Financial Performance - Peoples reported a net loss of $4.3 million, or $0.43 per diluted share for Q3 2024, compared to net income of $6.7 million, or $0.95 per diluted share for Q3 2023[2]. - Core net income for Q3 2024 was $16.5 million, or $1.64 per diluted share, compared to $7.5 million, or $1.05 per diluted share for Q3 2023[3]. - For the nine months ended September 30, 2024, net income was $2.4 million, or $0.30 per diluted share, down from $23.8 million, or $3.31 per diluted share for the same period in 2023[5]. - The company reported a net loss of $4,337,000 for the three months ended September 30, 2024, compared to a net income of $3,282,000 in June 2024[78]. - Core net income for the nine months ended September 30, 2024, was $25,619,000, compared to $24,517,000 for the same period in 2023, reflecting an increase of 4.5%[80]. Interest Income and Expenses - Net interest income increased by $18.0 million to $39.2 million, with a tax-equivalent net interest margin (NIM) rising 97 basis points to 3.26% due to higher earning assets and a $3.7 million net accretion impact from the FNCB merger[2][21]. - Tax-equivalent net interest income for Q3 2024 increased by $18.2 million, or 83.7%, to $40.0 million compared to $21.8 million in Q3 2023[26]. - Total interest income for the nine months ended September 30, 2024, was $145.66 million, up from $109.78 million in the same period last year, reflecting a growth of approximately 32.7%[57]. - Interest income (GAAP) for the nine months ended September 30, 2024, was $145,657,000, an increase from $109,779,000 in 2023, marking a rise of 32.7%[81]. - Interest expense rose to $29,040 thousand, up from $19,460 thousand in the prior quarter, primarily driven by higher deposit costs[66]. Noninterest Income and Expenses - Noninterest income for Q3 2024 was $5.7 million, up from $3.7 million in Q3 2023, primarily due to the FNCB merger[31]. - Noninterest income for the nine months ended September 30, 2024, was $12.7 million, an increase of $1.8 million from $10.9 million in the comparable period in 2023[36]. - Noninterest expense increased by $18.4 million to $35.5 million for the three months ended September 30, 2024, compared to $17.1 million for the same period in 2023[32]. - Noninterest expense (GAAP) for the nine months ended September 30, 2024, was $71,728,000, compared to $50,222,000 in 2023, indicating an increase of 42.7%[82]. Asset and Liability Management - At September 30, 2024, total assets were $5.4 billion, with loans totaling $4.1 billion and deposits at $4.6 billion[38]. - Total deposits increased by $1.4 billion during the nine months ended September 30, 2024, primarily due to deposits acquired in the FNCB merger[40]. - The allowance for credit losses to loans, net increased to 0.97% at September 30, 2024, up from 0.81% at June 30, 2024[15]. - Total assets increased to $5,360,138 thousand as of September 30, 2024, up from $3,825,799 thousand a year earlier, representing a growth of 40.2%[68]. - Total liabilities of the company reached $4,801,057 thousand, an increase from $3,397,539 thousand a year ago, reflecting a growth of 41.4%[76]. Credit Quality and Provisions - The provision for credit losses for the nine months ended September 30, 2024, was $15.8 million, including a $14.3 million day-one provision for non-PCD loans acquired in the FNCB merger[35]. - Nonperforming assets were $21.5 million, or 0.53% of loans, net and foreclosed assets, at September 30, 2024, compared to $4.9 million, or 0.17%, at December 31, 2023[46]. - The provision for credit losses was $15.76 million for the nine months ended September 30, 2024, compared to a credit of $1.10 million in the same period last year[57]. - The company recorded charge-offs of $534 thousand for the quarter, compared to $65 thousand in the same quarter last year, indicating a rise in credit losses[71]. Shareholder Metrics - Stockholders' equity increased to $475.1 million, or $47.53 per share, at September 30, 2024, from $340.4 million, or $48.35 per share, at December 31, 2023[44]. - The company declared cash dividends of $0.62 per share for the latest quarter, an increase from $0.41 per share in the previous quarter[56]. - The market capitalization rose to $468.55 million, significantly up from $282.34 million a year ago, representing an increase of approximately 66%[56]. - Average common shares outstanding - basic increased to 9,987,627 from 7,088,745 year-over-year, reflecting a growth of 41.0%[59]. - Tangible book value per share decreased to $36.24 from $37.07 a year ago, reflecting a decline of approximately 2.2%[56].

分组1 - Peoples Financial Services Corp. declared a fourth quarter cash dividend of $0.6175 per share, payable on December 13, 2024, to shareholders of record on November 29, 2024, representing a 50.6% increase compared to the fourth quarter of 2023 [1] - Peoples Financial Services Corp. operates as a bank holding company for Peoples Security Bank and Trust Company, providing a range of financial products and services through 39 community banking offices across Pennsylvania, New Jersey, and New York [2] - The company emphasizes a business philosophy that includes direct access to senior management and a commitment to friendly, informed, and courteous service [2] 分组2 - The merger with FNCB Bancorp, Inc. was completed on July 1, 2024, and there are expectations regarding the realization of anticipated benefits from this merger [4] - The company faces various risks and uncertainties related to the integration of FNCB, including potential challenges in achieving expected synergies and operating efficiencies [4] - Factors such as economic conditions, competitive dynamics, and management's focus on ongoing operations may impact the success of the merger and overall business performance [4]

Core Viewpoint - The merger of FNCB Bancorp, Inc. with Peoples Financial Services Corp. marks a significant milestone in the company's growth strategy, enhancing its market presence and service capabilities [2][3]. Company Overview - Peoples Financial Services Corp. is the bank holding company for Peoples Security Bank and Trust Company, operating 44 full-service community banking offices across Pennsylvania, New Jersey, and New York [3]. - The company focuses on providing a comprehensive range of financial products and services to individuals, businesses, not-for-profit organizations, and government entities, emphasizing direct access to senior management and high-quality customer service [3]. Merger Details - The merger of FNCB Bancorp, Inc. with PFIS and FNCB Bank with Peoples Security Bank and Trust Company became effective on July 1, 2024 [1]. - The closing bell ceremony at NASDAQ on July 30, 2024, will celebrate this merger, attended by key executives and board members [1][2]. Leadership Statements - Craig Best, CEO of PFIS, expressed excitement about the merger, highlighting its role in uniting organizations and enhancing financial services to communities [2]. - Jerry Champi, President of PFIS, noted that the integration of FNCB Bank into PSBT strengthens their commitment to high-quality service and market expansion [2].

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 44 full-service community banking offices located within the 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 ...

Core Viewpoint - Peoples Financial Services Corp. reported its unaudited financial results for the three and six months ended June 30, 2024, showing a decline in core net income and total deposits, while maintaining strong asset quality and liquidity [1][4][24]. Financial Performance - Core pre-provision net revenue (PPNR) for Q2 2024 was $5.2 million or $0.73 per diluted share, down from $9.0 million or $1.25 per diluted share in Q2 2023 [2]. - Core net income for Q2 2024 was $4.2 million or $0.59 per diluted share, compared to $6.7 million or $0.95 per diluted share in Q2 2023 [4]. - For the six months ended June 30, 2024, core net income was $8.1 million or $1.14 per diluted share, down from $17.0 million or $2.37 per diluted share in the same period of 2023 [4][16]. Asset and Deposit Trends - Total assets, loans, and deposits as of June 30, 2024, were $3.6 billion, $2.9 billion, and $3.1 billion, respectively [10]. - Total deposits decreased by $214.1 million during 2024, attributed to seasonal outflows of municipal deposits [4]. - Estimated total insured deposits were approximately $2.3 billion, or 75.7% of total deposits, compared to $2.4 billion, or 73.1% at the end of 2023 [4]. Interest Income and Expense - Total interest income for the six months ended June 30, 2024, was $77.4 million, an increase from $71.0 million in the same period of 2023 [16]. - Total interest expense rose to $39.1 million for the six months ended June 30, 2024, compared to $25.8 million in the prior year [16]. - Net interest income after provision for credit losses was $36.9 million for the six months ended June 30, 2024, down from $46.1 million in the same period of 2023 [16]. Noninterest Income and Expenses - Noninterest income for Q2 2024 was $3.5 million, unchanged from Q2 2023 [7]. - Noninterest expense for the six months ended June 30, 2024, was $36.2 million, an increase of $3.0 million from $33.2 million in the same period of 2023, primarily due to acquisition-related expenses and increased technology costs [9][16]. Capital and Liquidity - Stockholders' equity at June 30, 2024, was $340.8 million, or $48.29 per share, slightly up from $340.4 million, or $48.35 per share at December 31, 2023 [24]. - The company maintained a well-capitalized position, with cash and cash equivalents representing 45.4% of total assets and 53.5% of total deposits [4][24].

Safe Harbor Forward-Looking Statements: NEWS RELEASE PEOPLES FINANCIAL SERVICES CORP. Scranton, PA, July 25, 2024/PRNEWSWIRE/ – Peoples Financial Services Corp. ("Peoples" or the "Company") (NASDAQ: PFIS), the bank holding company for Peoples Security Bank and Trust Company, today reported unaudited financial results at and for the three and six months ended June 30, 2024. Core net income 1, a non-GAAP measure, excludes acquisition related expenses from the strategic combination with FNCB Bancorp, Inc. comp ...

Peoples Financial Services Corp. is the bank holding company of Peoples Security Bank and Trust Company ("Peoples Bank"), an independent community bank serving its retail and commercial customers through 28 fullservice community banking offices located within the Allegheny, Bucks, Lackawanna, Lebanon, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Susquehanna, and Wyoming Counties in Pennsylvania, Middlesex County in New Jersey and Broome County in New York. Each office, interdependent with the community ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2024 or (Exact name of registrant as specified in its charter) Pennsylvania 23-2391852 (State of incorporation) (IRS Employer ID Number) 150 North Washington Avenue, Scranton, PA 18503 (Address of principal executive offices) (Zip code) (570) 346-7741 (Registrant's telephone number, ...

Financial Performance - Peoples Financial Services Corp. reported a net income of $3.5 million, or $0.49 per diluted share for Q1 2024, a 54.3% decrease from $7.6 million, or $1.05 per diluted share in Q1 2023[3] - Core net income for Q1 2024 was $3.9 million, or $0.55 per diluted share, compared to $7.5 million, or $1.04 per share in the same period last year[4] - Net income for the three months ended March 31, 2024 was $0.49 per share, down from $0.51 per share for the previous quarter[44] - Core net income for the same period was $0.55 per share, compared to $0.61 per share in the prior quarter[44] - Comprehensive income for Q1 2024 was $2,402,000, significantly lower than $14,473,000 in Q1 2023[47] - Core net income for the quarter was $3,893 thousand, down from $4,341 thousand, a decrease of 10.3%[62] - Core net income per share decreased to $0.55 from $0.61, a decline of 9.8%[62] Income and Expenses - Tax-equivalent net interest income decreased by $3.7 million, or 15.9%, to $19.8 million in Q1 2024 from $23.5 million in Q1 2023[10] - Noninterest income for Q1 2024 was $3.4 million, a decrease of $0.3 million from the prior year's quarter, mainly due to lower swap income[16] - Total noninterest expense increased to $18,068,000 in Q1 2024, up 9.0% from $16,486,000 in Q1 2023[47] - Noninterest income totaled $3,402,000 in Q1 2024, a decrease of 7.4% compared to $3,674,000 in Q1 2023[47] - Noninterest expense (GAAP) rose to $18,068,000 in Q1 2024 from $16,486,000 in Q1 2023, an increase of 9.6%[63] Asset and Deposit Trends - Total deposits decreased by $75.1 million to $3.2 billion during Q1 2024, attributed to seasonal outflows of municipal deposits[12] - Total assets as of March 31, 2024, were $3,676,750,000, up from $3,574,845,000 in the previous year[54] - Total deposits decreased to $3,203,938 thousand, down from $3,279,037 thousand, a decline of 2.29%[59] - Noninterest-bearing deposits decreased to $616,610,000 from $744,931,000 year-over-year[54] - Total deposits decreased to $3,210,423 thousand from $3,312,338 thousand, a decline of 3.1%[61] Loan and Credit Quality - Net loan growth for Q1 2024 was $8.5 million, or 1.2% annualized, primarily driven by growth in commercial loans[20] - The provision for credit losses was $0.7 million in Q1 2024, down from $1.3 million in the prior year, reflecting a lower calculated allowance for credit losses[15] - Nonperforming assets increased to $7.7 million or 0.27% of loans, net and foreclosed assets at March 31, 2024, compared to $4.9 million or 0.17% at December 31, 2023[28] - The allowance for credit losses equaled $22.6 million or 0.79% of loans, net, at March 31, 2024, compared to $21.9 million or 0.77% at December 31, 2023[29] - The allowance for credit losses was $22,290,000 as of March 31, 2024, compared to $24,557,000 in the previous year[54] Equity and Market Capitalization - Stockholders' equity at March 31, 2024, was $340.0 million, or $48.18 per share, reflecting a decrease due to an increase in unrealized losses on available-for-sale securities[26] - Tangible stockholders' equity decreased to $39.20 per share at March 31, 2024, from $39.35 per share at December 31, 2023[27] - Market capitalization decreased to $304.24 million at March 31, 2024, from $342.89 million at December 31, 2023[44] - The total stockholders' equity slightly decreased to $339,992 thousand from $340,422 thousand, a decrease of 0.13%[55] Strategic Developments - The company announced a strategic merger with FNCB Bancorp, expected to close in the second half of 2024, creating a bank holding company with nearly $5.5 billion in assets[6] Efficiency Metrics - The efficiency ratio increased to 75.77% for the three months ended March 31, 2024, compared to 69.94% in the previous quarter[44] - The efficiency ratio (non-GAAP) increased to 75.77% in Q1 2024 compared to 60.61% in Q1 2023, indicating a decline in operational efficiency[63]

Loan Portfolio Composition - Commercial real estate loans total $1.86 billion, representing 65.4% of the gross loan portfolio as of December 31, 2023[46]. - Multi-family commercial real estate loans account for $433.2 million, or 23.3% of the commercial real estate loan portfolio[49]. - Commercial business loans comprise 19.1% of the loan portfolio, offering term loans for capital improvements and equipment acquisition[49]. - Residential real estate loans make up 12.7% of the loan portfolio, with fixed-rate loans having terms of up to 30 years[52]. - Consumer loans represent 2.9% of the loan portfolio, including lines of credit and automobile loans[58]. - Approximately 84.5% of Peoples' loan portfolio consists of commercial and industrial, construction, and commercial real estate loans, which are generally viewed as having a higher risk of default[184]. Loan Performance and Credit Quality - Total nonperforming loans increased to $4.948 million at December 31, 2023, compared to $4.134 million at December 31, 2022, reflecting a rise of 19.7%[71]. - The allowance for credit losses (ACL) decreased to $21.9 million at December 31, 2023, from $27.5 million at the end of 2022, a reduction of 20.3%[73]. - The ACL as a percentage of loans held for investment was 0.77% at the end of 2023, down from 1.01% at the end of 2022[75]. - The coverage ratio of ACL to nonperforming loans was 442.6% at December 31, 2023, compared to 664.5% at December 31, 2022[75]. - The company may need to increase its allowance for credit losses (ACL) due to potential inadequacies in absorbing actual loan losses, which could adversely affect financial conditions[186]. - The determination of ACL involves significant estimates of current credit risks and future trends, which may change due to economic conditions and borrower performance[187]. Capital Adequacy and Regulatory Compliance - Peoples Bank was classified as "well capitalized" based on its actual capital position as of December 31, 2023[111]. - The bank is subject to restrictions on dividend payments, requiring that dividends be declared only from accumulated net earnings and not reducing surplus below 100% of capital stock[100]. - Federal regulations impose a five-tiered system for measuring capital adequacy, with "well capitalized" being the highest category[111]. - The bank holding company must act as a source of financial strength to its subsidiary banks, which may require capital injections during financial distress[104]. - The bank is required to file annual and quarterly reports with the Federal Reserve Board and is subject to examinations by the FRB[95]. - The bank must meet certain minimum capital stock and surplus requirements before establishing new branch offices, requiring state approval[115]. - As of December 31, 2023, the Company's Common Equity Tier 1 capital ratio is 12.10%, significantly above the minimum requirement of 4.50%[119]. - Peoples Bank's Common Equity Tier 1 capital ratio stands at 13.30%, exceeding the minimum requirement of 4.50%[119]. - The Company's Total capital to risk-weighted assets ratio is 14.16%, well above the minimum requirement of 8.00%[119]. - Peoples Bank's Total capital to risk-weighted assets ratio is 14.12%, also exceeding the minimum requirement of 8.00%[119]. - The Company has a Tier 1 capital to average assets ratio of 8.50%, surpassing the minimum requirement of 4.00%[119]. - Peoples Bank's Tier 1 capital to average assets ratio is 9.34%, exceeding the minimum requirement of 4.00%[119]. Interest Rate Risk and Economic Conditions - Changes in interest rates significantly impact Peoples' financial condition, with the Federal Reserve's target rate currently between 5.25% and 5.50%[173]. - Rising interest rates have decreased the value of Peoples' securities portfolio, potentially leading to losses if securities need to be sold to meet liquidity needs[175]. - The company utilizes interest rate risk models and derivatives to manage interest rate exposure and ensure stability in interest income[125]. - The interest rate risk position is more asset-sensitive as of December 31, 2023, due to an increase in floating rate overnight federal funds sold position[478]. - The ALCO regularly reviews various interest rate shift scenarios, including changes in the yield curve and parallel interest rate changes of up to 400 basis points[479]. Merger and Acquisition Activities - Peoples announced a merger agreement with FNCB, where each share of FNCB common stock will be converted into the right to receive 0.1460 shares of common stock of Peoples[158]. - The merger is subject to regulatory approvals, which may impose unforeseen conditions or delays, potentially affecting the completion timeline[159]. - If the merger is not completed by September 27, 2024, either party may terminate the agreement, which could adversely impact Peoples' financial condition and stock price[162]. - Peoples incurred substantial expenses related to the merger negotiations, which would be recognized without realizing the expected benefits if the merger fails[163]. - The Merger Agreement includes provisions that may discourage other companies from pursuing business combination proposals that could provide greater value to Peoples' shareholders, including a termination fee of $4.8 million if the agreement is terminated under certain conditions[166]. - The anticipated benefits and cost savings from the merger may not be fully realized, and integration challenges could lead to unforeseen expenses[167]. Operational Risks and Challenges - The company operates 28 branch offices and is exposed to environmental liabilities related to real estate, which could have substantial financial implications[199]. - The company relies on third-party vendors for essential services, and any disruption could materially affect operations and financial results[202]. - The company is facing significant information security risks due to increased cyber-attacks and sophisticated external threats, which could disrupt operations and damage reputation[207]. - A breach of information security could lead to unauthorized use or loss of confidential information, resulting in financial losses that may exceed insurance coverage[211]. - The company’s financial performance may be adversely impacted by general economic trends, including geopolitical conflicts and public health crises[204]. - The company’s future pension plan costs could be negatively affected by various actuarial factors, potentially impacting liquidity[196]. Liquidity and Funding - Total loans held for investment increased to $2.849 billion at December 31, 2023, from $2.730 billion at the end of 2022, representing a growth of 4.4%[71]. - The total sources of liquidity amounted to $2.257 billion, with $631.4 million outstanding[84]. - At December 31, 2023, the maximum borrowing capacity with the FHLB of Pittsburgh was $1.2 billion, with $25 million outstanding in borrowings[82]. - Approximately 14.0% of the company's deposits were uninsured and uncollateralized as of December 31, 2023[190]. - The company has a high degree of uninsured deposits compared to larger national banks, potentially leading to increased regulatory scrutiny and perceived risk[221]. Regulatory Environment and Compliance - The company is subject to extensive regulation by state and federal agencies, which could materially impact operations and financial condition[219]. - Compliance with privacy and data protection laws may result in higher costs and could restrict the company's ability to provide certain products and services[228]. - Future increases in FDIC insurance premiums could adversely affect the company's earnings[225]. - The company is currently evaluating the impact of the modified Community Reinvestment Act regulations, effective January 1, 2026, but does not anticipate material operational impacts[127]. - The company is monitoring the impact of the corporate alternative minimum tax introduced by the Inflation Reduction Act, which applies to companies with net income exceeding $1 billion[147]. Market and Competitive Risks - Strong competition in the banking sector limits Peoples' growth and profitability, as larger institutions may offer services that Peoples cannot provide[156]. - Negative developments in the banking industry in 2023 have eroded consumer confidence, impacting liquidity and loan funding capacity for regional banks like Peoples[152]. - Economic conditions such as inflation and unemployment levels could adversely affect Peoples' business and profitability, impacting loan repayment and demand for banking products[153]. - The company faces increasing scrutiny regarding ESG practices, which may impose additional costs and risks, potentially impacting its reputation and stock price[229].