30, 2019, Peoples did not have any finance leases or any significant lessor agreements.

Peoples elected certain practical expedients, in accordance with Accounting Standards Codification ("ASC") 842. Peoples elected to recognize a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019 for the implementation of ASU 2016-02. Peoples also made an accounting policy election to account for each separate lease component of a contract and its associated non-lease components as a single lease component for all leases subject to ASC 842.

The table below details Peoples' lease expense, which is included in net occupancy and equipment expense in the Unaudited Consolidated Statements of Income:

	Three Months Ended		Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2019
Operating lease expense	$	311	618
Short-term lease expense	32		62
Total lease expense	$	343	$	680

The following table details the right-of-use asset, the lease liability and other information related to Peoples' operating leases:

(Dollars in thousands)	June 30, 2019
Right-of-use asset:
Other assets	$	6,661
Lease liability:
Accrued expenses and other liabilities	$	6,839
Other information:
Weighted-average remaining lease term	13.1 years
Weighted-average discount rate	2.46		%

The increased right-of-use asset and lease liability at June 30, 2019 were due to acquired leases associated with the First Prestonsburg merger.

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands)	Balance
Six months ending December 31, 2019	$	10
Year ending December 31, 2020	112
Year ending December 31, 2021	148
Year ending December 31, 2022	700
Year ending December 31, 2023	63
Thereafter	5,806
Total lease liability	$	6,839

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by Peoples as of the required effective dates. The following accounting pronouncements should be read in conjunction with "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples’ 2018 Form 10-K.

Accounting Standards Update ("ASU") 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. This accounting guidance will be effective for interim and annual reporting periods beginning after December 15, 2019 (effective January 1, 2020 for Peoples). Peoples early adopted this new accounting guidance as of January 1, 2019, and it will be incorporated in the October 1, 2019 annual goodwill and intangible assets impairment analysis, but it is not expected to have a material impact on Peoples' consolidated financial statements.

ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This accounting guidance replaces the current "incurred loss" model for recognizing credit losses with an "expected loss" model, referred to as the Current Expected Credit Loss ("CECL") model. Under the CECL model, Peoples will be required to present certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity investment securities, at the net amount expected to be collected. ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, and should be accounted for according to Topic 842.

The measurement of expected credit losses is to be based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This measurement will take place at the time the financial asset is first added to the balance sheet and periodically thereafter. This differs significantly from the "incurred loss" model required under current US GAAP, which delays recognition until it is probable a loss has been incurred. Accordingly, Peoples expects that the adoption of the CECL model will materially affect how the allowance for loan losses is determined and could require significant increases to the allowance for loan losses. Moreover, the CECL model may create more volatility in the level of Peoples' allowance for loan losses. If required to materially increase the level of allowance for loan losses for any reason, such increase could adversely affect Peoples' business, financial condition and results of operations.

The CECL standard will become effective for interim and annual reporting periods beginning after December 15, 2019 (effective January 1, 2020 for Peoples). Peoples has a committee that meets regularly to monitor progress and oversee the project. Peoples has implemented a third-party software solution, and is utilizing the tool to run test calculations throughout 2019 in anticipation of the full implementation at the beginning of 2020. Peoples has engaged consultants to assist with the completion of certain aspects of the project plan. Peoples will complete model validation during 2019, and is currently refining the economic forecasting process, documenting accounting policies, reviewing business processes and evaluating potential changes to the control environment. Peoples intends to complete a test run of its process, inclusive of the model, by the end of the third quarter of 2019, pending any unforeseen circumstances or significant changes to the requirements. Peoples expects to recognize a one-time cumulative-effect adjustment to the allowance for loan loss provision, and related tax effect, as of the beginning of the first reporting period in which the new standard is effective, consistent with regulatory expectations set forth in interagency guidance issued at the end of 2016. The impact of the adoption will depend on relevant data at the adoption date, including the characteristics of the loan portfolio, macroeconomic conditions and forecasts. Peoples has not yet determined the magnitude of any such one-time cumulative-effect adjustment or of the overall impact of the new standard on Peoples' financial condition or results of operations.

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on a Recurring Basis

	Recurring Fair Value Measurements at Reporting Date
	June 30, 2019						December 31, 2018
(Dollars in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Available-for-sale investment securities:
Obligations of:
U.S. government sponsored agencies	$	—	$	19,051	$	—	$	—	$	—	$	—
States and political subdivisions	—		125,418		—		—		88,587		—
Residential mortgage-backed securities	—		748,132		—		—		692,608		—
Commercial mortgage-backed securities	—		22,664		—		—		6,707		—
Bank-issued trust preferred securities	—		4,099		—		—		3,989		—
Total available-for-sale securities	—		919,364		—		—		791,891		—
Equity investment securities	111		188		—		94		183		—
Derivative assets (a)	—		9,972		—		—		4,544		—
Liabilities:
Derivative liabilities (b)	$	—	$	14,020	$	—	$	—	$	3,562	$	—

(a) Included in other assets on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

(b) Included in accrued expenses and other liabilities on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 9 Derivative Financial Instruments" of the Notes to the Unaudited Consolidated Financial Statements.

Fair Value Measurements, Nonrecurring [Table Text Block]

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy.

	Non-Recurring Fair Value Measurements at Reporting Date
	June 30, 2019						December 31, 2018
(Dollars in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Impaired loans	$	—	$	—	$	32,952	$	—	$	—	$	24,129
Other real estate owned ("OREO")	—		—		123		—		—		94

Fair Values of Financial Assets and Liabilities on Balance Sheets

	Fair Value Measurements of Other Financial Instruments
(Dollars in thousands)	Fair Value Hierarchy Level	June 30, 2019				December 31, 2018
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	1	$	93,423	$	93,423	$	77,612	$	77,612
Held-to-maturity investment securities:
Obligations of:
States and political subdivisions	2	4,398		4,880		4,403		4,896
Residential mortgage-backed securities	2	23,335		23,451		29,044		28,603
Commercial mortgage-backed securities	2	7,106		7,416		3,514		3,464
Total held-to-maturity securities		34,839		35,747		36,961		36,963
Other investment securities:
Federal Home Loan Bank ("FHLB") stock	2	29,257		29,257		29,367		29,367
Federal Reserve Bank ("FRB") stock	2	12,294		12,294		12,294		12,294
Nonqualified deferred compensation	2	1,293		1,293		987		987
Other investment securities	2	365		365		60		60
Other investment securities (a)		43,209		43,209		42,708		42,708
Net loans	3	2,812,176		3,076,717		2,708,583		2,907,537
Loans held for sale	2	5,928		6,353		5,470		5,492
Bank owned life insurance	3	69,909		69,909		68,934		68,934
Servicing rights (b)	3	2,571		3,617		2,655		4,568
Liabilities:
Deposits	2	$	3,363,613	$	3,335,686	$	2,955,465	$	2,953,452
Short-term borrowings	2	186,457		187,337		356,198		349,994
Long-term borrowings	2	85,691		84,933		109,644		107,696

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2019

Investment Holdings [Line Items]

Summary of Available-for-sale Investment Securities

The following table summarizes Peoples' available-for-sale investment securities:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2019
Obligations of:
U.S. government sponsored agencies	$	18,606	$	445	$	—		$	19,051
States and political subdivisions	122,809		2,721		(112		)	125,418
Residential mortgage-backed securities	742,164		8,770		(2,802		)	748,132
Commercial mortgage-backed securities	22,656		148		(140		)	22,664
Bank-issued trust preferred securities	4,196		100		(197		)	4,099
Total available-for-sale securities	$	910,431	$	12,184	$	(3,251	)	$	919,364
December 31, 2018
Obligations of:
States and political subdivisions	$	88,358	$	787	$	(558	)	$	88,587
Residential mortgage-backed securities	705,289		2,720		(15,401		)	692,608
Commercial mortgage-backed securities	6,812		—		(105		)	6,707
Bank-issued trust preferred securities	4,196		75		(282		)	3,989
Total available-for-sale securities	$	804,655	$	3,582	$	(16,346	)	$	791,891

Schedule of Gross Gains and Losses from Sales of Available-for-sale Securities

The gross gains and gross losses realized by Peoples from sales of available-for-sale securities for the periods ended June 30 were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross gains realized	$	30		$	3		$	60		$	5
Gross losses realized	87			150			87			151
Net losses realized	$	(57	)	$	(147	)	$	(27	)	$	(146	)

Summary of Available-for-sale Securities with Unrealized Loss

The following table presents a summary of available-for-sale investment securities that had an unrealized loss:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
June 30, 2019
Obligations of:
States and political subdivisions	$	—	$	—	—	$	8,020	$	112	5	$	8,020	$	112
Residential mortgage-backed securities	17,932		154		7	226,208		2,648		77	244,140		2,802
Commercial mortgage-backed securities	—		—		—	6,380		140		5	6,380		140
Bank-issued trust preferred securities	—		—		—	1,803		197		2	1,803		197
Total	$	17,932	$	154	7	$	242,411	$	3,097	89	$	260,343	$	3,251
December 31, 2018
Obligations of:
States and political subdivisions	$	10,173	$	18	17	$	19,918	$	540	20	$	30,091	$	558
Residential mortgage-backed securities	47,562		226		50	517,335		15,175		170	564,897		15,401
Commercial mortgage-backed securities	—		—		—	6,707		105		3	6,707		105
Bank-issued trust preferred securities	—		—		—	1,718		282		2	1,718		282
Total	$	57,735	$	244	67	$	545,678	$	16,102	195	$	603,413	$	16,346

Summary of Held-to-maturity Investment Securities

The following table summarizes Peoples’ held-to-maturity investment securities:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2019
Obligations of:
States and political subdivisions	$	4,398	$	482	$	—		$	4,880
Residential mortgage-backed securities	23,335		256		(140		)	23,451
Commercial mortgage-backed securities	7,106		310		—			7,416
Total held-to-maturity securities	$	34,839	$	1,048	$	(140	)	$	35,747
December 31, 2018
Obligations of:
States and political subdivisions	$	4,403	$	493	$	—		$	4,896
Residential mortgage-backed securities	29,044		191		(632		)	28,603
Commercial mortgage-backed securities	3,514		—		(50		)	3,464
Total held-to-maturity securities	$	36,961	$	684	$	(682	)	$	36,963

Cost-method Investments, Description [Text Block]

The following table summarizes the carrying value of Peoples' other investment securities:

(Dollars in thousands)	June 30, 2019		December 31, 2018
FHLB stock	$	29,257	$	29,367
FRB stock	12,294		12,294
Nonqualified deferred compensation	1,293		987
Equity investment securities	299		277
Other investment securities	365		60
Total other investment securities	$	43,508	$	42,985

Available-for-sale securities

Investment Holdings [Line Items]

Summary of Investment Securities by Contractual Maturity

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at June 30, 2019.  The weighted-average yields are based on the amortized cost.  In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.  

(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
U.S. government sponsored agencies	$	—		$	2,984		$	14,644		$	978		$	18,606
States and political subdivisions	4,234			31,186			44,207			43,182			122,809
Residential mortgage-backed securities	1			1,919			60,647			679,597			742,164
Commercial mortgage-backed securities	—			17,107			1,848			3,701			22,656
Bank-issued trust preferred securities	—			—			4,196			—			4,196
Total available-for-sale securities	$	4,235		$	53,196		$	125,542		$	727,458		$	910,431
Fair value
Obligations of:
U.S. government sponsored agencies	$	—		$	3,041		$	15,011		$	999		$	19,051
States and political subdivisions	4,236			31,477			45,518			44,187			125,418
Residential mortgage-backed securities	1			1,934			60,507			685,690			748,132
Commercial mortgage-backed securities	—			17,195			1,904			3,565			22,664
Bank-issued trust preferred securities	—			—			4,099			—			4,099
Total available-for-sale securities	$	4,237		$	53,647		$	127,039		$	734,441		$	919,364
Total weighted-average yield	2.36		%	2.52		%	2.77		%	2.93		%	2.88		%

Held-to-maturity securities

Investment Holdings [Line Items]

Summary of Held-to-maturity Securities with Unrealized Loss

The following table presents a summary of held-to-maturity investment securities that had an unrealized loss:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
June 30, 2019
Residential mortgage-backed securities	$	—	$	—	—	$	11,639	$	140	3	$	11,639	$	140
Total	$	—	$	—	—	$	11,639	$	140	3	$	11,639	$	140
December 31, 2018
Residential mortgage-backed securities	$	—	$	—	—	$	13,102	$	632	5	$	13,102	$	632
Commercial mortgage-backed securities	—		—		—	3,464		50		1	3,464		50
Total	$	—	$	—	—	$	16,566	$	682	6	$	16,566	$	682

Summary of Investment Securities by Contractual Maturity

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at June 30, 2019.  The weighted-average yields are based on the amortized cost.  In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date. 

(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
States and political subdivisions	$	305		$	—		$	2,984		$	1,109		$	4,398
Residential mortgage-backed securities	—			—			4,002			19,333			23,335
Commercial mortgage-backed securities	—			410			3,893			2,803			7,106
Total held-to-maturity securities	$	305		$	410		$	10,879		$	23,245		$	34,839
Fair value
Obligations of:
States and political subdivisions	$	307		$	—		$	3,458		$	1,115		$	4,880
Residential mortgage-backed securities	—			—			4,070			19,381			23,451
Commercial mortgage-backed securities	—			412			4,196			2,808			7,416
Total held-to-maturity securities	$	307		$	412		$	11,724		$	23,304		$	35,747
Total weighted-average yield	2.62		%	2.29		%	1.49		%	2.81		%	2.83		%

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Loans (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Schedule of Financing Receivables, Type

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)	June 30, 2019		December 31, 2018
Originated loans:
Commercial real estate, construction	$	102,904	$	124,013
Commercial real estate, other	641,061		632,200
Commercial real estate	743,965		756,213
Commercial and industrial	548,460		530,207
Residential real estate	299,173		296,860
Home equity lines of credit	90,374		93,326
Consumer, indirect	419,595		407,167
Consumer, direct	72,209		71,674
Consumer	491,804		478,841
Deposit account overdrafts	676		583
Total originated loans	$	2,174,452	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	6,775	$	12,404
Commercial real estate, other	201,909		184,711
Commercial real estate	208,684		197,115
Commercial and industrial	51,506		35,537
Residential real estate	348,439		296,937
Home equity lines of credit	41,262		40,653
Consumer, indirect	90		136
Consumer, direct	9,100		2,370
Consumer	9,190		2,506
Total acquired loans	$	659,081	$	572,748
Total loans	$	2,833,533	$	2,728,778

Schedule of Financing Receivables Acquired with Deteriorated Credit Quality

Peoples has acquired various loans through business combinations for which there was, at acquisition, evidence of deterioration of credit quality since origination, and for which it was probable that all contractually required payments would not be collected. The carrying amounts of these purchased credit impaired loans included in the loan balances above are summarized as follows:

(Dollars in thousands)	June 30, 2019		December 31, 2018
Commercial real estate	$	13,116	$	11,955
Commercial and industrial	4,479		1,287
Residential real estate	23,509		20,062
Consumer	640		58
Total outstanding balance	$	41,744	$	33,362
Net carrying amount	$	28,125	$	22,475

Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Accretable Yield

Changes in the accretable yield for purchased credit impaired loans for the six months ended June 30 were as follows:

(Dollars in thousands)	June 30, 2019			June 30, 2018
Balance, beginning of period	$	8,955		$	6,704
Additions:
ASB Financial Corp.	—			2,415
First Prestonsburg Bancshares Inc.	3,853			—
Accretion	(1,148		)	(897		)
Balance, June 30	$	11,660		$	8,222

(Dollars in thousands)	First Prestonsburg
Non-impaired Loans
Contractual cash flows	$	168,903
Nonaccretable difference	19,756
Expected cash flows	149,147
Accretable yield	27,789
Fair value	$	121,358
Credit Impaired Loans
Contractual cash flows	$	17,706
Nonaccretable difference	4,804
Expected cash flows	12,902
Accretable yield	3,853
Fair value	$	9,049

Nonaccrual and Past Due Loans

The recorded investments in loans on nonaccrual status and loans delinquent for 90 days or more and accruing were as follows:

	Nonaccrual Loans				Loans 90+ Days Past Due and Accruing
(Dollars in thousands)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Originated loans:
Commercial real estate, construction	$	688	$	710	$	—	$	—
Commercial real estate, other	6,241		6,565		—		786
Commercial real estate	6,929		7,275		—		786
Commercial and industrial	2,044		1,673		—		—
Residential real estate	3,816		4,105		438		398
Home equity lines of credit	452		596		53		7
Consumer, indirect	535		480		—		—
Consumer, direct	12		56		—		—
Consumer	547		536		—		—
Total originated loans	$	13,788	$	14,185	$	491	$	1,191
Acquired loans:
Commercial real estate, construction	$	—	$	—	$	230	$	—
Commercial real estate, other	308		319		557		15
Commercial real estate	308		319		787		15
Commercial and industrial	36		36		261		18
Residential real estate	1,716		1,921		1,853		1,032
Home equity lines of credit	742		637		—		—
Consumer, direct	1		—		57		—
Total acquired loans	$	2,803	$	2,913	$	2,958	$	1,065
Total loans	$	16,591	$	17,098	$	3,449	$	2,256

Aging Of The Recorded Investment In Past Due Loans And Leases

The following table presents the aging of the recorded investment in past due loans:

	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
June 30, 2019
Originated loans:
Commercial real estate, construction	$	—	$	—	$	688	$	688	$	102,216	$	102,904
Commercial real estate, other	—		—		6,050		6,050		635,011		641,061
Commercial real estate	—		—		6,738		6,738		737,227		743,965
Commercial and industrial	606		3		1,937		2,546		545,914		548,460
Residential real estate	1,391		1,177		2,478		5,046		294,127		299,173
Home equity lines of credit	387		18		461		866		89,508		90,374
Consumer, indirect	3,024		216		111		3,351		416,244		419,595
Consumer, direct	306		17		2		325		71,884		72,209
Consumer	3,330		233		113		3,676		488,128		491,804
Deposit account overdrafts	—		—		—		—		676		676
Total originated loans	$	5,714	$	1,431	$	11,727	$	18,872	$	2,155,580	$	2,174,452
Acquired loans:
Commercial real estate, construction	$	—	$	—	$	230	$	230	$	6,545	$	6,775
Commercial real estate, other	661		728		773		2,162		199,747		201,909
Commercial real estate	661		728		1,003		2,392		206,292		208,684
Commercial and industrial	488		60		297		845		50,661		51,506
Residential real estate	1,685		2,075		2,700		6,460		341,979		348,439
Home equity lines of credit	228		109		563		900		40,362		41,262
Consumer, indirect	—		—		—		—		90		90
Consumer, direct	88		52		57		197		8,903		9,100
Consumer	88		52		57		197		8,993		9,190
Total acquired loans	$	3,150	$	3,024	$	4,620	$	10,794	$	648,287	$	659,081
Total loans	$	8,864	$	4,455	$	16,347	$	29,666	$	2,803,867	$	2,833,533

	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
December 31, 2018
Originated loans:
Commercial real estate, construction	$	—	$	—	$	710	$	710	$	123,303	$	124,013
Commercial real estate, other	12		736		7,151		7,899		624,301		632,200
Commercial real estate	12		736		7,861		8,609		747,604		756,213
Commercial and industrial	1,678		3,520		1,297		6,495		523,712		530,207
Residential real estate	4,457		1,319		2,595		8,371		288,489		296,860
Home equity lines of credit	531		30		431		992		92,334		93,326
Consumer, indirect	3,266		488		165		3,919		403,248		407,167
Consumer, direct	308		50		42		400		71,274		71,674
Consumer	3,574		538		207		4,319		474,522		478,841
Deposit account overdrafts	—		—		—		—		583		583
Total originated loans	$	10,252	$	6,143	$	12,391	$	28,786	$	2,127,244	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	511	$	—	$	—	$	511	$	11,893	$	12,404
Commercial real estate, other	523		457		233		1,213		183,498		184,711
Commercial real estate	1,034		457		233		1,724		195,391		197,115
Commercial and industrial	111		13		18		142		35,395		35,537
Residential real estate	6,124		1,823		1,885		9,832		287,105		296,937
Home equity lines of credit	238		233		534		1,005		39,648		40,653
Consumer, indirect	—		—		—		—		136		136
Consumer, direct	23		6		—		29		2,341		2,370
Consumer	23		6		—		29		2,477		2,506
Total acquired loans	$	7,530	$	2,532	$	2,670	$	12,732	$	560,016	$	572,748
Total loans	$	17,782	$	8,675	$	15,061	$	41,518	$	2,687,260	$	2,728,778

Loans By Risk Category

The following table summarizes the risk category of loans within Peoples' loan portfolio based upon the most recent analysis performed:

	Pass Rated (Grades 1 - 4)		Special Mention (Grade 5)		Substandard (Grade 6)		Doubtful (Grade 7)		Not Rated		Total Loans
(Dollars in thousands)
June 30, 2019
Originated loans:
Commercial real estate, construction	$	100,231	$	—	$	1,431	$	—	$	1,242	$	102,904
Commercial real estate, other	622,966		7,673		10,416		6		—		641,061
Commercial real estate	723,197		7,673		11,847		6		1,242		743,965
Commercial and industrial	525,738		5,807		16,915		—		—		548,460
Residential real estate	13,752		201		14,682		249		270,289		299,173
Home equity lines of credit	17		—		—		—		90,357		90,374
Consumer, indirect	—		—		—		—		419,595		419,595
Consumer, direct	24		—		—		—		72,185		72,209
Consumer	24		—		—		—		491,780		491,804
Deposit account overdrafts	—		—		—		—		676		676
Total originated loans	$	1,262,728	$	13,681	$	43,444	$	255	$	854,344	$	2,174,452
Acquired loans:
Commercial real estate, construction	$	4,338	$	1,636	$	801	$	—	$	—	$	6,775
Commercial real estate, other	178,425		12,700		10,693		91		—		201,909
Commercial real estate	182,763		14,336		11,494		91		—		208,684
Commercial and industrial	43,171		3,265		5,038		32		—		51,506
Residential real estate	17,634		2,686		2,564		130		325,425		348,439
Home equity lines of credit	81		—		—		—		41,181		41,262
Consumer, indirect	1		—		—		—		89		90
Consumer, direct	19		—		—		—		9,081		9,100
Consumer	20		—		—		—		9,170		9,190
Total acquired loans	$	243,669	$	20,287	$	19,096	$	253	$	375,776	$	659,081
Total loans	$	1,506,397	$	33,968	$	62,540	$	508	$	1,230,120	$	2,833,533

	Pass Rated (Grades 1 - 4)		Special Mention (Grade 5)		Substandard (Grade 6)		Doubtful (Grade 7)		Not Rated		Total Loans
(Dollars in thousands)
December 31, 2018
Originated loans:
Commercial real estate, construction	$	121,457	$	—	$	1,472	$	—	$	1,084	$	124,013
Commercial real estate, other	612,099		10,898		9,203		—		—		632,200
Commercial real estate	733,556		10,898		10,675		—		1,084		756,213
Commercial and industrial	476,290		45,990		7,692		—		235		530,207
Residential real estate	14,229		500		11,971		409		269,751		296,860
Home equity lines of credit	453		—		—		—		92,873		93,326
Consumer, indirect	8		—		—		—		407,159		407,167
Consumer, direct	30		—		—		—		71,644		71,674
Consumer	38		—		—		—		478,803		478,841
Deposit account overdrafts	—		—		—		—		583		583
Total originated loans	$	1,224,566	$	57,388	$	30,338	$	409	$	843,329	$	2,156,030
Acquired loans:
Commercial real estate, construction	$	8,976	$	1,795	$	1,633	$	—	$	—	$	12,404
Commercial real estate, other	169,260		7,241		8,114		96		—		184,711
Commercial real estate	178,236		9,036		9,747		96		—		197,115
Commercial and industrial	32,471		2,008		1,058		—		—		35,537
Residential real estate	17,370		1,938		2,033		137		275,459		296,937
Home equity lines of credit	33		—		—		—		40,620		40,653
Consumer, indirect	4		—		—		—		132		136
Consumer, direct	31		—		—		—		2,339		2,370
Consumer	35		—		—		—		2,471		2,506
Total acquired loans	$	228,145	$	12,982	$	12,838	$	233	$	318,550	$	572,748
Total loans	$	1,452,711	$	70,370	$	43,176	$	642	$	1,161,879	$	2,728,778

Schedule Of Impaired Loans

The following table summarizes loans classified as impaired:

	Unpaid Principal Balance		Recorded Investment				Total Recorded Investment				Average Recorded Investment		Interest Income Recognized
			With Allowance		Without Allowance				Related Allowance
(Dollars in thousands)
June 30, 2019
Commercial real estate, construction	$	1,793	$	—	$	1,706	$	1,706	$	—	$	1,728	$	29
Commercial real estate, other	15,546		4,753		10,296		15,049		520		14,722		250
Commercial real estate	17,339		4,753		12,002		16,755		520		16,450		279
Commercial and industrial	4,265		1,485		2,731		4,216		449		3,226		47
Residential real estate	22,195		387		23,170		23,557		53		22,086		629
Home equity lines of credit	1,469		419		1,051		1,470		68		1,343		40
Consumer, indirect	445		96		356		452		23		413		15
Consumer, direct	464		49		415		464		18		207		9
Consumer	909		145		771		916		41		620		24
Total	$	46,177	$	7,189	$	39,725	$	46,914	$	1,131	$	43,725	$	1,019
December 31, 2018
Commercial real estate, construction	$	2,376	$	—	$	2,376	$	2,376	$	—	$	1,732	$	74
Commercial real estate, other	15,464		274		14,946		15,220		119		14,043		455
Commercial real estate	17,840		274		17,322		17,596		119		15,775		529
Commercial and industrial	3,305		790		2,436		3,226		157		2,423		72
Residential real estate	25,990		644		24,034		24,678		154		22,769		1,134
Home equity lines of credit	2,291		424		1,869		2,293		73		1,832		109
Consumer, indirect	496		—		503		503		—		278		15
Consumer, direct	79		22		57		79		6		63		20
Consumer	575		22		560		582		6		341		35
Total	$	50,001	$	2,154	$	46,221	$	48,375	$	509	$	43,140	$	1,879

Troubled Debt Restructurings on Financing Receivables

The following table summarizes the loans that were modified as a TDR during the three months ended June 30:

		Three Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2019
Originated loans:
Residential real estate	1	$	37	$	37	$	37
Home equity lines of credit	2	60		60		60
Consumer, indirect	7	110		110		110
Consumer, direct	3	41		41		41
Consumer	10	151		151		151
Total originated loans	13	$	248	$	248	$	248
Acquired loans:
Commercial real estate, other	7	$	725	$	699	$	700
Commercial and industrial	4	1,259		1,259		1,259
Residential real estate	35	1,823		1,823		1,823
Home equity lines of credit	7	113		113		113
Consumer, direct	16	340		340		340
Total acquired loans	69	$	4,260	$	4,234	$	4,235
June 30, 2018
Originated loans:
Residential real estate	5	$	717	$	717	$	717
Home equity lines of credit	3	61		61		61
Consumer, indirect	14	230		230		230
Consumer, direct	5	27		27		27
Consumer	19	257		257		257
Total originated loans	27	$	1,035	$	1,035	$	1,035
Acquired loans:
Residential real estate	11	$	720	$	720	$	720
Home equity lines of credit	4	86		86		86
Consumer, direct	3	57		57		57
Total acquired loans	18	$	863	$	863	$	863
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period-end are not reported.

		Six Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2019
Originated loans:
Commercial and industrial	2	$	38	$	38	$	35
Residential real estate	3	436		440		437
Home equity lines of credit	4	139		139		139
Consumer, indirect	8	123		123		123
Consumer, direct	5	69		69		67
Consumer	13	192		192		190
Total originated loans	22	$	805	$	809	$	801
Acquired loans:
Commercial real estate, other	7	$	724	$	699	$	700
Commercial and industrial	4	1,259		1,259		1,259
Residential real estate	36	1,847		1,847		1,842
Home equity lines of credit	9	179		179		178
Consumer, direct	16	340		340		340
Total acquired loans	72	$	4,349	$	4,324	$	4,319
June 30, 2018
Originated loans:
Residential real estate	7	$	910	$	910	$	911
Home equity lines of credit	3	61		61		61
Consumer, indirect	21	316		316		302
Consumer, direct	7	31		31		31
Consumer	28	347		347		333
Total originated loans	38	$	1,318	$	1,318	$	1,305
Acquired loans:
Commercial real estate, other	1	$	50	$	50	$	48
Residential real estate	13	989		989		989
Home equity lines of credit	4	86		86		86
Consumer, direct	3	57		57		57
Total acquired loans	21	$	1,182	$	1,182	$	1,180
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Troubled Debt Restructurings during prior 12 months that subsequently defaulted

The following table presents those acquired loans modified in a TDR during the year that subsequently defaulted (i.e., were 90 days or more past due following a modification) during the six-month periods ended June 30:

	June 30, 2019					June 30, 2018
(Dollars in thousands)	Number of Contracts	Recorded Investment (a)		Impact on the Allowance for Loan Losses		Number of Contracts	Recorded Investment (a)		Impact on the Allowance for Loan Losses
Acquired loans:
Consumer, direct	1	$	34	$	—	—	$	—	$	—
Total	1	$	34	$	—	—	$	—	$	—
(a) The amount shown is inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Summary Of Activity In Allowance For Loan And Lease Losses

Changes in the allowance for originated loan losses for the six months ended June 30 were as follows:

(Dollars in thousands)	Commercial Real Estate			Commercial and Industrial			Residential Real Estate			Home Equity Lines of Credit			Consumer Indirect			Consumer Direct			Deposit Account Overdrafts			Total
Balance, January 1, 2019	$	8,003		$	6,178		$	1,214		$	618		$	3,214		$	351		$	81		$	19,659
Charge-offs	(153		)	(63		)	(176		)	(9		)	(819		)	(96		)	(349		)	(1,665		)
Recoveries	12			2,012			133			2			162			40			106			2,467
Net (charge-offs) recoveries	(141		)	1,949			(43		)	(7		)	(657		)	(56		)	(243		)	802
Provision for (recoveries of) loan losses	383			(930		)	13			(13		)	615			47			248			363
Balance, June 30, 2019	$	8,245		$	7,197		$	1,184		$	598		$	3,172		$	342		$	86		$	20,824
Balance, January 1, 2018	$	7,797		$	5,813		$	904		$	693		$	2,944		$	464		$	70		$	18,685
Charge-offs	(849		)	(38		)	(227		)	(57		)	(1,479		)	(219		)	(420		)	(3,289		)
Recoveries	43			—			67			9			272			84			116			591
Net charge-offs	(806		)	(38		)	(160		)	(48		)	(1,207		)	(135		)	(304		)	(2,698		)
Provision for (recovery of) loan losses	1,280			(410		)	261			(27		)	1,602			136			329			3,171
Balance, June 30, 2018	$	8,271		$	5,365		$	1,005		$	618		$	3,339		$	465		$	95		$	19,158

Allowance for loan losses and recorded investment in loans disaggregated based on impairment method [Table Text Block]

The following table details the recorded investment and allowance for originated loan losses disaggregated based on impairment method:

(Dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Residential Real Estate		Home Equity Lines of Credit		Consumer Indirect		Consumer Direct		Deposit Account Overdrafts		Total
June 30, 2019
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	520	$	449	$	53	$	68	$	23	$	18	$	—	$	1,131
Loans collectively evaluated for impairment	7,725		6,748		1,131		530		3,149		324		86		19,693
Ending balance	$	8,245	$	7,197	$	1,184	$	598	$	3,172	$	342	$	86	$	20,824
Recorded investment in:
Loans individually evaluated for impairment	$	16,755	$	4,216	$	23,557	$	1,470	$	452	$	464	$	—	$	46,914
Loans collectively evaluated for impairment	727,210		544,244		275,616		88,904		419,143		71,745		676		2,127,538
Ending balance	$	743,965	$	548,460	$	299,173	$	90,374	$	419,595	$	72,209	$	676	$	2,174,452
December 31, 2018
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	119	$	157	$	154	$	73	$	—	$	6	$	—	$	509
Loans collectively evaluated for impairment	7,884		6,021		1,060		545		3,214		345		81		19,150
Ending balance	$	8,003	$	6,178	$	1,214	$	618	$	3,214	$	351	$	81	$	19,659
Recorded investment in:
Loans individually evaluated for impairment	$	17,596	$	3,226	$	24,678	$	2,293	$	503	$	79	$	—	$	48,375
Loans collectively evaluated for impairment	738,617		526,981		272,182		91,033		406,664		71,595		583		2,107,655
Ending balance	$	756,213	$	530,207	$	296,860	$	93,326	$	407,167	$	71,674	$	583	$	2,156,030
June 30, 2018
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	1	$	191	$	47	$	14	$	31	$	45	$	—	$	329
Loans collectively evaluated for impairment	8,270		5,174		958		604		3,308		420		95		18,829
Ending balance	$	8,271	$	5,365	$	1,005	$	618	$	3,339	$	465	$	95	$	19,158
Recorded investment in:
Loans individually evaluated for impairment	$	19,162	$	3,173	$	26,497	$	1,736	$	441	$	150	$	—	$	51,159
Loans collectively evaluated for impairment	737,051		468,097		273,437		88,221		372,943		71,395		860		2,012,004
Ending balance	$	756,213	$	471,270	$	299,934	$	89,957	$	373,384	$	71,545	$	860	$	2,063,163

Allowance for Loan Losses Acquired Loans [Table Text Block]

The following table presents activity in the allowance for loan losses for acquired loans:

	Three Months Ended				Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2018		June 30, 2019			June 30, 2018
Non-impaired loans:
Balance, beginning of period	$	380	$	—	$	383		$	—
Charge-offs	—		—		(3		)	—
Balance, end of period	$	380	$	—	$	380		$	—
Purchased credit impaired loans:
Balance, beginning of period	$	153	$	108	$	153		$	108
Balance, end of period	$	153	$	108	$	153		$	108

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Long-Term Borrowings (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following table summarizes Peoples' long-term borrowings:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Balance		Weighted- Average Rate		Balance		Weighted- Average Rate
FHLB putable, non-amortizing, fixed-rate advances	$	65,000	2.18	%	$	85,000	2.05	%
FHLB amortizing, fixed-rate advances	13,324		1.73	%	17,361		2.09	%
Junior subordinated debt securities	7,367		7.34	%	7,283		7.83	%
Total long-term borrowings	$	85,691	2.55	%	$	109,644	2.44	%

Schedule of Maturities of Long-term Debt

The aggregate minimum annual retirements of long-term borrowings in future periods are as follows:

(Dollars in thousands)	Balance		Weighted-Average Rate
Six months ending December 31, 2019	$	2,568	1.48	%
Year ending December 31, 2020	2,555		1.35	%
Year ending December 31, 2021	21,979		1.74	%
Year ending December 31, 2022	16,521		1.95	%
Year ending December 31, 2023	1,157		1.06	%
Thereafter	40,911		3.41	%
Total long-term borrowings	$	85,691	2.55	%

Effective April 3, 2019, Peoples terminated the Credit Agreement, dated as of March 4, 2016, between Peoples, as Borrower, and Raymond James Bank, N.A., as Lender (the "RJB Credit Agreement"), with a revolving line of credit in the maximum aggregate principal amount of $15.0 million. As of the termination date, April 3, 2019, and December 31, 2018, there were no borrowings outstanding under the RJB Credit Agreement. Additional information regarding the RJB Credit Agreement can be found in "Note 9 Long-Term Borrowings" of the Notes to the Consolidated Financial Statements included in Peoples' 2018 Form 10-K.

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Schedule of Preferred, Common and Treasury Stock

The following table details the progression in Peoples’ common shares and treasury stock during the six months ended June 30, 2019:

	Common Stock	Treasury Stock
Shares at December 31, 2018	20,124,378	601,289
Changes related to stock-based compensation awards:
Release of restricted common shares	—	17,481
Cancellation of restricted common shares	—	3,465
Grant of restricted common shares	—	(122,286	)
Grant of common shares	—	(4,680	)
Changes related to deferred compensation plan for Boards of Directors:
Purchase of treasury stock	—	3,834
Disbursed out of treasury stock	—	(2,187	)
Common shares issued under dividend reinvestment plan	12,400	—
Common shares issued under compensation plan for Boards of Directors	—	(3,490	)
Common shares issued under employee stock purchase plan	—	(3,624	)
Issuance of common shares related to the merger with First Prestonsburg Bancshares Inc.	1,005,478	—
Shares at June 30, 2019	21,142,256	489,802

Dividends Declared [Table Text Block]

The following table details the cash dividends declared per common share during 2019 and the comparable period of 2018:

	2019		2018
First quarter	$	0.30	$	0.26
Second quarter	0.34		0.28
Third quarter	0.34		0.28
Total dividends declared	$	0.98	$	0.82

Schedule of Accumulated Other Comprehensive (Loss) Income

The following table details the change in the components of Peoples’ accumulated other comprehensive income (loss) for the six months ended June 30, 2019:

(Dollars in thousands)	Unrealized Gain (Loss) on Securities			Unrecognized Net Pension and Postretirement Costs			Unrealized Gain (Loss) on Cash Flow Hedge			Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2018	$	(10,082	)	$	(3,711	)	$	860		$	(12,933	)
Reclassification adjustments to net income:
Realized gain on sale of securities, net of tax	21			—			—			21
Other comprehensive income (loss), net of reclassifications and tax	17,121			31			(3,924		)	13,228
Balance, June 30, 2019	$	7,060		$	(3,680	)	$	(3,064	)	$	316

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The following tables detail the components of the net periodic cost for the plans described above:

	Pension Benefits
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Interest cost	$	110		$	105		$	219		$	210
Expected return on plan assets	(196		)	(146		)	(391		)	(293		)
Amortization of net loss	20			27			39			55
Net periodic income	$	(66	)	$	(14	)	$	(133	)	$	(28	)

	Postretirement Benefits
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Interest cost	$	1		$	1		$	2		$	2
Amortization of prior service cost	(1		)	—			(1		)	—
Amortization of net loss	—			(1		)	(2		)	(3		)
Net periodic income	$	—		$	—		$	(1	)	$	(1	)

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Calculations of Basic and Diluted Earnings per Common Share

The calculations of basic and diluted earnings per common share were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands, except per common share data)	2019		2018		2019		2018
Distributed earnings allocated to common shareholders	$	6,935	$	5,407	$	12,711	$	10,123
Undistributed earnings allocated to common shareholders	2,568		2,427		11,067		9,389
Net earnings allocated to common shareholders	$	9,503	$	7,834	$	23,778	$	19,512
Weighted-average common shares outstanding	20,277,028		19,160,728		19,824,035		18,646,266
Effect of potentially dilutive common shares	165,338		132,653		148,315		126,903
Total weighted-average diluted common shares outstanding	20,442,366		19,293,381		19,972,350		18,773,169
Earnings per common share:
Basic	$	0.47	$	0.41	$	1.20	$	1.05
Diluted	$	0.46	$	0.41	$	1.19	$	1.04
Anti-dilutive common shares excluded from calculation:
Restricted shares	87		—		46		32

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Derivative Financial Instruments Derivative Instruments and Hedging Activities Disclosure (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives [Table Text Block]

The following table summarizes information about the interest rate swaps designated as cash flow hedges:

(Dollars in thousands)	June 30, 2019			December 31, 2018
Notional amount	$	140,000		$	110,000
Weighted average pay rates	2.27		%	2.37		%
Weighted average receive rates	1.80		%	2.57		%
Weighted average maturity	5.6 years			6.2 years
Unrealized gains	$	3,879		$	860

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table presents net losses or gains recorded in AOCI and in the Unaudited Consolidated Statements of Income related to the cash flow hedges:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Dollars in thousands)	2019		2018			2019			2018
Amount of loss (gain) recognized in AOCI, pre-tax	$	2,994	$	(529	)	$	4,661		$	(1,907	)
Amount of (gain) loss recognized in earnings	$	—	$	—		$	(19	)	$	30

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following table reflects the cash flow hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in other assets:
Interest rate swaps related to debt	$	35,000	$	316	$	60,000	$	2,093
Total included in other assets	$	35,000	$	316	$	60,000	$	2,093
Included in accrued expenses and other liabilities:
Interest rate swaps related to debt	$	105,000	$	4,363	$	50,000	$	1,111
Total included in accrued expenses and other liabilities	$	105,000	$	4,363	$	50,000	$	1,111

Derivatives Not Designated as Hedging Instruments [Table Text Block]

The following table reflects the non-designated hedges, which are included in the Unaudited Consolidated Balance Sheets at fair value:

	June 30, 2019				December 31, 2018
(Dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in other assets:
Interest rate swaps related to commercial loans	$	245,996	$	9,656	$	226,662	$	2,451
Total included in other assets	$	245,996	$	9,656	$	226,662	$	2,451
Included in accrued expenses and other liabilities:
Interest rate swaps related to commercial loans	$	245,996	$	9,656	$	226,662	$	2,451
Total included in accrued expenses and other liabilities	$	245,996	$	9,656	$	226,662	$	2,451

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Restricted Shares Activity

The following table summarizes the changes to Peoples’ restricted common shares for the six months ended June 30, 2019:

	Time-Based Vesting			Performance-Based Vesting
	Number of Common Shares	Weighted-Average Grant Date Fair Value		Number of Common Shares	Weighted-Average Grant Date Fair Value
Outstanding at January 1	43,679	$	29.64	175,772	$	31.08
Awarded	5,086	32.05		117,200	32.20
Released	17,500	21.69		33,400	17.86
Forfeited	2,852	37.79		613	34.50
Outstanding at June 30	28,413	$	34.16	258,959	$	33.29

Summary of Stock-Based Compensation and Related Tax Benefit

The following table summarizes the amount of stock-based compensation expense and related tax benefit recognized for each period:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Total stock-based compensation expense	$	930		$	424		$	2,138		$	1,510
Recognized tax benefit	(195		)	(89		)	(449		)	(317		)
Net expense recognized	$	735		$	335		$	1,689		$	1,193

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Revenue (Tables)

6 Months Ended

Jun. 30, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Disaggregation of Revenue [Table Text Block]

The following table details Peoples' revenue from contracts with customers:

	Three Months Ended				Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Insurance income:
Commission and fees from sale of insurance policies (a)	$	3,306	$	3,193	$	6,339	$	6,382
Fees related to third-party administration services (a)	178		173		347		292
Performance-based commissions (b)	2		3		1,421		1,350
Trust and investment income (a)	3,401		3,232		6,513		6,300
Electronic banking income:
Interchange income (a)	2,747		2,520		5,190		4,784
Promotional and usage income (a)	520		265		1,064		786
Deposit account service charges:
Ongoing maintenance fees for deposit accounts (a)	1,012		646		1,764		1,321
Transactional-based fees (b)	1,965		1,742		3,554		3,187
Commercial loan swap fees (b)	516		146		662		262
Other non-interest income transactional-based fees (b)	253		262		424		543
Total	$	13,900	$	12,182	$	27,278	$	25,207
Timing of revenue recognition:
Services transferred over time	$	11,164	$	10,029	$	21,217	$	19,865
Services transferred at a point in time	2,736		2,153		6,061		5,342
Total	$	13,900	$	12,182	$	27,278	$	25,207

(a) Services transferred over time.

(b) Services transferred at a point in time.

Contract with Customer, Asset and Liability [Table Text Block]

The following table details the change in Peoples' contract assets and contract liabilities for the period ended June 30, 2019:

	Contract Assets			Contract Liabilities
(Dollars in thousands)
Balance, January 1, 2019	$	207		$	5,055
Additional income receivable	183			—
Additional deferred income	—			4,013
Receipt of income previously receivable	(11		)	—
Recognition of income previously deferred	—			(3,521		)
Balance, June 30, 2019	$	379		$	5,547

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2019

Acquisitions [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

(Dollars in thousands, except per share data)
Consideration
Common shares	80,362
Number of common shares of Peoples issued for each common share of acquired company	12.512
Price per Peoples common share, based on closing date	$	32.26
Common share consideration	$	32,437
Net Assets at Fair Value
Assets
Cash and due from banks	$	4,998
Interest-bearing deposits in other banks	2,798
Total cash and cash equivalents	7,796
Available-for-sale investment securities	137,658
Other investment securities	3,068
Total investment securities	140,726
Total loans	130,407
Bank premises and equipment, net of accumulated depreciation	8,255
Other intangible assets	4,234
Other assets	2,677
Total assets	$	294,095
Liabilities
Deposits:
Non-interest-bearing	$	40,089
Interest-bearing	217,151
Total deposits	257,240
Short-term borrowings	14,400
Accrued expenses and other liabilities	2,065
Total liabilities	$	273,705
Net assets	$	20,390
Goodwill	$	12,047

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Table Text Block]

Changes in the accretable yield for purchased credit impaired loans for the six months ended June 30 were as follows:

(Dollars in thousands)	June 30, 2019			June 30, 2018
Balance, beginning of period	$	8,955		$	6,704
Additions:
ASB Financial Corp.	—			2,415
First Prestonsburg Bancshares Inc.	3,853			—
Accretion	(1,148		)	(897		)
Balance, June 30	$	11,660		$	8,222

(Dollars in thousands)	First Prestonsburg
Non-impaired Loans
Contractual cash flows	$	168,903
Nonaccretable difference	19,756
Expected cash flows	149,147
Accretable yield	27,789
Fair value	$	121,358
Credit Impaired Loans
Contractual cash flows	$	17,706
Nonaccretable difference	4,804
Expected cash flows	12,902
Accretable yield	3,853
Fair value	$	9,049

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Income and Expenses, Lessee [Abstract]

The table below details Peoples' lease expense, which is included in net occupancy and equipment expense in the Unaudited Consolidated Statements of Income:

	Three Months Ended		Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2019
Operating lease expense	$	311	618
Short-term lease expense	32		62
Total lease expense	$	343	$	680

Lease, Cost [Table Text Block]

The following table details the right-of-use asset, the lease liability and other information related to Peoples' operating leases:

(Dollars in thousands)	June 30, 2019
Right-of-use asset:
Other assets	$	6,661
Lease liability:
Accrued expenses and other liabilities	$	6,839
Other information:
Weighted-average remaining lease term	13.1 years
Weighted-average discount rate	2.46		%

Finance Lease, Liability, Maturity [Table Text Block]

The following table summarizes the maturity of remaining lease liabilities:

(Dollars in thousands)	Balance
Six months ending December 31, 2019	$	10
Year ending December 31, 2020	112
Year ending December 31, 2021	148
Year ending December 31, 2022	700
Year ending December 31, 2023	63
Thereafter	5,806
Total lease liability	$	6,839

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Fair Value of Financial Instruments (Assets Measured at Fair Value Recurring) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Recurring Basis
Available-for-sale securities	$ 919,364	$ 791,891
Other investment securities	43,209	42,708
US Government-sponsored Enterprises Debt Securities [Member]
Recurring Basis
Available-for-sale securities	19,051
States and political subdivisions
Recurring Basis
Available-for-sale securities	125,418	88,587
Residential mortgage-backed securities
Recurring Basis
Available-for-sale securities	748,132	692,608
Commercial mortgage-backed securities
Recurring Basis
Available-for-sale securities	22,664	6,707
Bank-issued trust preferred securities
Recurring Basis
Available-for-sale securities	4,099	3,989
Equity investment securities
Recurring Basis
Other investment securities	299	277
Recurring Basis [Member] | Level 1
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Level 2
Recurring Basis
Available-for-sale securities	919,364	791,891
Interest Rate Derivative Assets, at Fair Value	9,972	4,544
Interest Rate Derivative Liabilities, at Fair Value	14,020	3,562
Recurring Basis [Member] | Level 3
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Level 1
Recurring Basis
Available-for-sale securities	0
Recurring Basis [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Level 2
Recurring Basis
Available-for-sale securities	19,051
Recurring Basis [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Level 3
Recurring Basis
Available-for-sale securities	0
Recurring Basis [Member] | States and political subdivisions | Level 1
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | States and political subdivisions | Level 2
Recurring Basis
Available-for-sale securities	125,418	88,587
Recurring Basis [Member] | States and political subdivisions | Level 3
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Residential mortgage-backed securities | Level 1
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Residential mortgage-backed securities | Level 2
Recurring Basis
Available-for-sale securities	748,132	692,608
Recurring Basis [Member] | Residential mortgage-backed securities | Level 3
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Commercial mortgage-backed securities | Level 1
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Commercial mortgage-backed securities | Level 2
Recurring Basis
Available-for-sale securities	22,664	6,707
Recurring Basis [Member] | Commercial mortgage-backed securities | Level 3
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Bank-issued trust preferred securities | Level 1
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Bank-issued trust preferred securities | Level 2
Recurring Basis
Available-for-sale securities	4,099	3,989
Recurring Basis [Member] | Bank-issued trust preferred securities | Level 3
Recurring Basis
Available-for-sale securities	0	0
Recurring Basis [Member] | Equity investment securities | Level 1
Recurring Basis
Other investment securities	111	94
Recurring Basis [Member] | Equity investment securities | Level 2
Recurring Basis
Other investment securities	$ 188	$ 183

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Fair Value of Financial Instruments (Assets Measured at Fair Value Nonrecurring) (Details) - Nonrecurring Basis - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Nonrecurring Basis
Losses on impaired loans charged through allowance for loan losses	$ 223,000	$ 830,000
Level 3
Nonrecurring Basis
Impaired loans, fair value	32,952,000	32,952,000	$ 24,129,000
Other Real Estate, Foreclosed Assets, and Repossessed Assets	123,000	123,000	$ 94,000
Impaired loans, aggregate outstanding principal balance	$ 43,200,000	$ 43,200,000

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Fair Value of Financial Instruments (Fair Values of Financial Assets and Liabilities on Balance Sheets) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Financial assets:
Cash and cash equivalents	$ 93,423	$ 77,612
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	34,839	36,961
Held-to-maturity investment securities at fair value	35,747	36,963
Federal Home Loan Bank (FHLB) stock	29,257	29,367
Federal Reserve Bank (FRB) stock	12,294	12,294
Other investment securities	43,209	42,708
Net loans	3,076,717	2,907,537
Loans held for sale	5,928	5,470
Loans held for sale	6,353	5,492
Bank owned life insurance	69,909	68,934
Financial liabilities:
Deposits, Fair Value Disclosure	3,335,686	2,953,452
Short-term Debt, Fair Value	187,337	349,994
Long-term Debt, Fair Value	84,933	107,696
Carrying Amount
Financial assets:
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	34,839	36,961
Other investment securities	43,209	42,708
Net loans	2,812,176	2,708,583
Servicing Asset	2,571	2,655
Financial liabilities:
Deposits, Fair Value Disclosure	3,363,613	2,955,465
Short-term Debt, Fair Value	186,457	356,198
Long-term Debt, Fair Value	85,691	109,644
States and political subdivisions
Financial assets:
Held-to-maturity investment securities at fair value	4,880	4,896
States and political subdivisions | Carrying Amount
Financial assets:
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	4,398	4,403
Residential mortgage-backed securities
Financial assets:
Held-to-maturity investment securities at fair value	23,451	28,603
Residential mortgage-backed securities | Carrying Amount
Financial assets:
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	23,335	29,044
Commercial mortgage-backed securities
Financial assets:
Held-to-maturity investment securities at fair value	7,416	3,464
Commercial mortgage-backed securities | Carrying Amount
Financial assets:
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	7,106	3,514
U.S. Treasury and government agencies
Financial assets:
Other investment securities	1,293	987
Servicing Asset	3,617	4,568
U.S. Treasury and government agencies | Carrying Amount
Financial assets:
Other investment securities	1,293	987
Other Security Investments [Member]
Financial assets:
Other investment securities	$ 365	$ 60

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Investment Securities (Available-for-sale Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities
Amortized Cost	$ 910,431	$ 804,655
Gross Unrealized Gains	12,184	3,582
Gross Unrealized Losses	(3,251)	(16,346)
Available-for-sale securities	919,364	791,891
US Government-sponsored Enterprises Debt Securities [Member]
Schedule of Available-for-sale Securities
Amortized Cost	18,606
Gross Unrealized Gains	445
Gross Unrealized Losses	0
Available-for-sale securities	19,051
States and political subdivisions
Schedule of Available-for-sale Securities
Amortized Cost	122,809	88,358
Gross Unrealized Gains	2,721	787
Gross Unrealized Losses	(112)	(558)
Available-for-sale securities	125,418	88,587
Residential mortgage-backed securities
Schedule of Available-for-sale Securities
Amortized Cost	742,164	705,289
Gross Unrealized Gains	8,770	2,720
Gross Unrealized Losses	(2,802)	(15,401)
Available-for-sale securities	748,132	692,608
Commercial mortgage-backed securities
Schedule of Available-for-sale Securities
Amortized Cost	22,656	6,812
Gross Unrealized Gains	148	0
Gross Unrealized Losses	(140)	(105)
Available-for-sale securities	22,664	6,707
Bank-issued trust preferred securities
Schedule of Available-for-sale Securities
Amortized Cost	4,196	4,196
Gross Unrealized Gains	100	75
Gross Unrealized Losses	(197)	(282)
Available-for-sale securities	$ 4,099	$ 3,989

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Investment Securities (Available-for-sale Securities Gross Realized Gains and Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Gross gains and gross losses realized from sales of available-for-sale securities:
Gross gains realized	$ 30	$ 3	$ 60	$ 5
Gross losses realized	87	150	87	151
Net losses realized	$ (57)	$ (147)	$ (27)	$ (146)

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Investment Securities (Available-for-sale Securities with Unrealized Loss) (Details)	Jun. 30, 2019 USD ($) securities	Dec. 31, 2018 USD ($) securities
Available-for-sale securities that had an unrealized loss:
Less than 12 months, fair value	$ 17,932,000	$ 57,735,000
Less than 12 months, unrealized loss	$ 154,000	$ 244,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | securities	7	67
12 months or more, fair value	$ 242,411,000	$ 545,678,000
12 months or more, unrealized loss	$ 3,097,000	$ 16,102,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | securities	89	195
Total unrealized loss position, fair value	$ 260,343,000	$ 603,413,000
Total unrealized loss	3,251,000	16,346,000
States and political subdivisions
Available-for-sale securities that had an unrealized loss:
Less than 12 months, fair value	0	10,173,000
Less than 12 months, unrealized loss	$ 0	$ 18,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | securities	0	17
12 months or more, fair value	$ 8,020,000	$ 19,918,000
12 months or more, unrealized loss	$ 112,000	$ 540,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | securities	5	20
Total unrealized loss position, fair value	$ 8,020,000	$ 30,091,000
Total unrealized loss	112,000	558,000
Residential mortgage-backed securities
Available-for-sale securities that had an unrealized loss:
Less than 12 months, fair value	17,932,000	47,562,000
Less than 12 months, unrealized loss	$ 154,000	$ 226,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | securities	7	50
12 months or more, fair value	$ 226,208,000	$ 517,335,000
12 months or more, unrealized loss	$ 2,648,000	$ 15,175,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | securities	77	170
Total unrealized loss position, fair value	$ 244,140,000	$ 564,897,000
Total unrealized loss	2,802,000	15,401,000
Commercial mortgage-backed securities
Available-for-sale securities that had an unrealized loss:
Less than 12 months, fair value	0	0
Less than 12 months, unrealized loss	$ 0	$ 0
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | securities	0	0
12 months or more, fair value	$ 6,380,000	$ 6,707,000
12 months or more, unrealized loss	$ 140,000	$ 105,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | securities	5	3
Total unrealized loss position, fair value	$ 6,380,000	$ 6,707,000
Total unrealized loss	140,000	105,000
Bank-issued trust preferred securities
Available-for-sale securities that had an unrealized loss:
Less than 12 months, fair value	0	0
Less than 12 months, unrealized loss	$ 0	$ 0
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | securities	0	0
12 months or more, fair value	$ 1,803,000	$ 1,718,000
12 months or more, unrealized loss	$ 197,000	$ 282,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | securities	2	2
Total unrealized loss position, fair value	$ 1,803,000	$ 1,718,000
Total unrealized loss	$ 197,000	$ 282,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | securities	2
Mortgage-backed securities, issued by US government sponsored agencies
Available-for-sale securities that had an unrealized loss:
Percentage of mortgage-backed securities in unrealized loss position for more than 12 months	99.00%
Mortgage-backed securities, privately issued
Available-for-sale securities that had an unrealized loss:
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | securities	2
Percentage of mortgage-backed securities in unrealized loss position for more than 12 months	1.00%
Fair value within book value	90.00%
Fair Value Less Than 90 Percent of Book Value [Member] | Mortgage-backed securities, privately issued
Available-for-sale securities that had an unrealized loss:
12 months or more, fair value	$ 147,000
Book value of privately issued mortgage-backed securities in unrealized loss position for more than 12 months	$ 211,000

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Investment Securities (Available-for-sale Securities by Maturities) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities
Debt securities, maturing within 1 year, amortized cost	$ 4,235
Debt securities, maturing 1 to 5 years, amortized cost	53,196
Debt securities, maturing 5 to 10 years, amortized cost	125,542
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Amortized Cost	727,458
Amortized Cost	910,431	$ 804,655
Debt securities, maturing within 1 year, fair value	4,237
Debt securities, maturing 1 to 5 years, fair value	53,647
Debt securities, maturing 5 to 10 years, fair value	127,039
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value	734,441
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	$ 919,364	791,891
Available-for-sale securities, maturing within 1 year, average yield	2.36%
Available-for-sale securities, maturing 1 to 5 years, average yield	2.52%
Available-for-sale securities, maturing 5 to 10 years, average yield	2.77%
Available-for-sale securities, maturing over 10 years, average yield	2.93%
Available-for-sale securities, total average yield	2.88%
US Government-sponsored Enterprises Debt Securities [Member]
Schedule of Available-for-sale Securities
Debt securities, maturing within 1 year, amortized cost	$ 0
Debt securities, maturing 1 to 5 years, amortized cost	2,984
Debt securities, maturing 5 to 10 years, amortized cost	14,644
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Amortized Cost	978
Debt securities, total amortized cost	18,606
Amortized Cost	18,606
Debt securities, maturing within 1 year, fair value	0
Debt securities, maturing 1 to 5 years, fair value	3,041
Debt securities, maturing 5 to 10 years, fair value	15,011
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value	999
Debt securities, total fair value	19,051
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	19,051
States and political subdivisions
Schedule of Available-for-sale Securities
Debt securities, maturing within 1 year, amortized cost	4,234
Debt securities, maturing 1 to 5 years, amortized cost	31,186
Debt securities, maturing 5 to 10 years, amortized cost	44,207
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Amortized Cost	43,182
Debt securities, total amortized cost	122,809
Amortized Cost	122,809	88,358
Debt securities, maturing within 1 year, fair value	4,236
Debt securities, maturing 1 to 5 years, fair value	31,477
Debt securities, maturing 5 to 10 years, fair value	45,518
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value	44,187
Debt securities, total fair value	125,418
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	125,418	88,587
Residential mortgage-backed securities
Schedule of Available-for-sale Securities
Debt securities, maturing within 1 year, amortized cost	1
Debt securities, maturing 1 to 5 years, amortized cost	1,919
Debt securities, maturing 5 to 10 years, amortized cost	60,647
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Amortized Cost	679,597
Debt securities, total amortized cost	742,164
Amortized Cost	742,164	705,289
Debt securities, maturing within 1 year, fair value	1
Debt securities, maturing 1 to 5 years, fair value	1,934
Debt securities, maturing 5 to 10 years, fair value	60,507
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value	685,690
Debt securities, total fair value	748,132
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	748,132	692,608
Commercial mortgage-backed securities
Schedule of Available-for-sale Securities
Debt securities, maturing within 1 year, amortized cost	0
Debt securities, maturing 1 to 5 years, amortized cost	17,107
Debt securities, maturing 5 to 10 years, amortized cost	1,848
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Amortized Cost	3,701
Debt securities, total amortized cost	22,656
Amortized Cost	22,656	6,812
Debt securities, maturing within 1 year, fair value	0
Debt securities, maturing 1 to 5 years, fair value	17,195
Debt securities, maturing 5 to 10 years, fair value	1,904
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value	3,565
Debt securities, total fair value	22,664
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	22,664	6,707
Bank-issued trust preferred securities
Schedule of Available-for-sale Securities
Debt securities, maturing 5 to 10 years, amortized cost	4,196
Available-for-sale Securities, Other Maturities, Rolling after Year Ten, Amortized Cost Basis	0
Available-for-sale Securities, Other Maturities, Amortized Cost Basis	4,196
Amortized Cost	4,196	4,196
Debt securities, maturing 5 to 10 years, fair value	4,099
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value	0
Debt securities, total fair value	4,099
Available-for-sale investment securities, at fair value (amortized cost of $910,431 at June 30, 2019 and $804,655 at December 31, 2018)	$ 4,099	$ 3,989

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Investment Securities (Held-to-maturity Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	$ 34,839	$ 36,961
Gross Unrealized Gains	1,048	684
Gross Unrealized Losses	(140)	(682)
Held-to-maturity investment securities at fair value	35,747	36,963
Amortized Cost	34,839	36,961
States and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Gross Unrealized Gains	482	493
Gross Unrealized Losses	0	0
Held-to-maturity investment securities at fair value	4,880	4,896
Amortized Cost	4,398
Residential mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Gross Unrealized Gains	256	191
Gross Unrealized Losses	(140)	(632)
Held-to-maturity investment securities at fair value	23,451	28,603
Amortized Cost	23,335
Commercial mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Gross Unrealized Gains	310	0
Gross Unrealized Losses	0	(50)
Held-to-maturity investment securities at fair value	7,416	3,464
Amortized Cost	7,106
Reported Value Measurement [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	34,839	36,961
Reported Value Measurement [Member] | States and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	4,398	4,403
Reported Value Measurement [Member] | Residential mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	23,335	29,044
Reported Value Measurement [Member] | Commercial mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity investment securities, at amortized cost (fair value of $35,747 at June 30, 2019 and $36,963 at December 31, 2018)	$ 7,106	$ 3,514

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Investment Securities (Held-to-Maturity Securities Gross Realized Gains and Losses) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Realized Gain (Loss) on Held-to-Maturity Securities	$ 0	$ 0	$ 0	$ 0

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Investment Securities (Held-to-maturity Securities with Unrealized Loss) (Details) $ in Thousands	Jun. 30, 2019 USD ($) securities	Dec. 31, 2018 USD ($) securities
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months, fair value	$ 0	$ 0
Less than 12 months, unrealized loss	$ 0	$ 0
Less than 12 months, no. of securities | securities	0	0
12 months or more, fair value	$ 11,639	$ 16,566
12 months or more, unrealized loss	$ 140	$ 682
12 months or more, no. of securities | securities	3	6
Total fair value	$ 11,639	$ 16,566
Total unrealized loss	140	682
Residential mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months, fair value	0	0
Less than 12 months, unrealized loss	$ 0	$ 0
Less than 12 months, no. of securities | securities	0	0
12 months or more, fair value	$ 11,639	$ 13,102
12 months or more, unrealized loss	$ 140	$ 632
12 months or more, no. of securities | securities	3	5
Total fair value	$ 11,639	$ 13,102
Total unrealized loss	140	632
Commercial mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months, fair value		0
Less than 12 months, unrealized loss		$ 0
Less than 12 months, no. of securities | securities		0
12 months or more, fair value		$ 3,464
12 months or more, unrealized loss		$ 50
12 months or more, no. of securities | securities		1
Total fair value		$ 3,464
Total unrealized loss	$ 0	$ 50

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Investment Securities (Held-to-maturity Securities by Maturities) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
Debt securities, maturing within 1 year, amortized cost	$ 305
Debt securities, maturing 1 to 5 years, amortized cost	410
Debt securities, maturing 5 to 10 years, amortized cost	10,879
Debt securities, maturing over 10 years, amortized cost	23,245
Amortized Cost	34,839	$ 36,961
Debt securities, maturing within 1 year, fair value	307
Debt securities, maturing 1 to 5 years, fair value	412
Debt securities, maturing 5 to 10 years, fair value	11,724
Debt securities, maturing over 10 years, fair value	23,304
Fair Value	$ 35,747	36,963
Held-to-maturity securities, maturing within 1 year, average yield	2.62%
Held-to-maturity securities, maturing 1 to 5 years, average yield	2.29%
Held-to-maturity securities, maturing 6 to 10 years, average yield	1.49%
Held-to-maturity securities, maturing over 10 years, average yield	2.81%
Held-to-maturity securities, total average yield	2.83%
States and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Debt securities, maturing within 1 year, amortized cost	$ 305
Debt securities, maturing 1 to 5 years, amortized cost	0
Debt securities, maturing 5 to 10 years, amortized cost	2,984
Debt securities, maturing over 10 years, amortized cost	1,109
Amortized Cost	4,398
Debt securities, maturing within 1 year, fair value	307
Debt securities, maturing 1 to 5 years, fair value	0
Debt securities, maturing 5 to 10 years, fair value	3,458
Debt securities, maturing over 10 years, fair value	1,115
Fair Value	4,880	4,896
Residential mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Debt securities, maturing within 1 year, amortized cost	0
Debt securities, maturing 1 to 5 years, amortized cost	0
Debt securities, maturing 5 to 10 years, amortized cost	4,002
Debt securities, maturing over 10 years, amortized cost	19,333
Amortized Cost	23,335
Debt securities, maturing within 1 year, fair value	0
Debt securities, maturing 1 to 5 years, fair value	0
Debt securities, maturing 5 to 10 years, fair value	4,070
Debt securities, maturing over 10 years, fair value	19,381
Fair Value	23,451	28,603
Commercial mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Debt securities, maturing within 1 year, amortized cost	0
Debt securities, maturing 1 to 5 years, amortized cost	410
Debt securities, maturing 5 to 10 years, amortized cost	3,893
Debt securities, maturing over 10 years, amortized cost	2,803
Amortized Cost	7,106
Debt securities, maturing within 1 year, fair value	0
Debt securities, maturing 1 to 5 years, fair value	412
Debt securities, maturing 5 to 10 years, fair value	4,196
Debt securities, maturing over 10 years, fair value	2,808
Fair Value	$ 7,416	$ 3,464

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Investment Securities Other Investments (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Other Investments Carrying Value [Line Items]
Federal Home Loan Bank (FHLB) stock	$ 29,257,000			$ 29,257,000		$ 29,367,000
Federal Reserve Bank (FRB) stock	12,294,000			12,294,000		12,294,000
Other investment securities	43,209,000			43,209,000		42,708,000
Other investment securities	43,508,000			43,508,000		42,985,000
Proceeds from Sale of Federal Home Loan Bank Stock	1,100,000	$ 1,800,000
Trading Securities, Change in Unrealized Holding Gain (Loss)	0		$ 658,000	22,000	$ 198,000
Gain (Loss) on Sale of Equity Investments				787,000
Securities of a single issuer, other than US Treasury, government agencies and US government sponsored agencies exceeding 10% of Stockholders' Equity	0			0
Other
Other Investments Carrying Value [Line Items]
Other investment securities	365,000			365,000		60,000
U.S. Treasury and government agencies
Other Investments Carrying Value [Line Items]
Other investment securities	1,293,000			1,293,000		987,000
Equity investment securities
Other Investments Carrying Value [Line Items]
Other investment securities	$ 299,000			$ 299,000		$ 277,000

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Investment Securities (Pledged Securities) (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Carrying value of available-for-sale securities pledged to secure public and trust department deposits and repurchase agreements	$ 499.5	$ 430.0
Carrying value of held-to-maturity securities pledged to secure public and trust department deposits and repurchase agreements	14.6	16.9
Carrying value of available-for-sale securities pledged to secure additional borrowing capacity at Federal Home Loan Bank and Federal Reserve Bank	54.3	60.1
Pledged Financial Instruments, Not Separately Reported, Held-To-Maturity Securities for Federal Home Loan Bank and Federal Reserve Bank	$ 15.6	$ 16.7

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Loans (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage Loans in Process of Foreclosure, Amount	$ 2.2
Percent of Loans Considered Current	99.00%	98.50%
Loans and leases receivable, impaired, commitment to lend	$ 0.0
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Pledged assets separately reported, loans pledged as collateral, at fair value	488.4	$ 505.7
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Pledged assets separately reported, loans pledged as collateral, at fair value	$ 153.0	$ 180.9

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Loans (Loan Balances By Classification) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	$ 2,833,533	$ 2,728,778
Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,833,533	2,728,778
Originated Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,174,452	2,156,030	$ 2,063,163
Originated Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,174,452	2,156,030
Originated Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	102,904	124,013
Originated Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	641,061	632,200
Originated Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	743,965	756,213	756,213
Originated Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	548,460	530,207	471,270
Originated Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	299,173	296,860	299,934
Originated Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	90,374	93,326	89,957
Originated Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	419,595	407,167	373,384
Originated Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	72,209	71,674	71,545
Originated Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	491,804	478,841
Originated Loans | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	676	583	$ 860
Acquired Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	659,081	572,748
Acquired Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	6,775	12,404
Acquired Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	201,909	184,711
Acquired Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	208,684	197,115
Acquired Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	51,506	35,537
Acquired Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	348,439	296,937
Acquired Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	41,262	40,653
Acquired Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	90	136
Acquired Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	9,100	2,370
Acquired Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	$ 9,190	$ 2,506

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Loans (Loans Acquired With Deterioration of Credit Quality) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Purchased credit impaired loans
Carrying Amount	$ 28,125	$ 22,475
Total loans
Purchased credit impaired loans
Outstanding Balance	41,744	33,362
Commercial real estate, other
Purchased credit impaired loans
Outstanding Balance	13,116	11,955
Commercial and industrial
Purchased credit impaired loans
Outstanding Balance	4,479	1,287
Residential real estate
Purchased credit impaired loans
Outstanding Balance	23,509	20,062
Consumer
Purchased credit impaired loans
Outstanding Balance	$ 640	$ 58

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Loans Accretable Yield Rollforward (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning balance	$ 11,660	$ 8,222	$ 8,955	$ 6,704
Accretion	(1,148)	(897)
Ending balance	11,660	8,222
ASB Financial Corp. [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning balance		2,415
Ending balance		$ 2,415
FIRST PRESTONSBURG BANCSHARES INC. [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning balance	3,853
Ending balance	$ 3,853

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Loans (Nonaccrual and Past Due Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	$ 16,591	$ 17,098
Loans 90 Days Past Due and Accruing	3,449	2,256
Originated Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	13,788	14,185
Loans 90 Days Past Due and Accruing	491	1,191
Originated Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	688	710
Loans 90 Days Past Due and Accruing	0	0
Originated Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	6,241	6,565
Loans 90 Days Past Due and Accruing	0	786
Originated Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	6,929	7,275
Loans 90 Days Past Due and Accruing	0	786
Originated Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	2,044	1,673
Loans 90 Days Past Due and Accruing	0	0
Originated Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	3,816	4,105
Loans 90 Days Past Due and Accruing	438	398
Originated Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	452	596
Loans 90 Days Past Due and Accruing	53	7
Originated Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	535	480
Loans 90 Days Past Due and Accruing	0	0
Originated Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	12	56
Loans 90 Days Past Due and Accruing	0	0
Originated Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	547	536
Loans 90 Days Past Due and Accruing	0	0
Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	2,803	2,913
Loans 90 Days Past Due and Accruing	2,958	1,065
Acquired Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	0	0
Loans 90 Days Past Due and Accruing	230	0
Acquired Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	308	319
Loans 90 Days Past Due and Accruing	557	15
Acquired Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	308	319
Loans 90 Days Past Due and Accruing	787	15
Acquired Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	36	36
Loans 90 Days Past Due and Accruing	261	18
Acquired Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	1,716	1,921
Loans 90 Days Past Due and Accruing	1,853	1,032
Acquired Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	742	637
Loans 90 Days Past Due and Accruing	0	0
Acquired Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans	1	0
Loans 90 Days Past Due and Accruing	$ 57	$ 0

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Loans (Aging Of The Recorded Investment In Past Due Loans And Leases) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 2,833,533	$ 2,728,778
Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	29,666	41,518
Current Loans	2,803,867	2,687,260
Total Loans	2,833,533	2,728,778
Originated Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	2,174,452	2,156,030	$ 2,063,163
Originated Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	688	710
Current Loans	102,216	123,303
Total Loans	102,904	124,013
Originated Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	6,050	7,899
Current Loans	635,011	624,301
Total Loans	641,061	632,200
Originated Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	6,738	8,609
Current Loans	737,227	747,604
Total Loans	743,965	756,213	756,213
Originated Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2,546	6,495
Current Loans	545,914	523,712
Total Loans	548,460	530,207	471,270
Originated Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	5,046	8,371
Current Loans	294,127	288,489
Total Loans	299,173	296,860	299,934
Originated Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	866	992
Current Loans	89,508	92,334
Total Loans	90,374	93,326	89,957
Originated Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	3,351	3,919
Current Loans	416,244	403,248
Total Loans	419,595	407,167	373,384
Originated Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	325	400
Current Loans	71,884	71,274
Total Loans	72,209	71,674	71,545
Originated Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	3,676	4,319
Current Loans	488,128	474,522
Total Loans	491,804	478,841
Originated Loans | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
Current Loans	676	583
Total Loans	676	583	$ 860
Originated Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	18,872	28,786
Current Loans	2,155,580	2,127,244
Total Loans	2,174,452	2,156,030
Acquired Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	230	511
Current Loans	6,545	11,893
Total Loans	6,775	12,404
Acquired Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2,162	1,213
Current Loans	199,747	183,498
Total Loans	201,909	184,711
Acquired Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2,392	1,724
Current Loans	206,292	195,391
Total Loans	208,684	197,115
Acquired Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	845	142
Current Loans	50,661	35,395
Total Loans	51,506	35,537
Acquired Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	6,460	9,832
Current Loans	341,979	287,105
Total Loans	348,439	296,937
Acquired Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	900	1,005
Current Loans	40,362	39,648
Total Loans	41,262	40,653
Acquired Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
Current Loans	90	136
Total Loans	90	136
Acquired Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	197	29
Current Loans	8,903	2,341
Total Loans	9,100	2,370
Acquired Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	197	29
Current Loans	8,993	2,477
Total Loans	9,190	2,506
Acquired Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	10,794	12,732
Current Loans	648,287	560,016
Total Loans	659,081	572,748
30 - 59 days | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	8,864	17,782
30 - 59 days | Originated Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
30 - 59 days | Originated Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	12
30 - 59 days | Originated Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	12
30 - 59 days | Originated Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	606	1,678
30 - 59 days | Originated Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,391	4,457
30 - 59 days | Originated Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	387	531
30 - 59 days | Originated Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	3,024	3,266
30 - 59 days | Originated Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	306	308
30 - 59 days | Originated Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	3,330	3,574
30 - 59 days | Originated Loans | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
30 - 59 days | Originated Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	5,714	10,252
30 - 59 days | Acquired Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	511
30 - 59 days | Acquired Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	661	523
30 - 59 days | Acquired Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	661	1,034
30 - 59 days | Acquired Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	488	111
30 - 59 days | Acquired Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,685	6,124
30 - 59 days | Acquired Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	228	238
30 - 59 days | Acquired Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
30 - 59 days | Acquired Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	88	23
30 - 59 days | Acquired Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	88	23
30 - 59 days | Acquired Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	3,150	7,530
60 - 89 days | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	4,455	8,675
60 - 89 days | Originated Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
60 - 89 days | Originated Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	736
60 - 89 days | Originated Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	736
60 - 89 days | Originated Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	3	3,520
60 - 89 days | Originated Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,177	1,319
60 - 89 days | Originated Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	18	30
60 - 89 days | Originated Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	216	488
60 - 89 days | Originated Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	17	50
60 - 89 days | Originated Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	233	538
60 - 89 days | Originated Loans | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
60 - 89 days | Originated Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,431	6,143
60 - 89 days | Acquired Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
60 - 89 days | Acquired Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	728	457
60 - 89 days | Acquired Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	728	457
60 - 89 days | Acquired Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	60	13
60 - 89 days | Acquired Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2,075	1,823
60 - 89 days | Acquired Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	109	233
60 - 89 days | Acquired Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
60 - 89 days | Acquired Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	52	6
60 - 89 days | Acquired Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	52	6
60 - 89 days | Acquired Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	3,024	2,532
90 Days | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	16,347	15,061
90 Days | Originated Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	688	710
90 Days | Originated Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	6,050	7,151
90 Days | Originated Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	6,738	7,861
90 Days | Originated Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,937	1,297
90 Days | Originated Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2,478	2,595
90 Days | Originated Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	461	431
90 Days | Originated Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	111	165
90 Days | Originated Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2	42
90 Days | Originated Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	113	207
90 Days | Originated Loans | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
90 Days | Originated Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	11,727	12,391
90 Days | Acquired Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	230	0
90 Days | Acquired Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	773	233
90 Days | Acquired Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,003	233
90 Days | Acquired Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	297	18
90 Days | Acquired Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2,700	1,885
90 Days | Acquired Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	563	534
90 Days | Acquired Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
90 Days | Acquired Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	57	0
90 Days | Acquired Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	57	0
90 Days | Acquired Loans | Total loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	$ 4,620	$ 2,670

XML

Loans (Loans By Risk Category) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	$ 2,833,533	$ 2,728,778
Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,833,533	2,728,778
Pass Rated (Grades 1 - 4) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1,506,397	1,452,711
Special Mention (Grade 5) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	33,968	70,370
Substandard (Grade 6) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	62,540	43,176
Doubtful (Grade 7) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	508	642
Not Rated | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1,230,120	1,161,879
Originated Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,174,452	2,156,030	$ 2,063,163
Originated Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	102,904	124,013
Originated Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	641,061	632,200
Originated Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	743,965	756,213	756,213
Originated Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	548,460	530,207	471,270
Originated Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	299,173	296,860	299,934
Originated Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	90,374	93,326	89,957
Originated Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	419,595	407,167	373,384
Originated Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	72,209	71,674	71,545
Originated Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	491,804	478,841
Originated Loans | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	676	583	$ 860
Originated Loans | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,174,452	2,156,030
Originated Loans | Pass Rated (Grades 1 - 4) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	100,231	121,457
Originated Loans | Pass Rated (Grades 1 - 4) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	622,966	612,099
Originated Loans | Pass Rated (Grades 1 - 4) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	723,197	733,556
Originated Loans | Pass Rated (Grades 1 - 4) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	525,738	476,290
Originated Loans | Pass Rated (Grades 1 - 4) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	13,752	14,229
Originated Loans | Pass Rated (Grades 1 - 4) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	17	453
Originated Loans | Pass Rated (Grades 1 - 4) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	8
Originated Loans | Pass Rated (Grades 1 - 4) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	24	30
Originated Loans | Pass Rated (Grades 1 - 4) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	24	38
Originated Loans | Pass Rated (Grades 1 - 4) | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Pass Rated (Grades 1 - 4) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1,262,728	1,224,566
Originated Loans | Special Mention (Grade 5) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Special Mention (Grade 5) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	7,673	10,898
Originated Loans | Special Mention (Grade 5) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	7,673	10,898
Originated Loans | Special Mention (Grade 5) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	5,807	45,990
Originated Loans | Special Mention (Grade 5) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	201	500
Originated Loans | Special Mention (Grade 5) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Special Mention (Grade 5) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Special Mention (Grade 5) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Special Mention (Grade 5) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Special Mention (Grade 5) | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Special Mention (Grade 5) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	13,681	57,388
Originated Loans | Substandard (Grade 6) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1,431	1,472
Originated Loans | Substandard (Grade 6) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	10,416	9,203
Originated Loans | Substandard (Grade 6) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	11,847	10,675
Originated Loans | Substandard (Grade 6) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	16,915	7,692
Originated Loans | Substandard (Grade 6) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	14,682	11,971
Originated Loans | Substandard (Grade 6) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Substandard (Grade 6) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Substandard (Grade 6) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Substandard (Grade 6) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Substandard (Grade 6) | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Substandard (Grade 6) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	43,444	30,338
Originated Loans | Doubtful (Grade 7) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Doubtful (Grade 7) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	6	0
Originated Loans | Doubtful (Grade 7) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	6	0
Originated Loans | Doubtful (Grade 7) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Doubtful (Grade 7) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	249	409
Originated Loans | Doubtful (Grade 7) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Doubtful (Grade 7) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Doubtful (Grade 7) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Doubtful (Grade 7) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Doubtful (Grade 7) | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Doubtful (Grade 7) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	255	409
Originated Loans | Not Rated | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1,242	1,084
Originated Loans | Not Rated | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Originated Loans | Not Rated | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1,242	1,084
Originated Loans | Not Rated | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	235
Originated Loans | Not Rated | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	270,289	269,751
Originated Loans | Not Rated | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	90,357	92,873
Originated Loans | Not Rated | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	419,595	407,159
Originated Loans | Not Rated | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	72,185	71,644
Originated Loans | Not Rated | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	491,780	478,803
Originated Loans | Not Rated | Deposit account overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	676	583
Originated Loans | Not Rated | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	854,344	843,329
Acquired Loans | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	6,775	12,404
Acquired Loans | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	201,909	184,711
Acquired Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	208,684	197,115
Acquired Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	51,506	35,537
Acquired Loans | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	348,439	296,937
Acquired Loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	41,262	40,653
Acquired Loans | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	90	136
Acquired Loans | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	9,100	2,370
Acquired Loans | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	9,190	2,506
Acquired Loans | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	659,081	572,748
Acquired Loans | Pass Rated (Grades 1 - 4) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	4,338	8,976
Acquired Loans | Pass Rated (Grades 1 - 4) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	178,425	169,260
Acquired Loans | Pass Rated (Grades 1 - 4) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	182,763	178,236
Acquired Loans | Pass Rated (Grades 1 - 4) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	43,171	32,471
Acquired Loans | Pass Rated (Grades 1 - 4) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	17,634	17,370
Acquired Loans | Pass Rated (Grades 1 - 4) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	81	33
Acquired Loans | Pass Rated (Grades 1 - 4) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1	4
Acquired Loans | Pass Rated (Grades 1 - 4) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	19	31
Acquired Loans | Pass Rated (Grades 1 - 4) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	20	35
Acquired Loans | Pass Rated (Grades 1 - 4) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	243,669	228,145
Acquired Loans | Special Mention (Grade 5) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	1,636	1,795
Acquired Loans | Special Mention (Grade 5) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	12,700	7,241
Acquired Loans | Special Mention (Grade 5) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	14,336	9,036
Acquired Loans | Special Mention (Grade 5) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	3,265	2,008
Acquired Loans | Special Mention (Grade 5) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,686	1,938
Acquired Loans | Special Mention (Grade 5) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Special Mention (Grade 5) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Special Mention (Grade 5) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Special Mention (Grade 5) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Special Mention (Grade 5) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	20,287	12,982
Acquired Loans | Substandard (Grade 6) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	801	1,633
Acquired Loans | Substandard (Grade 6) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	10,693	8,114
Acquired Loans | Substandard (Grade 6) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	11,494	9,747
Acquired Loans | Substandard (Grade 6) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	5,038	1,058
Acquired Loans | Substandard (Grade 6) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	2,564	2,033
Acquired Loans | Substandard (Grade 6) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Substandard (Grade 6) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Substandard (Grade 6) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Substandard (Grade 6) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Substandard (Grade 6) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	19,096	12,838
Acquired Loans | Doubtful (Grade 7) | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Doubtful (Grade 7) | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	91	96
Acquired Loans | Doubtful (Grade 7) | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	91	96
Acquired Loans | Doubtful (Grade 7) | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	32	0
Acquired Loans | Doubtful (Grade 7) | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	130	137
Acquired Loans | Doubtful (Grade 7) | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Doubtful (Grade 7) | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Doubtful (Grade 7) | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Doubtful (Grade 7) | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Doubtful (Grade 7) | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	253	233
Acquired Loans | Not Rated | Commercial real estate, construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Not Rated | Commercial real estate, other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Not Rated | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Not Rated | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	0	0
Acquired Loans | Not Rated | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	325,425	275,459
Acquired Loans | Not Rated | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	41,181	40,620
Acquired Loans | Not Rated | Consumer, indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	89	132
Acquired Loans | Not Rated | Consumer, direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	9,081	2,339
Acquired Loans | Not Rated | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	9,170	2,471
Acquired Loans | Not Rated | Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of deferred fees and costs (a)	$ 375,776	$ 318,550

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Loans (Schedule Of Impaired Loans) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Total loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 46,177	$ 50,001
Recorded Investment With Allowance	7,189	2,154
Recorded Investment Without Allowance	39,725	46,221
Recorded investment in loans individually evaluated for impairment	46,914	48,375	$ 51,159
Total Recorded Investment	46,914	48,375
Related Allowance	1,131	509
Average Recorded Investment	43,725	43,140
Interest Income Recognized	1,019	1,879
Commercial real estate, construction
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,793	2,376
Recorded Investment With Allowance	0	0
Recorded Investment Without Allowance	1,706	2,376
Total Recorded Investment	1,706	2,376
Related Allowance	0	0
Average Recorded Investment	1,728	1,732
Interest Income Recognized	29	74
Commercial real estate, other
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	15,546	15,464
Recorded Investment With Allowance	4,753	274
Recorded Investment Without Allowance	10,296	14,946
Total Recorded Investment	15,049	15,220
Related Allowance	520	119
Average Recorded Investment	14,722	14,043
Interest Income Recognized	250	455
Commercial real estate
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	17,339	17,840
Recorded Investment With Allowance	4,753	274
Recorded Investment Without Allowance	12,002	17,322
Recorded investment in loans individually evaluated for impairment	16,755	17,596	19,162
Total Recorded Investment	16,755	17,596
Related Allowance	520	119
Average Recorded Investment	16,450	15,775
Interest Income Recognized	279	529
Commercial and industrial
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	4,265	3,305
Recorded Investment With Allowance	1,485	790
Recorded Investment Without Allowance	2,731	2,436
Recorded investment in loans individually evaluated for impairment	4,216	3,226	3,173
Total Recorded Investment	4,216	3,226
Related Allowance	449	157
Average Recorded Investment	3,226	2,423
Interest Income Recognized	47	72
Residential real estate
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	22,195	25,990
Recorded Investment With Allowance	387	644
Recorded Investment Without Allowance	23,170	24,034
Recorded investment in loans individually evaluated for impairment	23,557	24,678	26,497
Total Recorded Investment	23,557	24,678
Related Allowance	53	154
Average Recorded Investment	22,086	22,769
Interest Income Recognized	629	1,134
Home equity lines of credit
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,469	2,291
Recorded Investment With Allowance	419	424
Recorded Investment Without Allowance	1,051	1,869
Recorded investment in loans individually evaluated for impairment	1,470	2,293	1,736
Total Recorded Investment	1,470	2,293
Related Allowance	68	73
Average Recorded Investment	1,343	1,832
Interest Income Recognized	40	109
Consumer, indirect
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	445	496
Recorded Investment With Allowance	96	0
Recorded Investment Without Allowance	356	503
Recorded investment in loans individually evaluated for impairment	452	503	441
Related Allowance	23	0
Average Recorded Investment	413	278
Interest Income Recognized	15	15
Consumer, direct
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	464	79
Recorded Investment With Allowance	49	22
Recorded Investment Without Allowance	415	57
Recorded investment in loans individually evaluated for impairment	464	79	$ 150
Total Recorded Investment	464	79
Related Allowance	18	6
Average Recorded Investment	207	63
Interest Income Recognized	9	20
Consumer
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	909	575
Recorded Investment With Allowance	145	22
Recorded Investment Without Allowance	771	560
Total Recorded Investment	916	582
Related Allowance	41	6
Average Recorded Investment	620	341
Interest Income Recognized	$ 24	$ 35

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Loans (Troubled Debt Restructurings) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) contract	Jun. 30, 2018 USD ($) contract	Jun. 30, 2019 USD ($) contract	Jun. 30, 2018 USD ($) contract
Originated Loans
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	13	27	22	38
Pre-Modification	$ 248	$ 1,035	$ 805	$ 1,318
Post-Modification	248	1,035	809	1,318
Remaining Recorded Investment	$ 248	$ 1,035	$ 801	$ 1,305
Originated Loans | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract			2
Pre-Modification			$ 38
Post-Modification			38
Remaining Recorded Investment			$ 35
Originated Loans | Residential real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1	5	3	7
Pre-Modification	$ 37	$ 717	$ 436	$ 910
Post-Modification	37	717	440	910
Remaining Recorded Investment	$ 37	$ 717	$ 437	$ 911
Originated Loans | Home equity lines of credit
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	2	3	4	3
Pre-Modification	$ 60	$ 61	$ 139	$ 61
Post-Modification	60	61	139	61
Remaining Recorded Investment	$ 60	$ 61	$ 139	$ 61
Originated Loans | Consumer, indirect
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	7	14	8	21
Pre-Modification	$ 110	$ 230	$ 123	$ 316
Post-Modification	110	230	123	316
Remaining Recorded Investment	$ 110	$ 230	$ 123	$ 302
Originated Loans | Consumer, direct
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	3	5	5	7
Pre-Modification	$ 41	$ 27	$ 69	$ 31
Post-Modification	41	27	69	31
Remaining Recorded Investment	$ 41	$ 27	$ 67	$ 31
Originated Loans | Consumer
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	10	19	13	28
Pre-Modification	$ 151	$ 257	$ 192	$ 347
Post-Modification	151	257	192	347
Remaining Recorded Investment	$ 151	$ 257	$ 190	$ 333
Acquired Loans
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	69	18	72	21
Pre-Modification	$ 4,260	$ 863	$ 4,349	$ 1,182
Post-Modification	4,234	863	4,324	1,182
Remaining Recorded Investment	$ 4,235	$ 863	$ 4,319	$ 1,180
Acquired Loans | Commercial real estate, other
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	7		7
Pre-Modification	$ 725		$ 724
Post-Modification	699		699
Remaining Recorded Investment	$ 700		$ 700
Acquired Loans | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	4		4
Pre-Modification	$ 1,259		$ 1,259
Post-Modification	1,259		1,259
Remaining Recorded Investment	$ 1,259		$ 1,259
Acquired Loans | Residential real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	35	11	36	13
Pre-Modification	$ 1,823	$ 720	$ 1,847	$ 989
Post-Modification	1,823	720	1,847	989
Remaining Recorded Investment	$ 1,823	$ 720	$ 1,842	$ 989
Acquired Loans | Home equity lines of credit
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	7	4	9	4
Pre-Modification	$ 113	$ 86	$ 179	$ 86
Post-Modification	113	86	179	86
Remaining Recorded Investment	$ 113	$ 86	$ 178	$ 86
Acquired Loans | Consumer, direct
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	16	3	16	3
Pre-Modification	$ 340	$ 57	$ 340	$ 57
Post-Modification	340	57	340	57
Remaining Recorded Investment	$ 340	$ 57	$ 340	$ 57
Acquired Loans | Commercial real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract				1
Pre-Modification				$ 50
Post-Modification				50
Remaining Recorded Investment				$ 48

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Loans (Troubled Debt Restructuring Subsequent Default) (Details) - Consumer, direct - Acquired Loans $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) contract
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | contract	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $	$ 34

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Loans (Summary Of Activity In Allowance For Loan And Lease Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Provision for (recoveries of) loan losses	$ 626	$ 1,188	$ 363	$ 3,171
Commercial real estate, other
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			8,003	7,797
Charge-offs			(153)	(849)
Recoveries			12	43
Net (charge-offs) recoveries			(141)	(806)
Provision for (recoveries of) loan losses			383	1,280
Ending balance	8,245	8,271	8,245	8,271
Period-end amount allocated to:
Ending balance	8,245	8,271	8,245	8,271
Acquired Nonimpaired Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	380		383	0
Charge-offs	0	0	(3)	0
Ending balance	380	0	380	0
Period-end amount allocated to:
Ending balance	380	0	380	0
Total loans
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			19,659	18,685
Charge-offs			(1,665)	(3,289)
Recoveries			2,467	591
Net (charge-offs) recoveries			802	(2,698)
Provision for (recoveries of) loan losses			363	3,171
Ending balance	20,824	19,158	20,824	19,158
Period-end amount allocated to:
Ending balance	20,824	19,158	20,824	19,158
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			8,003
Ending balance	8,245	8,271	8,245	8,271
Period-end amount allocated to:
Ending balance	8,245	8,271	8,245	8,271
Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			6,178	5,813
Charge-offs			(63)	(38)
Recoveries			2,012	0
Net (charge-offs) recoveries			1,949	(38)
Provision for (recoveries of) loan losses			(930)	(410)
Ending balance	7,197	5,365	7,197	5,365
Period-end amount allocated to:
Ending balance	7,197	5,365	7,197	5,365
Residential real estate
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			1,214	904
Charge-offs			(176)	(227)
Recoveries			133	67
Net (charge-offs) recoveries			(43)	(160)
Provision for (recoveries of) loan losses			13	261
Ending balance	1,184	1,005	1,184	1,005
Period-end amount allocated to:
Ending balance	1,184	1,005	1,184	1,005
Home equity lines of credit
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			618	693
Charge-offs			(9)	(57)
Recoveries			2	9
Net (charge-offs) recoveries			(7)	(48)
Provision for (recoveries of) loan losses			(13)	(27)
Ending balance	598	618	598	618
Period-end amount allocated to:
Ending balance	598	618	598	618
Consumer, indirect
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			3,214	2,944
Charge-offs			(819)	(1,479)
Recoveries			162	272
Net (charge-offs) recoveries			(657)	(1,207)
Provision for (recoveries of) loan losses			615	1,602
Ending balance	3,172	3,339	3,172	3,339
Period-end amount allocated to:
Ending balance	3,172	3,339	3,172	3,339
Consumer, direct
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			351	464
Charge-offs			(96)	(219)
Recoveries			40	84
Net (charge-offs) recoveries			(56)	(135)
Provision for (recoveries of) loan losses			47	136
Ending balance	342	465	342	465
Period-end amount allocated to:
Ending balance	342	465	342	465
Deposit account overdrafts
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			81	70
Charge-offs			(349)	(420)
Recoveries			106	116
Net (charge-offs) recoveries			(243)	(304)
Provision for (recoveries of) loan losses			248	329
Ending balance	86	95	86	95
Period-end amount allocated to:
Ending balance	$ 86	$ 95	$ 86	$ 95

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Loans (Allowance for Loan Losses Disaggregated by Impairment Method) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	$ 2,833,533	$ 2,728,778
Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	2,174,452	2,156,030	$ 2,063,163
Commercial real estate, other
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending balance	8,245	8,003	8,271	$ 7,797
Commercial real estate, other | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	641,061	632,200
Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	449	157	191
Allowance for loan losses allocated to loans collectively evaluated for impairment	6,748	6,021	5,174
Ending balance	7,197	6,178	5,365	5,813
Recorded investment in loans individually evaluated for impairment	4,216	3,226	3,173
Recorded investment in loans collectively evaluated for impairment	544,244	526,981	468,097
Commercial and industrial | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	548,460	530,207	471,270
Residential real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	53	154	47
Allowance for loan losses allocated to loans collectively evaluated for impairment	1,131	1,060	958
Ending balance	1,184	1,214	1,005	904
Recorded investment in loans individually evaluated for impairment	23,557	24,678	26,497
Recorded investment in loans collectively evaluated for impairment	275,616	272,182	273,437
Residential real estate | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	299,173	296,860	299,934
Home equity lines of credit
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	68	73	14
Allowance for loan losses allocated to loans collectively evaluated for impairment	530	545	604
Ending balance	598	618	618	693
Recorded investment in loans individually evaluated for impairment	1,470	2,293	1,736
Recorded investment in loans collectively evaluated for impairment	88,904	91,033	88,221
Home equity lines of credit | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	90,374	93,326	89,957
Consumer, indirect
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	23	0	31
Allowance for loan losses allocated to loans collectively evaluated for impairment	3,149	3,214	3,308
Ending balance	3,172	3,214	3,339	2,944
Recorded investment in loans individually evaluated for impairment	452	503	441
Recorded investment in loans collectively evaluated for impairment	419,143	406,664	372,943
Consumer, indirect | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	419,595	407,167	373,384
Consumer, direct
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	18	6	45
Allowance for loan losses allocated to loans collectively evaluated for impairment	324	345	420
Ending balance	342	351	465	464
Recorded investment in loans individually evaluated for impairment	464	79	150
Recorded investment in loans collectively evaluated for impairment	71,745	71,595	71,395
Consumer, direct | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	72,209	71,674	71,545
Deposit account overdrafts
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	0	0	0
Allowance for loan losses allocated to loans collectively evaluated for impairment	86	81	95
Ending balance	86	81	95	70
Recorded investment in loans individually evaluated for impairment	0	0	0
Recorded investment in loans collectively evaluated for impairment	676	583	860
Deposit account overdrafts | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	676	583	860
Total loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	1,131	509	329
Allowance for loan losses allocated to loans collectively evaluated for impairment	19,693	19,150	18,829
Ending balance	20,824	19,659	19,158	$ 18,685
Recorded investment in loans individually evaluated for impairment	46,914	48,375	51,159
Recorded investment in loans collectively evaluated for impairment	2,127,538	2,107,655	2,012,004
Loans, net of deferred fees and costs (a)	2,833,533	2,728,778
Total loans | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	2,174,452	2,156,030
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses allocated to loans individually evaluated for impairment	520	119	1
Allowance for loan losses allocated to loans collectively evaluated for impairment	7,725	7,884	8,270
Ending balance	8,245	8,003	8,271
Recorded investment in loans individually evaluated for impairment	16,755	17,596	19,162
Recorded investment in loans collectively evaluated for impairment	727,210	738,617	737,051
Commercial real estate | Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans, net of deferred fees and costs (a)	$ 743,965	$ 756,213	$ 756,213

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Loans Summary of Activity in Allowance for Acquired Loan and Lease Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Acquired Nonimpaired Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 380		$ 383	$ 0
Charge-offs	0	$ 0	3	0
Ending balance	380	0	380	0
Financial Asset Acquired with Credit Deterioration
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance			153	108
Ending balance	$ 153	$ 108	$ 153	$ 108

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Long-Term Borrowings (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Total long-term borrowings	$ 85,691	$ 109,644
Long-term borrowings, Weighted-Average Rate	2.55%	2.44%
FHLB putable, non-amortizing, fixed-rate advances
Debt Instrument [Line Items]
FHLB Advances	$ 65,000	$ 85,000
Federal Home Loan Bank, Advances, Weighted Average Interest Rate	2.18%	2.05%
FHLB amortizing, fixed-rate advances
Debt Instrument [Line Items]
FHLB Advances	$ 13,324	$ 17,361
Federal Home Loan Bank, Advances, Weighted Average Interest Rate	1.73%	2.09%
Junior subordinated debt securities
Debt Instrument [Line Items]
Junior subordinated debt securities	$ 7,367	$ 7,283
Weighted- Average Rate	7.34%	7.83%

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Long-Term Borrowings (Narrative) (Details)	6 Months Ended
	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Proceeds from long-term borrowings	$ 0
Unadvanced revolving line of credit	$ 15,000,000
FHLB Advances [Member]
Number of agreements	2
FHLB amortizing, fixed-rate advances
FHLB Advances	$ 13,324,000	$ 17,361,000
FHLB amortizing, fixed-rate advances | Minimum
Federal Home Loan Bank, advances, general debt obligations, disclosures, maturities period	8 years
FHLB amortizing, fixed-rate advances | Maximum
Federal Home Loan Bank, advances, general debt obligations, disclosures, maturities period	13 years
FHLB Advances [Member]
FHLB Advances	$ 20,000,000

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Long-Term Borrowings (Maturity) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Six months ending December 31, 2019	$ 2,568
Year ending December 31, 2020	2,555
Year ending December 31, 2021	21,979
Year ending December 31, 2022	16,521
Year ending December 31, 2023	1,157
Thereafter	40,911
Long-term borrowings	$ 85,691	$ 109,644
Six months ending December 31, 2019	1.48%
Year ending December 31, 2020	1.35%
Year ending December 31, 2021	1.74%
Year ending December 31, 2022	1.95%
Year ending December 31, 2023	1.06%
Thereafter	3.41%
Total long-term borrowings	2.55%	2.44%

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Stockholders' Equity (Stock Rollforward) (Details)	6 Months Ended
	Jun. 30, 2019 shares
Increase (Decrease) in Stock by Class [Roll Forward]
Common stock, beginning of period	20,124,378
Treasury stock, beginning of period	601,289
Changes related to deferred compensation plan for Boards of Directors:
Common stock, end of period	21,142,256
Treasury stock, end of period	489,802
Common Stock
Increase (Decrease) in Stock by Class [Roll Forward]
Common stock, beginning of period	20,124,378
Changes related to stock-based compensation awards:
Cancellation of restricted common shares	0
Changes related to deferred compensation plan for Boards of Directors:
Common shares issued under dividend reinvestment plan	12,400
Common stock, end of period	21,142,256
Treasury Stock
Increase (Decrease) in Stock by Class [Roll Forward]
Treasury stock, beginning of period	601,289
Changes related to stock-based compensation awards:
Release of restricted common shares	17,481
Cancellation of restricted common shares	3,465
Grant of common shares	(4,680)
Changes related to deferred compensation plan for Boards of Directors:
Purchase of treasury stock	3,834
Disbursed out of treasury stock	(2,187)
Common shares issued under compensation plan for Boards of Directors	(3,490)
Common shares issued under employee stock purchase plan	(3,624)
Treasury stock, end of period	489,802
Restricted Shares | Treasury Stock
Changes related to stock-based compensation awards:
Grant of common shares	(122,286)

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Stockholders' Equity (Narrative) (Details) - $ / shares	3 Months Ended						6 Months Ended		9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Class of Stock [Line Items]
Preferred stock - shares authorized		50,000					50,000				50,000
Preferred stock - shares issued		0					0				0
Cash dividends declared per common share		$ 0.34	$ 0.30	$ 0.28	$ 0.28	$ 0.26	$ 0.64	$ 0.54		$ 0.82
Subsequent Event [Member]
Class of Stock [Line Items]
Cash dividends declared per common share	$ 0.34								$ 0.98

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Stockholders' Equity (Accumulated Other Comprehensive (Loss) Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive (Loss) Income [Roll Forward]
Unrealized Gain (Loss) on Securities			$ (10,082)
Realized gain on sale of securities, net of tax			21
Other comprehensive income (loss), net of reclassifications and tax			17,121
Unrealized Gain (Loss) on Securities	$ 7,060		7,060
Unrecognized Net Pension and Postretirement Costs			(3,711)
Other comprehensive income (loss), net of reclassifications and tax			31
Unrecognized Net Pension and Postretirement Costs	(3,680)		(3,680)
Unrealized Gain (Loss) on Cash Flow Hedge			860
Other comprehensive income (loss), net of reclassifications and tax	(2,476)	$ 424	(3,924)	$ 1,513
Unrealized Gain (Loss) on Cash Flow Hedge	(3,064)		(3,064)
Accumulated Other Comprehensive Income (Loss)			(12,933)
Realized gain on sale of securities, net of tax			21
Other comprehensive income (loss), net of reclassifications and tax			13,228
Accumulated Other Comprehensive Income (Loss)	$ 316		$ 316

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Employee Benefit Plans (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Pension Benefits
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items]
Settlement charge	$ 0	$ 0	$ 0	$ 0
Components of net periodic benefit costs:
Interest cost	110,000	105,000	219,000	210,000
Expected return on plan assets	(196,000)	(146,000)	(391,000)	(293,000)
Amortization of net loss	20,000	27,000	39,000	55,000
Net periodic benefit/cost	(66,000)	(14,000)	(133,000)	(28,000)
Postretirement Benefits
Components of net periodic benefit costs:
Interest cost	1,000	1,000	2,000	2,000
Amortization of prior service cost	(1,000)		(1,000)
Amortization of net loss	0	(1,000)	(2,000)	(3,000)
Net periodic benefit/cost	$ 0	$ 0	$ (1,000)	$ (1,000)
Postretirement Benefits | Employees Hired before January 1, 2003
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items]
Benefit based on highest average salary for number of consecutive years			5 years
Number of years for consecutive years calculation			10 years
Postretirement Benefits | Employees Hired on or after January 1, 2003
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items]
Percent of annual salary to calculate benefit			2.00%

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Earnings Per Common Share (Calculations of Basic and Diluted Earnings per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Distributed earnings allocated to shareholders	$ 6,935	$ 5,407	$ 12,711	$ 10,123
Undistributed earnings allocated to shareholders	2,568	2,427	11,067	9,389
Net earnings allocated to shareholders	$ 9,503	$ 7,834	$ 23,778	$ 19,512
Weighted-average number of common shares outstanding - basic	20,277,028	19,160,728	19,824,035	18,646,266
Effect of potentially dilutive shares	165,338	132,653	148,315	126,903
Total weighted-average diluted shares outstanding	20,442,366	19,293,381	19,972,350	18,773,169
Earnings per common share - basic	$ 0.47	$ 0.41	$ 1.20	$ 1.05
Earnings per common share - diluted	$ 0.46	$ 0.41	$ 1.19	$ 1.04
Anti-dilutive shares excluded from computation of EPS	87	0	46	32

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Derivative Financial Instruments Interest rate swaps designated as cash flow hedges (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Weighted average pay rates	2.27%	2.37%
Weighted average receive rates	1.80%	2.57%
Weighted average maturity	5 years 7 months	6 years 2 months
Unrealized gains	$ 3,879,000	$ 860,000
Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount	$ 140,000	$ 110,000,000

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Derivative Financial Instruments Net gains and losses recorded in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Amount of loss (gain) recognized in AOCI, pre-tax	$ 2,994	$ (529)	$ 4,661	$ (1,907)
Amount of (gain) loss recognized in earnings	$ 0	$ 0	$ (19)	$ 30

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Derivative Financial Instruments Cash flow hedges (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Derivative [Line Items]
Reclassifications into Interest expense on cash flow hedge	$ 70,000	$ 28,000	$ 153,000	$ 16,000
Fair Value of Interest Rate Swaps	9,700,000		9,700,000		$ 2,500,000
Interest Rate Swap [Member]
Derivative [Line Items]
Interest rate swaps related to debt	35,000,000		35,000,000		60,000,000
Interest rate swaps related to debt	105,000,000		105,000,000		50,000,000
Other Assets [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Fair Value of Interest Rate Swaps	316,000		316,000		2,093,000
Liability [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Fair Value of Interest Rate Swaps	$ 4,363,000		$ 4,363,000		$ 1,111,000

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Derivative Financial Instruments (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) contract	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) contract	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Derivative [Line Items]
Maximum Length of Time Hedged in Interest Rate Cash Flow Hedge			10 years
Reclassifications into Interest expense on cash flow hedge	$ 70,000	$ 28,000	$ 153,000	$ 16,000
Cumulative unrealized gain or loss on cash flow hedges, pretax, included in accumulated other comprehensive income or loss	3,900,000		3,900,000
Cash pledged to Peoples from counterparties	0		0		$ 130,000
Fair Value of Interest Rate Swaps	$ 9,700,000		$ 9,700,000		2,500,000
Interest Rate Swap [Member]
Derivative [Line Items]
Derivative, Number of Instruments Held | contract	15		15
Notional amount	$ 140,000,000		$ 140,000,000		110,000,000,000
Interest Rate Contract [Member]
Derivative [Line Items]
Notional amount	492,000,000		492,000,000		453,400,000
Fair Value of Interest Rate Swaps	9,656,000		9,656,000		2,451,000
Other Assets [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Fair Value of Interest Rate Swaps	316,000		316,000		2,093,000
Liability [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Fair Value of Interest Rate Swaps	4,363,000		4,363,000		1,111,000
Interest Rate Swap [Member]
Derivative [Line Items]
Restricted Cash	$ 14,400,000		$ 14,400,000		$ 0

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Derivative Financial Instruments Non-designated hedges (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Cash pledged to Peoples from counterparties	$ 0	$ 130,000
Fair Value of Interest Rate Swaps	9,700,000	2,500,000
Interest Rate Contract [Member]
Derivative [Line Items]
Notional amount	492,000,000	453,400,000
Fair Value of Interest Rate Swaps	9,656,000	2,451,000
Interest rate swaps related to debt	245,996,000	226,662,000
Interest rate swaps related to debt	$ 245,996,000	$ 226,662,000

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Stock-Based Compensation (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum Aggregate Value of Performance Unit Award Outstanding	$ 1,300,000
Unrecognized stock-based compensation expense related to unvested awards, amount	$ 3,600,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 1 month
Unrestricted Stock Granted to Employees		11,112
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares authorized under the 2006 Equity Plan	500,000
Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of awards released in period	$ 1,600,000	$ 3,200,000
Restricted Shares | Employees | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards expiration period	1 year
Restricted Shares | Employees | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards expiration period	3 years
2006 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized under 2006 Equity Plan	891,340
Time-Based Vesting | Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period	5,086
Performance-Based Vesting | Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period	117,200
Awarded	117,200
Director [Member] | Time-Based Vesting | Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period	3,200	3,600
Treasury Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures		$ 388,000
Treasury Stock | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures	$ 102,000	$ 128,000

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Stock-Based Compensation (Restricted Shares) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 03, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrestricted Stock Granted to Employees		11,112		11,112
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			2 years 1 month
Allocated Share-based Compensation Expense	$ 930,000	$ 424,000	$ 2,138,000	$ 1,510,000
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 11,000	81,000	$ 50,000	125,000
Time-Based Vesting | Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period			5,086
Number of Shares (in shares)
Outstanding at January 1			43,679
Released			17,500
Forfeited			2,852
June 30, 2019	28,413		28,413
Weighted - Average Grant Date Fair Value (in dollars per share)
Outstanding at January 1			$ 29.64
Awarded			32.05
Released			21.69
Forfeited			37.79
June 30, 2019	$ 34.16		$ 34.16
Performance-Based Vesting | Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period			117,200
Number of Shares (in shares)
Outstanding at January 1			175,772
Awarded			117,200
Released			33,400
Forfeited			613
June 30, 2019	258,959		258,959
Weighted - Average Grant Date Fair Value (in dollars per share)
Outstanding at January 1			$ 31.08
Awarded			32.20
Released			17.86
Forfeited			34.50
June 30, 2019	$ 33.29		$ 33.29
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 16,000	$ 14,000	$ 32,000	28,000
Treasury Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures				388,000
Treasury Stock | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures			$ 102,000	$ 128,000
FIRST PRESTONSBURG BANCSHARES INC. [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrestricted Stock Granted to Employees					880
FIRST PRESTONSBURG BANCSHARES INC. [Member] | Treasury Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures	$ 27,000

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Stock-Based Compensation (Stock-Based Compensation and Related Tax Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Total stock-based compensation expense	$ 930	$ 424	$ 2,138	$ 1,510
Recognized tax benefit	(195)	(89)	(449)	(317)
Net expense recognized	$ 735	$ 335	$ 1,689	$ 1,193

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Revenue Revenue from contracts with customers (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Commission and fees from sale of insurance policies	$ 3,306	$ 3,193	$ 6,339	$ 6,382
Fees related to third party insurance administration services	178	173	347	292
Performance-based insurance commissions	2	3	1,421	1,350
Interchange electronic banking income	2,747	2,520	5,190	4,784
Promotional and usage electronic banking income	520	265	1,064	786
Ongoing maintenance fees for deposit accounts	1,012	646	1,764	1,321
Transactional-based fees for deposit accounts	1,965	1,742	3,554	3,187
Transactional-based fees included in other non-interest income	253	262	424	543
Revenue from Contract with Customer, Excluding Assessed Tax	13,900	12,182	27,278	25,207
Fiduciary and Trust [Member]
Revenue from Contract with Customer, Including Assessed Tax	3,401	3,232	6,513	6,300
Interest Rate Swap [Member] | transaction fee [Member]
Revenue from Contract with Customer, Including Assessed Tax	516	146	662	262
Transferred over Time [Member]
Revenue from Contract with Customer, Excluding Assessed Tax	11,164	10,029	21,217	19,865
Transferred at Point in Time [Member]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 2,736	$ 2,153	$ 6,061	$ 5,342

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Revenue (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Contract Assets	$ 207
Contract Liabilities	5,055
Additional income receivable	183
Additional deferred income	4,013
Receipt of income previously receivable	(11)
Recognition of income previously deferred	(3,521)
Contract Assets	379
Contract Liabilities	$ 5,547

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Acquisitions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Apr. 12, 2019	Dec. 31, 2018
Business Combination, Acquired Receivables [Abstract]
Cash and due from banks	$ 56,731,000		$ 56,731,000			$ 61,775,000
Interest-bearing deposits in other banks	36,692,000		36,692,000			15,837,000
Goodwill	163,292,000		163,292,000			$ 151,245,000
Noninterest Expense	38,876,000	$ 35,971,000	70,736,000	$ 64,192,000
Net loss on asset disposals and other transactions	(293,000)	(405,000)	(475,000)	(331,000)
Salaries and employee benefit costs	20,824,000	18,025,000	40,026,000	34,015,000
Professional fees	2,344,000	3,022,000	3,620,000	4,740,000
Other non-interest expense	6,063,000	$ 6,170,000	8,448,000	$ 8,400,000
FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Acquisition [Line Items]
Shares, Outstanding					80,362
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles					$ 4,234,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets					$ 2,677,000
Business Combination, Acquired Receivables [Abstract]
Number of common shares of Peoples issued for each common share of acquired company					12.512
Price per Peoples common share, based on closing date					$ 32.26
Common share consideration					$ 32,437,000
Total consideration	32,400,000		43,700,000
Cash and due from banks	4,998,000		4,998,000
Interest-bearing deposits in other banks	2,798,000		2,798,000
Total cash and cash equivalents					7,796,000
Bank premises and equipment, net of accumulated depreciation					8,255,000
Total assets					294,095,000
Total deposits					257,240,000
Short-term borrowings					14,400,000
Accrued expenses and other liabilities					2,065,000
Total liabilities					273,705,000
Net assets					20,390,000
Goodwill					12,047,000
Noninterest Expense	6,800,000		7,000,000
Net loss on asset disposals and other transactions			253,000
Salaries and employee benefit costs			2,400,000
Professional fees	562,000		620,000
Other non-interest expense	3,700,000		$ 3,800,000
Business Acquisition Cost of Acquired Entity Purchase Price Total					11,300,000
Special Dividend [Member] | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Total consideration	$ 0
Available-for-sale securities | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Business Combination, Acquired Receivable, Fair Value					137,658,000
Investment in Federal Home Loan Bank Stock [Member] | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Business Combination, Acquired Receivable, Fair Value					3,068,000
Debt Securities [Member] | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Business Combination, Acquired Receivable, Fair Value					140,726,000
Financial Asset Acquired and No Credit Deterioration [Member] | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Acquisition [Line Items]
Business Combination, Acquired Receivables, Gross Contractual Amount					168,903,000
Business Combination, Acquired Receivables [Abstract]
Business Combination, Acquired Receivable, Fair Value					121,358,000
Loans [Member] | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Business Combination, Acquired Receivable, Fair Value					130,407,000
Non-interest-bearing deposits [Member] | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Total deposits					40,089,000
Interest-bearing Deposits [Member] | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Total deposits					$ 217,151,000
Common Stock | FIRST PRESTONSBURG BANCSHARES INC. [Member]
Business Combination, Acquired Receivables [Abstract]
Stock Issued During Period, Shares, Acquisitions			1,005,478

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Acquisitions Acquired Loans (Details) - FIRST PRESTONSBURG BANCSHARES INC. [Member] $ in Thousands	Apr. 12, 2019 USD ($)
Financial Asset Acquired and No Credit Deterioration [Member]
Business Acquisition [Line Items]
Business Combination, Acquired Receivables, Gross Contractual Amount	$ 168,903
Certain Loans Acquired in Transfer, Nonaccretable Difference	19,756
Business Combination Acquired Receivables Expected Cash Flows	149,147
Business Combination Acquired Receivable Accretable Yield	27,789
Business Combination, Acquired Receivable, Fair Value	121,358
Financial Asset Acquired with Credit Deterioration
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer, Nonaccretable Difference	4,804
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Acquired During Period, Contractually Required Payments Receivable at Acquisition	17,706
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Acquired During Period, Cash Flows Expected to be Collected at Acquisition	12,902
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield	3,853
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Acquired During Period, at Acquisition, at Fair Value	$ 9,049

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Leases Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Operating Leases, Rent Expense	$ 311	$ 618
Short-term Lease Payments	32	62
Lease, Cost	$ 343	$ 680

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Leases (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Right-of-use asset:	$ 6,661
Lease liability:	$ 6,839
Weighted-average remaining lease term	13 years 1 month
Weighted-average discount rate	2.46%
Minimum
Lessee, Operating Lease, Term of Contract	2 years
Maximum
Lessee, Operating Lease, Term of Contract	20 years

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Leases Operating Lease Liability Maturity (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Leases [Abstract]
Six months ending December 31, 2019	$ 10
Year ending December 31, 2020	112
Year ending December 31, 2021	148
Year ending December 31, 2022	700
Thereafter	63
Lessee, Operating Lease, Liability, Payments, Due after Year Five	5,806
Total lease liability	$ 6,839