Peoples Financial Services Corp. (“Peoples” or the “Company”) (NASDAQ: PFIS), the bank holding company for Peoples Security Bank and Trust Company (the “Bank”), today reported unaudited financial results at and for the three and six months ended June 30, 2025.
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Peoples reported net income of $17.0 million, or $1.68 per diluted share for the three months ended June 30, 2025, compared to net income of $15.0 million, or $1.49 per diluted share for the three months ended March 31, 2025. Return on average assets (“ROAA”) and return on average equity (“ROAE”) for the three months ended June 30, 2025 was 1.36% and 13.87% on an annualized basis compared to 1.22% and 12.70% for the three months ended March 31, 2025. Net income on a linked-quarter basis, increased primarily due to higher net interest income and a lower provision for credit losses.
For the six months ended June 30, 2025, net income was $32.0 million, or $3.18 per diluted share, compared to $6.7 million, or $0.95 per diluted share for the comparable period of 2024. The increase in net income for the current period of $25.3 million was due primarily to higher net interest income and noninterest income, and a lower provision for credit losses which more than offset an increase in noninterest expenses. On July 1, 2024, the Company completed its merger with FNCB Bancorp, Inc. (“FNCB,” such merger the “FNCB merger”). Higher levels of interest-earning assets, higher transaction volumes and purchase accounting related accretion resulting from the FNCB merger resulted in the increase in net interest income and noninterest income when compared to the prior year period.
Gerard A. Champi, Chief Executive Officer, stated, “One year ago, we merged with FNCB Bancorp, Inc. with the belief that together, we would be stronger. Today, our performance affirms that belief – our net income, earnings per share, net interest margin, efficiency ratio and asset quality all reflect the strength of our combined organization as we continue to build on the synergies and efficiencies of the FNCB merger.”
The Company's financial results for any periods ended prior to July 1, 2024, only reflect Peoples results on a stand-alone basis. As a result of the FNCB merger, the Company's financial results for the three and six months ended June 30, 2025, may not be directly comparable to prior reported periods.
In addition to evaluating its results of operations in accordance with U.S. generally accepted accounting principles (“GAAP”), Peoples routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible stockholders' equity, core net income and pre-provision revenue ratios, and tax-equivalent net interest income and related ratios, among others. The reported results included in this release contain items, which Peoples considers non-core, namely acquisition related expenses, nonrecurring provisions for non-purchase credit deteriorated (“non-PCD”) loans and gain or loss on the sale of securities available for sale. Peoples believes the reported non-GAAP financial measures provide information useful to investors in understanding its operating performance and trends. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure is provided in the accompanying tables. The non-GAAP financial measures Peoples uses may differ from the non-GAAP financial measures of other financial institutions.
NOTABLES IN THE QUARTER
— Paid a second quarter dividend of $0.6175 per share, representing an increase of 50.6% over the per share dividend for the quarter ended June 30, 2024 and equal to the per share dividend for the quarter ended March 31, 2025.
— Allowance for credit losses to loans was 1.02% at June 30, 2025, compared to 1.03% at March 31, 2025 and 1.05% at December 31, 2024.
— ROAA for the three months ended June 30, 2025 was 13.87% on an annualized basis compared to 12.70% for the three months ended March 31, 2025 and 3.87% for the three months ended June 30, 2024.
— ROAE for the three months ended June 30, 2025 was 1.36% on an annualized basis compared to 1.22% for the three months ended March 31, 2025 and 0.37% for the three months ended June 30, 2024.
— The efficiency ratio1, a non-GAAP measure, was 53.92% for the three months ended June 30, 2025, compared to 55.77% for the three months ended March 31, 2025 and 75.14% for the three months ended June 30, 2024.
— Book value per common share at June 30, 2025 was $49.44 compared to $48.21 and $48.29 at March 31, 2025 and June 30, 2024, respectively.
— Tangible book value per common share1, a non-GAAP measure, was $38.75 at June 30, 2025 compared to $37.35 and $39.31 at March 31, 2025 and June 30, 2024, respectively.
— In June 2025, the Company called and redeemed $33.0 million of its subordinated notes due in June 2030 that repriced to 9.08% and issued $85.0 million in aggregate principal amount of 7.75% fixed-to-floating rate subordinated notes due June 2035 at a price equal to 100% of the principal amount.
INCOME STATEMENT REVIEW
— Net interest margin (“NIM”), calculated on a fully taxable equivalent (“FTE”) basis, a non-GAAP measure1, for the three months ended June 30, 2025 was 3.69%, an increase of 19 basis points compared to 3.50% for the three months ended March 31, 2025. The net accretion impact of purchase accounting marks was $4.0 million and $3.7 million of net interest income in each period, which represented 35 basis points and 32 basis points of NIM for the three months ended June 30, 2025 and March 31, 2025, respectively.
— The tax-equivalent yield on interest-earning assets, a non-GAAP measure1, increased 18 basis point to 5.68% during the three months ended June 30, 2025 from 5.50% during the three months ended March 31, 2025.
— The cost of funds, which represents the average rate paid on total interest-bearing liabilities, increased 2 basis points to 2.60% for the three months ended June 30, 2025 when compared to 2.58% during the three months ended March 31, 2025.
— The cost of interest-bearing deposits decreased 5 basis points during the three months ended June 30, 2025 to 2.41% from 2.46% in the three months ended March 31, 2025.
— The cost of total deposits, which includes the impact of noninterest-bearing deposits was 1.91% for the three months ended June 30, 2025, a decrease of 5 basis points from 1.96% for the three months ended March 31, 2025.
— The cost of total borrowings for the three months ended June 30, 2025 was 5.68%, an increase of 50 basis points from 5.18% for the three months ended March 31, 2025 due in part to the issuance during the quarter of $85.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due June 2035 at an initial fixed rate through June 2030 of 7.75%.
Second Quarter 2025 Results – Comparison to First Quarter 2025
Net interest income for the three months ended June 30, 2025 increased $2.7 million to $42.2 million from $39.5 million for the three months ended March 31, 2025. FTE net interest income, a non-GAAP measure1, for the three months ended June 30, 2025 increased $2.7 million or 6.6% to $42.9 million from $40.2 million for the three months ended March 31, 2025. The increase in FTE net interest income was due to a $2.9 million increase in tax-equivalent interest income that was partially offset by a $0.2 million increase in interest expense.
Higher interest income resulted from loan and investment cash flow repricing at higher rates, an increase to the volume of interest-earning assets, higher loan accretion from the loans acquired in the FNCB merger, and accelerated investment accretion from corporate bond redemptions. Average loans, net, increased $11.4 million for the three months ended June 30, 2025 compared to the prior three month period ended March 31, 2025. Average investments totaled $627.3 million in the three months ended June 30, 2025 and $643.0 million in the three months ended March 31, 2025, a decrease of $15.7 million. Average federal funds sold increased $13.1 million to $39.1 million for the three months ended June 30, 2025 from $26.0 million for the three months ended March 31, 2025.
The increase in interest expense, comparing the three months ended June 30, 2025 and March 31, 2025, was due primarily to an increase in borrowing costs, which were partially offset by lower deposit costs. The Company's cost of borrowings increased 50 basis points to 5.68% for the three months ended June 30, 2025 compared to 5.18% for the three months ended March 31, 2025. The total cost of deposits decreased 5 basis points to 1.91% during the three months ended June 30, 2025 compared to 1.96% for the prior quarter. The cost of interest-bearing deposits decreased 5 basis points to 2.41% from 2.46% in the prior quarter.
Average interest-bearing liabilities decreased $22.1 million for the three months ended June 30, 2025, compared to the three months ended March 31, 2025. Average interest-bearing deposits decreased $63.4 million and represented 79.0% of total average deposits for the three months ended June 30, 2025 as compared to 79.7% for the three months ended March 31, 2025. Average noninterest-bearing deposits increased $22.2 million and represented 21.0% of total average deposits in the three months ended June 30, 2025 as compared to 20.3% in the three months ended March 31, 2025. Short-term borrowings averaged $35.6 million for the three month period ended June 30, 2025 at an average cost of 4.62% compared to $20.2 million at an average cost of 4.52% during the three months ended March 31, 2025. Long-term debt averaged $101.1 million for the three month period ended June 30, 2025 at an average cost of 4.81% compared to $97.8 million at an average cost of 4.88% for the three months ended March 31, 2025. Subordinated debt averaged $55.6 million for the three month period ended June 30, 2025 at an average cost of 7.40% compared to $33.0 million at an average cost of 5.44% for the three months ended March 31, 2025.
For the three months ended June 30, 2025, $0.2 million was credited to the provision for credit losses compared to an expense of $0.2 million in the prior quarter. The provision for the second quarter of 2025 declined from the previous quarter due mainly to the Bank reporting net recoveries for the quarter and a reduction in specific reserves on individually evaluated loans associated with a reduction in nonperforming loans. This was offset by an increase in pooled loan reserves for the Company's equipment financing loans, resulting from the model loss rate increasing due to changes in loan delinquencies, charge-offs and risk rating migration along with an increase in qualitative factor reserve requirements.
Noninterest income was $6.2 million and $6.3 million for the three months ended June 30, 2025 and March 31, 2025, respectively. Quarterly changes in noninterest income included increased merchant servicing income, higher swap origination revenue, net gains on equity investments and recovery of a pre-merger loss. The prior quarter included a $0.7 million gain on the sale of the Company's former corporate headquarters in Scranton, PA.
Noninterest expense increased $0.9 million to $28.3 million for the three months ended June 30, 2025, from $27.4 million for the three months ended March 31, 2025. Salaries and employee benefits were $0.3 million higher due to the accrual of year-end cash incentives, offset in part by lower payroll taxes and retirement benefits expenses. Net occupancy and equipment expense decreased $0.3 million from the prior quarter which included seasonal snow removal and higher utility expenses. Other expenses increased $1.1 million to $5.5 million for the second quarter of 2025 from $4.4 million for the prior quarter, which included a $0.4 million increase in account processing expenses, $0.3 million increase in legal and professional fees expense and $0.2 million expense for the reserve on off balance sheet commitments.
Income tax expense was $3.5 million for the three months ended June 30, 2025, compared to $3.2 million for the three months ended March 31, 2025. The effective tax rate was 17.0% and 17.8% for the three months ended June 30, 2025 and March 31, 2025, respectively. The quarter's lower tax rate was due to the impact of tax-exempt income and bank owned life insurance (BOLI) income, combined with an increase in low income housing tax credits.
Six-Month Results – Comparison to Prior Year First Six Months
Net interest income for the six months ended June 30, 2025 increased $43.5 million to $81.7 million from $38.2 million for the six months ended June 30, 2024. FTE net interest income, a non-GAAP measure1, for the six months ended June 30, 2025 increased $44.0 million to $83.2 million from $39.2 million for the six months ended June 30, 2024.
Tax-equivalent interest income, a non-GAAP measure1, increased $50.9 million to $129.2 million due to higher levels of interest-earning assets such as loans and investments and an additional $8.5 million from accretion of purchase accounting marks on loans. Average loans increased $1.1 billion and average investments increased $103.4 million comparing the six months ended June 30, 2025 and 2024, primarily due to assets the Company acquired in the FNCB merger. The tax-equivalent yield on interest-earning assets was 5.59% for the first six months of 2025 compared to 4.57% for the six months ended June 30, 2024. Loan yields increased 92 basis points to 5.99% while investment yields increased 132 basis point to 3.12% for the six months ended June 30, 2025.
The cost of interest-bearing liabilities during the six-month period ended June 30, 2025 decreased 40 basis points to 2.59% from 2.99% for the six months ended June 30, 2024 as the cost of interest-bearing deposit products and short-term borrowing costs decreased. Partially offsetting these declines were increases to long-term borrowings, subordinated debt and junior subordinated debt. On June 6, 2025, the Company issued $85 million in aggregate principal amount of 7.75% fixed-to-floating rate subordinated notes due June 2035 and subsequently on June 30 redeemed all $33 million of its June 2020 issuance of subordinated debt that repriced at 9.08% on June 1, 2025.
For the six months ended June 30, 2025, a credit to the provision for credit losses of $39 thousand was recorded compared to a prior year provision of $1.3 million. The decrease was due to a reduction in specific reserves on individually evaluated loans associated with a reduction in nonperforming loans along with a decline in the overall model loss rate due primarily to a significant reduction on balances of existing loans in various segments offset somewhat by an overall increase in qualitative factors due mainly to changing loan balances.
Noninterest income was $12.5 million for the six months ended June 30, 2025 and $6.9 million for the comparable period ended June 30, 2024. These increases were attributable to the increased size and scale of the Company following the merger. During the period, service charges and fees increased $3.2 million, a $0.7 million gain on the sale of fixed assets due to the sale of the Company's former corporate headquarters located in Scranton, PA was recorded, wealth management income increased $0.5 million, BOLI cash surrender value increased $0.5 million and merchant services income increased $0.4 million.
Noninterest expense for the six months ended June 30, 2025 was $55.6 million, an increase of $19.4 million from $36.2 million for the six months ended June 30, 2024. Almost all noninterest expense line items increased as a result of the FNCB merger and the expanded operations of the newly combined Company. Salaries and employee benefits expenses increased $10.0 million compared to the year ago period due to the addition of 195 full time equivalent employees from the FNCB merger. Occupancy and equipment expenses were higher by $3.6 million in the current period due to increased technology costs related to system integration and increased account and transaction volumes, and higher facilities costs. Amortization of intangible assets totaled $3.4 million for the six months ended June 30, 2025. There was no amortization expense recorded for the comparable period of 2024.
The provision for income taxes for the six months ended June 30, 2025 totaled $6.7 million and the effective tax rate was 17.3% as compared to $0.9 million and 11.80% in the prior period.
BALANCE SHEET REVIEW
At June 30, 2025, total assets, loans, and deposits were $5.1 billion, $4.0 billion, and $4.3 billion, respectively.
Total loans increased $4.0 million during the first six months to $4.0 billion at June 30, 2025. Increases in commercial loans, residential real estate loans and equipment financing loans, were partially offset by reductions in commercial real estate, indirect auto, and other consumer loans.
Total investments were $582.8 million at June 30, 2025, compared to $606.9 million at December 31, 2024. At June 30, 2025, the available for sale securities totaled $505.2 million and the held to maturity securities totaled $75.1 million. The unrealized loss on the available for sale securities decreased $7.5 million from $49.0 million at December 31, 2024, to $41.5 million at June 30, 2025. The unrealized losses on the held to maturity portfolio totaled $10.9 million and $13.0 million at June 30, 2025, and December 31, 2024, respectively.
Total deposits decreased $120.2 million to $4.3 billion at June 30, 2025, due primarily to seasonal outflows of non-maturity deposits and reductions in brokered CDs. Noninterest-bearing deposits decreased $35.9 million to $899.6 million at June 30, 2025 from $935.5 million at December 31, 2025 and interest-bearing deposits decreased $84.3 million to $3.4 billion at June 30, 2025. Additionally, the Company had $198.0 million and $256.4 million of longer-term brokered CDs at June 30, 2025, and December 31, 2024, respectively. During the six months ended June 30, 2025 $119.0 million in higher rate brokered CDs were called and replaced with lower cost brokered CDs.
The Company's deposit base consisted of 42.0% retail accounts, 37.2% commercial accounts, 16.2% municipal relationships and 4.6% brokered deposits at June 30, 2025. At June 30, 2025, total estimated uninsured deposits were $1.3 billion, or approximately 30.7% of total deposits. Included in the uninsured total at June 30, 2025, were $513.6 million of municipal deposits collateralized by letters of credit issued by the FHLB and pledged investment securities, and $2.0 million of affiliate company deposits.
In addition to deposit gathering and current long-term debt, the Company has additional sources of liquidity available such as cash and cash equivalents, overnight borrowings from the FHLB, the Federal Reserve's Discount Window, correspondent bank lines of credit, brokered deposit capacity and unencumbered securities. At June 30, 2025, available borrowing capacity totaled $1.1 billion at the FHLB and $426.8 million at the Federal Reserve's Discount Window. At June 30, 2025, the Company had $175.7 million in cash and cash equivalents, an increase of $39.8 million from $135.9 million at December 31, 2024. For additional information on the deposit portfolio and additional sources of liquidity, see the tables on page 15.
The Company maintained its well capitalized position at June 30, 2025. Stockholders' equity equaled $494.1 million or $49.44 per share at June 30, 2025, compared to $469.0 million or $46.94 per share at December 31, 2024. The increase in stockholders' equity from December 31, 2024, is primarily attributable to net income less dividends to shareholders and a $5.7 million decrease to accumulated other comprehensive loss (“AOCL”) resulting from a reduction in the unrealized loss on available for sale securities. The net after tax unrealized loss on available for sale securities included in AOCL at June 30, 2025, and December 31, 2024, was $32.5 million and $38.3 million, respectively.
Tangible book value1, a non-GAAP measure, increased to $38.75 per share at June 30, 2025, from $35.88 per share at December 31, 2024. Dividends declared for the six months ended June 30, 2025 amounted to $1.235 per share.
ASSET QUALITY REVIEW
Nonperforming assets, which include nonperforming loans, loans past due 90 days or more and still accruing, and foreclosed assets, were $17.4 million or 0.44% of loans, net, and foreclosed assets at June 30, 2025, compared to $23.0 million or 0.58% of loans, net, and foreclosed assets at December 31, 2024. As a percentage of total assets, nonperforming assets were 0.34% at June 30, 2025, compared to 0.45% at December 31, 2024. At June 30, 2025, the Company had no foreclosed property compared to one foreclosed property recorded at $27 thousand at December 31, 2024.
During the six months ended June 30, 2025, net charge-offs totaled $0.8 million and the credit to the provision for credit losses was $39 thousand. During the three months ended June 30, 2025, net recoveries were $0.1 million and the credit to the provision for credit losses was $0.2 million. The allowance for credit losses equaled $40.9 million or 1.02% of loans, net, at June 30, 2025, compared to $41.8 million or 1.05% of loans, net, at December31, 2024.
____________________1 See reconciliation of non-GAAP financial measures on pg.17-19.
About Peoples:
Peoples Financial Services Corp. is the bank holding company of Peoples Security Bank and Trust Company, an independent community bank serving its retail and commercial customers through 39 full-service community banking offices located within Allegheny, Bucks, Lackawanna, Lebanon, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Susquehanna, Wayne and Wyoming Counties in Pennsylvania, Middlesex County in New Jersey and Broome County in New York. Each office, interdependent with the community, offers a comprehensive array of financial products and services to individuals, businesses, not-for-profit organizations, and government entities. Peoples' business philosophy includes offering direct access to senior management and other officers and providing friendly, informed and courteous service, and local and timely decision making. For more information visit psbt.com.
Safe Harbor Forward-Looking Statements:
We make statements in this press release, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results and/or other matters regarding or affecting Peoples Financial Services Corp. and its subsidiaries (collectively, “Peoples”) and other statements that are not historical facts that are considered “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “intend” and “potential.” For these statements, Peoples claims the protection of the statutory safe harbors for forward-looking statements.
Peoples cautions you that undue reliance should not be placed on forward-looking statements and that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: macroeconomic trends, including interest rates and inflation and their effect on our investment values; the effects of any recession in the United States; the impact on financial markets from geopolitical conflict, including from wars, military conflict or trade policies, including tariffs, retaliatory tariffs, tariff counter-measures, or the threat of such actions; impairment charges relating to our investment portfolio; credit risks in connection with our lending activities; the economic health of our market area; our exposure to commercial and industrial, construction, commercial real estate, and equipment finance loans; our ability to maintain an adequate allowance for credit losses; access to liquidity; the strength of our customer deposit levels; unrealized losses; reliance on our subsidiaries; accounting procedures, policies and requirements; changes in the value of goodwill; future pension plan costs; our ability to retain key personnel; the strength of our disclosure controls and procedures; environmental liabilities; reliance on third-party vendors and service providers; competition from non-bank entities; the development and us of AI in business processes, services, and products; our ability to prevent, detect and respond to cybersecurity threats and incidents; a failure of information technology, whether due to a breach, cybersecurity incident, or ability to keep pace with growth and developments; our ability to comply with privacy and data protection requirements; changes in U.S. or regional economic conditions; our ability to compete effectively in our industry; the soundness of other financial institutions; adverse changes (or the threat of such changes) in laws and regulations; fiscal and monetary policies of the federal government and its agencies; a failure to meet minimum capital requirements; our ability to realize the anticipated benefits of the FNCB merger; future acquisitions or a change in control; and other factors that may be described in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.
The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, Peoples assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
[TABULAR MATERIAL FOLLOWS]
Summary DataPeoples Financial Services Corp.Five Quarter Trend (Unaudited)(In thousands, except share and per share data) June30 Mar31 Dec31 Sept30 June30 2025 2025 2024 2024 2024Key performance data:Share and per share amounts:Net income (loss) $ 1.68 $ 1.49 $ 0.61 $ (0.43) $ 0.46Core net income (1) $ 1.69 $ 1.51 $ 0.99 $ 1.64 $ 0.59Core net income (PPNR) (1) $ 2.03 $ 1.83 $ 1.46 $ 1.83 $ 0.73Cash dividends declared $ 0.62 $ 0.62 $ 0.62 $ 0.62 $ 0.41Book value $ 49.44 $ 48.21 $ 46.94 $ 47.53 $ 48.29Tangible book value (1) $ 38.75 $ 37.35 $ 35.88 $ 36.24 $ 39.31Market value:High $ 51.21 $ 53.70 $ 58.76 $ 50.49 $ 46.25Low $ 40.67 $ 44.47 $ 44.73 $ 41.44 $ 36.26Closing $ 49.37 $ 44.47 $ 51.18 $ 46.88 $ 45.54Market capitalization $ 493,438 $ 444,499 $ 511,325 $ 468,549 $ 321,388Common shares outstanding 9,994,696 9,995,483 9,990,724 9,994,648 7,057,258Selected ratios:Return on average stockholders' equity 13.87 % 12.70 % 5.07 % (3.58) % 3.87 %Core return on average stockholders' equity(1) 13.92 % 12.80 % 8.31 % 13.61 % 5.00 %Return on average tangible stockholders' equity (1) 17.73 % 16.46 % 6.62 % (4.67) % 4.76 %Core return on average tangible stockholders' equity (1) 17.79 % 16.59 % 10.87 % 17.77 % 6.14 %Return on average assets 1.36 % 1.22 % 0.47 % (0.33) % 0.37 %Core return on average assets (1) 1.36 % 1.23 % 0.76 % 1.24 % 0.47 %Stockholders' equity to total assets 9.67 % 9.64 % 9.21 % 8.86 % 9.42 %Efficiency ratio (1)(2) 53.92 % 55.77 % 63.03 % 53.14 % 74.54 %Nonperforming assets to loans, net, and foreclosed assets 0.44 % 0.59 % 0.58 % 0.53 % 0.25 %Nonperforming assets to total assets 0.34 % 0.47 % 0.45 % 0.41 % 0.20 %Net charge-offs to average loans, net 0.00 % 0.09 % 0.09 % 0.01 % 0.01 %Allowance for credit losses to loans, net 1.02 % 1.03 % 1.05 % 0.97 % 0.81 %Interest-bearing assets yield (FTE) (3) 5.68 % 5.50 % 5.51 % 5.63 % 4.58 %Cost of funds 2.60 % 2.58 % 2.88 % 3.04 % 3.01 %Net interest spread (FTE) (3) 3.08 % 2.92 % 2.62 % 2.59 % 1.57 %Net interest margin (FTE) (1)(3) 3.69 % 3.50 % 3.25 % 3.26 % 2.29 %
(1) See Reconciliation of Non-GAAP financial measures on pages 17-19.(2) Total noninterest expense less amortization of intangible assets and acquisition related expenses, divided by tax-equivalent net interest income and noninterest income less net gains (losses) on investment securities available for sale and net gains (losses) on sales of fixed assets.(3) Tax-equivalent adjustments were calculated using the federal statutory tax rate prevailing during the indicated periods of 21%.
Peoples Financial Services Corp.Consolidated Statements of Income (Unaudited)(In thousands, except per share data) June30 June30Six months ended 2025 2024Interest income:Interest and fees on loans:Taxable $ 112,671 $ 68,447Tax-exempt 4,547 2,817Interest and dividends on investment securities:Taxable 8,738 3,822Tax-exempt 795 742Dividends 81 4Interest on interest-bearing deposits in other banks 209 235Interest on federal funds sold 720 1,306Total interest income 127,761 77,373Interest expense:Interest on deposits 41,150 36,818Interest on short-term borrowings 635 895Interest on long-term debt 2,388 539Interest on subordinated debt 1,469 887Interest on junior subordinated debt 374Total interest expense 46,016 39,139Net interest income 81,745 38,234(Credit to) provision for credit losses (39) 1,304Net interest income after (credit to) provision for credit losses 81,784 36,930Noninterest income:Service charges, fees, commissions and other 7,068 3,921Merchant services income 815 375Commissions and fees on fiduciary activities 1,100 1,068Wealth management income 1,269 777Mortgage banking income 239 179Increase in cash surrender value of life insurance 1,061 565Interest rate swap income 207 78Net gains (losses) on equity investments 64 (20)Net gains on sale of fixed assets 680 4Total noninterest income 12,503 6,947Noninterest expense:Salaries and employee benefits expense 27,242 17,289Net occupancy and equipment expense 12,894 9,305Acquisition related expenses 220 1,557Amortization of intangible assets 3,367FDIC insurance and assessments 1,998 1,098Other expenses 9,894 6,981Total noninterest expense 55,615 36,230Income before income taxes 38,672 7,647Provision for income tax expense 6,707 899Net income $ 31,965 $ 6,748Other comprehensive income:Unrealized gains (losses) on investment securities available for sale $ 7,431 $ (2,423)Change in derivative fair value (132) 1,239Income tax expense (benefit) related to other comprehensive income (loss) 1,592 (260)Other comprehensive income (loss), net of income tax expense (benefit) 5,707 (924)Comprehensive income $ 37,672 $ 5,824Share and per share amounts:Net income – basic $ 3.20 $ 0.96Net income – diluted 3.18 0.95Cash dividends declared $ 1.24 $ 0.82Average common shares outstanding – basic 9,993,944 7,055,085Average common shares outstanding – diluted 10,062,831 7,108,113
Peoples Financial Services Corp.Consolidated Statements of Income (Loss) (Unaudited)(In thousands, except per share data) June30 Mar31 Dec31 Sept30 June30Threemonthsended 2025 2025 2024 2024 2024Interest income:Interest and fees on loans:Taxable $ 57,459 $ 55,212 $ 57,048 $ 59,412 $ 34,406Tax-exempt 2,302 2,245 2,238 2,299 1,399Interest and dividends on investment securities:Taxable 4,604 4,134 4,359 4,732 1,904Tax-exempt 399 396 397 411 371Dividends 40 41 40 62 2Interest on interest-bearing deposits in other banks 96 113 113 150 115Interest on federal funds sold 435 285 1,608 1,218 179Total interest income 65,335 62,426 65,803 68,284 38,376Interest expense:Interest on deposits 20,303 20,847 24,718 26,398 18,114Interest on short-term borrowings 410 225 474 550 633Interest on long-term debt 1,211 1,177 1,389 1,389 269Interest on subordinated debt 1,026 443 444 443 444Interest on junior subordinated debt 188 186 267 260Total interest expense 23,138 22,878 27,292 29,040 19,460Net interest income 42,197 39,548 38,511 39,244 18,916(Credit to) provision for credit losses (239) 200 3,369 14,458 596Net interest income after (credit to) provision for credit 42,436 39,348 35,142 24,786 18,320lossesNoninterest income:Service charges, fees, commissions and other 3,664 3,404 3,368 3,384 1,885Merchant services income 584 231 298 223 260Commissions and fees on fiduciary activities 563 537 553 649 517Wealth management income 619 650 633 708 416Mortgage banking income 125 114 126 84 87Increase in cash surrender value of life insurance 535 526 456 551 286Interest rate swap income (loss) 164 43 260 (53) 102Net (losses) gains on equity investments (7) 71 (23) 175 (12)Net gains on sale of investment securities available for sale 1Net gains (losses) on sale of fixed assets 680 (165) (3) 13Total noninterest income 6,247 6,256 5,506 5,719 3,554Noninterest expense:Salaries and employee benefits expense 13,761 13,481 15,287 13,170 8,450Net occupancy and equipment expense 6,284 6,610 6,386 6,433 4,589Acquisition related expenses 66 154 4,990 9,653 1,071Amortization of intangible assets 1,684 1,683 1,702 1,665FDIC insurance and assessments 976 1,022 1,251 809 504Other expenses 5,491 4,403 5,217 3,769 3,557Total noninterest expense 28,262 27,353 34,833 35,499 18,171Income (loss) before income taxes 20,421 18,251 5,815 (4,994) 3,703Income tax expense (benefit) 3,465 3,242 (272) (657) 421Net income (loss) $ 16,956 $ 15,009 $ 6,087 $ (4,337) $ 3,282Other comprehensive income (loss):Unrealized gain (loss) on investment securities available for sale $ 1,859 $ 5,572 $ (10,175) $ 15,167 $ 18Reclassification adjustment for gains on available for sale securities (1)included in net incomeChange in benefit plan liabilities 1,518Change in derivative fair value 16 (148) 817 (1,424) 160Income tax expense (benefit) related to other comprehensive (loss) 409 1,183 (1,686) 3,008 38incomeOther comprehensive income (loss), net of income tax 1,466 4,241 (6,154) 10,734 140expense (benefit)Comprehensive income (loss) $ 18,422 $ 19,250 $ (67) $ 6,397 $ 3,422Share and per share amounts:Net income – basic $ 1.70 $ 1.50 $ 0.61 $ (0.43) $ 0.47Net income – diluted 1.68 1.49 0.61 (0.43) 0.46Cash dividends declared $ 0.62 $ 0.62 $ 0.62 $ 0.62 $ 0.41Average common shares outstanding – basic 9,994,955 9,992,922 9,994,605 9,987,627 7,057,258Average common shares outstanding – diluted 10,082,260 10,043,186 10,051,337 10,044,449 7,114,115
Peoples Financial Services Corp.Net Interest Margin (Unaudited)(In thousands, fully taxable equivalent basis) Three Months Ended June 30, 2025 June 30, 2024 Average InterestIncome/ Yield/ Average InterestIncome/ Yield/ Balance Expense Rate Balance Expense RateAssets:Earning assets:Loans:Taxable $ 3,707,650 $ 57,459 6.22 % $ 2,637,164 $ 34,406 5.25 %Tax-exempt 282,406 2,914 4.14 222,655 1,771 3.20Total loans 3,990,056 60,373 6.07 2,859,819 36,177 5.09Investments:Taxable 540,424 4,644 3.45 443,146 1,906 1.73Tax-exempt 86,899 505 2.33 86,418 470 2.19Total investments 627,323 5,149 3.29 529,564 2,376 1.80Interest-bearing deposits 9,186 96 4.19 8,763 115 5.28Federal funds sold 39,084 435 4.46 12,672 179 5.68Total earning assets 4,665,649 66,053 5.68 % 3,410,818 38,847 4.58 %Less: allowance for credit losses 41,837 23,046Other assets 390,522 221,294Total assets $ 5,014,334 $ 66,053 $ 3,609,066 $ 38,847Liabilities and Stockholders' Equity:Interest-bearing liabilities:Money market accounts $ 708,585 $ 6,992 3.96 % $ 714,669 $ 6,749 3.80 %Interest-bearing demand and NOW 1,406,998 5,882 1.68 729,196 4,400 2.43accountsSavings accounts 501,975 376 0.30 408,883 280 0.28Time deposits less than $100 404,142 3,991 3.96 403,069 3,964 3.96Time deposits $100 or more 352,216 3,062 3.49 240,481 2,721 4.55Total interest-bearing 3,373,916 20,303 2.41 2,496,298 18,114 2.92depositsShort-term borrowings 35,587 410 4.62 45,383 633 5.61Long-term debt 101,066 1,211 4.81 25,000 269 4.33Subordinated debt 55,622 1,026 7.40 33,000 444 5.41Junior subordinated debt 8,075 188 9.34Total borrowings 200,350 2,835 5.68 103,383 1,346 5.24Total interest-bearing 3,574,266 23,138 2.60 % 2,599,681 19,460 3.01 %liabilitiesNoninterest-bearing deposits 897,212 620,256Other liabilities 52,608 48,630Stockholders' equity 490,248 340,499Total liabilities and $ 5,014,334 $ 3,609,066stockholders' equityNet interest income/spread $ 42,915 3.08 % $ 19,387 1.57 %Net interest margin 3.69 % 2.29 %Tax-equivalent adjustments:Loans $ 612 $ 372Investments 106 99Total adjustments $ 718 $ 471
The average balances of assets and liabilities, corresponding interest income and expense and resulting average yields or rates paid are summarized as follows. Averages for earning assets include nonaccrual loans. Investment averages include available for sale securities at amortized cost. Income on investment securities and loans is adjusted to a tax-equivalent basis using the prevailing federal statutory tax rate of 21%.
Peoples Financial Services Corp.Net Interest Margin (Unaudited)(In thousands, fully taxable equivalent basis) Six Months Ended June 30, 2025 June 30, 2024 Average InterestIncome/ Yield/ Average InterestIncome/ Yield/ Balance Expense Rate Balance Expense RateAssets:Earning assets:Loans:Taxable $ 3,702,911 $ 112,671 6.14 % $ 2,634,859 $ 68,447 5.22 %Tax-exempt 281,486 5,756 4.12 223,974 3,566 3.20Total loans 3,984,397 118,427 5.99 2,858,833 72,013 5.07Investments:Taxable 548,124 8,819 3.24 445,071 3,826 1.73Tax-exempt 86,985 1,006 2.33 86,641 939 2.18Total investments 635,109 9,825 3.12 531,712 4,765 1.80Interest-bearing deposits 10,186 209 4.14 8,894 235 5.31Federal funds sold 32,568 720 4.46 46,813 1,306 5.61Total earning assets 4,662,260 129,181 5.59 % 3,446,252 78,319 4.57 %Less: allowance for credit losses 41,960 22,668Other assets 391,221 219,324Total assets $ 5,011,521 $ 129,181 $ 3,642,908 $ 78,319Liabilities and Stockholders' Equity:Interest-bearing liabilities:Money market accounts $ 698,111 $ 13,562 3.92 % $ 734,779 $ 13,884 3.80 %Interest-bearing demand and NOW 1,435,943 12,298 1.73 756,827 9,237 2.45accountsSavings accounts 500,392 737 0.30 415,849 555 0.27Time deposits less than $100 414,197 8,219 4.00 406,131 8,301 4.11Time deposits $100 or more 356,817 6,334 3.58 231,470 4,841 4.21Total interest-bearing 3,405,460 41,150 2.44 2,545,056 36,818 2.91depositsShort-term borrowings 27,925 635 4.59 32,535 895 5.53Long-term debt 99,426 2,388 4.84 25,000 539 4.34Subordinated debt 44,373 1,469 6.68 33,000 887 5.41Junior subordinated debt 8,063 374 9.35Total borrowings 179,787 4,866 5.46 90,535 2,321 5.16Total interest-bearing 3,585,247 46,016 2.59 % 2,635,591 39,139 2.99 %liabilitiesNoninterest-bearing deposits 886,193 618,433Other liabilities 55,298 48,159Stockholders' equity 484,783 340,725Total liabilities and $ 5,011,521 $ 3,642,908stockholders' equityNet interest income/spread $ 83,165 3.00 % $ 39,180 1.58 %Net interest margin 3.60 % 2.29 %Tax-equivalent adjustments:Loans $ 1,209 $ 749Investments 211 197Total adjustments $ 1,420 $ 946
The average balances of assets and liabilities, corresponding interest income and expense and resulting average yields or rates paid are summarized as follows. Averages for earning assets include nonaccrual loans. Investment averages include available for sale securities at amortized cost. Income on investment securities and loans is adjusted to a tax-equivalent basis using the prevailing federal statutory tax rate of 21%.
Peoples Financial Services Corp.Details of Net Interest Income and Net Interest Margin (Unaudited)(In thousands, fully taxable equivalent basis) June30 Mar31 Dec31 Sept30 June30Threemonthsended 2025 2025 2024 2024 2024Net interest income:Interest income:Loans, net:Taxable $ 57,459 $ 55,212 $ 57,048 $ 59,412 $ 34,406Tax-exempt 2,914 2,842 2,834 2,910 1,771Total loans, net 60,373 58,054 59,882 62,322 36,177Investments:Taxable 4,644 4,175 4,399 4,794 1,906Tax-exempt 505 501 502 520 470Total investments 5,149 4,676 4,901 5,314 2,376Interest on interest-bearing balances in other banks 96 113 113 150 115Federal funds sold 435 285 1,608 1,218 179Total interest income 66,053 63,128 66,504 69,004 38,847Interest expense:Deposits 20,303 20,847 24,718 26,398 18,114Short-term borrowings 410 225 474 550 633Long-term debt 1,211 1,177 1,389 1,389 269Subordinated debt 1,026 443 444 443 444Junior subordinated debt 188 186 267 260Total interest expense 23,138 22,878 27,292 29,040 19,460Net interest income $ 42,915 $ 40,250 $ 39,212 $ 39,964 $ 19,387Loans, net:Taxable 6.22 % 6.05 % 6.04 % 6.24 % 5.25 %Tax-exempt 4.14 % 4.11 % 4.05 % 4.16 % 3.20 %Total loans, net 6.07 % 5.92 % 5.90 % 6.09 % 5.09 %Investments:Taxable 3.45 % 3.05 % 3.23 % 3.12 % 1.73 %Tax-exempt 2.33 % 2.33 % 2.29 % 2.31 % 2.19 %Total investments 3.29 % 2.95 % 3.10 % 3.02 % 1.80 %Interest-bearing balances with banks 4.19 % 4.09 % 4.93 % 5.55 % 5.28 %Federal funds sold 4.46 % 4.45 % 4.94 % 5.26 % 5.68 %Total interest-earning assets 5.68 % 5.50 % 5.51 % 5.63 % 4.58 %Interest expense:Deposits 2.41 % 2.46 % 2.75 % 2.91 % 2.92 %Short-term borrowings 4.62 % 4.52 % 4.80 % 4.98 % 5.61 %Long-term debt 4.81 % 4.88 % 4.97 % 4.94 % 4.33 %Subordinated debt 7.40 % 5.44 % 5.35 % 5.34 % 5.41 %Junior subordinated debt 9.34 % 9.37 % 13.23 % 12.93 %Total interest-bearing liabilities 2.60 % 2.58 % 2.88 % 3.04 % 3.01 %Net interest spread 3.08 % 2.92 % 2.62 % 2.59 % 1.57 %Net interest margin 3.69 % 3.50 % 3.25 % 3.26 % 2.29 %
Peoples Financial Services Corp.Consolidated Balance Sheets (Unaudited)(In thousands) June30 Mar31 Dec31 Sept30 June30Atperiodend 2025 2025 2024 2024 2024Assets:Cash and due from banks $ 60,173 $ 60,125 $ 47,029 $ 97,090 $ 41,234Interest-bearing balances in other banks 9,646 9,196 8,593 10,286 8,722Federal funds sold 105,920 7,781 80,229 178,093Investment securities:Available for sale 505,181 503,043 526,329 562,486 385,240Held to maturity 75,137 76,689 78,184 79,861 81,598Equity investments carried at fair value 2,494 2,500 2,430 3,921 78Total investments 582,812 582,232 606,943 646,268 466,916Loans held for sale 547 420 803Loans 3,997,525 3,991,539 3,993,505 4,069,683 2,869,553Less: allowance for credit losses 40,890 41,054 41,776 39,341 23,123Net loans 3,956,635 3,950,485 3,951,729 4,030,342 2,846,430Goodwill 75,986 75,986 75,986 76,958 63,370Premises and equipment, net 76,896 72,492 73,283 75,877 58,565Bank owned life insurance 87,635 87,953 87,429 87,401 49,955Deferred tax assets 31,647 32,628 35,688 33,078 14,460Accrued interest receivable 15,854 16,436 15,632 17,979 13,326Other intangible assets, net 30,778 32,488 34,197 35,907Other assets 73,350 71,136 74,919 70,056 53,077Total assets $ 5,107,879 $ 4,999,358 $ 5,091,657 $ 5,360,138 $ 3,616,055Liabilities:Deposits:Noninterest-bearing $ 899,597 $ 901,398 $ 935,516 $ 927,864 $ 620,971Interest-bearing 3,387,752 3,415,529 3,472,036 3,710,000 2,443,988Total deposits 4,287,349 4,316,927 4,407,552 4,637,864 3,064,959Short-term borrowings 76,340 14,840 15,900 37,346 104,250Long-term debt 103,449 88,403 98,637 111,489 25,000Subordinated debt 83,164 33,000 33,000 33,000 33,000Junior subordinated debt 8,088 8,063 8,039 8,015Accrued interest payable 4,640 5,439 5,503 6,829 5,507Other liabilities 50,753 50,832 54,076 50,544 42,532Total liabilities 4,613,783 4,517,504 4,622,707 4,885,087 3,275,248Stockholders' equity:Common stock 20,015 20,014 19,995 19,993 14,122Capital surplus 250,468 250,488 250,695 250,578 122,449Retained earnings 258,601 247,806 238,955 239,021 249,511Accumulated other comprehensive loss (34,988) (36,454) (40,695) (34,541) (45,275)Total stockholders' equity 494,096 481,854 468,950 475,051 340,807Total liabilities and stockholders' $ 5,107,879 $ 4,999,358 $ 5,091,657 $ 5,360,138 $ 3,616,055equity
Peoples Financial Services Corp.Loan and Asset Quality Data (Unaudited)(In thousands) June 30 Mar 31 Dec 31 Sept 30 June 30At period end 2025 2025 2024 2024 2024CommercialTaxable $ 595,042 $ 570,966 $ 556,630 $ 616,369 $ 411,112Non-taxable 278,026 282,031 279,390 273,710 220,893Total 873,068 852,997 836,020 890,079 632,005Real estateCommercial real estate 2,252,574 2,275,241 2,294,113 2,309,588 1,793,652Residential 573,864 560,067 551,383 550,590 369,671Total 2,826,438 2,835,308 2,845,496 2,860,178 2,163,323ConsumerIndirect Auto 104,618 108,819 117,914 130,380 66,792Consumer Other 13,929 14,209 14,955 15,580 7,433Total 118,547 123,028 132,869 145,960 74,225Equipment Financing 179,472 180,206 179,120 173,466Total $ 3,997,525 $ 3,991,539 $ 3,993,505 $ 4,069,683 $ 2,869,553
June30 Mar31 Dec31 Sept30 June30Atquarterend 2025 2025 2024 2024 2024Nonperforming assets:Nonaccrual/restructured loans $ 17,390 $ 23,002 $ 22,499 $ 20,949 $ 7,116Accruing loans past due 90 days or more 72 655 458 569Foreclosed assets 27 27 27 27Total nonperforming assets $ 17,462 $ 23,684 $ 22,984 $ 21,545 $ 7,143
June30 Mar31 Dec31 Sept30 June30Three months ended 2025 2025 2024 2024 2024Allowance for credit losses:Beginning balance $ 41,054 $ 41,776 $ 39,341 $ 23,123 $ 22,597Merger-related adjustments – Non PCD Loans 14,328Merger-related adjustments – PCD Loans 1,841Charge-offs 1,151 1,233 1,108 534 135Recoveries 1,226 311 174 453 65(Credit to) provision for credit losses (239) 200 3,369 130 596Ending balance $ 40,890 $ 41,054 $ 41,776 $ 39,341 $ 23,123
Peoples Financial Services Corp.Deposit and Liquidity Detail (Unaudited)(In thousands) June 30 Mar 31 Dec 31 Sept 30 June 30At period end 2025 2025 2024 2024 2024Interest-bearing deposits:Money market accounts $ 971,136 $ 967,661 $ 936,239 $ 1,018,575 $ 690,631Interest-bearing demand and NOW accounts 1,200,911 1,177,507 1,238,853 1,229,083 715,890Savings accounts 500,680 502,851 492,180 509,412 397,827Time deposits less than $250 543,257 599,127 620,725 824,791 504,879Time deposits $250 or more 171,768 168,383 184,039 128,139 134,761Total interest-bearing deposits 3,387,752 3,415,529 3,472,036 3,710,000 2,443,988Noninterest-bearing deposits 899,597 901,398 935,516 927,864 620,971Total deposits $ 4,287,349 $ 4,316,927 $ 4,407,552 $ 4,637,864 $ 3,064,959
June 30, 2025At period end Amount Percent of Total Number of accounts Average BalanceDeposit Detail:Retail $ 1,799,773 42.0 % 95,276 $ 19Commercial 1,592,947 37.2 18,474 86Municipal 696,601 16.2 2,445 285Brokered 198,028 4.6 17 11,649Total Deposits $ 4,287,349 100.0 % 116,212 $ 37Uninsured $ 1,315,345 30.7 %Insured 2,972,004 69.3 December 31, 2024At period end Amount Percent of Total Number of accounts Average BalanceDeposit Detail:Retail $ 1,779,729 40.4 % 98,583 $ 18Commercial 1,538,757 34.9 18,675 82Municipal 832,665 18.9 2,427 343Brokered 256,401 5.8 28 9,157Total Deposits $ 4,407,552 100.0 % 119,713 $ 37Uninsured $ 1,381,492 31.3 %Insured 3,026,060 68.7
Total AvailableAt June 30, 2025 Total Available Outstanding for Future LiquidityFHLB advances (1) $ 1,647,028 $ 514,902 $ 1,132,126Federal Reserve – Discount Window 426,801 426,801Correspondent bank lines of credit 18,000 18,000Other sources of liquidity:Brokered deposits 766,182 198,028 568,154Unencumbered securities 174,563 174,563Total sources of liquidity $ 3,032,574 $ 712,930 $ 2,319,644
(1) Outstanding balance of FHLB advances includes letters of credit used to collateralize public fund deposits.
Peoples Financial Services Corp.Consolidated Balance Sheets (Unaudited)(In thousands) June30 Mar31 Dec31 Sept30 June30Averagequarterlybalances 2025 2025 2024 2024 2024Assets:Loans, net:Taxable $ 3,707,650 $ 3,698,124 $ 3,757,273 $ 3,790,138 $ 2,637,164Tax-exempt 282,406 280,555 278,429 278,496 222,655Total loans, net 3,990,056 3,978,679 4,035,702 4,068,634 2,859,819Investments:Taxable 540,424 555,910 541,526 611,032 443,146Tax-exempt 86,899 87,072 87,419 89,532 86,418Total investments 627,323 642,982 628,945 700,564 529,564Interest-bearing balances with banks 9,186 11,197 9,116 10,820 8,763Federal funds sold 39,084 25,979 129,517 92,171 12,672Total interest-earning assets 4,665,649 4,658,837 4,803,280 4,872,189 3,410,818Other assets 348,685 349,840 400,179 419,005 198,248Total assets $ 5,014,334 $ 5,008,677 $ 5,203,459 $ 5,291,194 $ 3,609,066Liabilities and stockholders' equity:Deposits:Interest-bearing $ 3,373,916 $ 3,437,355 $ 3,573,321 $ 3,607,405 $ 2,496,298Noninterest-bearing 897,212 875,053 904,274 908,776 620,256Total deposits 4,271,128 4,312,408 4,477,595 4,516,181 3,116,554Short-term borrowings 35,587 20,176 39,319 43,895 45,383Long-term debt 101,066 97,769 111,135 111,804 25,000Subordinated debt 55,622 33,000 33,000 33,000 33,000Junior subordinated debt 8,075 8,050 8,026 8,000Other liabilities 52,608 58,018 56,445 96,177 48,630Total liabilities 4,524,086 4,529,421 4,725,520 4,809,057 3,268,567Stockholders' equity 490,248 479,256 477,939 482,137 340,499Total liabilities and stockholders' $ 5,014,334 $ 5,008,677 $ 5,203,459 $ 5,291,194 $ 3,609,066equity
Peoples Financial Services Corp.Reconciliation of Non-GAAP Financial Measures (Unaudited)(In thousands, except share and per share data) June30 Mar31 Dec31 Sept30 June30Threemonthsended 2025 2025 2024 2024 2024Core net income per share:Net income (loss) GAAP $ 16,956 $ 15,009 $ 6,087 $ (4,337) $ 3,282Adjustments:Add: ACL provision for FNCB acquired legacy loans 14,328Less: ACL provision for FNCB acquired legacy loans tax adjustment 1,885Add: Acquisition related expenses 66 154 4,990 9,653 1,071Less: Acquisition related expenses tax adjustment 14 34 1,089 1,270 122Core net income $ 17,008 $ 15,129 $ 9,988 $ 16,489 $ 4,231Average common shares outstanding – diluted 10,082,260 10,043,186 10,051,337 10,044,449 7,114,115Core net income per diluted share $ 1.69 $ 1.51 $ 0.99 $ 1.64 $ 0.59Tangible book value:Total stockholders' equity $ 494,096 $ 481,854 $ 468,950 $ 475,051 $ 340,807Less: Goodwill 75,986 75,986 76,325 76,958 63,370Less: Other intangible assets, net 30,778 32,488 34,197 35,907Total tangible stockholders' equity $ 387,332 $ 373,380 $ 358,428 $ 362,186 $ 277,437Common shares outstanding 9,994,696 9,995,483 9,990,724 9,994,648 7,057,258Tangible book value per share $ 38.75 $ 37.35 $ 35.88 $ 36.24 $ 39.31Core return on average stockholders' equity:Net income (loss) GAAP $ 16,956 $ 15,009 $ 6,087 $ (4,337) $ 3,282Adjustments:Add: ACL provision for FNCB acquired legacy loans 14,328Less: ACL provision for FNCB acquired legacy loans tax adjustment 1,885Add: Acquisition related expenses 66 154 4,990 9,653 1,071Less: Acquisition related expenses tax adjustment 14 34 1,089 1,270 122Core net income $ 17,008 $ 15,129 $ 9,988 $ 16,489 $ 4,231Average stockholders' equity $ 490,248 $ 479,256 $ 477,939 $ 482,137 $ 340,499Core return on average stockholders' equity 13.92 % 12.80 % 8.31 % 13.61 % 5.00 %Return on average tangible stockholders' equity:Net income (loss) GAAP $ 16,956 $ 15,009 $ 6,087 $ (4,337) $ 3,282Average stockholders' equity $ 490,248 $ 479,256 $ 477,939 $ 482,137 $ 340,499Less: average intangibles 106,764 109,386 112,399 113,032 63,370Average tangible stockholders' equity $ 383,484 $ 369,870 $ 365,540 $ 369,105 $ 277,129Return on average tangible stockholders' equity 17.73 % 16.46 % 6.62 % (4.67) % 4.76 %Core return on average tangible stockholders' equity:Net income (loss) GAAP $ 16,956 $ 15,009 $ 6,087 $ (4,337) $ 3,282Adjustments:Add: ACL provision for FNCB acquired legacy loans 14,328Less: ACL provision for FNCB acquired legacy loans tax adjustment 1,885Add: Acquisition related expenses 66 154 4,990 9,653 1,071Less: Acquisition related expenses tax adjustment 14 34 1,089 1,270 122Core net income $ 17,008 $ 15,129 $ 9,988 $ 16,489 $ 4,231Average stockholders' equity $ 490,248 $ 479,256 $ 477,939 $ 482,137 $ 340,499Less: average intangibles 106,764 109,386 112,399 113,032 63,370Average tangible stockholders' equity $ 383,484 $ 369,870 $ 365,540 $ 369,105 $ 277,129Core return on average tangible stockholders' equity 17.79 % 16.59 % 10.87 % 17.77 % 6.14 %Core return on average assets:Net income (loss) GAAP $ 16,956 $ 15,009 $ 6,087 $ (4,337) $ 3,282Adjustments:Add: ACL provision for FNCB acquired legacy loans 14,328Less: ACL provision for FNCB acquired legacy loans tax adjustment 1,885Add: Acquisition related expenses 66 154 4,990 9,653 1,071Less: Acquisition related expenses tax adjustment 14 34 1,089 1,270 122Core net income $ 17,008 $ 15,129 $ 9,988 $ 16,489 $ 4,231Average assets $ 5,014,334 $ 5,008,677 $ 5,203,459 $ 5,291,194 $ 3,609,066Core return on average assets 1.36 % 1.23 % 0.76 % 1.24 % 0.47 %Pre-provision net revenue (PPNR) per share:Income (Loss) before taxes (GAAP) $ 20,421 $ 18,251 $ 5,815 $ (4,994) $ 3,703Add: ACL provision for FNCB acquired legacy loans 14,328Add: (Credit to) provision for credit losses (239) 200 3,369 130 596Add: (Credit to) provision for credit losses on unfunded commitments 172 (202) 452 (785) (197)PPNR (non-GAAP) $ 20,354 $ 18,249 $ 9,636 $ 8,679 $ 4,102Average common shares outstanding-diluted 10,082,260 10,043,186 10,051,337 10,044,449 7,114,115PPNR per share (non-GAAP) $ 2.02 $ 1.82 $ 0.96 $ 0.86 $ 0.58Core pre-provision net revenue (PPNR) per share:Income (Loss) before taxes (GAAP) $ 20,421 $ 18,251 $ 5,815 $ (4,994) $ 3,703Add: Acquisition related expenses 66 154 4,990 9,653 1,071Add: ACL provision for FNCB acquired legacy loans 14,328Add: (Credit to) provision for credit losses (239) 200 3,369 130 596Add: (Credit to) provision for credit losses on unfunded commitments 172 (202) 452 (785) (197)Core PPNR (non-GAAP) $ 20,420 $ 18,403 $ 14,626 $ 18,332 $ 5,173Average common shares outstanding-diluted 10,082,260 10,043,186 10,051,337 10,044,449 7,114,115Core PPNR per share (non-GAAP) $ 2.03 $ 1.83 $ 1.46 $ 1.83 $ 0.73
(1) Current year quarters and fourth quarter 2024 tax adjustments use a rate of 21.8%, prior quarters use the effective tax rate for the quarter.
Peoples Financial Services Corp.Reconciliation of Non-GAAP Financial Measures (Unaudited)(In thousands, except share and per share data) June30 June30Six months ended 2025 2024Core net income per share:Net income GAAP $ 31,965 $ 6,748Adjustments:Add: Acquisition related expenses 220 1,557Less: Acquisition related expenses tax adjustment 48 183Core net income $ 32,137 $ 8,122Average common shares outstanding – diluted 10,062,831 7,108,113Core net income per diluted share $ 3.19 $ 1.14Core return on average stockholders' equity:Net income GAAP $ 31,965 $ 6,748Adjustments:Add: Acquisition related expenses 220 1,557Less: Acquisition related expenses tax adjustment 48 183Core net income $ 32,137 $ 8,122Average stockholders' equity 484,783 340,725Core return on average stockholders' equity 13.37 % 4.79 %Return on average tangible stockholders' equity:Net income GAAP $ 31,965 $ 6,748Average stockholders' equity 484,783 340,725Less: average intangibles 108,562 63,375Average tangible stockholders' equity $ 376,221 $ 277,350Return on average tangible stockholders' equity 17.13 % 4.89 %Core return on average tangible stockholders' equity:Net income GAAP $ 31,965 $ 6,748Adjustments:Add: Acquisition related expenses 220 1,557Less: Acquisition related expenses tax adjustment 48 183Core net income $ 32,137 $ 8,122Average stockholders' equity 484,783 340,725Less: average intangibles 108,562 63,375Average tangible stockholders' equity $ 376,221 $ 277,350Core return on average tangible stockholders' equity 17.23 % 5.89 %Core return on average assets:Net income GAAP $ 31,965 $ 6,748Adjustments:Add: Acquisition related expenses 220 1,557Less: Acquisition related expenses tax adjustment 48 183Core net income $ 32,137 $ 8,122Average assets 5,011,521 3,642,908Core return on average assets 1.29 % 0.45 %Pre-provision net revenue (PPNR) per share:Income before taxes (GAAP) $ 38,672 $ 7,647Add: (Credit to) provision for credit losses (39) 1,304Add: (Credit to) provision for credit losses on unfunded commitments (30) 290PPNR (non-GAAP) $ 38,603 $ 9,241Average common shares outstanding-diluted 10,062,831 7,108,113PPNR per share (non-GAAP) $ 3.84 $ 1.30Core pre-provision net revenue (PPNR) per share:Income before taxes (GAAP) $ 38,672 $ 7,647Add: Acquisition related expenses 220 1,557Add: (Credit to) provision for credit losses (39) 1,304Add: (Credit to) provision for credit losses on unfunded commitments (30) 290Core PPNR (non-GAAP) $ 38,823 $ 10,798Average common shares outstanding-diluted 10,062,831 7,108,113Core PPNR per share (non-GAAP) $ 3.86 $ 1.52
Peoples Financial Services Corp.Reconciliation of Non-GAAP Financial Measures (Unaudited)(In thousands, except share and per share data)The following tables reconcile the non-GAAP financial measures ofFTEnet interest income for the three and six months ended June 30, 2025 and 2024:Three months ended June 30 2025 2024Interest income (GAAP) $ 65,335 $ 38,376Adjustment to FTE 718 471Interest income adjusted to FTE (non-GAAP) 66,053 38,847Interest expense 23,138 19,460Net interest income adjusted to FTE (non-GAAP) $ 42,915 $ 19,387Six months ended June 30 2025 2024Interest income (GAAP) $ 127,761 $ 77,373Adjustment to FTE 1,420 946Interest income adjusted to FTE (non-GAAP) 129,181 78,319Interest expense 46,016 39,139Net interest income adjusted to FTE (non-GAAP) $ 83,165 $ 39,180
The efficiency ratio isnoninterestexpenses, less amortization of intangible assets and acquisition related costs, as a percentage ofFTEnet interest income plusnoninterestincome. The following tables reconcile the non-GAAP financial measures of the efficiency ratio to GAAP for the three and six months ended June 30, 2025 and 2024:Three months ended June 30 2025 2024Efficiency ratio (non-GAAP):Noninterest expense (GAAP) $ 28,262 $ 18,171Less: Amortization of intangible assets expense 1,684Less: Acquisition related expenses 66 1,071Noninterest expense (non-GAAP) 26,512 17,100Net interest income (GAAP) 42,197 18,916Plus: Taxable equivalent adjustment 718 471Noninterest income (GAAP) 6,247 3,554Less: Net gains (losses) on equity securities (6) (12)Less: Gains on sale of fixed assets 13Net interest income (FTE) plus noninterest income (non-GAAP) $ 49,168 $ 22,940Efficiency ratio (non-GAAP) 53.92 % 74.54 %Six months ended June 30 2025 2024Efficiency ratio (non-GAAP):Noninterest expense (GAAP) $ 55,615 $ 36,230Less: Amortization of intangible assets expense 3,367Less: Acquisition related expenses 220 1,557Noninterest expense (non-GAAP) 52,028 34,673Net interest income (GAAP) 81,745 38,234Plus: Taxable equivalent adjustment 1,420 946Noninterest income (GAAP) 12,503 6,947Less: Net gains (losses) on equity securities 65 (20)Less: Gains on sale of fixed assets 680 4Net interest income (FTE) plus noninterest income (non-GAAP) $ 94,923 $ 46,143Efficiency ratio (non-GAAP) 54.81 % 75.14 %
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