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 June 30, 2021 or ☐ Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the transition period from 001-36388 (Commission File Number) PEOPLES FINANCIAL SERVICES CORP. (Exact name of registrant as specified in its charter) Pennsylvania 23-2391852 (State ...

Financial Performance - Net income for the three months ended March 31, 2021, was $9,478 thousand, contributing to an increase in stockholders' equity to $317,331 thousand [186]. - For the three months ended March 31, 2021, net income was $9,478, or $1.31 per diluted share, representing a 79.5% increase compared to $5,281, or $0.71 per diluted share for the same period in 2020 [190]. - Noninterest income for the three months ended March 31, 2021 totaled $3,517, a slight decrease of $33 or 0.9% from $3,550 in 2020 [214]. - Noninterest expense decreased by $1,022 or 7.5% to $12,629 in 2021 from $13,651 in 2020 [217]. - Salaries and employee benefits expense totaled $6,570 for the first quarter of 2021, a decrease of $1,286 or 16.4% compared to the first quarter of 2020 [218]. Asset and Loan Growth - Total assets increased by $111,667, or 15.7% annualized, to $2,995,469 at March 31, 2021, from $2,883,802 at December 31, 2020 [135]. - Total loans slightly increased to $2,179,534 at March 31, 2021, compared to $2,177,982 at December 31, 2020, with a net loan growth of $11,075 from PPP loans [135]. - Total loans increased to $2,179,534 at March 31, 2021, from $2,177,982 at December 31, 2020, reflecting a slight growth of $1,552 due to net increases in PPP loans [141]. - Total loans excluding PPP loans averaged $1,983,947 for the three months ended March 31, 2021, an increase of $18,232 or 0.9% compared to the same period in 2020 [145]. - Consumer loans decreased by $4,641, or 22.6% on an annualized basis, to $78,651 at March 31, 2021, primarily due to payoffs outpacing dealer indirect auto loan origination volumes [142]. - Residential real estate loans decreased by $4,188, or 6.1% on an annualized basis, to $273,226 at March 31, 2021, driven by significant refinancing activity due to lower mortgage rates [143]. - Commercial real estate loans increased by $12,577, or 4.5% annualized, to $1,150,567 at March 31, 2021, due to increased activity in all markets [141]. Deposits and Borrowings - Deposits increased by $113,303, or 18.9% annualized, driven by demand for liquid accounts and federal government stimulus payments [135]. - Total deposits increased by $113,303, or 4.6%, to $2,550,416 at March 31, 2021, from $2,437,113 at December 31, 2020, driven by elevated demand for liquid accounts [160]. - Interest-bearing deposits averaged $1,833,661 in 2021, an increase of $309,396, or 20.3%, compared to $1,524,265 in 2020 [161]. - Total borrowings increased to $66,244 thousand as of March 31, 2021, up from $64,769 thousand at December 31, 2020, representing an increase of $1,475 thousand [165]. - Short-term borrowings rose to $51,980 thousand at March 31, 2021, compared to $50,000 thousand at December 31, 2020, an increase of $1,980 thousand [165]. Investment Portfolio - The investment portfolio totaled $333,753 at March 31, 2021, an increase of $37,842, or 12.8% from $295,911 at December 31, 2020 [136]. - The available-for-sale investment securities portfolio totaled $333.8 million at March 31, 2021, with $165.9 million being unencumbered [177]. - The tax-equivalent yield on the investment portfolio decreased by 33 basis points to 2.15% for the three months ended March 31, 2021, from 2.48% for the comparable period of 2020 [137]. Interest Rates and Income - The tax-equivalent net interest income increased by $1,189 to $21,103 for the three months ended March 31, 2021, compared to $19,914 for the same period in 2020 [198]. - The net interest spread decreased to 2.98% for the three months ended March 31, 2021, down from 3.24% for the same period in 2020, as the earning asset yield decreased by 70 basis points [198]. - The overall yield on earning assets decreased to 3.55% for the three months ended March 31, 2021, down from 4.25% for the same period in 2020 [206]. - The tax-equivalent yield on the loan portfolio decreased to 4.09% in 2021 from 4.55% in 2020, resulting in a decrease in interest income of $9,479 [206]. - Average earning assets rose by $426,664 to $2,716,867 for the three months ended March 31, 2021, compared to $2,290,203 for the same period in 2020 [202]. Credit Quality and Losses - Outstanding loan balances in deferral decreased to $1.3 million at March 31, 2021, from $6.1 million at December 31, 2020, representing less than 0.1% of total loan balances [130]. - Nonperforming assets decreased to $8,376, or 0.28% of total assets at March 31, 2021, down from $10,502, or 0.36% at December 31, 2020 [153]. - The allowance for loan losses decreased by $561, or 2.1%, to $26,783, or 1.23% of loans, net at March 31, 2021, compared to $27,344, or 1.26% at December 31, 2020 [159]. - The provision for loan losses was a credit of $500 for the three months ended March 31, 2021, reflecting improved credit quality [213]. Regulatory and Economic Factors - The effective tax rate for the three months ended March 31, 2021 was 22.0%, an increase from 11.4% in the same period of 2020 [224]. - FDIC assessments increased by $186, or 251.4%, compared to the same period in 2020 due to a prior period credit recognized [222]. - The Federal Open Market Committee (FOMC) lowered the federal funds target rate by 150 basis points in March 2020, maintaining a low interest rate environment [237]. - The transition from USD-LIBOR to the Secured Overnight Funding Rate (SOFR) is expected to be completed by the end of 2021, with the company monitoring the associated risks [238].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36388 Peoples Financial Services Corp. (Exact name of registrant as specified in its charter) Pennsylvania 23-2391852 S ...