PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited Second Quarter and Year to Date 2026 Earnings

PR Newswire

MOOSIC, Pa., July 30, 2026

MOOSIC, Pa., July 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 and six months ended June 30, 2026.  

Peoples Financial Services Corp. Logo. (PRNewsFoto/Peoples Financial Services Corp.) (PRNewsFoto/PEOPLES FINANCIAL SERVICES CORP_)

Peoples reported net income of $14.8 million, or $1.48 per diluted share for the three months ended June 30, 2026, a decrease of $2.2 million compared to net income of $17.0 million, or $1.68 per diluted share for the three months ended June 30, 2025. Net income for the six months ended June 30, 2026 totaled $29.6 million, or $2.95 per diluted share, a decrease of $2.4 million, compared to $32.0 million, or $3.18 per diluted share for the same six months of 2025. Return on average assets ("ROAA") and return on average equity ("ROAE") on an annualized basis for the three months ended June 30, 2026, was 1.13% and 11.10% compared to 1.36% and 13.87% for the three months ended June 30, 2025. For the six months ended June 30, annualized ROAA and ROAE were 1.14% and 11.18%, respectively, in 2026 compared to 1.29% and 13.30%, respectively, in 2025. The decrease in net income for both the quarterly and year-to-date periods was primarily attributable to a higher provision for credit losses, reflecting strong loan growth, along with increases in noninterest expense and income tax expense, partially offset by higher net interest income and noninterest income.

"Our second quarter and year to date results reflect both the strength of our underlying business and the disciplined growth strategy we continue to execute" commented Gerard A. Champi, President and CEO. "While net income declined compared to last year, our performance was driven by robust loan growth, higher net interest income, and solid noninterest income. The increase in our provision for credit losses and higher operating expenses were consistent with the expansion of our balance sheet and ongoing investments in our franchise. Even with these pressures, we delivered healthy returns for the quarter. As we move forward, we remain focused on prudent risk management, operational efficiency, and delivering long term value for our shareholders." concluded Mr. 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 and core net income, 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 available for sale ("AFS") investment securities and acquisition-related expenses. 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

INCOME STATEMENT REVIEW

Second Quarter 2026 Results – Comparison to First Quarter 2026 and Second Quarter 2025

Net interest income was $45.6 million for the second quarter of 2026, an increase of $2.7 million from the first quarter of 2026 and $3.4 million from the second quarter of 2025. Interest income rose to $67.8 million, compared with $64.7 million in the linked quarter and $65.3 million in the prior-year quarter. On an FTE basis, interest income was $68.7 million, compared with $65.6 million in the first quarter of 2026 and $66.1 million in the second quarter of 2025. The increase was primarily attributable to loan growth and higher investment income resulting from the Company's investment portfolio repositioning strategy, which commenced in the fourth quarter of 2025 and was completed in the first quarter of 2026. Interest expense was $22.1 million for the second quarter of 2026, an increase of $0.3 million compared with $21.8 million in the linked quarter, which primarily reflected increased utilization of FHLB of Pittsburgh advances. Conversely, interest expense decreased $1.0 million from $23.1 million for the comparable prior-year quarter, primarily reflecting lower deposit and borrowing rates. The decrease in rates was partially offset by increased utilization of short-term and long-term borrowings through the FHLB of Pittsburgh and subordinated debt costs associated with the Company's June 2025 issuance of $85 million of subordinated notes, which carry an initial fixed rate of 7.75% through June 2030, as well as the redemption of $33.0 million of subordinated notes due in June 2030 that had repriced to 9.08%.

For the three months ended June 30, 2026, the provision for credit losses was $3.1 million, compared with a benefit of $0.2 million for the same period in 2025, an increase of $3.3 million. The increase in the current quarter was primarily attributable to significant loan growth, while the prior-year quarter benefited from lower specific reserves associated with reductions in nonperforming loans. On a linked quarter basis, the provision increased $1.7 million from $1.4 million, which also primarily reflected strong loan growth.

Noninterest income was $6.5 million and $6.2 million for the three months ended June 30, 2026, and 2025, respectively. The $0.3 million increase in noninterest income was primarily due to a gain of $0.3 million on the sale of a branch property that was part of a sale/leaseback transaction, coupled with increases in wealth management and mortgage banking income, which includes gains on the sale of residential mortgage loans, partially offset by decreases in service charges, fees and commissions and merchant services income. 

Noninterest income decreased $0.4 million from $6.9 million for the first quarter of 2026, primarily due to a $0.5 million reduction in interest rate swap income, partially offset by higher service charges, fees and commissions, merchant services income, and a $0.3 million gain on the sale of a branch property that was part of the aforementioned sale/leaseback transaction. The first quarter of 2026 included a $0.5 million gain on the sale of investment securities related to the Company's portfolio repositioning efforts and $0.5 million in gains on equity investments. There were no sales of available for sale investment securities during the second quarter of 2026.

Noninterest expense was $30.6 million for the second quarter of 2026, an increase of $2.3 million from $28.3 million for the three months ended June 30, 2025, which primarily reflected increases in salaries and employee benefits, due to annual merit increases and higher benefit costs, coupled with an increase in occupancy and equipment expense resulting from higher leasing costs and data processing expenses. Salaries and employee benefits expense was $15.1 million for the three months ended June 30, 2026, compared to $13.8 million for the same three months in 2025. Net occupancy and equipment expenses were $7.3 million for the second quarter of 2026, an increase of $1.0 million from $6.3 million for the same quarter of 2025. On a linked basis, noninterest expense increased $0.7 million from $29.9 million for the quarter ended March 31, 2026, which reflected increases in salaries and employee benefits expenses and other expenses, partially offset by a reduction in occupancy and equipment expense.

Income tax expense was $3.6 million for the three months ended June 30, 2026, compared to $3.8 million for the three months ending March 31, 2026, and $3.5 million for the three months ended June 30, 2025. The effective tax rate was 19.6% for the three months ended June 30, 2026, 20.4% for the three months ended March 31, 2026 and 17.0% for the quarter ended June 30, 2025. The increase in the effective tax rate was largely due to an increase in amortization associated with the Company's low-income housing tax credit investments, coupled with an increase in the provision for state income taxes.

Six-Month Results – Comparison to Prior Year First Six Months

Net interest income for the six months ended June 30, 2026, increased $6.7 million to $88.5 million from $81.7 million for the six months ended June 30, 2025. On an FTE basis, net interest income for the six months ended June 30, 2026, increased $7.0 million to $90.2 million from $83.2 million for the six months ended June 30, 2025. The increase in FTE net interest income was due to a $5.0 million increase in tax-equivalent interest income, a non-GAAP measure1, coupled with a $2.0 million decrease in interest expense. The Company's net interest spread widened 16 basis points to 3.16 % for the first six months of 2026 from 3.00 % for the same six-month period of 2025. Additionally, comparing the first six months of 2026 and 2025, the Company's FTE net interest margin widened 15 basis points to 3.75% from 3.60%, respectively.

The increase in fully tax-equivalent interest income was primarily driven by higher earning asset balances, particularly taxable loans. This benefit was partially offset by lower overall FTE yields, primarily on taxable loans. Higher balances and yields on tax-exempt investment securities also contributed to the increase.

Total average earning assets increased $195.0 million to $4.9 billion for the six months ended June 30, 2026 from $4.7 billion for the same six months of 2025. Average taxable loans increased $214.0 million to $3.9 billion from $3.7 billion comparing the six months ended June 30, 2026, and 2025, respectively. The yield on taxable loans decreased 18 basis points to 5.96% from 6.14%, respectively, comparing the first six months of 2026 and 2025, which primarily reflected a 75-basis point reduction in the prime rate during the second half of 2025. Accretion associated with purchase accounting fair value discounts on purchased loans was $6.5 million for the six months ended June 30, 2026, compared to $8.5 million for the same period of 2025. Average tax-exempt investments totaled $155.0 million for the six months ended June 30, 2026, an increase of $68.0 million from $87.0 million for the same six-month period ended June 30, 2025. The FTE yield on the tax-exempt investment securities portfolio increased 161 basis points to 3.94% for the six months ended June 30, 2026, from 2.33% for the same six months of 2025. The increase in yield was predominantly due to strategic portfolio repositioning beginning in the fourth quarter of 2025, as new purchases were added at yields higher than existing portfolio yields.

Interest expense decreased $2.0 million to $44.0 million for the six months ended June 30, 2026, compared with $46.0 million for the same period in 2025, primarily due to lower average deposit rates and balances on small-dollar time deposits. These benefits were partially offset by higher average rates and balances on subordinated debt. The average rate paid on interest-bearing deposits decreased 29 basis points to 2.15% from 2.44%, largely reflecting lower market rates.

Average small dollar time deposits, which include brokered deposits, decreased $134.0 million to $280.2 million, for the six months ended June 30, 2026, from $414.2 million for the six months ended June 30, 2025. Average brokered deposits decreased $82.3 million comparing the six months ended June 30, 2026, and 2025. The Company let these higher-costing deposits roll off at maturity and were replaced with lower-costing non-maturity deposits and borrowings. Additionally, the average rate paid for small dollar time deposits decreased 83 basis points to 3.17% from 4.00% for the six months ended June 30, 2026, and 2025, respectively. Average subordinated debt increased $38.9 million to $83.3 million for the six months ended June 30, 2026, from $44.4 million for the same period in 2025, while the average rate paid on subordinated debt increased 179 basis points to 8.47% from 6.68% for the periods ended June 30, 2026, and 2025, respectively, due to a net new issuance of subordinated debt in the second quarter of 2025 in the amount of $52 million.

For the six months ended June 30, 2026, the provision for credit losses was $4.5 million, an increase of $4.5 million from a negligible $39 thousand benefit recorded for the same six months of 2025. The increase in loan provisioning for the year-to-date period of 2026 was primarily impacted by significant loan growth. 

Noninterest income was $13.4 million and $12.5 million for the six months ended June 30, 2026, and 2025, respectively. The $0.9 million increase in noninterest income was primarily due to increases in interest rate swap income of $0.6 million, along with combined gains of $1.0 million on the sale of investment securities available for sale and on the sale and market value appreciation of equity securities and a $0.3 million increase in mortgage banking income, partially offset by a decrease in service charge, fee, and commission income of $0.5 million. The current six-month period ended June 30, 2026, includes a gain on the sale of a branch property of $0.3 million that was part of the aforementioned sale/leaseback transaction. Additionally, the comparable prior year period included a gain of $0.7 million on the sale of the Company's former corporate headquarters in Scranton, PA.

Noninterest expense increased $4.9 million to $60.5 million for the six months ended June 30, 2026, from $55.6 million for the six months ended June 30, 2025, which primarily reflected increases in salaries and employee benefits expenses, and occupancy and equipment expenses. Salaries and employee benefits expense was $29.6 million for the six months ended June 30, 2026, compared to $27.2 million for the same six months in 2025. The $2.4 million increase resulted primarily from annual merit increases and higher health insurance costs. Net occupancy and equipment expenses were $15.0 million for the first six months of 2026, an increase of $2.1 million from $12.9 million for the same six-month period in 2025. The increase was largely caused by higher rent expense associated with the new corporate headquarters and increases in data processing expenses related to the implementation of an on-line account opening platform.

Income tax expense was $7.4 million for the six months ended June 30, 2026, compared to $6.7 million for the six months ended June 30, 2025. The effective tax rate was 20.0% for the six months ended June 30, 2026, and 17.3% in the prior year's same six-month period. The increase in the effective tax rate was largely due to an increase in amortization associated with the Company's low-income housing tax credits investments, coupled with an increase in the provision for state income taxes.

BALANCE SHEET REVIEW

Total loans were $4.3 billion at June 30, 2026, an increase of $112.6 million compared to $4.2 billion at March 31, 2026, and an increase of $305.3 million compared to $4.0 billion at June 30, 2025. Strong demand in all markets for commercial and residential real estate loans were partially offset by reductions to indirect auto, equipment financing and municipal loans.

Total investments were $529.6 million at June 30, 2026, compared to $542.9 million at March 31, 2026, and $582.8 million at June 30, 2025. At June 30, 2026, available for sale securities totaled $458.1 million, a decrease of $11.2 million from $469.3 million at March 31, 2026, and a decrease of $47.1 million from $505.2 million at June 30, 2025. Beginning in the fourth quarter of 2025, the Company began a repositioning of its investment securities portfolio, which was completed in the first quarter of 2026. Proceeds of the sales of U.S. government agency and sponsored agency mortgage-backed securities were used in part to purchase higher yielding US agency mortgage-backed securities and tax-exempt bonds. The Company used the remaining proceeds and the majority of the principal cash flows received during the first half of 2026 to fund loan growth. Held to maturity ("HTM") securities totaled $68.7 million at June 30, 2026, a decrease of $1.9 million from $70.6 million at March 31, 2026, and a decrease of $6.4 million from $75.1 million at June 30, 2025.

Total deposits were $4.5 billion at June 30, 2026, an increase of $83.5 million from $4.4 billion at March 31, 2026, and an increase of $221.5 million from $4.3 billion at June 30, 2025. Noninterest-bearing deposits decreased $22.8 million to $946.5 million at June 30, 2026, from $969.3 million at March 31, 2026, but increased $46.9 million from $899.6 million at June 30, 2025. Interest-bearing deposits increased $106.3 million from $3.5 billion at March 31, 2026, and $174.6 million from $3.4 billion at June 30, 2025, primarily reflecting an increase in brokered deposits. The Company increased its utilization of short-term and longer-term callable brokered deposits during the second quarter of 2026 to offset cyclical outflows of municipal deposits. As a result, brokered deposits represented 7.7% of total deposits at June 30, 2026, compared with 2.5% at March 31, 2026, and 4.6% at June 30, 2025. Approximately 31% of deposits were uninsured at June 30, 2026, compared with 34.5% at March 31, 2026 and 30.7% at June 30, 2025. 

The Company maintained a strong capital position at June 30, 2026. Stockholders' equity equaled $536.2 million or $53.56 per share at June 30, 2026, compared to $525.5 million or $52.50 per share at March 31, 2026, and $494.1 million, or $49.44 per share at June 30, 2025. The increase in stockholders' equity in all periods is primarily attributable to net income, partially offset by dividends paid to shareholders.

Tangible book value, a non-GAAP measure1, increased to $43.51 per share at June 30, 2026, from $42.29 per share at March 31, 2026, and $38.75 at June 30, 2025. The Company declared dividends of $0.625 for the first and second quarters of 2026 and $0.6175 for the quarter ending June 30, 2025. 

ASSET QUALITY REVIEW

Nonperforming assets, which include nonperforming loans, loans past due 90 days or more and still accruing, and foreclosed assets, were $14.7 million or 0.34% of loans, net and foreclosed assets, at June 30, 2026, a $2.4 million increase compared to $12.3 million, or 0.29% of loans, net and foreclosed assets at March 31, 2026.  The linked-quarter increase was primarily due to one commercial relationship involving two loans placed on nonaccrual status at the end of the second quarter of 2026. In comparison to the year ago period, nonperforming assets decreased $2.8 million from $17.5 million, or 0.44% of loans, net and foreclosed assets at June 30, 2025, primarily reflecting a $3.7 million reduction in nonaccrual loans. Nonperforming assets represented 0.27% of total assets at June 30, 2026, compared to 0.23% at March 31, 2026 and 0.34% at June 30, 2025. At June 30, 2026, the Company held one foreclosed commercial property with a carrying value of $0.6 million. The carrying value of this property was $0.8 million at March 31, 2026. The property went under a sales agreement during the second quarter, and it was written down to the sales price less estimated selling costs. The Company had no foreclosed assets at June 30, 2025.

During the three months ended June 30, 2026, net charge-offs were $0.4 million and the provision for credit losses was $3.1 million, compared to net recoveries of $0.1 million and a benefit for credit losses of $0.2 million for the same period of 2025. The allowance for credit losses equaled $42.3 million or 0.98% of loans, net, at June 30, 2026, compared to $39.6 million or 0.94% of loans, net, at March 31, 2026, and $40.9 million or 1.02% of loans, net at June 30, 2025.

_________________________________
1
See reconciliation of non-GAAP financial measures on pg.14-15.

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:

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to risks and uncertainties. These statements are based on assumptions and may describe future plans, strategies and expectations of Peoples Financial Services Corp. and its subsidiaries (the "Company") that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond the Company's control). These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions. All statements in this release, other than statements of historical facts, are forward-looking statements.

The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Important factors that could cause the Company's actual results to differ materially from those in the forward-looking statements include, but are not limited to: changes in interest rates, including their effect on the Company's investment values; impairment charges relating to the Company's investment portfolio; credit risks in connection with the Company's lending activities; the Company's exposure to commercial and industrial, construction, commercial real estate, and equipment finance loans; the Company's ability to maintain an adequate allowance for credit losses; access to liquidity; the strength of the Company's customer deposit levels; unrealized losses; reliance on the Company's subsidiaries; accounting procedures, policies and requirements; changes in the value of goodwill; the Company's ability to attract and retain key personnel; the strength of the Company's disclosure controls and procedures and internal controls over financial reporting; potential for errors, omissions or fraud; environmental liabilities; reliance on third-party vendors and service providers; the Company's ability to compete effectively in the Company's industry and within the Company's market area, including with respect to competition from financial technology companies and non-bank entities; the development and use of artificial intelligence ("AI") in business processes, services, and products, including emerging focus among regulators and other officials related to risks in connection with the development and use of AI; the Company's 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; the Company's ability to comply with privacy and data protection requirements; changes in U.S. or regional economic conditions; the soundness of other financial institutions; changes in laws and regulations; geopolitical instability, including wars and other conflicts; fiscal and monetary policies of the federal government and its agencies; a failure to meet minimum capital requirements; the Company's ability to realize the anticipated benefits of future acquisitions or a change in control; and the Company's ability to pay dividends. Additional factors that may affect the Company's results are discussed in the Company's 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.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Summary Data
Peoples Financial Services Corp. 
Three Quarter and Six-Month Trend (Unaudited)
(In thousands, except share and per share data)





Three Months Ended




Six Months Ended




June 30



Mar 31



June 30



June 30



June 30




2026



2026



2025



2026



2025


Key performance data:





















Share and per share amounts:





















Net income - diluted


$

1.48



$

1.47



$

1.68



$

2.95



$

3.18


Core net income (1)


$

1.48



$

1.43



$

1.69



$

2.91



$

3.19


Cash dividends declared


$

0.6250



$

0.6250



$

0.6175



$

1.2500



$

1.2350


Book value


$

53.56



$

52.50



$

49.44



$

53.56



$

49.44


Tangible book value (1)


$

43.51



$

42.29



$

38.75



$

43.51



$

38.75


Market value:





















High


$

67.75



$

57.17



$

51.21



$

67.75



$

53.70


Low


$

52.63



$

47.82



$

40.67



$

47.39



$

40.67


Closing


$

66.37



$

53.33



$

49.37



$

66.37



$

49.37


Market capitalization


$

664,388



$

533,859



$

493,438



$

664,388



$

493,438


Common shares outstanding



10,010,367




10,010,488




9,994,696




10,010,367




9,994,696


Selected ratios:





















Return on average stockholders'
equity (2)



11.10

%



11.26

%



13.87

%



11.18

%



13.30

%

Core return on average
stockholders' equity (1)(2)



11.10

%



10.95

%



13.92

%



11.03

%



13.37

%

Return on average tangible
stockholders' equity (1)(2)



13.70

%



13.97

%



17.73

%



13.83

%



17.13

%

Core return on average tangible
stockholders' equity (1)(2)



13.70

%



13.59

%



17.79

%



13.64

%



17.23

%

Return on average assets (2)



1.13

%



1.15

%



1.36

%



1.14

%



1.29

%

Core return on average assets (1)(2)



1.13

%



1.12

%



1.36

%



1.13

%



1.29

%

Stockholders' equity to total assets



9.86

%



9.69

%



9.67

%



9.86

%



9.67

%

Efficiency ratio (1)(3)



55.16

%



57.09

%



53.92

%



56.10

%



54.81

%

Nonperforming assets to loans, net,
and foreclosed assets



0.34

%



0.29

%



0.44

%



0.34

%



0.44

%

Nonperforming assets to total assets



0.27

%



0.23

%



0.34

%



0.27

%



0.34

%

Net charge-offs to average loans,
net (2)



0.04

%



0.08

%



0.00

%



0.06

%



0.00

%

Allowance for credit losses to loans,
net



0.98

%



0.94

%



1.02

%



0.98

%



1.02

%

Interest earning assets yield (FTE)
(4)



5.64

%



5.51

%



5.68

%



5.57

%



5.59

%

Cost of funds



2.40

%



2.41

%



2.60

%



2.41

%



2.59

%

Net interest spread (FTE) (4)



3.24

%



3.10

%



3.08

%



3.16

%



3.30

%

Net interest margin (FTE) (1)(4)



3.82

%



3.67

%



3.69

%



3.75

%



3.60

%



(1)

See Reconciliation of Non-GAAP financial measures on pages 14-15.

(2)

Presented on an annualized basis.

(3)

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 (losses) gains on sales of fixed assets.

(4)

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 and Comprehensive Income (Unaudited)
(In thousands, except per share data)




Three Months Ended


Six Months Ended



June 30


Mar 31


June 30



June 30



June 30



2026


2026


2025



2026



2025

Interest income:
















Interest and fees on loans:
















Taxable


$

59,483


$

56,316


$

57,459


$

115,799


$

112,671

Tax-exempt



2,155



2,068



2,302



4,223



4,547

Interest and dividends on investment securities:
















Taxable



3,926



4,035



4,604



7,961



8,738

Tax-exempt



1,261



1,133



399



2,394



795

Dividends



305



259



40



564



81

Interest on interest-bearing deposits in other banks



622



893



531



1,515



929

Total interest income



67,752



64,704



65,335



132,456



127,761

Interest expense:
















Interest on deposits



18,188



18,139



20,303



36,327



41,150

Interest on short-term borrowings



536



372



410



908



635

Interest on long-term debt



1,500



1,404



1,211



2,904



2,388

Interest on subordinated debt



1,750



1,749



1,026



3,499



1,469

Interest on junior subordinated debt



174



173



188



347



374

Total interest expense



22,148



21,837



23,138



43,985



46,016

Net interest income



45,604



42,867



42,197



88,471



81,745

Provision (benefit) for credit losses



3,105



1,387



(239)



4,492



(39)

Net interest income after provision (benefit) for
credit losses



42,499



41,480



42,436



83,979



81,784

Noninterest income:
















Service charges, fees, commissions and other



3,411



3,157



3,664



6,568



7,068

Merchant services income



489



180



584



669



815

Commissions and fees on fiduciary activities



588



551



563



1,139



1,100

Wealth management income



753



646



619



1,399



1,269

Mortgage banking income



302



241



125



543



239

Increase in cash surrender value of life insurance



500



497



535



997



1,061

Interest rate swap income



187



660



164



847



207

Net gains (losses) on equity investments



33



456



(7)



489



64

Net gains on sale of investment securities available for sale






510






510




Net gains on sale of fixed assets



271









271



680

Total noninterest income



6,534



6,898



6,247



13,432



12,503

Noninterest expense:
















Salaries and employee benefits expense



15,087



14,517



13,761



29,604



27,242

Net occupancy and equipment expense



7,338



7,675



6,284



15,013



12,894

Acquisition related expenses









66






220

Amortization of intangible assets



1,518



1,517



1,684



3,035



3,367

FDIC insurance and assessments



709



756



976



1,465



1,998

Other expenses



5,958



5,398



5,491



11,356



9,894

Total noninterest expense



30,610



29,863



28,262



60,473



55,615

Income before income taxes



18,423



18,515



20,421



36,938



38,672

Income tax expense



3,618



3,768



3,465



7,386



6,707

Net income


$

14,805


$

14,747


$

16,956


$

29,552


$

31,965

Other comprehensive income:
















Unrealized gains (losses) on investment securities available for
sale


$

2,431


$

(3,383)


$

1,859


$

(952)


$

7,431

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






(510)






(510)




Change in derivative fair value



80



156



16



236



(132)

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



551



(820)



409



(269)



1,592

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



1,960



(2,917)



1,466



(957)



5,707

Comprehensive income


$

16,765


$

11,830


$

18,422


$

28,595


$

37,672

Share and per share amounts:
















Net income - basic


$

1.48


$

1.47


$

1.70


$

2.95


$

3.20

Net income - diluted



1.48



1.47



1.68



2.95



3.18

Cash dividends declared


$

0.6250


$

0.6250


$

0.6175


$

1.2500


$

1.2350

Average common shares outstanding - basic



10,010,529



10,002,903



9,994,955



10,006,737



9,993,944

Average common shares outstanding - diluted



10,036,037



10,029,213



10,082,260



10,033,374



10,062,831

 

Peoples Financial Services Corp.
Net Interest Margin (Unaudited)
(In thousands, fully taxable equivalent basis)




Three Months Ended




June 30, 2026



March 31, 2026



June 30, 2025




Average


Interest


Yield/



Average


Interest


Yield/



Average


Interest


Yield/




 Balance  


Inc./Exp.


Rate  



 Balance  


Inc./Exp.


Rate  



 Balance  


Inc./Exp.


Rate  


Assets:




























Earning assets:




























Loans:




























Taxable


$

3,973,583


$

59,483


6.00

%


$

3,859,588


$

56,316


5.92

%


$

3,707,650


$

57,459


6.22

%

Tax-exempt



263,731



2,728


4.15




258,745



2,618


4.10




282,406



2,914


4.14


Total loans



4,237,314



62,211


5.89




4,118,333



58,934


5.80




3,990,056



60,373


6.07


Investments:




























Taxable



422,646



4,231


4.02




461,292



4,294


3.78




540,424



4,644


3.45


Tax-exempt



160,117



1,596


4.00




149,700



1,434


3.88




86,899



505


2.33


Total investments



582,763



5,827


4.01




610,992



5,728


3.80




627,323



5,149


3.29


Interest-bearing deposits



67,064



622


3.72




97,657



893


3.71




48,270



531


4.41


Total earning assets



4,887,141



68,660


5.64

%



4,826,982



65,555


5.51

%



4,665,649



66,053


5.68

%

Less: allowance for credit losses



40,521









39,470









41,837







Other assets



401,762









399,812









390,522







Total assets


$

5,248,382








$

5,187,324








$

5,014,334







Liabilities and stockholders' equity:




























Interest-bearing liabilities:




























Money market accounts


$

1,034,838


$

6,673


2.59

%


$

1,020,493


$

6,471


2.57

%


$

708,585


$

6,992


3.96

%

Interest-bearing demand and NOW accounts



1,213,141



5,825


1.93




1,224,040



5,938


1.97




1,406,998



5,882


1.68


Savings accounts



511,202



466


0.37




504,166



421


0.34




501,975



376


0.30


Time deposits less than $100



290,045



2,297


3.18




270,285



2,109


3.16




404,142



3,991


3.96


Time deposits $100 or more



365,167



2,927


3.22




383,825



3,200


3.38




352,216



3,062


3.49


Total interest-bearing deposits



3,414,393



18,188


2.14




3,402,809



18,139


2.16




3,373,916



20,303


2.41


Short-term borrowings



56,166



536


3.83




39,180



372


3.85




35,587



410


4.62


Long-term debt



145,346



1,500


4.14




133,990



1,404


4.25




101,066



1,211


4.81


Subordinated debt



83,334



1,750


8.42




83,222



1,749


8.52




55,622



1,026


7.40


Junior subordinated debt



8,177



174


8.54




8,150



173


8.61




8,075



188


9.34


Total borrowings



293,023



3,960


5.42




264,542



3,698


5.67




200,350



2,835


5.68


Total interest-bearing liabilities



3,707,416



22,148


2.40

%



3,667,351



21,837


2.41

%



3,574,266



23,138


2.60

%

Noninterest-bearing deposits



940,512









929,686









897,212







Other liabilities



65,432









58,944









52,608







Stockholders' equity



535,022









531,343









490,248







Total liabilities and stockholders' equity


$

5,248,382








$

5,187,324








$

5,014,334







Net interest income/spread





$

46,512


3.24

%





$

43,718


3.10

%





$

42,915


3.08

%

Net interest margin








3.82

%








3.67

%








3.69

%

Tax-equivalent adjustments:




























Loans





$

573








$

550








$

612




Investments






335









301









106




Total adjustments





$

908








$

851








$

718




The average balances of assets and liabilities, corresponding interest income and expense and resulting average yields or rates paid are summarized as follows. Averages for earning assets include nonaccrual loans. Investment averages include available for sale securities at amortized cost. Income on investment securities and loans is adjusted to a tax-equivalent basis using the prevailing federal statutory tax rate of 21%.

Peoples Financial Services Corp.
Net Interest Margin (Unaudited)
(In thousands, fully taxable equivalent basis)




Six Months Ended




June 30, 2026


June 30, 2025




Average


Interest Income/


Yield/


Average


Interest Income/


Yield/




Balance  


Expense


Rate  


Balance  


Expense


Rate  


Assets:


















Earning assets:


















Loans:


















Taxable


$

3,916,900


$

115,799


5.96

%

$

3,702,911


$

112,671


6.14

%

Tax-exempt



261,252



5,346


4.13



281,486



5,756


4.12


Total loans



4,178,152



121,145


5.85



3,984,397



118,427


5.99


Investments:


















Taxable



441,862



8,525


3.89



548,124



8,819


3.24


Tax-exempt



154,937



3,030


3.94



86,985



1,006


2.33


Total investments



596,799



11,555


3.90



635,109



9,825


3.12


Interest-bearing deposits



82,275



1,515


3.71



42,754



929


4.38


Total earning assets



4,857,226



134,215


5.57

%


4,662,260



129,181


5.59

%

Less: allowance for credit losses



39,998








41,960







Other assets



400,794








391,221







Total assets


$

5,218,022







$

5,011,521







Liabilities and stockholders' equity:


















Interest-bearing liabilities:


















Money market accounts


$

1,027,706


$

13,144


2.58

%

$

698,111


$

13,562


3.92

%

Interest-bearing demand and NOW accounts



1,218,560



11,763


1.95



1,435,943



12,298


1.73


Savings accounts



507,704



888


0.35



500,392



737


0.30


Time deposits less than $100



280,219



4,406


3.17



414,197



8,219


4.00


Time deposits $100 or more



374,444



6,126


3.30



356,817



6,334


3.58


Total interest-bearing deposits



3,408,633



36,327


2.15



3,405,460



41,150


2.44


Short-term borrowings



47,720



908


3.84



27,925



635


4.59


Long-term debt



139,700



2,904


4.19



99,426



2,388


4.84


Subordinated debt



83,278



3,499


8.47



44,373



1,469


6.68


Junior subordinated debt



8,163



347


8.57



8,063



374


9.35


Total borrowings



278,861



7,658


5.54



179,787



4,866


5.46


Total interest-bearing liabilities



3,687,494



43,985


2.41

%


3,585,247



46,016


2.59

%

Noninterest-bearing deposits



935,129








886,193







Other liabilities



62,206








55,298







Stockholders' equity



533,193








484,783







Total liabilities and stockholders'
equity


$

5,218,022







$

5,011,521







Net interest income/spread





$

90,230


3.16

%




$

83,165


3.00

%

Net interest margin








3.75

%







3.60

%

Tax-equivalent adjustments:


















Loans





$

1,123







$

1,209




Investments






636








211




Total adjustments





$

1,759







$

1,420




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.
Consolidated Balance Sheets (Unaudited)
(In thousands)




June 30


Mar 31


June 30

At period end


2026


2026


2025

Assets:










Cash and due from banks


$

74,930


$

59,479


$

60,173

Interest-bearing balances in other banks



181,320



269,133



115,566

Investment securities:










Available for sale



458,144



469,261



505,181

Held to maturity



68,723



70,557



75,137

Equity investments carried at fair value



2,748



3,054



2,494

Total investments



529,615



542,872



582,812

Loans held for sale



718



1,181



547

Loans



4,302,821



4,190,202



3,997,525

Less: allowance for credit losses



42,311



39,586



40,890

Net loans



4,260,510



4,150,616



3,956,635

Goodwill



75,986



75,986



75,986

Premises and equipment, net



79,523



79,206



76,896

Bank owned life insurance



83,124



83,417



87,635

Deferred tax assets



25,905



26,264



31,647

Accrued interest receivable



17,770



17,991



15,854

Other intangible assets, net



24,622



26,161



30,778

Other assets



86,523



91,024



73,350

Total assets


$

5,440,546


$

5,423,330


$

5,107,879

Liabilities:










Deposits:










Noninterest-bearing


$

946,528


$

969,341


$

899,597

Interest-bearing



3,562,324



3,456,028



3,387,752

Total deposits



4,508,852



4,425,369



4,287,349

Short-term borrowings



85,331



179,321



76,340

Long-term debt



154,472



134,750



103,449

Subordinated debt



83,392



83,289



83,164

Junior subordinated debt



8,194



8,167



8,088

Accrued interest payable



4,727



7,890



4,640

Other liabilities



59,393



59,039



50,753

Total liabilities



4,904,361



4,897,825



4,613,783

Stockholders' equity:










Common stock



20,053



20,047



20,015

Capital surplus



251,224



251,065



250,468

Retained earnings



290,556



282,001



258,601

Accumulated other comprehensive loss



(25,648)



(27,608)



(34,988)

Total stockholders' equity



536,185



525,505



494,096

Total liabilities and stockholders' equity


$

5,440,546


$

5,423,330


$

5,107,879











Book value per common share


$

53.56


$

52.50


$

49.44

Tangible book value per common share (1)


$

43.51


$

42.29


$

38.75

(1)

See reconciliation of Non-GAAP financial measures on pages 14-15.

 

Peoples Financial Services Corp.
Loan and Asset Quality Data (Unaudited)
(In thousands)










June 30


Mar 31


June 30

At period end


2026


2026


2025

Commercial and industrial


$

712,705


$

675,446


$

678,539

Municipal



200,552



212,586



194,529

Real estate










Commercial



2,490,510



2,423,027



2,252,574

Residential



640,000



618,156



573,864

  Total real estate



3,130,510



3,041,183



2,826,438

Consumer










Indirect auto



82,721



85,726



104,618

Consumer other



16,775



15,592



13,929

   Total consumer



99,496



101,318



118,547

Equipment financing



159,558



159,669



179,472

                Total


$

4,302,821


$

4,190,202


$

3,997,525





June 30


Mar 31


June 30


At period end


2026


2026


2025


Nonperforming assets:











Nonaccrual/restructured loans


$

13,667


$

11,437


$

17,390


Accruing loans past due 90 days or more



451



160



72


Foreclosed assets



630



750





Total nonperforming assets


$

14,748


$

12,347


$

17,462



























June 30


Mar 31


June 30

Three months ended



2026


2026


2025

Allowance for credit losses:











Beginning balance


$

39,586


$

39,007


$

41,054


Charge-offs



697



976



1,151


Recoveries



317



168



1,226


Provision for credit losses



3,105



1,387



(239)


Ending balance


$

42,311


$

39,586


$

40,890


 

Peoples Financial Services Corp.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(In thousands, except share and per share data)




Three Months Ended


Six Months Ended




June 30


Mar 31


June 30


June 30


June 30




2026


2026


2025


2026


2025


Core net income per share:

















Net income GAAP


$

14,805


$

14,747


$

16,956


$

29,552


$

31,965


Adjustments:

















Less: Net gains on sale of available for sale securities






510






510





Add: Net gains on sale of available for sale securities tax adjustment






112






112





Add: Acquisition related expenses









66






220


Less: Acquisition related expenses tax adjustment









14






48


Core net income


$

14,805


$

14,349


$

17,008


$

29,154


$

32,137


Average common shares outstanding - diluted



10,036,037



10,029,213



10,082,260



10,033,374



10,062,831


Core net income per diluted share


$

1.48


$

1.43


$

1.69


$

2.91


$

3.19



















Tangible book value:

















Total stockholders' equity


$

536,185


$

525,505


$

494,096


$

536,185


$

494,096


Less: Goodwill



75,986



75,986



75,986



75,986



75,986


Less: Other intangible assets, net



24,622



26,161



30,778



24,622



30,778


Total tangible stockholders' equity


$

435,577


$

423,358


$

387,332


$

435,577


$

387,332


Common shares outstanding



10,010,367



10,010,488



9,994,696



10,010,367



9,994,696


Tangible book value per share


$

43.51


$

42.29


$

38.75


$

43.51


$

38.75



















Core return on average stockholders' equity:

















Net income GAAP


$

14,805


$

14,747


$

16,956


$

29,552


$

31,965


Adjustments:

















Less: Net gains on sale of available for sale securities






510






510





Add: Net gains on sale of available for sale securities tax adjustment






112






112





Add: Acquisition related expenses









66






220


Less: Acquisition related expenses tax adjustment









14






48


Core net income


$

14,805


$

14,349


$

17,008


$

29,154


$

32,137


Average stockholders' equity


$

535,022


$

531,343


$

490,248


$

533,193


$

484,783


Core return on average stockholders' equity



11.10

%


10.95

%


13.92

%


11.03

%


13.37

%


















Return on average tangible stockholders' equity:

















Net income GAAP


$

14,805


$

14,747


$

16,956


$

29,552


$

31,965


Average stockholders' equity


$

535,022


$

531,343


$

490,248


$

533,193


$

484,783


Less: goodwill and intangibles



101,482



103,156



106,764



102,315



108,562


Average tangible stockholders' equity


$

433,540


$

428,187


$

383,484


$

430,878


$

376,221


Return on average tangible stockholders' equity



13.70

%


13.97

%


17.73

%


13.83

%


17.13

%


















Core return on average tangible stockholders' equity:

















Net income GAAP


$

14,805


$

14,747


$

16,956


$

29,552


$

31,965


Adjustments:

















Less: Net gains on sale of available for sale securities






510






510





Add: Net gains on sale of available for sale securities tax adjustment






112






112





Add: Acquisition related expenses









66






220


Less: Acquisition related expenses tax adjustment









14






48


Core net income


$

14,805


$

14,349


$

17,008


$

29,154


$

32,137


Average stockholders' equity


$

535,022


$

531,343


$

490,248


$

533,193


$

484,783


Less: goodwill and intangibles



101,482



103,156



106,764



102,315



108,562


Average tangible stockholders' equity


$

433,540


$

428,187


$

383,484


$

430,878


$

376,221


Core return on average tangible stockholders' equity



13.70

%


13.59

%


17.79

%


13.64

%


17.23

%


















Core return on average assets:

















Net income GAAP


$

14,805


$

14,747


$

16,956


$

29,552


$

31,965


Adjustments:

















Less: Net gains on sale of available for sale securities






510






510





Add: Net gains on sale of available for sale securities tax adjustment






112






112





Add: Acquisition related expenses









66






220


Less: Acquisition related expenses tax adjustment









14






48


Core net income


$

14,805


$

14,349


$

17,008


$

29,154


$

32,137


Average assets


$

5,248,382


$

5,187,324


$

5,014,334


$

5,218,022


$

5,011,521


Core return on average assets



1.13

%


1.12

%


1.36

%


1.13

%


1.29

%


















(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)

The following tables reconcile the non-GAAP financial measures of FTE net interest income for the three and six months ended:
























Three Months Ended



Six Months Ended



June 30



Mar 31



June 30



June 30



June 30



2026



2026



2025



2026



2025

Interest income (GAAP)


$

67,752



$

64,704



$

65,335



$

132,456



$

127,761

Adjustment to FTE



908




851




718




1,759




1,420

Interest income adjusted to FTE (non-GAAP)



68,660




65,555




66,053




134,215




129,181

Interest expense



22,148




21,837




23,138




43,985




46,016

Net interest income adjusted to FTE (non-GAAP)


$

46,512



$

43,718



$

42,915



$

90,230



$

83,165

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 and six months ended:
























Three Months Ended



Six Months Ended




June 30



Mar 31



June 30



June 30



June 30




2026



2026



2025



2026



2025


Efficiency ratio (non-GAAP):





















Noninterest expense (GAAP)


$

30,610



$

29,863



$

28,262



$

60,473



$

55,615


Less: Amortization of intangible assets expense



1,518




1,517




1,684




3,035




3,367


Less: Acquisition related expenses











66








220


Adjusted Noninterest expense (non-GAAP)



29,092




28,346




26,512




57,438




52,028























Net interest income (GAAP)



45,604




42,867




42,197




88,471




81,745


Plus: Taxable equivalent adjustment



908




851




718




1,759




1,420


Noninterest income (GAAP)



6,534




6,898




6,247




13,432




12,503


Less: Net gains (losses) on equity securities



33




456




(7)




489




64


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







510








510






Less: Net gains on sale of fixed assets



271












271




680


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


$

52,742



$

49,650



$

49,169



$

102,392



$

94,924


Efficiency ratio (non-GAAP)



55.16

%



57.09

%



53.92

%



56.10

%



54.81

%

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/peoples-financial-services-corp-reports-unaudited-second-quarter-and-year-to-date-2026-earnings-302839474.html

SOURCE Peoples Financial Services Corp.