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 March 31,
                                                  2009                2008
   SIGNIFICANT RATIOS
   Return on average stockholders' equity              7.91%              11.00%
   Return on average common stockholders'              8.27%              11.00%
   equity
   Return on average assets                            0.84%               1.21%
   Net interest margin (a)                             3.52%               3.51%
   Efficiency ratio (b)                               58.59%              58.09%
   Average stockholders' equity to average            10.63%              10.99%
   assets
   Average loans to average deposits                  79.84%              92.06%
   Dividend payout ratio                              62.30%              40.46%


   ASSET QUALITY RATIOS
   Nonperforming loans as a percent of                 3.50%               1.57%
   total loans (c)(d)
   Nonperforming assets as a percent of                1.89%               0.94%
   total assets (d)(e)
   Allowance for loan losses to loans net              2.19%               1.43%
   of unearned interest (d)
   Allowance for loan losses to                       62.40%              91.20%
   nonperforming loans (c)(d)
   Provision for loan losses to average                0.37%               0.13%
   loans
   Net charge-offs as a percentage of                  1.07%               0.43%
   average loans (annualized)


   CAPITAL RATIOS (d)
   Tier I capital ratio                               14.80%              12.12%
   Total risk-based capital ratio                     16.08%              13.43%
   Leverage ratio                                      9.97%               8.81%
   Tangible equity to tangible assets (f)              8.24%               7.67%
   Tangible common equity to tangible                  6.31%               7.67%
   assets (f)


   PER COMMON SHARE DATA
   Earnings per share:
    Basic                                         $     0.37          $     0.55
    Diluted                                             0.37                0.55
   Cash dividends declared per common share             0.23                0.22
   Book value per share (d)                            18.55               20.15
   Tangible book value per share (d) (g)          $    12.14          $    13.58
   Weighted-average common shares
   outstanding:
    Basic                                         10,344,862          10,302,713
    Diluted                                       10,355,280          10,345,180
   Common shares outstanding at end of            10,343,974          10,295,414
   period

(a) Fully tax-equivalent net interest income as a percentage of average earning assets.

(b) Non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income (excluding gains or losses on investment securities and asset disposals).

(c) Nonperforming loans include loans 90 days past due and accruing, renegotiated loans and nonaccrual loans.

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

(e) Nonperforming assets include nonperforming loans and other real estate owned.

(f) Excludes balance sheet impact of intangible assets acquired through acquisitions on each of total stockholders' equity, total common equity and total assets.

(g) Tangible book value per share reflects capital calculated for banking regulatory requirements and excludes balance sheet impact of intangible assets acquired through purchase accounting for acquisitions.

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. Words such as "anticipate", "estimates", "may", "feels", "expects", "believes", "plans", "will", "would", "should", "could" and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertain­ties that may cause actual results to differ materially. Factors that might cause such a difference include, but are not limited to:
(1) continued deterioration in the credit quality of Peoples' loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be less favorable than expected, which may adversely impact the provision for loan losses;

(2) competitive pressures among financial institutions or from non-financial institutions, which may increase significantly;

(3) changes in the interest rate environment, which may adversely impact interest margins;

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

(5) general economic conditions and weakening in the economy, specifically the real estate market, either national or in the states in which Peoples does business, which may be less favorable than expected;

(6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions;

(7) legislative or regulatory changes or actions, which may adversely affect the business of Peoples;

(8) adverse changes in the conditions and trends in the financial markets, which may adversely affect the fair value of securities within Peoples' investment portfolio;

(9) a delayed or incomplete resolution of regulatory issues that could arise;

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

(11) the impact of larger or similar financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples;

(12) changes in accounting standards, policies, estimates or procedures, which may impact Peoples' reported financial condition or results of operations;

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

(14) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity;

(15) the costs and effects of regulatory and legal developments, including the outcome of regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; and

(16) 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 ("SEC"), including those risk factors included in the disclosure under the heading "ITEM 1A. RISK FACTORS" of this Form 10-Q and

All forward-looking statements speak only as of the execution 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 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 Bancorp Inc.'s 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' 2008 Form 10-K, as well as 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 50 financial service locations and 39 ATMs in southeastern Ohio, northwestern West Virginia and northeastern Kentucky through its financial service units - Peoples Bank, National Association ("Peoples Bank"), Peoples Financial Advisors (a division of Peoples Bank) and Peoples Insurance Agency, Inc, a subsidiary of Peoples Bank. Peoples Bank is a member of the Federal Reserve System and subject to regulation, supervision and examination by the Office of the Comptroller of the Currency.

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

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 an understanding of Peoples' Consolidated Financial Statements and Management's Discussion and Analysis at March 31, 2009, which were unchanged from the policies disclosed in Peoples' 2008 Form 10-K.

Fair Value Measurements
As a financial services company, the carrying value of certain financial assets and liabilities of Peoples is impacted by the application of fair value measurements, either directly or indirectly. Given the inherent volatility, the use of fair value measurements may have a significant impact on the carrying value of assets or liabilities, or result in material changes to the consolidated financial statements, from period to period. There were no material changes to the accounting practices and valuation methodologies employed by Peoples related to fair value measurements from those disclosed in Peoples' 2008 Form 10-K.

Summary of Recent Transactions and Events The following is a summary of recent transactions that have impacted or are expected to impact Peoples' results of operations or financial condition:

o On March 16, 2009, Peoples Bank announced plans to open a new full-service office in Zanesville, Ohio and combine operations in Nelsonville, Ohio into a single facility during the second quarter of 2009. Peoples Bank also plans to close its Rutland, Ohio and Lower Salem, Ohio banking offices and consolidate those offices into existing nearby offices effective June 30, 2009. These actions are consistent with management's ongoing strategic focus of improving operating efficiencies by directing resources to areas with greater growth potential.

o As described in "ITEM 1. BUSINESS-Recent Corporate Developments" of Peoples' 2008 Form 10-K, on January 30, 2009, Peoples received $39 million of new equity capital from the U.S. Treasury's TARP Capital Purchase Program. The investment was in the form of newly-issued non-voting Fixed Rate Cumulative Perpetual Preferred Shares, Series A (the "Series A Preferred Shares") and a related 10-year warrant sold by Peoples to the U.S. Treasury (the "TARP Capital Investment").

o Between August 2007 and December 2008, the Federal Reserve's Open Market Committee reduced the target Federal Funds rate 500 basis points and the Discount Rate 575 basis points. These actions caused a corresponding downward shift in short-term interest rates, while longer-term rates have not decreased to the same extent. This steepening of the yield curve has provided Peoples with opportunities to improve net interest income and margin by taking advantage of lower-cost funding available in the market place and reducing certain deposit costs.

o Since early 2008, Peoples' loan quality has been impacted by contraction within the commercial real estate market and economy as a whole, which has caused declines in commercial real estate values and deterioration in financial condition of various commercial borrowers. These conditions led to Peoples downgrading the loan quality ratings on various commercial real estate loans during 2008 through its normal loan review process. In addition, several impaired loans became under-collateralized due to the reduction in the estimated net realizable fair value of the underlying collateral. As a result, Peoples' provision for loan losses, net charge-offs and nonperforming loans in recent quarters have been higher than historical levels.

o During 2008, Peoples systematically sold the preferred stocks issued by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") held in its investment portfolio, due to the uncertainty surrounding these entities. These securities had a total recorded value of $12.1 million at December 31, 2007. In July 2008, Peoples sold its remaining Fannie Mae preferred stocks, which completely eliminated all equity holdings in Fannie Mae and Freddie Mac. As a result of the sales, Peoples recognized a cumulative pre-tax loss of $0.2 million in the first quarter of 2008.

o Also during 2008 and continuing in the first quarter of 2009, Peoples sold selected lower yielding, longer-term investment securities, primarily obligations of U.S. government-sponsored enterprises, U.S. agency mortgage-backed securities and tax-exempt municipal bonds, as well as several small-lot mortgage-backed securities. The proceeds from these sales were reinvested into similar securities with less price risk volatility. These actions were intended to reposition the investment portfolio to reduce interest rate exposures and resulted in Peoples recognizing a pre-tax gain of $0.3 million in the first quarter of both 2009 and 2008.

o During the fourth quarter of 2008, Peoples Bank sold its merchant credit card payment processing services to First Data Merchant Services Corporation ("First Data"). Peoples Bank will continue to serve the credit card processing needs of its commercial customers through a referral program with First Data.

The impact of these transactions, where material, is discussed in the applicable sections of this Management's Discussion and Analysis.

First quarter 2009 net income totaled $4.2 million versus $5.6 million for the first quarter of 2008, as improvements in net interest income were offset by an increased provision for loan losses. Diluted earnings per common share were $0.37 and $0.55 for the three months ended March 31, 2009 and 2008, respectively. First quarter 2009 diluted earnings per common share include the impact of accrued dividends on the Series A Preferred Shares issued as part of the TARP Capital Investment.

During the first three months of 2009, Peoples recorded a provision for loan losses of $4.1 million, versus $1.4 million during the same period in 2008 and $13.4 million during the fourth quarter of 2008. These provisions reflect the amounts needed to maintain the adequacy of the allowance for loan losses based on management's formal quarterly analysis. The year-over-year increase was largely attributable to adverse conditions experienced by Peoples for most of 2008 and continuing into the first quarter of 2009.

Net interest income was $15.5 million for the first quarter of 2009, up 6% from the linked quarter, while net interest margin expanded 8 basis points to 3.52%. These improvements resulted from a 7% reduction in interest expense and stable interest income. Interest expense benefited from opportunities to reduce Peoples' overall cost of funds provided by growth in lower-cost deposits and lower short-term market rates. First quarter interest income was challenged by lower asset yields from increased refinancing and downward repricing of variable rate assets, although much of the impact was offset by a higher level of earning assets. Compared to the prior year, first quarter net interest income was up 9%, largely attributable to higher earning asset levels, while net interest margin was basically unchanged as higher investment yields offset a reduction in loan yields.

Non-interest income, which excludes gains and losses on securities and asset disposals, remained strong in the first quarter of 2009, with increased mortgage banking income offset by lower revenues from other major sources. As a result, total non-interest income for the three months ended March 31, 2009, was consistent with the same period last year, totaling $8.2 million. Compared to the fourth quarter of 2008, non-interest income increased 5%, due to the higher mortgage banking income, coupled with recognition of annual performance based insurance revenue of $768,000 received during the first quarter.

In the first quarter of 2009, non-interest expense totaled $14.5 million, up 6% year-over-year and up 7% on a linked quarter basis. These increases were due mostly to increased FDIC insurance expense and higher loan-related costs, primarily external legal and valuation services. Other contributing factors included higher electronic banking expense and increased employee medical benefit and pension plan costs.

At March 31, 2009, total assets were $2.06 billion, up $53.6 million compared to year-end 2008, as substantial deposit growth produced a higher level of cash and cash equivalents at quarter-end. Gross portfolio loan balances decreased $3.1 million in the first quarter of 2009, to $1.10 billion at March 31, 2009, as increased consumer lending was offset by slower commercial lending activity. Loan balances were also impacted by the first quarter write-downs on impaired loans. Total investment securities were comparable to year-end 2008, as the impact of calls and pay downs was offset by purchases of new securities and a modest increase in overall fair value of the portfolio.

Total liabilities were $1.83 billion at March 31, 2009, up $9.9 million compared to December 31, 2008. Total deposit balances increased $55.2 million during the first quarter to $1.42 billion at quarter-end. Retail balances increased $74.4 million, or 23% annualized, since December 31, 2008, due mostly to an increase in governmental deposit balances from tax revenues and seasonal growth typically experienced during the first quarter of each year. This growth, coupled with the funds generated from the TARP Capital Investment, enabled Peoples to reduce higher rate brokered certificates of deposit balances by $19.2 million, or 43%, and total borrowed funds by $44.2 million, or 10%. The reduction in borrowed funds included the elimination of overnight wholesale borrowings, which totaled $44.4 million at December 31, 2008.

Total stockholders' equity increased $43.7 million during the first quarter of 2009, to $230.3 million at March 31, 2009. The TARP Capital Investment accounted for most of this growth, while an increase in fair value of the available-for-sale investment portfolio reduced the accumulated comprehensive loss by $3.0 million since year-end 2008. The TARP Capital Investment also allowed Peoples to improve its already strong regulatory capital ratios and increase tangible equity during the first quarter of 2009.

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.

The following table details Peoples' average balance sheets for the periods presented:

                                                               For the Three Months Ended
                                March 31, 2009                     December 31, 2008                      March 31, 2008
                         Average      Income/    Yield/       Average      Income/    Yield/       Average      Income/    Yield/
(Dollars in              Balance      Expense     Rate        Balance      Expense     Rate        Balance      Expense     Rate
thousands)
Short-Term
Investments:
Deposits with other      $   25,678    $    16    0.25%       $    1,403    $     3    0.96%       $    3,382    $    27    3.10%
banks
Federal funds sold                -          -    0.00%               52          1    0.75%              635          5    3.17%
 Total short-term            25,678         16    0.25%            1,455          4    0.96%            4,017         32    3.11%
investments
Investment
Securities (1):
Taxable                     640,547      8,864    5.54%          597,822      8,177    5.47%          512,362      6,684    5.22%
Nontaxable (2)               70,928      1,147    6.47%           62,645      1,036    6.61%           69,276      1,126    6.51%
 Total investment           711,475     10,011    5.63%          660,467      9,213    5.58%          581,638      7,810    5.37%
securities
Loans (3):
Commercial                  734,493     10,275    5.67%          743,803     11,076    5.92%          746,945     13,198    7.11%
Real estate (4)             281,406      4,682    6.66%          283,786      4,651    6.56%          283,949      5,005    7.09%
Consumer                     91,396      1,774    7.87%           88,435      1,760    7.92%           82,129      1,676    8.21%
 Total loans              1,107,295     16,731    6.12%        1,116,024     17,487    6.25%        1,113,023     19,879    7.17%
Less: Allowance for        (23,980)                             (20,650)                             (16,240)
loan losses
 Net loans                1,083,315     16,731    6.24%        1,095,374     17,487    6.36%        1,096,783     19,879    7.28%
  Total earning           1,820,468     26,758    5.92%        1,757,296     26,704    6.06%        1,682,438     27,721    6.61%
assets
Intangible assets            66,261                               66,589                               67,831
Other assets                136,756                              131,286                              128,307
  Total assets          $ 2,023,485                          $ 1,955,171                          $ 1,878,576

                                                                    For the Three Months Ended
                                   March 31, 2009                       December 31, 2008                       March 31, 2008
                            Average       Income/    Yield/       Average       Income/     Yield/       Average       Income/    Yield/
(Dollars in thousands)      Balance       Expense     Rate        Balance       Expense      Rate        Balance       Expense     Rate
Deposits:
Savings accounts            $  118,552     $   124    0.42%       $  116,807     $    167    0.57%       $  108,525     $   122    0.45%
Interest-bearing demand        195,707         735    1.52%          194,767          806    1.65%          197,998         982    1.99%
accounts
Money market accounts          222,649         649    1.18%          177,795          755    1.69%          152,202       1,058    2.80%
Brokered certificates           27,298         274    4.07%           39,947          347    3.46%           53,334         695    5.24%
of deposit
Retail certificates of         633,500       5,202    3.33%          610,009        5,531    3.61%          523,929       5,608    4.31%
deposit
 Total interest-bearing      1,197,706       6,984    2.36%        1,139,325        7,606    2.66%        1,035,988       8,465    3.29%
deposits
Borrowed Funds:
Short-term:
FHLB advances                   14,776          10    0.27%           40,973          141    1.35%          153,721       1,264    3.25%
Retail repurchase               54,521         159    1.17%           59,293          236    1.56%           34,894         275    3.17%
agreements
 Total short-term               69,297         169    0.98%          100,266          377    1.47%          188,615       1,539    3.24%
borrowings
Long-term:
FHLB advances                  152,396       1,527    4.06%          138,389        1,452    4.18%           97,977       1,062    4.36%
Wholesale repurchase           160,000       1,629    4.07%          160,000        1,670    4.08%          137,156       1,452    4.19%
agreements
Other borrowings                22,500         498    8.85%           22,491          495    8.61%           22,465         495    8.71%
 Total long-term               334,896       3,654    4.39%          320,880        3,617    4.41%          257,598       3,009    4.65%
borrowings
 Total borrowed funds          404,193       3,823    3.80%          421,146        3,994    3.73%          446,213       4,548    4.05%
Total interest-bearing       1,601,899      10,807    2.73%        1,560,471       11,600    2.95%        1,482,201      13,013    3.52%
liabilities
Non-interest-bearing           189,121                               183,993                                172,994
deposits
Other liabilities               17,405                                13,387                                 16,889
  Total liabilities          1,808,425                             1,757,851                              1,672,084
Preferred equity                26,068                                     -                                      -
Common equity                  188,992                               197,320                                206,492
  Total stockholders'          215,060                               197,320                                206,492
equity
  Total liabilities and
   stockholders' equity    $ 2,023,485                           $ 1,955,171                            $ 1,878,576
. . .