PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited Fourth Quarter and Full Year 2025 Earnings

MOOSIC, Pa., Jan. 30, 2026 /PRNewswire/ — 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 months and year ended December 31, 2025.

Peoples reported net income of $12.0 million, or $1.19 per diluted share for the three months ended December 31, 2025, compared to net income of $15.2 million, or $1.51 per diluted share for the three months ended September 30, 2025, and net income of $6.1 million, or $0.61 per diluted share for the three months ended December 31, 2024. Return on average assets (“ROAA”) and return on average equity (“ROAE”) on an annualized basis for the three months ended December 31, 2025, was 0.92% and 9.16% compared to 1.19% and 12.02% for the three months ended September 30, 2025, and 0.47% and 5.07% for the three months ended December 31, 2024. Net income in the current quarter was negatively impacted by the recognition of a $2.2 million pre-tax loss ($1.8 million after tax) on the sale of available for sale (“AFS”) investment securities associated with a strategic portfolio repositioning. Net income in the fourth quarter of 2024 included $5.0 million in acquisition-related expenses. Core net income, a non-GAAP measure[1], was $13.7 million, or $1.36 per diluted share for the three months ended December 31, 2025, and $10.0 million, or $0.99 per diluted share for the comparable three-month period of 2024.

For the year ended December 31, 2025, net income was $59.2 million, or $5.88 per diluted share an increase of $50.7 million compared to $8.5 million, or $0.99 per diluted share for 2024, which was primarily due to a full year of combined operations following the merger with FNCB Bancorp, Inc. (“FNCB” or “FNCB merger”) on July 1, 2024, coupled with a reduction in the provision for credit losses. 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, noninterest income and noninterest expense when compared to the prior year. Net income in 2024 included acquisition-related expenses of $16.2 million compared to $0.2 million in 2025, and a non-recurring provision of $14.3 million for non-purchase credit deteriorated (“PDC”) loans acquired in the FNCB merger. Core net income, a non-GAAP measure1 was $61.1 million, or $6.07 per diluted share for the year ended December 31, 2025, and $32.4 million, or $3.77 per diluted share for the year ended December 31, 2024. The Company’s consolidated financial results for any periods ended or including periods prior to July 1, 2024, do not reflect the financial results of FNCB and its subsidiaries.

“We delivered solid full-year results in 2025, with net income of $59.2 million driven by strong net interest income and a lower provision for credit losses, reflecting the benefits of our expanded balance sheet and disciplined credit performance,” said Gerard Champi, Chief Executive Officer of Peoples. “While fourth-quarter earnings were impacted by a strategic $2.2 million pre-tax loss related to the repositioning of our available-for-sale securities portfolio, this action strengthens our balance sheet and positions us well for future periods. Excluding this item, core earnings demonstrated continued momentum, supported by higher earning asset levels, increased transaction activity, and ongoing accretion from the FNCB merger. As we move forward, we remain focused on disciplined growth, operating efficiency, and delivering long-term value for our shareholders,” concluded Champi.

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 net gains and losses on the sale of AFS investment securities, acquisition-related expenses and merger-related adjustments to the allowance for credit losses (“ACL”) for nonrecurring provisions for purchase credit deteriorated (“PCD”) and non-PCD loans. 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 and should not be viewed as a substitute for GAAP.

NOTABLES

The Company completed a repositioning of a portion of its investment securities portfolio at the end of the fourth quarter of 2025. As part of the repositioning, the Company sold $78.6 million of lower-yielding, U.S. treasury bonds with a weighted average yield of 1.18%, resulting in an after-tax loss of approximately $1.8 million. The net proceeds of approximately $76.1 million from the sale were used to purchase higher-yielding investment securities that have been classified as AFS including $38.2 million of U.S. agency mortgage-backed securities and $37.9 million of tax-exempt municipal bonds. The purchased securities, which have been classified as AFS, have a weighted average book yield of approximately 4.67%. The Company expects to recover the after-tax loss recorded on the sale within approximately 10 months.
Core net income, a non-GAAP measure1 was $13.7 million, or $1.36 per diluted share for the three months ended December 31, 2025, and $10.0 million, or $0.99 per diluted share for the comparable three-month period of 2024. For the year ended December 31, 2025, core net income, a non-GAAP measure1 was $61.1 million, or $6.07 per diluted share, and $32.4 million, or $3.77 per diluted share for the year ended December 31, 2024.
ROAE for the three months annualized and year ended December 31, 2025, was 9.16% and 11.89% respectively, and 5.07% and 2.07% for the corresponding periods of 2024. Core ROAE, a non-GAAP measure1 was 10.49% and 12.27% for the three months annualized and year ended December 31, 2025, compared to 8.31% and 7.88% for the corresponding periods of 2024.
ROAA for the three months annualized and year ended December 31, 2025, was 0.92% and 1.17% respectively, and 0.47% and 0.19% for the corresponding periods of 2024. Core ROAA, a non-GAAP measure1, was 1.05% and 1.21% for the three months annualized and year ended December 31, 2025, compared to 0.76% and 0.72% for the three months annualized and year ended December 31, 2024.
Book value per common share at December 31, 2025, increased to $52.01 from $46.94 at December 31, 2024. Tangible book value per common share, a non-GAAP measure1, increased to $41.64 at December 31, 2025, compared to $35.88 at December 31, 2024.
Total loans increased $50.5 million or 5.0% annualized during the three months ended December 31, 2025; for the year ended December 31, 2025, total loans increased $73.4 million, or 1.8% to $4.1 billion.
Non-performing assets to total assets improved to 0.23% at December 31, 2025, compared to 0.45% at December 31, 2024, and non-performing assets to total loans, net and foreclosed assets improved to 0.30% at December 31, 2025, compared to 0.58% at December 31, 2024.

INCOME STATEMENT REVIEW

Net interest margin (“NIM”), calculated on a fully taxable equivalent (“FTE”) basis, a non-GAAP measure1, for the three months ended December 31, 2025, improved 35 basis points to 3.60% compared to 3.25% for the three months ended December 31, 2024. For the full year, the FTE NIM expanded 74 basis points to 3.58% in 2025 compared to 2.84% in 2024.
The FTE yield on interest-earning assets, a non-GAAP measure[2], increased 5 basis points to 5.56% for the fourth quarter of 2025, from 5.51% for the same quarter of 2024, and increased 43 basis points to 5.57% for the year ended December 31, 2025, from 5.14% for the year ended December 31, 2024.
The cost of funds, which represents the average rate paid on total interest-bearing liabilities, decreased 33 basis points to 2.55% for the three months ended December 31, 2025, from 2.88% for the three months ended December 31, 2024, and decreased 34 basis points to 2.59% for the year ended December 31, 2025, from 2.93% for the year ended December 31, 2024.
The cost of interest-bearing deposits decreased 45 basis points for the three months ended December 31, 2025, to 2.30% from 2.75% in the three months ended December 31, 2024, and decreased 43 basis points to 2.39% for the year ended December 31, 2025, from 2.82% for the year ended December 31, 2024.
The cost of total deposits, which includes the impact of noninterest-bearing deposits was 1.82% for the fourth quarter of 2025, a decrease of 38 basis points from 2.20% for the same quarter of 2024. For the full year, the cost of total deposits decreased 40 basis points to 1.89% in 2025 from 2.29% in 2024.
The efficiency ratio, a non-GAAP measure[3], was 59.53% and 56.45% for the three months and year ended December 31, 2025, respectively, compared to 62.67% and 63.83% for the respective periods of 2024.

Fourth Quarter 2025 Results – Comparison to Fourth Quarter 2024

Net interest income on a FTE basis for the three months ended December 31, 2025, increased $4.5 million to $43.7 million from $39.2 million for the three months ended December 31, 2024. The increase in FTE net interest income was due to a $0.9 million increase in tax-equivalent interest income, a non-GAAP measure1, coupled with a $3.6 million decrease in interest expense.

The $0.9 million increase in FTE interest income was largely due to an increase in the FTE yield on earning assets, primarily taxable loans and taxable and tax-exempt investments, coupled with an increase in total average earning assets. The FTE yield on earning assets increased 5 basis points to 5.56% for the fourth quarter of 2025 from 5.51% for the comparable quarter of 2024. The yield on taxable loans increased 15 basis points to 6.19% from 6.04% comparing the fourth quarters of 2025 and 2024, respectively. The yield on the total investment securities portfolio increased 17 basis points to 3.27% for the three months ended December 31, 2025, from 3.10% for the same three months of 2024 as new purchases were added at yields higher than existing portfolio yields. Total average earning assets increased $2.2 million comparing the fourth quarters of 2025 and 2024, due primarily to increases in average investments and federal funds sold, partially offset by a reduction in average loans. Accretion associated with purchase accounting fair value discounts on purchased loans was $4.1 million for the three months ended December 31, 2025, and $4.4 million for the same period of 2024. Average investments totaled $643.1 million in the three months ended December 31, 2025, and $628.9 million in the three months ended December 31, 2024, an increase of $14.2 million. Average federal funds sold increased $5.2 million to $134.7 million for the three months ended December 31, 2025, from $129.5 million for the three months ended December 31, 2024. Average loans, net, decreased $17.8 million for the three months ended December 31, 2025, compared to the prior year three-month period ended December 31, 2024.

The decrease in interest expense, comparing the three month periods ended December 31, 2025, and December 31, 2024, was due primarily to decreases in average deposit rates, coupled with a reduction in higher cost brokered deposits, partially offset by increases in average volumes and rates on borrowed funds, which were largely related to the net new issuance of subordinated debt in the second quarter of 2025 in the amount of $52.0 million. Average interest-bearing deposits decreased $153.4 million to $3.4 billion, or 78.9% of total average deposits for the three months ended December 31, 2025, from $3.6 billion, or 79.8% of average total deposits, for the three months ended December 31, 2024. Average brokered deposits decreased $140.0 million to $158.5 million for the three months ended December 31, 2025, from $298.5 million for the comparable three-month period of 2024. Average noninterest bearing deposits increased $9.7 million to $914.0 million, or 21.1% of total average deposits for the three months ended December 31, 2025, from $904.3 million, or 20.2% of total average deposits for the three months ended December 31, 2024.

Average total borrowings increased $77.1 million for the three months ended December 31, 2025, as compared to the same period of 2024, which was primarily due to a combination of increases in long-term borrowings and the new issuance of subordinated debt, which occurred in the second quarter of 2025. Additionally, the Company’s cost of borrowings increased 42 basis points to 5.77% for the three months ended December 31, 2025, compared to 5.35% for the same three months of 2024. 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 fixed-to-floating rate subordinated notes due June 2035 at an initial fixed rate through June 2030 of 7.75%.

Short-term borrowings averaged $31.8 million for the three-month period ended December 31, 2025, at an average cost of 3.87% compared to $39.3 million at an average cost of 4.80% for the comparable three-month period in 2024. Long-term debt, which includes term borrowings from the FHLB of Pittsburgh, averaged $145.4 million for the three-month period ended December 31, 2025, at an average cost of 4.54% compared to $111.1 million at an average cost of 4.97% for the three months ended December 31, 2024. Subordinated debt averaged $83.1 million for the three-month period ended December 31, 2025, at an average cost of 8.35% compared to $33.0 million at an average cost of 5.35% for the three months ended December 31, 2024.

For the three months ended December 31, 2025, the provision for credit losses was $1.0 million, a decrease of $2.4 million from the $3.4 million recorded in the year ago period. The decrease was due primarily to downward adjustments to qualitative factors on pooled loans, partially offset by an increase of $384 thousand in specific reserves on individually evaluated loans, while model loss rates were substantially unchanged.

Noninterest income was $3.7 million and $5.5 million for the three months ended December 31, 2025, and 2024, respectively. The quarter ended December 31, 2025 includes a $2.2 million loss on the sale of AFS treasury securities as part of a strategy to restructure the portfolio with higher-yielding securities. Interest rate swap income increased to $0.7 million from $0.3 million due to increased commercial loan volume.

Noninterest expense decreased $3.8 million to $31.1 million for the three months ended December 31, 2025, from $34.8 million for the three months ended December 31, 2024, which primarily reflected the absence of acquisition related expenses, partially offset by increased occupancy and equipment expenses due to the corporate office relocation and higher maintenance costs, and increased professional services including loan review services for a larger combined loan portfolio and consulting services related to SOX control enhancement, process improvement and implementation of a new on-line account opening platform. Acquisition-related expenses were $5.0 million in the quarter ended December 31, 2024, with no comparable expenses in the quarter ended December 31, 2025. Occupancy and equipment expenses were $7.3 million for the three months ended December 31, 2025, and $6.4 million for the same three months of 2024. Professional services totaled $1.9 million for the three months ended December 31, 2025, and $0.8 million for the same three months of 2024.

Income tax expense was $2.7 million for the three months ended December 31, 2025, compared to a benefit of $0.3 million for the three months ended December 31, 2024. The effective tax rate was 18.6% for the three months ended December 31, 2025, while the prior year’s quarter resulted in a tax benefit rate of 4.7%.

Full Year Results – 2025 vs. 2024

Net interest income for the year ended December 31, 2025, increased $50.0 million to $166.0 million from $116.0 million for the year ended December 31, 2024. FTE net interest income, a non-GAAP measure[4], for year ended December 31, 2025, increased $50.3 million to $168.7 million from $118.4 million for the year ended December 31, 2024.

Tax-equivalent interest income, a non-GAAP measure1, increased $48.7 million to $262.5 million in 2025 from $213.8 million in 2024, due to higher levels of interest-earning assets such as loans and investments and an additional $7.2 million from accretion of purchase accounting marks on acquired loans. Average loans increased $541.4 million and average investments increased $24.1 million comparing the years ended December 31, 2025, and 2024. The tax-equivalent yield on interest-earning assets, a non-GAAP measure1, was 5.57% for the year ended December 31, 2025, compared to 5.14% for the year ended December 31, 2024. Loan yields increased 37 basis points to 5.99% while investment yields increased 72 basis points to 3.15% for the year ended December 31, 2025. Average federal funds sold decreased $20.2 million to $58.5 million for the year ended December 31, 2025, from $78.7 million for the same period of 2024. Additionally, the average rate on federal funds sold decreased 111 basis points reflecting the 75-basis point cut to the federal funds rate by the Federal Open Market Committee in 2025.

Interest expense decreased $1.7 million to $93.7 million for the year ended December 31, 2025, from $95.5 million for the year ended December 31, 2024, which was primarily driven by a reduction in funding costs that outweighed increases to average balances. Average interest-bearing liabilities increased $354.8 million to $3.6 billion from $3.3 billion comparing the years ended December 31, 2025, and 2024, which reflected higher volumes of both deposits and borrowings. The cost of interest-bearing liabilities during the year ended December 31, 2025, decreased 34 basis points to 2.59% from 2.93% for the year ended December 31, 2024. The cost of interest-bearing deposit products decreased 43 basis points to 2.39% for the year ended December 31, 2025, from 2.82% for the prior year, while borrowing costs increased 42 basis points to 5.71% from 5.29% for the year ended December 31, 2024. The increase in the cost of borrowed funds was largely due to the previously mentioned issuance of new subordinated debt, partially offset by a reduction in market rates for short-term borrowings.

For the year ended December 31, 2025, a provision for credit losses of $98 thousand was recorded compared to a prior year provision of $19.1 million. The prior year provision included a non-recurring, Day 1 provision of $14.3 million for non-PCD loans acquired in the FNCB merger. The 2025 provision was due primarily to improvement in qualitative factors driven by a reduction in commercial real estate concentration levels and a seasoning of the equipment financing portfolio, while overall model loss rates were substantially unchanged. Specific reserves on individually evaluated loans increased $384 thousand.

Noninterest income was $21.7 million for the year ended December 31, 2025, and $18.3 million for the year ended December 31, 2024. The increase in non-interest income was primarily attributable to the increased size and scale of the Company following the FNCB merger. Comparing the years ended December 31, 2025, and 2024, service charges and fees increased $2.9 million, wealth management income increased $0.8 million, income from interest rate swap transactions increased $0.8 million, bank owned life insurance cash surrender value increased $0.5 million and merchant services income increased $0.4 million. Partially offsetting the increases was the net loss on the sale of AFS investment securities of $2.2 million resulting from the Company’s partial investment portfolio repositioning.

Noninterest expense for the year ended December 31, 2025, was $115.4 million, an increase of $8.7 million from $106.7 million for the year ended December 31, 2024. Almost all noninterest expense line items increased as a result of the FNCB merger and the expanded operations of the combined Company. Salaries and employee benefits expenses increased $10.6 million compared to 2024 due to the addition of staff associated with the FNCB merger. Occupancy and equipment expenses were higher by $5.2 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 increased $3.0 million in the year ended December 31, 2025, on the amortization of merger-related intangibles, primarily core deposit intangibles. Partially offsetting these increases was a decrease of $16.0 million in merger-related expenses to $0.2 million for the year ended December 31, 2025. The efficiency ratio, a non-GAAP measure[5], improved to 56.45% for the year ended December 31, 2025, compared to 63.83% for the year ended December 31, 2024.

The provision for income taxes for the year ended December 31, 2025, totaled $13.0 million and the effective tax rate was 18.1% as compared to a tax benefit of $30 thousand, or 0.4% for the year ended December 31, 2024.

BALANCE SHEET REVIEW

At December 31, 2025, total assets, loans, and deposits were $5.3 billion, $4.1 billion, and $4.4 billion, respectively.

Total loans, which were $4.1 billion at December 31, 2025, increased $73.4 million as compared to December 31, 2024. Increases in commercial loans, commercial and residential real estate loans, and consumer loans were partially offset by reductions to equipment financing, and indirect auto loans.

Total investments were $587.2 million at December 31, 2025, compared to $606.9 million at December 31, 2024. At December 31, 2025, AFS securities totaled $512.6 million and the held to maturity securities totaled $72.0 million. The unrealized loss on AFS securities decreased $19.9 million from $49.0 million at December 31, 2024, to $29.1 million at December 31, 2025. The unrealized losses on the held to maturity portfolio totaled $9.2 million and $13.0 million at December 31, 2025, and December 31, 2024, respectively.

Total deposits increased $26.5 million to $4.4 billion at December 31, 2025. Noninterest-bearing deposits increased $19.0 million to $954.5 million at December 31, 2025, from $935.5 million at December 31, 2024. Interest-bearing deposits increased $7.5 million comparing December 31, 2025, and 2024, which largely reflected increases in interest-bearing demand, money market accounts and retail time deposits, partially offset by a reduction in brokered deposits. The Company had $152.2 million and $256.4 million of longer-term brokered CDs at December 31, 2025, and December 31, 2024, respectively. As part of strategic balance sheet management initiatives, the Company reduced its higher rate brokered CD portfolio by $104.2 million during 2025. Total retail deposits, which exclude brokered deposits, increased $130.7 million to $4.3 billion at December 31, 2025, from $4.2 billion at December 31, 2024.

The Company’s deposit base is diversified and consisted of 40.6% retail accounts, 35.6% commercial accounts, 20.4% municipal relationships and 3.4% brokered deposits at December 31, 2025. At December 31, 2025, total uninsured deposits were approximately $1.5 billion, or 34.3% of total deposits. Included in the uninsured total at December 31, 2025, were $494.3 million of municipal deposits collateralized by letters of credit issued by the FHLB, and $2.9 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 December 31, 2025, available borrowing capacity totaled $1.0 billion at the FHLB and $349.0 million at the Federal Reserve’s Discount Window. At December 31, 2025, the Company had $269.0 million in cash and cash equivalents, an increase of $133.1 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 17.

The Company maintained its well capitalized position at December 31, 2025. Stockholders’ equity equaled $519.8 million or $52.01 per share at December 31, 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 and a $16.0 million decrease to accumulated other comprehensive loss (“AOCL”) resulting primarily from a reduction in the unrealized loss on AFS securities, partially offset by dividends to shareholders. The net after tax unrealized loss on AFS securities included in AOCL at December 31, 2025, and December 31, 2024, was $22.8 million and $38.3 million, respectively.

Tangible book value, a non-GAAP measure[6], increased to $41.64 per share at December 31, 2025, from $35.88 per share at December 31, 2024. Dividends declared for the year ended December 31, 2025, amounted to $2.47 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 $12.1 million or 0.30% of loans, net, and foreclosed assets at December 31, 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 0.23% at December 31, 2025, compared to 0.45% at December 31, 2024. The reduction in nonperforming assets was largely due to an $11.7 million decrease in nonaccrual loans following the resolution of several large commercial credit relationships. At December 31, 2025, the Company had one foreclosed commercial property recorded at $0.8 million compared to one foreclosed residential property recorded at $27 thousand at December 31, 2024.

During the three months ended December 31, 2025, net charge-offs were $1.8 million and the provision for credit losses was $1.0 million, compared to net charge-offs of $0.9 million and a provision for credit losses of $3.4 million for the same period of 2024. Net charge-offs in the current quarter included a valuation adjustment of $0.8 million related to a commercial property foreclosure. During the year ended December 31, 2025, net charge-offs totaled $2.9 million and the Company recognized a provision for credit losses of $98 thousand. The allowance for credit losses equaled $39.0 million or 0.96% of loans, net, at December 31, 2025, compared to $41.8 million or 1.05% of loans, net, at December 31, 2024.

_____________________________

1 See reconciliation of non-GAAP financial measures on pg.18-20.

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 40 full-service community banking offices located within Allegheny, Bucks, Lackawanna, Lancaster, 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; political instability and the consequences thereof, such as any shutdown of the U.S. federal government; 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 use 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 Data

Peoples Financial Services Corp.

Five Quarter Trend (Unaudited)

(In thousands, except share and per share data)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

2025

2024

Key performance data:

Share and per share amounts:

Net income

1.19

1.51

1.68

1.49

0.61

Core net income (1)

1.36

1.51

1.69

1.51

0.99

Core net income (PPNR) (1)

1.80

1.81

2.03

1.83

1.46

Cash dividends declared

0.6175

Book value

52.01

50.95

49.44

48.21

46.94

Tangible book value (1)

41.64

40.43

38.75

37.35

35.88

Market value:

High

53.22

53.69

51.21

53.70

58.76

Low

44.54

46.90

40.67

44.47

44.73

Closing

48.71

48.61

49.37

44.47

51.18

Market capitalization

486,837

485,837

493,438

444,499

511,325

Common shares outstanding

9,994,595

9,994,696

9,995,483

9,990,724

Selected ratios:

Return on average stockholders’ equity

9.16

12.02

13.87

12.70

5.07

Core return on average stockholders’ equity (1)

10.49

12.03

13.92

12.80

8.31

Return on average tangible stockholders’ equity (1)

11.47

15.24

17.73

16.46

6.62

Core return on average tangible stockholders’ equity (1)

13.14

15.25

17.79

16.59

10.87

Return on average assets

0.92

1.19

1.36

1.22

0.47

Core return on average assets (1)

1.05

1.19

1.36

1.23

0.76

Stockholders’ equity to total assets

9.86

9.87

9.67

9.64

9.21

Efficiency ratio (1)(2)

59.53

56.52

53.92

55.77

62.67

Nonperforming assets to loans, net, and foreclosed assets

0.30

0.42

0.44

0.59

0.58

Nonperforming assets to total assets

0.23

0.33

0.34

0.47

0.45

Net charge-offs to average loans, net

0.18

0.02

0.00

0.09

Allowance for credit losses to loans, net

0.96

0.99

1.02

1.03

1.05

Interest earning assets yield (FTE) (3)

5.56

5.68

5.50

5.51

Cost of funds

2.55

2.64

2.60

2.58

2.88

Net interest spread (FTE) (3)

3.01

2.92

3.08

2.92

2.63

Net interest margin (FTE) (1)(3)

3.60

3.54

3.69

3.50

3.25

(1)

See Reconciliation of Non-GAAP financial measures on pages 19-21.

(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 AFS 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)

Dec 31

Year ended

2025

2024

Interest income:

Interest and fees on loans:

Taxable

228,868

184,907

Tax-exempt

8,356

7,354

Interest and dividends on investment securities:

Taxable

17,444

12,930

Tax-exempt

2,040

1,550

Dividends

160

Interest on interest-bearing deposits in other banks

405

498

Interest on federal funds sold

2,424

4,132

Total interest income

259,697

211,460

Interest expense:

Interest on deposits

81,174

87,934

Interest on short-term borrowings

1,287

2,031

Interest on long-term debt

5,562

3,317

Interest on subordinated debt

4,967

1,774

Interest on junior subordinated debt

745

415

Total interest expense

93,735

95,471

Net interest income

165,962

115,989

Provision for credit losses

19,131

Net interest income after provision for credit losses

165,864

96,858

Noninterest income:

Service charges, fees, commissions and other

13,618

10,673

Merchant services income

1,299

896

Commissions and fees on fiduciary activities

2,267

2,270

Wealth management income

2,958

2,118

Mortgage banking income

549

389

Increase in cash surrender value of life insurance

2,076

1,572

Interest rate swap income

1,107

285

Net gains on equity investments

168

132

Net (losses) gains on sale of investment securities available for sale

(2,241)

Net loss on sale of fixed assets

(74)

Total noninterest income

21,727

18,336

Noninterest expense:

Salaries and employee benefits expense

56,341

45,746

Net occupancy and equipment expense

27,448

22,296

Acquisition related expenses

236

16,200

Amortization of intangible assets

6,397

3,367

FDIC insurance and assessments

3,288

3,158

Other expenses

21,647

15,959

Total noninterest expense

115,357

106,726

Income before income taxes

72,234

8,468

Income tax expense (benefit)

13,047

(30)

Net income

59,187

8,498

Other comprehensive income:

Unrealized gains on investment securities available for sale

17,574

2,569

Reclassification adjustment for losses (gains) on available for sale securities included in net income

2,241

(1)

Change in pension liability

674

1,518

Change in derivative fair value

(64)

632

Income tax expense related to other comprehensive income

4,421

1,062

Other comprehensive income, net of income tax expense

16,004

3,656

Comprehensive income

75,191

12,154

Share and per share amounts:

Net income – basic

5.92

1.00

Net income – diluted

5.88

0.99

Cash dividends declared

2.47

2.06

Average common shares outstanding – basic

9,994,281

8,531,122

Average common shares outstanding – diluted

10,073,996

8,586,035

Peoples Financial Services Corp.

Consolidated Statements of Income (Loss) (Unaudited)

(In thousands, except per share data)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Three months ended

2025

2024

Interest income:

Interest and fees on loans:

Taxable

58,576

57,621

57,459

55,212

57,048

Tax-exempt

1,658

2,151

2,302

2,245

2,238

Interest and dividends on investment securities:

Taxable

4,371

4,335

4,604

4,134

4,359

Tax-exempt

708

537

399

396

397

Dividends

Interest on interest-bearing deposits in other banks

101

113

Interest on federal funds sold

1,332

372

435

285

1,608

Total interest income

66,772

65,164

65,335

62,426

65,803

Interest expense:

Interest on deposits

19,830

20,194

20,303

20,847

24,718

Interest on short-term borrowings

311

341

410

225

474

Interest on long-term debt

1,665

1,509

1,211

1,177

1,389

Interest on subordinated debt

1,750

1,748

1,026

443

444

Interest on junior subordinated debt

182

189

188

186

267

Total interest expense

23,738

23,981

23,138

22,878

27,292

Net interest income

43,034

41,183

42,197

39,548

38,511

Provision (benefit) for credit losses

975

(838)

(239)

200

3,369

Net interest income after provision (benefit) for credit losses

42,059

42,021

42,436

39,348

35,142

Noninterest income:

Service charges, fees, commissions and other

3,164

3,386

3,664

3,404

3,368

Merchant services income

163

321

584

231

298

Commissions and fees on fiduciary activities

560

607

563

537

553

Wealth management income

739

950

619

650

633

Mortgage banking income

162

148

125

114

126

Increase in cash surrender value of life insurance

472

543

535

526

456

Interest rate swap income

718

182

164

260

Net gains (losses) on equity investments

125

(21)

(7)

(23)

Net (losses) on sale of investment securities available for sale

(2,241)

Net (losses) gains on sale of fixed assets

(139)

(615)

680

(165)

Total noninterest income

3,723

5,501

6,247

6,256

5,506

Noninterest expense:

Salaries and employee benefits expense

14,971

14,128

13,761

13,481

15,287

Net occupancy and equipment expense

7,333

7,221

6,284

6,610

6,386

Acquisition related expenses

154

4,990

Amortization of intangible assets

1,515

1,684

1,683

1,702

FDIC insurance and assessments

683

607

976

1,022

1,251

Other expenses

6,562

5,191

5,491

4,403

5,217

Total noninterest expense

31,064

28,678

28,262

27,353

34,833

Income before income taxes

14,718

18,844

20,421

18,251

5,815

Income tax expense (benefit)

2,742

3,598

3,465

3,242

(272)

Net income

11,976

15,246

16,956

15,009

6,087

Other comprehensive income (loss):

Unrealized gain (loss) on investment securities available for sale

2,728

7,415

1,859

5,572

(10,175)

Reclassification adjustment for gains on available for sale securities included in net income

2,241

Change in benefit plan liabilities

674

1,518

Change in derivative fair value

(148)

817

Income tax expense (benefit) related to other comprehensive income (loss)

1,208

1,621

409

1,183

(1,686)

Other comprehensive income (loss), net of income tax expense (benefit)

4,485

5,812

1,466

4,241

(6,154)

Comprehensive income (loss)

16,461

21,058

18,422

19,250

(67)

Share and per share amounts:

Net income – basic

1.20

1.53

1.70

1.50

0.61

Net income – diluted

1.19

1.51

1.68

1.49

0.61

Cash dividends declared

0.6175

Average common shares outstanding – basic

9,994,595

9,994,629

9,994,955

9,992,922

9,994,605

Average common shares outstanding – diluted

10,083,044

10,086,915

10,082,260

10,043,186

10,051,337

Peoples Financial Services Corp.

Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)

Three Months Ended

December 31, 2025

December 31, 2024

Average

Interest Income/

Yield/

Average

Interest Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Assets:

Earning assets:

Loans:

Taxable

3,756,872

58,576

6.19

3,757,273

57,048

6.04

Tax-exempt

261,029

2,099

3.19

278,429

2,834

4.05

Total loans

4,017,901

60,675

5.99

4,035,702

59,882

5.90

Investments:

Taxable

529,838

4,403

3.30

541,526

4,399

3.23

Tax-exempt

113,302

896

3.14

87,419

502

2.29

Total investments

643,140

5,299

3.27

628,945

4,901

3.10

Interest-bearing deposits

9,683

3.89

9,116

113

4.93

Federal funds sold

134,742

1,332

3.92

129,517

1,608

4.94

Total earning assets

4,805,466

67,401

5.56

4,803,280

66,504

5.51

Less: allowance for credit losses

40,117

39,850

Other assets

414,296

440,029

Total assets

5,179,645

5,203,459

Liabilities and stockholders’ equity:

Interest-bearing liabilities:

Money market accounts

972,871

6,780

2.76

945,644

7,526

3.17

Interest-bearing demand and NOW accounts

1,248,045

6,520

2.07

1,276,206

7,549

2.35

Savings accounts

495,001

403

0.32

502,028

651

0.52

Time deposits less than $100

316,533

2,670

3.35

497,473

5,428

4.34

Time deposits $100 or more

387,476

3,457

3.54

351,970

3,564

4.03

Total interest-bearing deposits

3,419,926

19,830

2.30

3,573,321

24,718

2.75

Short-term borrowings

31,862

311

3.87

39,319

474

4.80

Long-term debt

145,447

1,665

4.54

111,135

1,389

4.97

Subordinated debt

83,137

1,750

8.35

33,000

444

5.35

Junior subordinated debt

8,125

182

8.89

8,026

267

13.23

Total borrowings

268,571

3,908

5.77

191,480

2,574

5.35

Total interest-bearing liabilities

3,688,497

23,738

2.55

3,764,801

27,292

2.88

Noninterest-bearing deposits

914,014

904,274

Other liabilities

58,201

56,445

Stockholders’ equity

518,933

477,939

Total liabilities and stockholders’ equity

5,179,645

5,203,459

Net interest income/spread

43,663

3.01

39,212

2.63

Net interest margin

3.60

3.25

Tax-equivalent adjustments:

Loans

441

596

Investments

188

105

Total adjustments

629

701

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)

Year Ended

December 31, 2025

December 31, 2024

Average

Interest Income/

Yield/

Average

Interest Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Assets:

Earning assets:

Loans:

Taxable

3,724,920

228,868

6.14

3,205,564

184,907

5.77

Tax-exempt

273,373

10,577

3.87

251,300

9,309

3.70

Total loans

3,998,293

239,445

5.99

3,456,864

194,216

5.62

Investments:

Taxable

544,782

17,604

3.23

529,649

13,019

2.46

Tax-exempt

96,548

2,582

2.67

87,563

1,962

2.24

Total investments

641,330

20,186

3.15

617,212

14,981

2.43

Interest-bearing deposits

9,871

405

4.10

9,434

498

5.28

Federal funds sold

58,542

2,424

4.14

78,698

4,132

5.25

Total earning assets

4,708,036

262,460

5.57

4,162,208

213,827

5.14

Less: allowance for credit losses

41,399

30,724

Other assets

402,931

362,130

Total assets

5,069,568

4,493,614

Liabilities and stockholders’ equity:

Interest-bearing liabilities:

Money market accounts

958,516

27,884

2.91

621,993

29,643

4.77

Interest-bearing demand and NOW accounts

1,205,926

25,088

2.08

1,261,095

23,674

1.88

Savings accounts

497,991

1,530

0.31

463,199

4,625

1.00

Time deposits less than $100

371,339

13,812

3.72

480,737

18,124

3.77

Time deposits $100 or more

362,253

12,860

3.55

291,482

11,868

4.07

Total interest-bearing deposits

3,396,025

81,174

2.39

3,118,506

87,934

2.82

Short-term borrowings

29,241

1,287

4.40

37,083

2,031

5.48

Long-term debt

118,612

5,562

4.69

68,441

3,317

4.85

Subordinated debt

63,918

4,967

7.77

33,000

1,774

5.38

Junior subordinated debt

8,087

745

9.21

4,028

415

10.30

Total borrowings

219,858

12,561

5.71

142,552

7,537

5.29

Total interest-bearing liabilities

3,615,883

93,735

2.59

3,261,058

95,471

2.93

Noninterest-bearing deposits

898,043

714,824

Other liabilities

57,651

106,970

Stockholders’ equity

497,991

410,762

Total liabilities and stockholders’ equity

5,069,568

4,493,614

Net interest income/spread

168,725

2.98

118,356

2.21

Net interest margin

3.58

2.84

Tax-equivalent adjustments:

Loans

2,221

1,955

Investments

542

412

Total adjustments

2,763

2,367

Peoples Financial Services Corp.

Details of Net Interest Income and Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Three months ended

2025

2024

Net interest income:

Interest income:

Loans, net:

Taxable

58,576

57,621

57,459

55,212

57,048

Tax-exempt

2,099

2,722

2,914

2,842

2,834

Total loans, net

60,675

60,343

60,373

58,054

59,882

Investments:

Taxable

4,403

4,382

4,644

4,175

4,399

Tax-exempt

896

680

505

501

502

Total investments

5,299

5,062

5,149

4,676

4,901

Interest on interest-bearing balances in other banks

101

113

Federal funds sold

1,332

372

435

285

1,608

Total interest income

67,401

65,878

66,053

63,128

66,504

Interest expense:

Deposits

19,830

20,194

20,303

20,847

24,718

Short-term borrowings

311

341

410

225

474

Long-term debt

1,665

1,509

1,211

1,177

1,389

Subordinated debt

1,750

1,748

1,026

443

444

Junior subordinated debt

182

189

188

186

267

Total interest expense

23,738

23,981

23,138

22,878

27,292

Net interest income

43,663

41,897

42,915

40,250

39,212

Loans, net:

Taxable

6.19

6.12

6.22

6.05

6.04

Tax-exempt

3.19

4.00

4.14

4.11

4.05

Total loans, net

5.99

5.98

6.07

5.92

5.90

Investments:

Taxable

3.30

3.14

3.45

3.05

3.23

Tax-exempt

3.14

2.74

2.33

2.29

Total investments

3.27

3.08

3.29

2.95

3.10

Interest-bearing balances with banks

3.89

4.24

4.19

4.09

4.93

Federal funds sold

3.92

4.41

4.46

4.45

4.94

Total interest-earning assets

5.56

5.68

5.50

5.51

Interest expense:

Deposits

2.30

2.39

2.41

2.46

2.75

Short-term borrowings

3.87

4.63

4.62

4.52

4.80

Long-term debt

4.54

4.62

4.81

4.88

4.97

Subordinated debt

8.35

8.34

7.40

5.44

5.35

Junior subordinated debt

8.89

9.26

9.34

9.37

13.23

Total interest-bearing liabilities

2.55

2.64

2.60

2.58

2.88

Net interest spread

3.01

2.92

3.08

2.92

2.63

Net interest margin

3.60

3.54

3.69

3.50

3.25

Peoples Financial Services Corp.

Consolidated Balance Sheets (Unaudited)

(In thousands)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

At period end

2025

2024

Assets:

Cash and due from banks

58,420

62,133

60,173

60,125

47,029

Interest-bearing balances in other banks

9,321

9,492

9,646

9,196

8,593

Federal funds sold

201,243

108,298

105,920

7,781

80,229

Investment securities:

Available for sale

512,563

534,521

505,181

503,043

526,329

Held to maturity

72,047

73,286

75,137

76,689

78,184

Equity investments carried at fair value

2,598

2,473

2,494

2,500

2,430

Total investments

587,208

610,280

582,812

582,232

606,943

Loans held for sale

805

816

547

420

Loans

4,066,896

4,016,367

3,997,525

3,991,539

3,993,505

Less: allowance for credit losses

39,007

39,843

40,890

41,054

41,776

Net loans

4,027,889

3,976,524

3,956,635

3,950,485

3,951,729

Goodwill

75,986

Premises and equipment, net

78,496

77,009

76,896

72,492

73,283

Bank owned life insurance

88,645

88,175

87,635

87,953

87,429

Deferred tax assets

26,555

30,025

31,647

32,628

35,688

Accrued interest receivable

17,633

16,995

15,854

16,436

15,632

Other intangible assets, net

27,700

29,239

30,778

32,488

34,197

Other assets

70,677

74,664

73,350

71,136

74,919

Total assets

5,270,578

5,159,636

5,107,879

4,999,358

5,091,657

Liabilities:

Deposits:

Noninterest-bearing

954,485

912,044

899,597

901,398

935,516

Interest-bearing

3,479,584

3,377,687

3,387,752

3,415,529

3,472,036

Total deposits

4,434,069

4,289,731

4,287,349

4,316,927

4,407,552

Short-term borrowings

32,721

76,310

76,340

14,840

15,900

Long-term debt

134,352

137,029

103,449

88,403

98,637

Subordinated debt

83,187

83,111

83,164

33,000

Junior subordinated debt

8,140

8,114

8,088

8,063

8,039

Accrued interest payable

6,792

7,976

4,640

5,439

5,503

Other liabilities

51,470

48,105

50,753

50,832

54,076

Total liabilities

4,750,731

4,650,376

4,613,783

4,517,504

4,622,707

Stockholders’ equity:

Common stock

20,015

20,014

19,995

Capital surplus

251,023

250,735

250,468

250,488

250,695

Retained earnings

273,500

267,686

258,601

247,806

238,955

Accumulated other comprehensive loss

(24,691)

(29,176)

(34,988)

(36,454)

(40,695)

Total stockholders’ equity

519,847

509,260

494,096

481,854

468,950

Total liabilities and stockholders’ equity

5,270,578

5,159,636

5,107,879

4,999,358

5,091,657

Peoples Financial Services Corp.

Loan and Asset Quality Data (Unaudited)

(In thousands)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

At period end

2025

2024

Commercial

Taxable

596,422

597,163

595,042

570,966

556,630

Non-taxable

257,657

263,921

278,026

282,031

279,390

Total

854,079

861,084

873,068

852,997

836,020

Real estate

Commercial real estate

2,330,282

2,278,745

2,252,574

2,275,241

2,294,113

Residential

602,309

588,520

573,864

560,067

551,383

Total

2,932,591

2,867,265

2,826,438

2,835,308

2,845,496

Consumer

Indirect Auto

93,742

100,298

104,618

108,819

117,914

Consumer Other

17,496

14,212

13,929

14,209

14,955

Total

111,238

114,510

118,547

123,028

132,869

Equipment Financing

168,988

173,508

179,472

180,206

179,120

Total

4,066,896

4,016,367

3,997,525

3,991,539

3,993,505

Dec 31

Sept 30

June 30

Mar 31

Dec 31

At period end

2025

2024

Nonperforming assets:

Nonaccrual/restructured loans

10,796

14,386

17,390

23,002

22,499

Accruing loans past due 90 days or more

524

886

655

458

Foreclosed assets

750

1,541

Total nonperforming assets

12,070

16,813

17,462

23,684

22,984

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Three months ended

2025

2024

Allowance for credit losses:

Beginning balance

39,843

40,890

41,054

41,776

39,341

Charge-offs

1,960

489

1,151

1,233

1,108

Recoveries

149

280

1,226

311

174

Provision (benefit) for credit losses

975

(838)

(239)

200

3,369

Ending balance

39,007

39,843

40,890

41,054

41,776

Peoples Financial Services Corp.

Deposit and Liquidity Detail (Unaudited)

(In thousands)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

At period end

2025

2024

Interest-bearing deposits:

Money market accounts

989,230

1,026,725

971,136

967,661

936,239

Interest-bearing demand and NOW accounts

1,285,767

1,186,342

1,200,911

1,177,507

1,238,853

Savings accounts

497,523

493,957

500,680

502,851

492,180

Time deposits less than $250

477,115

497,131

543,257

599,127

620,725

Time deposits $250 or more

229,949

173,532

171,768

168,383

184,039

Total interest-bearing deposits

3,479,584

3,377,687

3,387,752

3,415,529

3,472,036

Noninterest-bearing deposits

954,485

912,044

899,597

901,398

935,516

Total deposits

4,434,069

4,289,731

4,287,349

4,316,927

4,407,552

December 31, 2025

At period end

Amount

Percent of Total

Number of accounts

Average Balance

Deposit Detail:

Retail

1,797,539

40.6

94,166

Commercial

1,579,584

35.6

18,474

Municipal

904,725

20.4

2,531

357

Brokered

152,221

3.4

11,709

Total Deposits

4,434,069

100.0

115,184

Uninsured

1,519,528

34.3

Insured

2,914,541

65.7

December 31, 2024

At period end

Amount

Percent of Total

Number of accounts

Average Balance

Deposit Detail:

Retail

1,779,729

40.4

98,583

Commercial

1,538,757

34.9

18,675

Municipal

832,665

18.9

2,427

343

Brokered

256,401

5.8

9,157

Total Deposits

4,407,552

100.0

119,713

Uninsured

1,381,492

31.3

Insured

3,026,060

68.7

Total Available

At December 31, 2025

Total Available

Outstanding

for Future Liquidity

FHLB advances (1)

1,692,839

658,587

1,034,252

Federal Reserve – Discount Window

348,996

Correspondent bank lines of credit

27,000

Other sources of liquidity:

Brokered deposits

790,587

152,221

638,366

Unencumbered securities

221,170

Total sources of liquidity

3,080,592

810,808

2,269,784

(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)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Average quarterly balances

2025

2024

Assets:

Loans, net:

Taxable

3,756,872

3,736,269

3,707,650

3,698,124

3,757,273

Tax-exempt

261,029

269,757

282,406

280,555

278,429

Total loans, net

4,017,901

4,006,026

3,990,056

3,978,679

4,035,702

Investments:

Taxable

529,838

553,151

540,424

555,910

541,526

Tax-exempt

113,302

98,608

86,899

87,072

87,419

Total investments

643,140

651,759

627,323

642,982

628,945

Interest-bearing balances with banks

9,683

9,441

9,186

11,197

9,116

Federal funds sold

134,742

33,443

39,084

25,979

129,517

Total interest-earning assets

4,805,466

4,700,669

4,665,649

4,658,837

4,803,280

Other assets

374,179

366,809

348,685

349,840

400,179

Total assets

5,179,645

5,067,478

5,014,334

5,008,677

5,203,459

Liabilities and stockholders’ equity:

Deposits:

Interest-bearing

3,419,926

3,353,559

3,373,916

3,437,355

3,573,321

Noninterest-bearing

914,014

905,385

897,212

875,053

904,274

Total deposits

4,333,940

4,258,944

4,271,128

4,312,408

4,477,595

Short-term borrowings

31,862

29,208

35,587

20,176

39,319

Long-term debt

145,447

129,524

101,066

97,769

111,135

Subordinated debt

83,137

83,149

55,622

33,000

Junior subordinated debt

8,125

8,098

8,075

8,050

8,026

Other liabilities

58,201

55,530

52,608

58,018

56,445

Total liabilities

4,660,712

4,564,453

4,524,086

4,529,421

4,725,520

Stockholders’ equity

518,933

503,025

490,248

479,256

477,939

Total liabilities and stockholders’ equity

5,179,645

5,067,478

5,014,334

5,008,677

5,203,459

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Three months ended

2025

2024

Core net income per share:

Net income GAAP

11,976

15,246

16,956

15,009

6,087

Adjustments:

Less: (Loss) on sale of available for sale securities

(2,241)

Add: (Loss) on sale of available for sale securities tax adjustment

(491)

Add: Acquisition related expenses

154

4,990

Less: Acquisition related expenses tax adjustment

1,089

Core net income

13,726

15,259

17,008

15,129

9,988

Average common shares outstanding – diluted

10,083,044

10,086,915

10,082,260

10,043,186

10,051,337

Core net income per diluted share

1.36

1.51

1.69

1.51

0.99

Tangible book value:

Total stockholders’ equity

519,847

509,260

494,096

481,854

468,950

Less: Goodwill

75,986

76,325

Less: Other intangible assets, net

27,700

29,239

30,778

32,488

34,197

Total tangible stockholders’ equity

416,161

404,035

387,332

373,380

358,428

Common shares outstanding

9,994,595

9,994,696

9,995,483

9,990,724

Tangible book value per share

41.64

40.43

38.75

37.35

35.88

Core return on average stockholders’ equity:

Net income GAAP

11,976

15,246

16,956

15,009

6,087

Adjustments:

Less: (Loss) on sale of available for sale securities

(2,241)

Add: (Loss) on sale of available for sale securities tax adjustment

(491)

Add: Acquisition related expenses

154

4,990

Less: Acquisition related expenses tax adjustment

1,089

Core net income

13,726

15,259

17,008

15,129

9,988

Average stockholders’ equity

518,933

503,025

490,248

479,256

477,939

Core return on average stockholders’ equity

10.49

12.03

13.92

12.80

8.31

Return on average tangible stockholders’ equity:

Net income GAAP

11,976

15,246

16,956

15,009

6,087

Average stockholders’ equity

518,933

503,025

490,248

479,256

477,939

Less: average intangibles

104,550

106,111

106,764

109,386

112,399

Average tangible stockholders’ equity

414,383

396,914

383,484

369,870

365,540

Return on average tangible stockholders’ equity

11.47

15.24

17.73

16.46

6.62

Core return on average tangible stockholders’ equity:

Net income GAAP

11,976

15,246

16,956

15,009

6,087

Adjustments:

Less: (Loss) on sale of available for sale securities

(2,241)

Add: (Loss) on sale of available for sale securities tax adjustment

(491)

Add: Acquisition related expenses

154

4,990

Less: Acquisition related expenses tax adjustment

1,089

Core net income

13,726

15,259

17,008

15,129

9,988

Average stockholders’ equity

518,933

503,025

490,248

479,256

477,939

Less: average intangibles

104,550

106,111

106,764

109,386

112,399

Average tangible stockholders’ equity

414,383

396,914

383,484

369,870

365,540

Core return on average tangible stockholders’ equity

13.14

15.25

17.79

16.59

10.87

Core return on average assets:

Net income GAAP

11,976

15,246

16,956

15,009

6,087

Adjustments:

Less: (Loss) on sale of available for sale securities

(2,241)

Add: (Loss) on sale of available for sale securities tax adjustment

(491)

Add: Acquisition related expenses

154

4,990

Less: Acquisition related expenses tax adjustment

1,089

Core net income

13,726

15,259

17,008

15,129

9,988

Average assets

5,179,645

5,067,478

5,014,334

5,008,677

5,203,459

Core return on average assets

1.05

1.19

1.36

1.23

0.76

Pre-provision net revenue (PPNR) per share:

Income before taxes (GAAP)

14,718

18,844

20,421

18,251

5,815

Add: Provision (benefit) for credit losses

975

(838)

(239)

200

3,369

Add: Provision (benefit) for credit losses on unfunded commitments

204

252

172

(202)

452

PPNR (non-GAAP)

15,897

18,258

20,354

18,249

9,636

Average common shares outstanding-diluted

10,083,044

10,086,915

10,082,260

10,043,186

10,051,337

PPNR per share (non-GAAP)

1.58

1.81

2.02

1.82

0.96

Core pre-provision net revenue (PPNR) per share:

Income before taxes (GAAP)

14,718

18,844

20,421

18,251

5,815

Add: Acquisition related expenses

154

4,990

Less: (Loss) on sale of available for sale securities

(2,241)

Add: Provision (benefit) for credit losses

975

(838)

(239)

200

3,369

Add: Provision (benefit) for credit losses on unfunded commitments

204

252

172

(202)

452

Core PPNR (non-GAAP)

18,138

18,274

20,420

18,403

14,626

Average common shares outstanding-diluted

10,083,044

10,086,915

10,082,260

10,043,186

10,051,337

Core PPNR per share (non-GAAP)

1.80

1.81

2.03

1.83

1.46

(1) Tax adjustments are calculated using the effective tax rate for the respective period.

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)

Dec 31

Year ended

2025

2024

Core net income per share:

Net income GAAP

59,187

8,498

Adjustments:

Add: ACL provision for FNCB acquired legacy loans

14,328

Less: ACL provision for FNCB acquired legacy loans tax adjustment

3,126

Less: (Loss) gain on sale of available for sale securities

(2,241)

Add: (Loss) gain on sale of available for sale securities tax adjustment

(491)

Add: Acquisition related expenses

236

16,200

Less: Acquisition related expenses tax adjustment

3,534

Core net income

61,121

32,365

Average common shares outstanding – diluted

10,073,996

8,586,035

Core net income per diluted share

6.07

3.77

Core return on average stockholders’ equity:

Net income GAAP

59,187

8,498

Adjustments:

Add: ACL provision for FNCB acquired legacy loans

14,328

Less: ACL provision for FNCB acquired legacy loans tax adjustment

3,126

Less: (Loss) gain on sale of available for sale securities

(2,241)

Add: (Loss) gain on sale of available for sale securities tax adjustment

(491)

Add: Acquisition related expenses

236

16,200

Less: Acquisition related expenses tax adjustment

3,534

Core net income

61,121

32,365

Average stockholders’ equity

497,991

410,762

Core return on average stockholders’ equity

12.27

7.88

Return on average tangible stockholders’ equity:

Net income GAAP

59,187

8,498

Average stockholders’ equity

497,991

410,762

Less: average intangibles

106,933

88,043

Average tangible stockholders’ equity

391,058

322,719

Return on average tangible stockholders’ equity

15.14

2.63

Core return on average tangible stockholders’ equity:

Net income GAAP

59,187

8,498

Adjustments:

Add: ACL provision for FNCB acquired legacy loans

14,328

Less: ACL provision for FNCB acquired legacy loans tax adjustment

3,126

Less: (Loss) gain on sale of available for sale securities

(2,241)

Add: (Loss) gain on sale of available for sale securities tax adjustment

(491)

Add: Acquisition related expenses

236

16,200

Less: Acquisition related expenses tax adjustment

3,534

Core net income

61,121

32,365

Average stockholders’ equity

497,991

410,762

Less: average intangibles

106,933

88,043

Average tangible stockholders’ equity

391,058

322,719

Core return on average tangible stockholders’ equity

15.63

10.03

Core return on average assets:

Net income GAAP

59,187

8,498

Adjustments:

Add: ACL provision for FNCB acquired legacy loans

14,328

Less: ACL provision for FNCB acquired legacy loans tax adjustment

3,126

Less: (Loss) gain on sale of available for sale securities

(2,241)

Add: (Loss) gain on sale of available for sale securities tax adjustment

(491)

—

Add: Acquisition related expenses

236

16,200

Less: Acquisition related expenses tax adjustment

3,534

Core net income

61,121

32,365

Average assets

5,069,568

4,493,614

Core return on average assets

1.21

0.72

Pre-provision net revenue (PPNR) per share:

Income before taxes (GAAP)

72,234

8,468

Add: ACL provision for FNCB acquired legacy loans

14,328

Less: ACL provision for FNCB acquired legacy loans tax adjustment

3,126

Add: Provision for credit losses

4,803

Add: Provision (benefit) for credit losses on unfunded commitments

426

(43)

PPNR (non-GAAP)

72,758

24,516

Average common shares outstanding-diluted

10,073,996

8,586,035

PPNR per share (non-GAAP)

7.22

2.86

Core pre-provision net revenue (PPNR) per share:

Income before taxes (GAAP)

72,234

8,468

Add: ACL provision for FNCB acquired legacy loans

14,328

Less: (Loss) gain on sale of available for sale securities

(2,241)

Add: Acquisition related expenses

236

16,200

Add: Provision for credit losses

4,803

Add: Provision (benefit) for credit losses on unfunded commitments

426

(43)

Core PPNR (non-GAAP)

75,235

43,755

Average common shares outstanding-diluted

10,073,996

8,586,035

Core PPNR per share (non-GAAP)

7.47

5.10

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 of FTE net interest income for the three months and year ended December 31, 2025, and 2024:

Three months ended December 31

2025

2024

Interest income (GAAP)

66,772

65,803

Adjustment to FTE

629

701

Interest income adjusted to FTE (non-GAAP)

67,401

66,504

Interest expense

23,738

27,292

Net interest income adjusted to FTE (non-GAAP)

43,663

39,212

Year ended December 31

2025

2024

Interest income (GAAP)

259,697

211,460

Adjustment to FTE

2,763

2,367

Interest income adjusted to FTE (non-GAAP)

262,460

213,827

Interest expense

93,735

95,471

Net interest income adjusted to FTE (non-GAAP)

168,725

118,356

The efficiency ratio is noninterest expenses, less amortization of intangible assets and acquisition related costs, as a percentage of FTE net interest income plus noninterest income. The following tables reconcile the non-GAAP financial measures of the efficiency ratio to GAAP for the three months and year ended December 31, 2025, and 2024:

Three months ended December 31

2025

2024

Efficiency ratio (non-GAAP):

Noninterest expense (GAAP)

31,064

34,833

Less: Amortization of intangible assets expense

1,515

1,702

Less: Acquisition related expenses

4,990

Noninterest expense (non-GAAP)

29,549

28,141

Net interest income (GAAP)

43,034

38,511

Plus: Taxable equivalent adjustment

629

701

Noninterest income (GAAP)

3,723

5,506

Less: Net gains (losses) on equity securities

125

(23)

Less: Net losses on sale of investment securities available for sale

(2,241)

Less: (Losses) on sale of fixed assets

(139)

(165)

Net interest income (FTE) plus noninterest income (non-GAAP)

49,641

44,906

Efficiency ratio (non-GAAP)

59.53

62.67

Year ended December 31

2025

2024

Efficiency ratio (non-GAAP):

Noninterest expense (GAAP)

115,357

106,726

Less: Amortization of intangible assets expense

6,397

3,367

Less: Acquisition related expenses

236

16,200

Noninterest expense (non-GAAP)

108,724

87,159

Net interest income (GAAP)

165,962

115,989

Plus: Taxable equivalent adjustment

2,763

2,367

Noninterest income (GAAP)

21,727

18,336

Less: Net gains on equity securities

168

132

Less: (Losses) gains on sale of available for sale securities

(2,241)

Less: (Losses) on sale of fixed assets

(74)

Net interest income (FTE) plus noninterest income (non-GAAP)

192,599

136,559

Efficiency ratio (non-GAAP)

56.45

63.83

SOURCE Peoples Financial Services Corp.

PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited Fourth Quarter and Full Year 2025 Earnings

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