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Acquisitions (Tables)
 3 Months Ended 9 Months Ended
Sep. 17, 2021
Sep. 30, 2021
Sep. 30, 2021
Business Acquisition [Line Items]      
Purchased Credit Deteriorated leases     Acquired purchased credit deteriorated leases are reported net of the unamortized fair value adjustment. The following table details the fair value adjustment for acquired purchased credit deteriorated leases as of the acquisition date:
(Dollars in thousands)NSL
Purchased credit deteriorated leases
Par value$5,248 
Allowance for credit losses(493)
Non-credit premium85 
Fair value$4,840 
Business Acquisition, Pro Forma Information    
Peoples' operating results for the three-month and nine-month periods ended September 30, 2021 include the operating results of the acquired assets and assumed liabilities of Premier subsequent to the acquisition on September 17, 2021. Due to the conversion of Premier systems during the third quarter of 2021, as well as other streamlining and integration of the operating activities into those of Peoples, historical reporting for the former Premier operations is impracticable and the disclosures of revenue from the assets acquired and income before income taxes is impracticable for the period subsequent to the acquisition. The following table presents unaudited pro forma information as if the acquisition of Premier had occurred on January 1, 2020. The pro forma adjustments include any changes in interest income due to the accretion of discounts, or amortization of premiums, associated with the fair value adjustments to acquired loans, interest-bearing deposits, long-term borrowings, trust preferred securities and customer deposit intangibles that would have resulted had the assets and liabilities been acquired as of January 1, 2020. The pro forma information excludes Peoples' acquisition-related expenses, which primarily included, but were not limited to, salaries and employee benefit costs, severance costs, professional fees, marketing expenses and deconversion costs. Those acquisition-related expenses totaled $16.2 million and $18.1 million for the quarter and year-to-date, respectively. The pro forma information also excludes a provision of credit losses of $11.0 million recorded to establish an allowance for credit losses for non-purchased credit deteriorated loans of $10.6 million, and a liability for unfunded commitments of $0.4 million, both relating to the acquired loans. The pro forma information does not necessarily reflect the results of operations that would have occurred had Peoples acquired Premier on January 1, 2020. Additionally, cost savings and other business synergies related to the acquisition are not reflected in the pro forma amounts.
Unaudited Pro Forma For
Three Months EndedNine Months Ended
(Dollars in thousands)September 30,
2021		September 30,
2020		September 30,
2021		September 30,
2020
Net interest income$59,248 $52,646 $168,644 $156,285 
Non-interest income19,071 18,967 57,061 53,507 
Net income17,492 16,151 56,862 31,529 
Premier Financial Bancorp, Inc.      
Business Acquisition [Line Items]      
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table provides the preliminary purchase price calculation as of the date of the Merger with Premier, and the assets acquired and liabilities assumed at their estimated fair values.
(Dollars in thousands)Unpaid Principal BalanceFair Value
Premier common shares14,811,200 
Number of common shares of Peoples issued for each common share of Premier0.58 
Price per Peoples common share, based at closing date$30.49 
Common share consideration261,899 
Cash paid in lieu of fractional common shares25 
Total consideration$261,924 
Net assets at fair value
Assets
Cash and due from banks$251,763 
Interest-bearing deposits in other banks1,025 
Total cash and cash equivalents252,788 
Available-for-sale investment securities563,294 
Other investment securities4,159 
Total investment securities567,453 
Loans:
  Construction97,262 93,819 
  Commercial real estate, other544,950 517,315 
  Commercial and industrial132,293 127,880 
  Residential real estate332,269 327,508 
  Home equity lines of credit46,969 45,841 
  Consumer21,083 21,527 
Total loans1,174,826 1,133,890 
Bank premises and equipment33,835 
Other intangible assets4,233 
OREO11,101 
Other assets19,671 
    Total assets$2,022,971 
(Dollars in thousands)Unpaid Principal BalanceFair Value
Liabilities
Deposits:
Non-interest-bearing$735,236 
Interest-bearing1,020,887 
Total deposits1,756,123 
Short-term borrowings63,807 
Long-term borrowings6,070 
Accrued expenses and other liabilities6,036 
Total liabilities1,832,036 
Net assets190,935 
Goodwill$70,989 
The recorded goodwill associated with the Premier merger is related to expected synergies and operational efficiencies to be gained from the combination of Premier with Peoples' operations. None of the goodwill associated with the Premier merger is expected to be deductible for tax purposes. The geographic locations of Premier will allow Peoples to continue to grow the loan and deposit portfolios, while also increasing Peoples' ability to penetrate the new markets with wealth management and insurance services, which should benefit Peoples in future periods. Additional information regarding other intangibles recognized in the acquisition can be found in "Note 5 Goodwill and Other Intangible Assets."
The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above.
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.
Investment Securities: Fair values for investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair value estimates are based on observable inputs including quoted market prices for similar instruments, quoted market prices that are not in an active market or other inputs that are observable in the market. In the absence of observable inputs, fair value is estimated based on pricing models and/or discounted cash flow methodologies.
Loans: Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan, related collateral, classification status, fixed or variable interest rate, term, amortization status and current discount rates. Loans were grouped together according to similar characteristics when applying various valuation techniques. The discount rates used for loans are based on current market rates at the acquisition date for new originations for comparable loans and include adjustments for liquidity. The discount rate does not include a factor for credit losses as that has been included as a reduction to the estimated cash flows.
Bank Premises and Equipment: The fair values of premises were based on a market approach, with third-party appraisals and broker opinions of value for land, office and branch space.
OREO: The fair values of OREO were based on a market approach, with third-party appraisals and broker opinions of value for land and buildings.
Customer Deposit Intangible: The customer deposit intangible represents the low cost of funding acquired core deposits provide relative to a marginal cost of funds. The fair value was estimated based on a discounted cash flow methodology that gave consideration to expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds, and the interest costs associated with customer deposits. The customer deposit intangible is being amortized over 10 years based upon the period over which estimated economic benefits are estimated to be received.
Deposits: The fair values used for the demand and savings deposits equal the amount payable on demand at the acquisition date. The fair values for time deposits were estimated using a discounted cash flow calculation that applies interest rates being offered at the acquisition date to the contractual interest rates on such time deposits.
Borrowings: Short-term borrowings consist of overnight repurchase agreements and rates, and given their short-term nature book value approximated fair value. The fair values of long-term borrowings are estimated using discounted cash flow analyses, based on incremental borrowing rates at acquisition date for similar types of instruments.
Loans acquired by Peoples in a business combination that have evidence of more than insignificant credit deterioration, which includes loans that Peoples believes it is probable that Peoples will be unable to collect all contractually required payments, are considered "purchased credit deteriorated" loans. Acquired purchased credit deteriorated loans are reported net of the unamortized fair
value adjustment. These loans are recorded at the purchase price, and an allowance for credit losses is determined based upon discrete credit marks, along with discounted cash flow models based upon similar pools of loans, using a similar methodology as for other loans. The following table details the fair value adjustment for acquired purchased credit deteriorated loans as of the acquisition date:
(Dollars in thousands)Par ValueAllowance for Credit LossesNon-Credit (Discount) PremiumFair Value
Purchased credit deteriorated loans
Construction$23,232 $(2,127)$(219)$20,886 
Commercial real estate, other176,122 (13,374)(8,022)154,726 
Commercial and industrial26,341 (4,286)281 22,336 
Residential real estate56,005 (2,394)(2,166)51,445 
Home equity lines of credit2,014 (41)(68)1,905 
Consumer1,614 (112)63 1,565 
Fair value$285,328 $(22,334)$(10,131)$252,863 
    
North Star Leasing      
Business Acquisition [Line Items]      
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed  
The following table provides the preliminary purchase price calculation as of the date of acquisition for NSL and the assets acquired and liabilities assumed at their estimated fair values.
(Dollars in thousands)
Total purchase price (a)$118,846 
Net assets at fair value
Assets
Cash and due from banks$216 
Net leases82,833 
Bank premises and equipment, net of accumulated depreciation470 
Other intangible assets14,009 
Other assets1,225 
    Total assets$98,753 
Liabilities
Accrued expenses and other liabilities$4,627 
Total liabilities$4,627 
Net assets$94,126 
Goodwill$24,720