8-K - PFIS - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report: November 5, 2024 ****

(Date of earliest event reported)

PEOPLES FINANCIAL SERVICES CORP.

(Exact name of registrant as specified in its charter)

001-36388

(Commission

File Number)

PA	23-2391852
(State or other jurisdiction<br><br>of incorporation)	(IRS Employer of<br><br>Identification No.)

150 North Washington Avenue , Scranton , Pennsylvania **** 18503-1848

(Address of principal executive offices) (Zip Code)

( 570 ) 346-7741

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	****	Trading Symbol	****	Name of each exchange on which registered:
Common stock, $2.00 par value		PFIS		The Nasdaq Stock Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On November 5, 2024, Peoples Financial Services Corp. issued a press release announcing unaudited results of operations for the three and nine month periods ended September 30, 2024 and financial condition at September 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits

The following exhibits are filed with this Form 8-K:


Exhibit<br>No.		Description

99.1		Press release dated November 5, 2024 announcing results of operations and financial condition.

Exhibit Index


Exhibit<br>No.		Description

99.1		Press release dated November 5, 2024 announcing results of operations and financial condition.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	PEOPLES FINANCIAL SERVICES CORP.

	By:		/s/ Craig W. Best
			Craig W. Best
			Chief Executive Officer
			(Principal Executive Officer)

	By:		/s/ John R. Anderson
			John R. Anderson III
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Date: November 5, 2024

Exhibit 99.1

NEWS RELEASE

TO BUSINESS EDITOR:

PEOPLES FINANCIAL SERVICES CORP.

Reports Unaudited Third Quarter and Year to Date 2024 Earnings

Scranton, PA, November 5, 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 nine months ended September 30, 2024.

Peoples reported a net loss of $4.3 million, or $0.43 per diluted share for the three months ended September 30, 2024, compared to net income of $6.7 million, or $0.95 per diluted share for the comparable period of 2023. Quarterly net income decreased primarily due to the non-recurring charges related to the July 1, 2024 merger of FNCB Bancorp, Inc. into Peoples and the merger of FNCB Bank into Peoples Security Bank and Trust Company (collectively referred to as the “FNCB merger”). Net interest income increased $18.0 million to $39.2 million and the tax-equivalent net interest margin (“NIM”) increased 97 basis points to 3.26% due to the combined higher level of earning assets and the $3.7 million net accretion impact of purchase accounting marks on loans, deposits, and borrowings acquired and assumed in the FNCB merger which added 30 basis points of tax-equivalent NIM^1^, a non-GAAP measure. Non-recurring charges, including a $14.3 million provision for credit losses on non-purchase credit deteriorated ("non-PCD") loans acquired in the FNCB merger and acquisition related expenses of $9.6 million, more than offset the higher level of net interest income.

Core net income and core earnings per share^1^, non-GAAP measures, exclude non-recurring transactions of $24.0 million and $0.9 million incurred during the three months ended September 30, 2024 and 2023 and totaled $16.5 million or $1.64 per diluted share for the three months ended September 30, 2024 compared to $7.5 million, or $1.05 per diluted share for the comparable period of 2023.

Core pre-provision net revenue (PPNR) and core PPNR per share^1^, non-GAAP measures, which exclude acquisition related expenses, the provision for credit losses and the provision for credit losses on unfunded commitments from income before taxes, for the three months ended September 30, 2024 was $18.3 million or $1.83 per diluted share. The core PPNR and core PPNR diluted earnings per share for the corresponding prior year period was $8.8 million or $1.23 per diluted share.

For the nine months ended September 30, 2024, net income was $2.4 million, or $0.30 per diluted share, compared to $23.8 million, or $3.31 per diluted share for the comparable period of 2023. Net income for the current period decreased $21.4 million when compared to the nine months ended September 30, 2023 due to $25.5 million of non-recurring charges, including $11.2 million of acquisition expenses and a $14.3 million provision for credit losses on non-PCD loans, which were partially offset by higher interest income due to increased levels of earning assets.

Core net income and core earnings per share^1^, non-GAAP measures, totaled $25.6 million or $3.17 per diluted share for the nine months ended September 30, 2024 compared to $24.5 million, or $3.42 per share for the comparable period of 2023.

Core pre-provision net revenue (PPNR) and core PPNR per share^1^, non-GAAP measures, for the nine months ended September 30, 2024 were $29.1 million or $3.60 per diluted share. The core PPNR and core PPNR diluted earnings per share for the corresponding prior year period was $28.0 million or $3.90 per diluted share.

^1^ See reconciliation of non-GAAP financial measures on pg.19-21. 1

Merger with FNCB

Peoples acquired FNCB and its wholly-owned subsidiary FNCB Bank by merger on July 1 2024. The merger and acquisition method of accounting was used to account for the transaction with Peoples as the acquirer. The Company recorded the assets and liabilities of FNCB at their respective fair values as of July 1, 2024. The transaction was valued at approximately $133.7 million. Primary reasons for the merger included: expansion of the branch network and commanding market share positions in northeastern Pennsylvania; attractive low-cost funding base; strong cultural alignment and a deep commitment to shareholders, customers, employees, and communities served by Peoples and FNCB, meaningful value creation to shareholders; and increased trading liquidity for both companies and increased dividends for Peoples shareholders.

At the time of the merger, FNCB contributed, after fair value purchase accounting adjustments, approximately $1.8 billion in assets, $421.9 million in investments, $1.2 billion in loans, $1.4 billion in deposits, $226.3 million in FHLB advances and other borrowings, and $8.0 million in subordinated debt and trust preferred debentures. The excess of the merger consideration over the fair value of the net FNCB assets acquired and liabilities assumed resulted in $13.6 million of goodwill. The FNCB merger also resulted in a core deposit intangible valued at $36.6 million or 5.1% of core deposits.

Subsequent to the FNCB merger, through September 30, 2024, the Company sold $271.2 million par value of the available for sale securities portfolio acquired for net proceeds of $241.2 million and used $189.0 million of the proceeds to repay short-term overnight FHLB advances.

The Company incurred non-recurring expenses of $24.0 million and $25.5 million for the three and nine months ended September 30, 2024, respectively, related to merger and acquisition costs, and an increased allowance for credit losses related to the acquisition of non-PCD loans acquired in the FNCB merger.

The Company’s financial results for any periods ended prior to July 1, 2024 reflect Peoples results only on a standalone basis. As a result of this factor and the below listed adjustments related to the FNCB merger, the Company’s financial results for the third quarter of 2024 may not be directly comparable to prior reported periods. The following schedule highlights specific merger related activity for the three and nine months ended September 30, 2024:

Schedule of Merger & Acquisition Cost and Non-Recurring Merger Related Activity (Unaudited)


			Quarter Ended			Nine Months Ended
(dollars in thousands)	****		September 30, 2024	****		September 30, 2024

M&A costs and merger related expenses		$	9,653		$	11,210
ACL provision for FNCB acquired legacy loans			14,328			14,328
Total net M&A costs and non-recurring transaction costs		$	23,981		$	25,538

NOTABLES IN THE QUARTER

●	Allowance for credit losses to loans, net increased to 0.97% at September 30, 2024 from 0.81% and 0.80% at June 30, 2024 and September 30, 2023, respectively.
●	Return on average equity for the three months ended September 30, 2024 was negative 3.58% compared to 8.05% for the three months ended September 30, 2023; excluding the non-recurring charges, core return on average equity1, a non-GAAP measure, was 13.61% for the three months ended September 30, 2024 compared to 8.91% for the three months ended September 30, 2023.
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●	Return on average assets for the three months ended September 30, 2024 was negative 0.33% compared to 0.72% for the three months ended September 30, 2023; excluding the non-recurring charges, core return on average assets^1^, a non-GAAP measure, was 1.24% for the three months ended September 30, 2024 compared to 0.79% for the three months ended September 30, 2023.
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●	Tangible book value per common share^1^, a non-GAAP measure, decreased to $36.24 per share at September 30, 2024 compared to $39.31 per share at June 30, 2024; this decrease was primarily due to the impact of loan marks associated with the FNCB merger and the net loss incurred for the third quarter of 2024.
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●	At September 30, 2024, the Company had $285.5 million in cash and cash equivalents, an increase of $98.1 million from December 31, 2023. Additional contingent sources of available liquidity total $2.2 billion and include lines of credit at the Federal Reserve Bank and Federal Home Loan Bank of Pittsburgh (FHLB), brokered deposit capacity and unencumbered securities that may be pledged as collateral. The Company’s cash and cash equivalents balance and available liquidity represent 47.2% of total assets and 54.5% of total deposits.
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●	At September 30, 2024, estimated total insured deposits were approximately $3.1 billion, or 66.2% of total deposits. Included in the uninsured total at September 30, 2024 is $372.5 million of municipal deposits collateralized by letters of credit issued by the FHLB and pledged investment securities, and $1.7 million of affiliate company deposits. Total insured and collateralized deposits represent 74.3% of total deposits at September 30, 2024.
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INCOME STATEMENT REVIEW

●	NIM, calculated on a fully taxable equivalent basis, a non-GAAP measure^1^, for the three months ended September 30, 2024 was 3.26%, an increase of 97 basis points compared to 2.29% for the prior quarter and an increase of 82 basis points when compared to 2.44% for the corresponding three month period in 2023. The increase in tax-equivalent NIM from the year ago period was primarily from a higher volume of earning assets and the net accretion impact of purchase accounting marks on loans, deposits and borrowings acquired and assumed in the FNCB merger, which totaled $3.7 million of net interest income, and represented 30 basis points of tax-equivalent NIM.
●	The tax-equivalent yield on interest-earning assets, a non-GAAP measure^1^^^, increased 105 basis points to 5.63% during the three months ended September 30, 2024 from 4.58% during the three months ended June 30, 2024, and increased 123 basis points when compared to 4.40% for the three months ended September 30, 2023.
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●	The cost of funds, which represents the average rate paid on total interest-bearing liabilities, decreased 12 basis points to 2.89% for the three months ended September 30, 2024 when compared to 3.01% during the three months ended June 30, 2024 and increased 28 basis points compared to 2.61% in the prior year period.
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●	The cost of interest-bearing deposits decreased 16 basis points during the three months ended September 30, 2024 to 2.76% from 2.92% in the three months ended June 30, 2024, and increased 23 basis points compared to 2.53% for the three months ended September 30, 2023.
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●	The cost of total deposits for the three months ended September 30, 2024 was 2.33%, a decrease of 1 basis point from 2.34% for the three months ended June 30, 2024, an increase of 33 basis points compared to 2.00% for the three months ended September 30, 2023.
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^1^See reconciliation of non-GAAP financial measures on pg.19-21. 3

Third Quarter 2024 Results – Comparison to Prior-Year Quarter

Tax-equivalent net interest income, a non-GAAP measure^1^, for the three months ended September 30, increased $18.2 million or 83.7% to $40.0 million in 2024 from $21.8 million in 2023. The increase in tax-equivalent net interest income was due to a $29.8 million increase in tax-equivalent interest income that was offset by a $11.6 million increase in interest expense.

Higher interest income was the result of increases in the volume of earning assets due to the FNCB merger and net accretion from purchase accounting loan marks which totaled $4.7 million. Average loans, net, increased $1.2 billion when comparing the three months ended September 30, 2024 to the corresponding three month period in 2023. Average investments totaled $700.6 million in the three months ended September 30, 2024 and $542.5 million in the three months ended September 30, 2023. Average federal funds sold decreased $42.4 million to $92.2 million for the three months ended September 30, 2024.

The increase in interest expense in the three months ended September 30, 2024 was $11.6 million due primarily to higher rates paid on consumer, business and municipal deposits coupled with the increased balances contributed by the FNCB merger. The increase in interest expense included $1.0 million in amortization of purchase accounting marks on deposits and borrowings acquired and assumed in the FNCB merger. The Company's total cost of deposits increased 33 basis points to 2.33% during the three months ended September 30, 2024 compared to the year ago period and the cost of interest-bearing deposits increased 23 basis points to 2.76% from 2.53% in the corresponding period of the prior year. Short-term borrowings averaged $43.9 million in the current period at an average cost of 5.53% compared to $21.8 million in short-term borrowings at an average cost of 5.31% in the corresponding period of the prior year.

Average interest-bearing liabilities increased $1.3 billion for the three months ended September 30, 2024, compared to the corresponding period last year primarily due to the FNCB merger. Average noninterest-bearing deposits increased $25.5 million or 3.7% from the corresponding period of the prior year, due in part to a shift to interest-bearing accounts, and represented 15.8% of total average deposits in the three months ended September 30 2024 as compared to 21.0% in the corresponding period of the prior year.

For the three months ended September 30, 2024, $14.5 million was recorded to the provision for credit losses compared to a credit of $0.2 million in the year ago period. The current period provision included a non-recurring provision of $14.3 million for non-PCD loans acquired in the FNCB merger. Excluding the impact of the FNCB merger, the provision for credit losses for the three months ended September 30, 2024 was $0.2 million.

Noninterest income for the three months ended September 30, 2024 and 2023 was $5.7 million and $3.7 million, respectively. The increase was primarily due to the FNCB merger and consisted of higher levels of service charges, fees, commissions and other income, wealth management fees and increased cash surrender value of life insurance. These increases were partially offset by lower interest rate swap revenue due to reduced origination volume.

Noninterest expense increased $18.4 million to $35.5 million for the three months ended September 30, 2024, from $17.1 million for the three months ended September 30, 2023. Acquisition related expenses, including legal and consulting, core system de-conversion fees and advisory fees, totaled $9.7 million. Salaries and employee benefits were $4.4 million higher due to the addition of 195 full time equivalent employees. Occupancy and equipment expenses increased $2.2 million in the current period due to higher information technology (IT) expense and higher facilities costs from inflationary price pressure and the additional branches from the FNCB merger.

The income tax benefit was $0.7 million or 13.2% of pre-tax loss for the three months ended September 30, 2024 compared to income tax expense of $1.3 million or 16.5% of pre-tax income for the three months ended September 30, 2023, a change of $2.0 million due to lower taxable income.

^1^ See reconciliation of non-GAAP financial measures on pg.19-21. 4

Nine-Month Results – Comparison to Prior Year First Nine months

The tax-equivalent NIM, a non-GAAP measure^1^, for the nine months ended September 30, 2024 was 2.69%, an increase of 7 basis points over the prior year’s period of 2.62%. Tax-equivalent net interest income, a non-GAAP measure^1^ for the nine months ended September 30, increased $11.2 million, or 16.5%, to $79.1 million in 2024 from $67.9 million in 2023. The increase in tax-equivalent net interest income was primarily the result of higher loan interest income due to increased volume and rates on new loans acquired through the FNCB merger and an additional $4.7 million from accretion of purchase accounting marks on loans. Average investments increased $22.2 million compared to September 30, 2023, as the Company engaged in investment sales subsequent to the FNCB merger to repay short-term borrowings. The tax-equivalent yield on earning assets was 5.01% for the first nine months of 2024 compared to 4.29% for the nine months ended September 30, 2023. The cost of interest bearing liabilities during the nine month period ended September 30, 2024 increased 68 basis points to 2.94% from 2.26% for the nine months ended September 30, 2023 as the cost of interest-bearing deposit products and short-term borrowing costs increased. The net impact of the purchase accounting accretion and amortization of the loan, deposit and borrowing marks acquired and assumed in the FNCB merger was $3.7 million and contributed 13 basis points to the NIM.

For the nine months ended September 30, 2024, a provision for credit losses of $15.8 million was recorded and included a $14.3 million day-one provision for non-PCD loans acquired in the FNCB merger. The balance includes adjustments through September 30, 2024 for individually evaluated and pooled loans.

Noninterest income was $12.7 million for the nine months ended September 30, 2024 and $10.9 million for the comparable period ended September 30, 2023. During the period, service charges and fees increased $1.5 million , wealth management income increased $0.3 million, bank owned life insurance cash surrender value increased $0.3 million and gains on equity securities increased $0.2 million while interest rate swap revenue decreased $0.5 million on lower loan origination volume and market value adjustments.

Noninterest expense for the nine months ended September 30, 2024, was $71.7 million, an increase of $21.5 million from $50.2 million for the nine months ended September 30, 2023. The increase was due primarily to higher acquisition related expenses, and higher expenses due to additional full time equivalent employees and facilities due to the FNCB merger. Salaries and employee benefits expenses increased $4.1 million compared to the year ago period due to the addition of 195 full time equivalent employees from the FNCB merger. Occupancy and equipment expenses were higher by $3.1 million in the current period due to increased technology costs related to system integration and increased account and transaction volumes, and higher facilities costs. Acquisition related expenses totaled $11.2 million compared to $1.0 million a year ago. The provision for income taxes for the nine months ended September 30, 2024 decreased $4.3 million and the effective tax rate was 9.1% as compared to 16.0% in the prior period.

BALANCE SHEET REVIEW

At September 30, 2024, total assets, loans and deposits were $5.4 billion, $4.1 billion and $4.6 billion, respectively.

Loan growth for the nine months ended September 30, 2024 was $1.2 billion or 42.8%, due primarily to the $1.2 billion in loans acquired in the FNCB merger. Commercial loans made up the majority of the growth with residential real estate loans also increasing.

Total investments were $647.1 million at September 30, 2024, compared to $483.9 million at December 31, 2023. At September 30, 2024, the available for sale securities totaled $563.3 million and the held to maturity securities totaled $79.9 million. The unrealized loss on the available for sale securities decreased $12.7 million from $51.5 million at December 31, 2023 to $38.8 million at September 30, 2024. The unrealized losses on the held to maturity portfolio totaled $10.8 million and $13.2 million at September 30, 2024 and December 31, 2023, respectively.

Total deposits increased $1.4 billion during the nine months ended September 30, 2024 due primarily to the $1.4 billion in deposits acquired in the FNCB merger. Noninterest-bearing deposits increased $72.9 million and interest-bearing deposits increased $1.3 billion during the nine months ended September 30, 2024. The Company had $391.6 million and $261.0 million of longer-term callable brokered CDs at September 30, 2024 and December 31, 2023, respectively. Of the balance at September 30, 2024, the Company has the option to call $248.9 million of the brokered

^1^ See reconciliation of non-GAAP financial measures on pg.19-21. 5

CDs at any time. Subsequent to quarter-end the Company called $100.7 million of its higher cost brokered CDs in order to reduce its cost of funds.

The Company’s deposit base consisted of 38.6% retail accounts, 33.3% commercial accounts, 19.7% municipal relationships and 8.4% brokered deposits at September 30, 2024. At September 30, 2024, total estimated uninsured deposits, were $1.6 billion, or approximately 33.8% of total deposits. Included in the uninsured total at September 30, 2024 is $372.5 million of municipal deposits collateralized by letters of credit issued by the FHLB and pledged investment securities, and $1.7 million of affiliate company deposits. We also offer customers access to IntraFi's CDARS and ICS programs through which their deposits may be allocated to separate FDIC-insured institutions, while they are able to maintain their relationship with the bank.

In addition to deposit gathering and current long-term debt, we have additional sources of liquidity available such as cash and cash equivalents, overnight borrowings from the FHLB, the Federal Reserve’s Discount Window and Borrower-in-Custody program, correspondent bank lines of credit, brokered deposit capacity and unencumbered securities. At September 30, 2024, the Company had $97.1 million in cash and cash equivalents, an increase of $63.6 million from December 31, 2023. At September 30, 2024, we had $2.2 billion in available additional liquidity representing 41.8% of total assets, 48.4% of total deposits and 143.1% of uninsured deposits. 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 September 30, 2024. Stockholders' equity equaled $475.1 million or $47.53 per share at September 30, 2024, and $340.4 million or $48.35 per share at December 31, 2023. The increase in stockholders’ equity from December 31, 2023 is primarily attributable to the FNCB merger, net income less dividends to shareholders, partially offset by a $9.8 million decrease to accumulated other comprehensive loss (“AOCL”) resulting from a reduction in the unrealized loss on available for sale securities. The net after tax unrealized loss on available for sale securities included in AOCL at September 30, 2024 and December 31, 2023 was $28.6 million and $40.3 million, respectively.

Tangible book value^1^, a non-GAAP measure, decreased to $36.24 per share at September 30, 2024, from $39.35 per share at December 31, 2023. Dividends declared for the nine months ended September 30, 2024 amounted to $1.4375 per share.

ASSET QUALITY REVIEW

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% of loans, net and foreclosed assets at December 31, 2023. Nonperforming assets at September 30, 2024 included $7.6 million of loans acquired in the FNCB merger. As a percentage of total assets, nonperforming assets totaled 0.41% at September 30, 2024 compared to 0.13% at December 31, 2023. At September 30, 2024, the Company had one foreclosed property recorded at $27 thousand.

During the nine months ended September 30, 2024, net charge-offs were $158 thousand and the provision for credit losses totaled $15.8 million. The provision for credit losses included a $14.3 million FNCB merger related adjustment for non-PCD loans. The allowance for credit losses equaled $39.3 million or 0.97% of loans, net, at September 30, 2024 compared to $21.9 million or 0.77% of loans, net, at December 31, 2023. Loans charged-off, net of recoveries, for the three months ended September 30, 2024 were $82 thousand, compared to $42 thousand for the comparable period last year.

^1^See reconciliation of non-GAAP financial measures on pg.19-21. 6

About Peoples:

Peoples Financial Services Corp. is the parent company of Peoples Security Bank and Trust Company, a community bank serving 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 through 39 offices. 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, local and timely decision making, flexible and reasonable operating procedures and consistently applied credit policies.

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, among others. The reported results included in this release contain items, which Peoples considers non-core, namely acquisition related expenses and gain or loss on the sale of securities available for sale. Peoples believes the reported non-GAAP financial measures provide information useful to investors in understanding its operating performance and trends. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure is provided in the accompanying tables. The non-GAAP financial measures Peoples uses may differ from the non-GAAP financial measures of other financial institutions.
SOURCE: Peoples Financial Services Corp.
/Contact:	MEDIA/INVESTORS, Marie L. Luciani, Investor Relations Officer, 570.346.7741 or marie.luciani@psbt.com
Co:	Peoples Financial Services Corp.
St:	Pennsylvania
In:	Fin

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; the effects of any recession in the United States; the impact on financial markets from geopolitical conflicts such as the military conflict between Russia and Ukraine and the conflict in Israel; the possibility that Peoples may be unable to achieve the expected synergies and operating efficiencies of the FNCB merger within the expected timeframes or at all; the possibility that Peoples may be unable to successfully integrate operations of FNCB or that the integration may be more difficult, time consuming or costly than expected; the FNCB merger may divert management’s attention from ongoing business operations and opportunities; effects of the FNCB merger on our ability to retain customers and retain and hire key personnel and maintain relationships with our vendors, and on our operating results and business generally; the dilution caused by Peoples’ issuance of additional shares of its capital stock in connection with the FNCB merger; the outcome of any legal proceedings that may be threatened or instituted against Peoples; changes in interest rates; economic conditions, particularly in our market area; legislative and regulatory changes and the ability to comply with the significant laws and regulations governing the banking and financial services business; monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of Treasury and the Federal Reserve System; adverse developments in the financial industry generally, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; credit risk associated with lending activities and changes in the quality and composition of our loan and investment portfolios; demand for loan and other products; deposit flows; competition; changes in the values of real estate and other collateral securing the loan portfolio, particularly in our market area; changes in relevant accounting principles and guidelines; inability of third party service providers to perform; our ability to prevent, detect and respond to cyberattacks; 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.

In addition to these risks, acquisitions and business combinations present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations and, specifically, the FNCB merger may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may be significantly harder - or take longer - to achieve than expected, if they are achieved at all. As a regulated financial institution, our pursuit of attractive acquisition and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues. Regulatory and/or legal issues related to the pre-acquisition operations of an acquired or combined business may cause reputational harm to Peoples following the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising as a result of those issues.

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)


	Sept 30			June 30			Mar 31			Dec 31			Sept 30
	2024			2024			2024			2023			2023
Key performance data:
Share and per share amounts:
Net (loss) income	$	(0.43)		$	0.46		$	0.49		$	0.51		$	0.95
Core net income (1)	$	1.64		$	0.59		$	0.55		$	0.61		$	1.05
Core net income (PPNR) (1)	$	1.83		$	0.73		$	0.79		$	0.95		$	1.23
Cash dividends declared	$	0.62		$	0.41		$	0.41		$	0.41		$	0.41
Book value	$	47.53		$	48.29		$	48.18		$	48.35		$	46.07
Tangible book value (1)	$	36.24		$	39.31		$	39.20		$	39.35		$	37.07
Market value:
High	$	50.49		$	46.25		$	48.84		$	49.99		$	48.19
Low	$	41.44		$	36.26		$	38.09		$	38.58		$	40.04
Closing	$	46.88		$	45.54		$	43.11		$	48.70		$	40.10
Market capitalization	$	468,549		$	321,388		$	304,238		$	342,889		$	282,338
Common shares outstanding		9,994,648			7,057,258			7,057,258			7,040,852			7,040,852
Selected ratios:
Return on average stockholders’ equity		(3.58)	%		3.87	%		4.09	%		4.40	%		8.05	%
Core return on average stockholders’ equity (1)		13.61	%		5.00	%		4.59	%		5.26	%		8.91	%
Return on average tangible stockholders’ equity		(4.67)	%		4.76	%		5.02	%		5.46	%		9.95	%
Core return on average tangible stockholders’ equity (1)		17.77	%		6.14	%		5.64	%		6.53	%		11.01	%
Return on average assets		(0.33)	%		0.37	%		0.38	%		0.38	%		0.72	%
Core return on average assets (1)		1.24	%		0.47	%		0.43	%		0.46	%		0.79	%
Stockholders’ equity to total assets		8.86	%		9.42	%		9.27	%		9.10	%		8.48	%
Efficiency ratio (1)(2)		53.14	%		74.49	%		75.77	%		69.94	%		63.50	%
Nonperforming assets to loans, net, and foreclosed assets		0.53	%		0.25	%		0.27	%		0.17	%		0.13	%
Nonperforming assets to total assets		0.41	%		0.20	%		0.21	%		0.13	%		0.10	%
Net charge-offs to average loans, net		0.01	%		0.01	%		0.00	%		0.39	%		0.01	%
Allowance for credit losses to loans, net		0.97	%		0.81	%		0.79	%		0.77	%		0.80	%
Interest-bearing assets yield (FTE) (3)		5.63	%		4.58	%		4.56	%		4.49	%		4.40	%
Cost of funds		2.89	%		3.01	%		2.96	%		2.86	%		2.61	%
Net interest spread (FTE) (3)		2.74	%		1.57	%		1.60	%		1.63	%		1.79	%
Net interest margin (FTE) (3)		3.26	%		2.29	%		2.29	%		2.30	%		2.44	%

(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 available for sale.
---	---
(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)


	Sept 30		Sept 30
Nine months ended	2024		2023
Interest income:
Interest and fees on loans:
Taxable	$	127,859	$	95,283
Tax-exempt		5,116		4,205
Interest and dividends on investment securities:
Taxable		8,561		5,973
Tax-exempt		1,153		1,210
Dividends		59		4
Interest on interest-bearing deposits in other banks		632		190
Interest on federal funds sold		2,277		2,914
Total interest income		145,657		109,779
Interest expense:
Interest on deposits		63,216		39,805
Interest on short-term borrowings		1,444		1,590
Interest on long-term debt		1,929		569
Interest on subordinated debt		1,330		1,330
Interest on junior subordinated debt		260
Total interest expense		68,179		43,294
Net interest income		77,478		66,485
Provision for (credit to) credit losses		15,762		(1,103)
Net interest income after provision for (credit to) credit losses		61,716		67,588
Noninterest income:
Service charges, fees, commissions and other		7,304		5,847
Merchant services income		598		542
Commissions and fees on fiduciary activities		1,717		1,691
Wealth management income		1,486		1,177
Mortgage banking income		263		295
Increase in cash surrender value of life insurance		1,116		790
Interest rate swap revenue		25		512
Net gains (losses) on equity investment securities		155		(17)
Net gains on sale of investment securities available for sale		1		81
Total noninterest income		12,665		10,918
Noninterest expense:
Salaries and employee benefits expense		30,459		26,346
Net occupancy and equipment expense		15,745		12,678
Acquisition related expenses		11,210		990
Amortization of intangible assets		1,665		86
Net gains on sale of other real estate owned				(18)
Other expenses		12,649		10,140
Total noninterest expense		71,728		50,222
Income before income taxes		2,653		28,284
Provision for income tax expense		242		4,534
Net income	$	2,411	$	23,750
Other comprehensive income (loss) :
Unrealized gains (losses) on investment securities available for sale	$	12,744	$	(4,690)
Reclassification adjustment for gains on available for sale securities included in net income		(1)		(81)
Change in derivative fair value		(185)		826
Income tax expense (benefit) related to other comprehensive income (loss)		2,748		(851)
Other comprehensive income (loss), net of income tax expense (benefit)		9,810		(3,094)
Comprehensive income	$	12,221	$	20,656
Share and per share amounts:
Net income - basic	$	0.30	$	3.33
Net income - diluted		0.30		3.31
Cash dividends declared		1.44		1.23
Average common shares outstanding - basic		8,039,734		7,130,506
Average common shares outstanding - diluted		8,094,036		7,165,570

Peoples Financial Services Corp.

Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)


	Sept 30		June 30		Mar 31		Dec 31		Sept 30
Three months ended	2024		2024		2024		2023		2023
Interest income:
Interest and fees on loans:
Taxable	$	59,412	$	34,406	$	34,041	$	33,730	$	33,095
Tax-exempt		2,299		1,399		1,418		1,423		1,411
Interest and dividends on investment securities:
Taxable		4,739		1,904		1,918		1,939		1,920
Tax-exempt		411		371		371		372		375
Dividends		55		2		2
Interest on interest-bearing deposits in other banks		397		115		120		145		91
Interest on federal funds sold		971		179		1,127		2,463		1,873
Total interest income		68,284		38,376		38,997		40,072		38,765
Interest expense:
Interest on deposits		26,398		18,114		18,704		18,756		16,481
Interest on short-term borrowings		550		633		262		330		291
Interest on long-term debt		1,389		269		270		273		273
Interest on subordinated debt		443		444		443		444		443
Interest on junior subordinated debt		260
Total interest expense		29,040		19,460		19,679		19,803		17,488
Net interest income		39,244		18,916		19,318		20,269		21,277
Provision for (credit to) credit losses		14,458		596		708		1,669		(166)
Net interest income after provision for (credit to) credit losses		24,786		18,320		18,610		18,600		21,443
Noninterest income:
Service charges, fees, commissions and other		3,384		1,885		2,036		1,881		1,900
Merchant services income		223		260		115		151		170
Commissions and fees on fiduciary activities		649		517		551		528		606
Wealth management income		708		416		361		399		393
Mortgage banking income		84		87		92		95		87
Increase in cash surrender value of life insurance		551		286		279		277		270
Interest rate swap revenue		(53)		102		(24)		(122)		266
Net gains (losses) on investment equity securities		175		(12)		(8)		6
Net gains on sale of investment securities available for sale		1
Total noninterest income		5,722		3,541		3,402		3,215		3,692
Noninterest expense:
Salaries and employee benefits expense		13,170		8,450		8,839		8,939		8,784
Net occupancy and equipment expense		6,436		4,576		4,725		4,468		4,298
Acquisition related expenses		9,653		1071		486		826		869
Amortization of intangible assets		1,665						19		29
Net gains on sale of other real estate										(18)
Other expenses		4,578		4,061		4,018		3,346		3,092
Total noninterest expense		35,502		18,158		18,068		17,598		17,054
Income before income taxes		(4,994)		3,703		3,944		4,217		8,081
Income tax (benefit) expense		(657)		421		478		587		1,335
Net (loss) income	$	(4,337)	$	3,282	$	3,466	$	3,630	$	6,746
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities available for sale	$	15,167	$	18	$	(2,441)	$	19,494	$	(10,378)
Reclassification adjustment for gains on available for sale securities included in net income		(1)
Change in benefit plan liabilities								1,129
Change in derivative fair value		(1,424)		160		1,079		(1,650)		747
Income tax expense (benefit) related to other comprehensive income (loss)		3,008		38		(298)		3,894		(2,074)
Other comprehensive income (loss), net of income tax expense (benefit)		10,734		140		(1,064)		15,079		(7,557)
Comprehensive income (loss)	$	6,397	$	3,422	$	2,402	$	18,709	$	(811)
Share and per share amounts:
Net income - basic	$	(0.43)	$	0.47	$	0.49	$	0.52	$	0.95
Net income - diluted		(0.43)		0.46		0.49		0.51		0.95
Cash dividends declared		0.62		0.41		0.41		0.41		0.41
Average common shares outstanding - basic		9,987,627		7,057,258		7,052,912		7,040,852		7,088,745
Average common shares outstanding - diluted		10,044,449		7,114,115		7,102,112		7,091,015		7,120,685

Peoples Financial Services Corp.

Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)


		Three Months Ended
		September 30, 2024								September 30, 2023
		Average			Interest Income/			Yield/		Average			Interest Income/			Yield/
	****	Balance		****	Expense		****	Rate	****	Balance		****	Expense		****	Rate
Assets:
Earning assets:
Loans:
Taxable		$	3,790,138		$	59,412		6.24	%	$	2,627,700		$	33,095		5.00	%
Tax-exempt			278,496			2,910		4.16			226,628			1,786		3.13
Total loans			4,068,634			62,322		6.09			2,854,328			34,881		4.85
Investments:
Taxable			611,032			4,794		3.12			454,727			1,920		1.68
Tax-exempt			89,532			520		2.31			87,731			475		2.15
Total investments			700,564			5,314		3.02			542,458			2,395		1.75
Interest-bearing deposits			10,820			150		5.55			6,893			91		5.24
Federal funds sold			92,171			1,218		5.26			134,583			1,873		5.52
Total earning assets			4,872,189			69,004		5.63	%		3,538,262			39,240		4.40	%
Less: allowance for credit losses			37,535								23,691
Other assets			456,540								215,472
Total assets		$	5,291,194		$	69,004				$	3,730,043		$	39,240
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Money market accounts		$	906,842		$	8,231		3.61	%	$	697,387		$	5,945		3.38	%
Interest-bearing demand and NOW accounts			1,414,228			6,888		1.94			800,978			4,335		2.15
Savings accounts			518,038			3,420		2.63			462,468			272		0.23
Time deposits less than $100			687,511			4,637		2.68			412,705			4,234		4.07
Time deposits $100 or more			275,786			3,222		4.65			208,153			1,695		3.23
Total interest-bearing deposits			3,802,405			26,398		2.76			2,581,691			16,481		2.53
Short-term borrowings			43,895			550		4.98			21,759			291		5.31
Long-term debt			111,804			1,389		4.94			25,000			273		4.33
Subordinated debt			33,000			443		5.34			33,000			443		5.33
Junior subordinated debt			8,000			260		12.93
Total borrowings			196,699			2,642		5.34			79,759			1,007		5.01
Total interest-bearing liabilities			3,999,104			29,040		2.89			2,661,450			17,488		2.61
Noninterest-bearing deposits			713,776								688,301
Other liabilities			96,177								47,788
Stockholders’ equity			482,137								332,504
Total liabilities and stockholders’ equity		$	5,291,194							$	3,730,043
Net interest income/spread					$	39,964		2.74	%				$	21,752		1.79	%
Net interest margin								3.26	%							2.44	%
Tax-equivalent adjustments:
Loans					$	611							$	375
Investments						109								100
Total adjustments					$	720							$	475

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)


		For the Nine Months Ended
		September 30, 2024								September 30, 2023
		Average			Interest Income/			Yield/		Average			Interest Income/			Yield/
	****	Balance		****	Expense		****	Rate	****	Balance		****	Expense		****	Rate	****
Assets:	****
Earning assets:
Loans:
Taxable		$	3,022,988		$	127,859		5.65	%	$	2,596,848		$	95,283		4.91	%
Tax-exempt			242,293			6,476		3.57			225,178			5,323		3.16
Total loans			3,265,281			134,335		5.50			2,822,026			100,606		4.77
Investments:
Taxable			501,100			8,620		2.30			474,425			5,977		1.68
Tax-exempt			87,612			1,459		2.22			92,111			1,532		2.22
Total investments			588,712			10,079		2.29			566,536			7,509		1.77
Interest-bearing deposits			9,541			385		5.39			5,004			190		5.08
Federal funds sold			61,635			2,524		5.47			72,098			2,914		5.40
Total earning assets			3,925,169			147,323		5.01	%		3,465,664			111,219		4.29	%
Less: allowance for credit losses			27,660								24,711
Other assets			294,186								211,537
Total assets		$	4,191,695		$	147,323				$	3,652,490		$	111,219
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Money market accounts		$	792,391		$	22,116		3.73	%	$	694,478		$	15,459		2.98	%
Interest-bearing demand and NOW accounts			977,722			16,125		2.20			768,277			10,661		1.86
Savings accounts			450,161			3,975		1.18			485,985			727		0.20
Time deposits less than $100			475,194			17,778		5.00			327,810			8,980		3.66
Time deposits $100 or more			271,765			3,222		1.58			195,450			3,978		2.72
Total interest-bearing deposits			2,967,233			63,216		2.85			2,472,000			39,805		2.15
Short-term borrowings			36,349			1,444		5.31			43,125			1,590		4.93
Long-term debt			54,147			1,929		4.76			17,576			569		4.33
Subordinated debt			33,000			1,330		5.38			33,000			1,330		5.39
Junior subordinated debt			2,692			260		12.90
Total borrowings			126,188			4,963		5.25			93,701			3,489		4.98
Total interest-bearing liabilities			3,093,421			68,179		2.94			2,565,701			43,294		2.26
Noninterest-bearing deposits			650,446								714,779
Other liabilities			59,622								42,101
Stockholders’ equity			388,206								329,909
Total liabilities and stockholders’ equity		$	4,191,695							$	3,652,490
Net interest income/spread					$	79,144		2.07	%				$	67,925		2.03	%
Net interest margin								2.69	%							2.62	%
Tax-equivalent adjustments:
Loans					$	1,360							$	1,118
Investments						306								322
Total adjustments					$	1,666							$	1,440

Peoples Financial Services Corp.

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

(In thousands, fully taxable equivalent basis)


	Sept 30			June 30			Mar 31			Dec 31			Sept 30
Three months ended	2024			2024			2024			2023			2023
Net interest income:
Interest income:
Loans, net:
Taxable	$	59,412		$	34,406		$	34,041		$	33,730		$	33,095
Tax-exempt		2,910			1,771			1,795			1,801			1,786
Total loans, net		62,322			36,177			35,836			35,531			34,881
Investments:
Taxable		4,794			1,906			1,920			1,939			1,920
Tax-exempt		520			469			470			471			475
Total investments		5,314			2,375			2,390			2,410			2,395
Interest on interest-bearing balances in other banks		150			115			120			145			91
Federal funds sold		1,218			179			1,127			2,463			1,873
Total interest income		69,004			38,846			39,473			40,549			39,240
Interest expense:
Deposits		26,398			18,114			18,704			18,756			16,481
Short-term borrowings		550			633			262			330			291
Long-term debt		1,389			269			270			273			273
Subordinated debt		443			444			443			444			443
Junior subordinated debt		260
Total interest expense		29,040			19,460			19,679			19,803			17,488
Net interest income	$	39,964		$	19,386		$	19,794		$	20,746		$	21,752
Loans, net:
Taxable		6.24	%		5.25	%		5.20	%		5.08	%		5.00	%
Tax-exempt		4.16	%		3.20	%		3.20	%		3.14	%		3.13	%
Total loans, net		6.09	%		5.09	%		5.04	%		4.93	%		4.85	%
Investments:
Taxable		3.12	%		1.73	%		1.73	%		1.71	%		1.68	%
Tax-exempt		2.31	%		2.19	%		2.18	%		2.14	%		2.15	%
Total investments		3.02	%		1.80	%		1.80	%		1.78	%		1.75	%
Interest-bearing balances with banks		5.55	%		5.28	%		5.35	%		5.51	%		5.24	%
Federal funds sold		5.26	%		5.68	%		5.60	%		5.52	%		5.52	%
Total interest-earning assets		5.63	%		4.58	%		4.56	%		4.49	%		4.40	%
Interest expense:
Deposits		2.76	%		2.92	%		2.90	%		2.80	%		2.53	%
Short-term borrowings		4.98	%		5.61	%		5.35	%		5.43	%		5.31	%
Long-term debt		4.94	%		4.33	%		4.34	%		4.33	%		4.33	%
Subordinated debt		5.34	%		5.41	%		5.40	%		5.34	%		5.33	%
Junior subordinated debt		12.93	%
Total interest-bearing liabilities		2.89	%		3.01	%		2.96	%		2.86	%		2.61	%
Net interest spread		2.74	%		1.57	%		1.60	%		1.63	%		1.79	%
Net interest margin		3.26	%		2.29	%		2.29	%		2.30	%		2.44	%

Peoples Financial Services Corp.

Consolidated Balance Sheets (Unaudited)

(In thousands)


	Sept 30		June 30		Mar 31		Dec 31		Sept 30
At period end	2024		2024		2024		2023		2023
Assets:
Cash and due from banks	$	97,090	$	41,234	$	32,009	$	33,524	$	39,285
Interest-bearing balances in other banks		10,286		8,722		8,259		9,141		9,550
Federal funds sold		178,093				69,700		144,700		205,700
Investment securities:
Available for sale		562,486		385,240		394,413		398,927		382,227
Equity investments carried at fair value		3,921		78		91		98		92
Held to maturity		79,861		81,598		83,306		84,851		86,246
Total investments		646,268		466,916		477,810		483,876		468,565
Loans held for sale		803				300		250
Loans		4,069,683		2,869,553		2,858,412		2,849,897		2,870,969
Less: allowance for credit losses		39,341		23,123		22,597		21,895		23,010
Net loans		4,030,342		2,846,430		2,835,815		2,828,002		2,847,959
Goodwill		76,958		63,370		63,370		63,370		63,370
Premises and equipment, net		75,877		58,565		59,097		61,276		61,936
Bank owned life insurance		87,401		49,955		49,673		49,397		49,123
Deferred tax assets		33,078		14,460		14,241		13,770		17,956
Accrued interest receivable		17,979		13,326		13,565		12,734		12,769
Other intangible assets, net		35,907								19
Other assets		70,056		53,077		45,299		42,249		49,567
Total assets	$	5,360,138	$	3,616,055	$	3,669,138	$	3,742,289	$	3,825,799
Liabilities:
Deposits:
Noninterest-bearing	$	717,565	$	620,971	$	623,408	$	644,683	$	691,071
Interest-bearing		3,920,299		2,443,988		2,580,530		2,634,354		2,674,012
Total deposits		4,637,864		3,064,959		3,203,938		3,279,037		3,365,083
Short-term borrowings		37,346		104,250		20,260		17,590		27,020
Long-term debt		111,489		25,000		25,000		25,000		25,000
Subordinated debt		33,000		33,000		33,000		33,000		33,000
Junior subordinated debt		8,015
Accrued interest payable		6,829		5,507		5,327		5,765		4,777
Other liabilities		50,544		42,532		41,621		41,475		46,529
Total liabilities		4,885,087		3,275,248		3,329,146		3,401,867		3,501,409
Stockholders’ equity:
Common stock		19,993		14,122		14,122		14,093		14,093
Capital surplus		250,578		122,449		122,162		122,130		121,870
Retained earnings		239,021		249,511		249,123		248,550		247,857
Accumulated other comprehensive loss		(34,541)		(45,275)		(45,415)		(44,351)		(59,430)
Total stockholders’ equity		475,051		340,807		339,992		340,422		324,390
Total liabilities and stockholders’ equity	$	5,360,138	$	3,616,055	$	3,669,138	$	3,742,289	$	3,825,799

Peoples Financial Services Corp.

Loan and Asset Quality Data (Unaudited)

(In thousands)


At period end	****	September 30, 2024		****	June 30, 2024		****	March 31, 2024		****	December 31, 2023		****	September 30, 2023
Commercial
Taxable		$	616,369		$	411,112		$	400,439		$	317,245		$	351,545
Non-taxable			273,710			220,893			224,083			226,470			229,635
Total			890,079			632,005			624,522			543,715			581,180
Real estate
Commercial real estate			2,309,588			1,793,652			1,794,086			1,863,118			1,846,350
Residential			550,590			369,671			361,490			360,803			357,647
Total			2,860,178			2,163,323			2,155,576			2,223,921			2,203,997
Consumer
Indirect Auto			130,380			66,792			71,675			75,389			78,953
Consumer Other			15,580			7,433			6,639			6,872			6,839
Total			145,960			74,225			78,314			82,261			85,792
Equipment Financing			173,466
Total		$	4,069,683		$	2,869,553		$	2,858,412		$	2,849,897		$	2,870,969


	Sept 30		June 30		Mar 31		Dec 31		Sept 30
At quarter end	2024		2024		2024		2023		2023
Nonperforming assets:
Nonaccrual/restructured loans	$	20,949	$	7,116	$	7,056	$	3,961	$	3,060
Accruing loans past due 90 days or more		569				656		986		700
Foreclosed assets		27		27
Total nonperforming assets	$	21,545	$	7,143	$	7,712	$	4,947	$	3,760


		Sept 30		June 30		Mar 31		Dec 31		Sept 30
Three months ended		2024		2024		2024		2023		2023
Allowance for credit losses:
Beginning balance	$	23,123	$	22,597	$	21,895	$	23,010	$	23,218
Merger-related adjustments - Non PCD Loans		14,328
Merger-related adjustments - PCD Loans		1,842
Charge-offs		534		135		108		2,808		65
Recoveries		452		65		102		24		23
Provision for (credit to) credit losses		130		596		708		1,669		(166)
Ending balance	$	39,341	$	23,123	$	22,597	$	21,895	$	23,010

Peoples Financial Services Corp.

Deposit and Liquidity Detail (Unaudited)

(In thousands)


At period end	****	September 30, 2024		****	June 30, 2024		****	March 31, 2024		****	December 31, 2023		****	September 30, 2023
Interest-bearing deposits:
Money market accounts		$	1,018,575		$	690,631		$	759,305		$	782,243		$	767,868
Interest-bearing demand and NOW accounts			1,439,382			715,890			754,673			796,426			825,066
Savings accounts			509,412			397,827			415,459			429,011			447,684
Time deposits less than $250			824,791			504,879			517,009			505,409			512,646
Time deposits $250 or more			128,139			134,761			134,084			121,265			120,748
Total interest-bearing deposits			3,920,299			2,443,988			2,580,530			2,634,354			2,674,012
Noninterest-bearing deposits			717,565			620,971			623,408			644,683			691,071
Total deposits		$	4,637,864		$	3,064,959		$	3,203,938		$	3,279,037		$	3,365,083


		September 30, 2024
At period end		Amount	Percent of Total		Number of accounts		Average Balance
Deposit Detail:
Retail	$	1,788,213	38.6	%	100,690	$	18
Commercial		1,544,269	33.3		19,496		79
Municipal		913,822	19.7		2,578		354
Brokered		391,560	8.4		50		7,831
Total Deposits	$	4,637,864	100.0		122,814	$	38

Uninsured		1,566,710	33.8	%
Insured		3,071,154	66.2

		December 31, 2023
At period end		Amount	Percent of Total		Number of accounts		Average Balance
Deposit Detail:
Retail	$	1,358,371	41.4	%	70,334	$	19
Commercial		1,096,547	33.4		13,433		82
Municipal		563,124	17.2		1,856		303
Brokered		260,995	8.0		24		10,875
Total Deposits	$	3,279,037	100.00		85,647	$	38

Uninsured		883,530	26.9	%
Insured		2,395,507	73.1


	****			****			Total Available
At September 30, 2024			Total Available			Outstanding		for Future Liquidity
FHLB advances		$	1,446,345		$	477,617	$	968,728
Federal Reserve - Discount Window & Bank Term Funding Program			569,771			25,000		544,771
Correspondent bank lines of credit			18,000					18,000
Other sources of liquidity:
Brokered deposits			804,021			391,560		412,461
Unencumbered securities			298,519					298,519
Total sources of liquidity		$	3,136,656		$	894,177	$	2,242,479

Peoples Financial Services Corp.

Consolidated Balance Sheets (Unaudited)

(In thousands)


	Sept 30		June 30		Mar 31		Dec 31		Sept 30
Average quarterly balances	2024		2024		2024		2023		2023
Assets:
Loans, net:
Taxable	$	3,790,138	$	2,637,164	$	2,632,554	$	2,632,865	$	2,627,700
Tax-exempt		278,496		222,655		225,293		227,800		226,628
Total loans, net		4,068,634		2,859,819		2,857,847		2,860,665		2,854,328
Investments:
Taxable		611,032		443,146		446,996		450,533		454,727
Tax-exempt		89,532		86,418		86,864		87,297		87,731
Total investments		700,564		529,564		533,860		537,830		542,458
Interest-bearing balances with banks		10,820		8,763		9,025		10,432		6,893
Federal funds sold		92,171		12,672		80,955		176,983		134,583
Total interest-earning assets		4,872,189		3,410,818		3,481,687		3,585,910		3,538,262
Other assets		419,005		198,248		195,063		188,478		191,781
Total assets	$	5,291,194	$	3,609,066	$	3,676,750	$	3,774,388	$	3,730,043
Liabilities and stockholders’ equity:
Deposits:
Interest-bearing	$	3,802,405	$	2,496,298	$	2,593,813	$	2,661,156	$	2,581,691
Noninterest-bearing		713,776		620,256		616,610		651,182		688,301
Total deposits		4,516,181		3,116,554		3,210,423		3,312,338		3,269,992
Short-term borrowings		43,895		45,383		19,687		24,103		21,759
Long-term debt		111,804		25,000		25,000		25,000		25,000
Subordinated debt		33,000		33,000		33,000		33,000		33,000
Other liabilities		96,177		48,630		47,688		52,760		47,788
Total liabilities		4,801,057		3,268,567		3,335,798		3,447,201		3,397,539
Stockholders’ equity		482,137		340,499		340,952		327,187		332,504
Total liabilities and stockholders’ equity	$	5,283,194	$	3,609,066	$	3,676,750	$	3,774,388	$	3,730,043

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)


	Sept 30			June 30			Mar 31			Dec 31			Sept 30
Three months ended	2024			2024			2024			2023			2023
Core net income per share:
Net (loss) income GAAP	$	(4,337)		$	3,282		$	3,466		$	3,630		$	6,746
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,885
Add: Acquisition related expenses		9,653			1,071			486			826			869
Less: Acquisition related expenses tax adjustment		1,270			122			59			115			144
Core net income	$	16,489		$	4,231		$	3,893		$	4,341		$	7,471
Average common shares outstanding - diluted		10,044,449			7,114,115			7,102,112			7,091,015			7,120,685
Core net income per share	$	1.64		$	0.59		$	0.55		$	0.61		$	1.05

Tangible book value:
Total stockholders’ equity	$	475,051		$	340,807		$	339,992		$	340,422		$	324,390
Less: Goodwill		76,958			63,370			63,370			63,370			63,370
Less: Other intangible assets, net		35,907												19
Total tangible stockholders’ equity	$	362,186		$	277,437		$	276,622		$	277,052		$	261,001
Common shares outstanding		9,994,648			7,057,258			7,057,258			7,040,852			7,040,852
Tangible book value per share	$	36.24		$	39.31		$	39.20		$	39.35		$	37.07

Core return on average stockholders’ equity:
Net (loss) income GAAP	$	(4,337)		$	3,282		$	3,466		$	3,630		$	6,746
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,885
Add: Acquisition related expenses		9,653			1,071			486			826			869
Less: Acquisition related expenses tax adjustment		1,270			122			59			115			144
Core net income	$	16,489		$	4,231		$	3,893		$	4,341		$	7,471
Average stockholders’ equity	$	482,137		$	340,499		$	340,952		$	327,187		$	332,504
Core return on average stockholders’ equity		13.61	%		5.00	%		4.59	%		5.26	%		8.91	%

Return on average tangible equity:
Net (loss) income GAAP	$	(4,337)		$	3,282		$	3,466		$	3,630		$	6,746
Average stockholders’ equity	$	482,137		$	340,499		$	340,952		$	327,187		$	332,504
Less: average intangibles		113,032			63,370			63,370			63,380			63,404
Average tangible stockholders’ equity	$	369,105		$	277,129		$	277,582		$	263,807		$	269,100
Return on average tangible stockholders’ equity		(4.67)	%		4.76	%		5.02	%		5.46	%		9.95	%

Core return on average tangible stockholders’ equity:
Net (loss) income GAAP	$	(4,337)		$	3,282		$	3,466		$	3,630		$	6,746
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,885
Add: Acquisition related expenses		9,653			1,071			486			826			869
Less: Acquisition related expenses tax adjustment		1,270			122			59			115			144
Core net income	$	16,489		$	4,231		$	3,893		$	4,341		$	7,471
Average stockholders’ equity	$	482,137		$	340,499		$	340,952		$	327,187		$	332,504
Less: average intangibles		113,032			63,370			63,370			63,380			63,404
Average tangible stockholders’ equity	$	369,105		$	277,129		$	277,582		$	263,807		$	269,100
Core return on average tangible stockholders’ equity		17.77	%		6.14	%		5.64	%		6.53	%		11.01	%

Core return on average assets:
Net (loss) income GAAP	$	(4,337)		$	3,282		$	3,466		$	3,630		$	6,746
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,885
Add: Acquisition related expenses		9,653			1,071			486			826			869
Less: Acquisition related expenses tax adjustment		1,270			122			59			115			144
Core net income	$	16,489		$	4,231		$	3,893		$	4,341		$	7,471
Average assets	$	5,291,194		$	3,609,066		$	3,676,750		$	3,774,388		$	3,730,043
Core return on average assets		1.24	%		0.47	%		0.43	%		0.46	%		0.79	%

Core pre-provision net revenue (PPNR) per share:
(Loss) income before taxes (GAAP)	$	(4,994)		$	3,703		$	3,944		$	4,217		$	8,081
Add: Acquisition related expenses		9,653			1,071			486			826			869
Add: ACL provision for FNCB acquired legacy loans		14,328
Add: Provision for (credit to) credit losses		130			596			708			1,669			(166)
Add: Provision for (credit to) credit losses on unfunded commitments		(785)			(197)			487			(2)			(12)
Core PPNR (non-GAAP)	$	18,332		$	5,173		$	5,625		$	6,710		$	8,772
Average common shares outstanding-diluted		10,044,449			7,114,115			7,102,112			7,091,015			7,120,685
Core PPNR per share (non-GAAP)	$	1.83		$	0.73		$	0.79		$	0.95		$	1.23

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)


	Sept 30			Sept 30
Nine months ended	2024			2023
Core net income per share:
Net income GAAP	$	2,411		$	23,750
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,307
Less: Gain on sale of available for sale securities					81
Add: Gain on sale of available for sale securities tax adjustment					17
Add: Acquisition related expenses		11,210			990
Less: Acquisition related expenses tax adjustment		1,023			159
Core net income	$	25,619		$	24,517
Average common shares outstanding - diluted		8,094,036			7,165,570
Core net income per share	$	3.17		$	3.42

Core return on average stockholders’ equity:
Net income GAAP	$	2,411		$	23,750
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,307
Less: Gain on sale of available for sale securities					81
Add: Gain on sale of available for sale securities tax adjustment					17
Add: Acquisition related expenses		11,210			990
Less: Acquisition related expenses tax adjustment		1,023			159
Core net income	$	25,619		$	24,517
Average stockholders’ equity		388,206			329,909
Core return on average stockholders’ equity		13.27	%		14.99	%

Return on average tangible equity:
Net income GAAP	$	2,411		$	23,750
Average stockholders’ equity		388,206			329,909
Less: average intangibles		79,924			63,694
Average tangible stockholders’ equity	$	308,282		$	266,215
Return on average tangible stockholders’ equity		1.57	%		17.99	%

Core return on average tangible stockholders’ equity:
Net income GAAP	$	2,411		$	23,750
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,307
Less: Gain on sale of available for sale securities					81
Add: Gain on sale of available for sale securities tax adjustment					17
Add: Acquisition related expenses		11,210			990
Less: Acquisition related expenses tax adjustment		1,023			159
Core net income	$	25,619		$	24,517
Average stockholders’ equity		388,206			329,909
Less: average intangibles		79,924			63,694
Average tangible stockholders’ equity	$	308,282		$	266,215
Core return on average tangible stockholders’ equity		16.71	%		18.57	%

Core return on average assets:
Net income GAAP	$	2,411		$	23,750
Adjustments:
Add: ACL provision for FNCB acquired legacy loans		14,328
Less: ACL provision for FNCB acquired legacy loans tax adjustment		1,307
Less: Gain on sale of available for sale securities					81
Add: Gain on sale of available for sale securities tax adjustment					17
Add: Acquisition related expenses		11,210			990
Less: Acquisition related expenses tax adjustment		1,023			159
Core net income	$	25,619		$	24,517
Average assets		4,191,695			3,652,490
Core return on average assets		1.23	%		1.35	%

Core pre-provision net revenue (PPNR) per share:
Income before taxes (GAAP)	$	2,653		$	28,284
Add: ACL provision for FNCB acquired legacy loans		14,328
Add: Acquisition related expenses		11,210			990
Add: Provision for (credit to) credit losses		1,434			(1,103)
Add: Provision for (credit to) credit losses on unfunded commitments		(495)			(197)
Core PPNR (non-GAAP)	$	29,130		$	27,974
Average common shares outstanding-diluted		8,094,036			7,165,570
Core PPNR per share (non-GAAP)	$	3.60		$	3.90

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 nine months ended September 30, 2024 and 2023:


Three months ended September 30	****	2024		****	2023
Interest income (GAAP)		$	68,284		$	38,765
Adjustment to FTE			720			475
Interest income adjusted to FTE (non-GAAP)			69,004			39,240
Interest expense			29,040			17,488
Net interest income adjusted to FTE (non-GAAP)		$	39,964		$	21,752

Nine months ended September 30	****	2024		****	2023
Interest income (GAAP)		$	145,657		$	109,779
Adjustment to FTE			1,666			1,440
Interest income adjusted to FTE (non-GAAP)			147,323			111,219
Interest expense			68,179			43,294
Net interest income adjusted to FTE (non-GAAP)		$	79,144		$	67,925

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 nine months ended September 30, 2024 and 2023:


Three months ended September 30	****	2024		****	2023		****
Efficiency ratio (non-GAAP):
Noninterest expense (GAAP)		$	35,502		$	17,054
Less: Amortization of intangible assets expense			1,665			29
Less: Acquisition related expenses			9,653			869
Noninterest expense (non-GAAP)			24,184			16,156

Net interest income (GAAP)			39,244			21,277
Plus: Taxable equivalent adjustment			720			475
Noninterest income (GAAP)			5,722			3,692
Less: Net gains (losses) on equity securities			175
Less: Gain (loss) on sale of available for sale securities			1
Net interest income (FTE) plus noninterest income (non-GAAP)		$	45,510		$	25,444
Efficiency ratio (non-GAAP)			53.14	%		63.50	%

Nine months ended September 30	****	2024		****	2023		****
Efficiency ratio (non-GAAP):
Noninterest expense (GAAP)		$	71,728		$	50,222
Less: Amortization of intangible assets expense			1,665			86
Less: Acquisition related expenses			11,210			990
Noninterest expense (non-GAAP)			58,853			49,146

Net interest income (GAAP)			77,478			66,485
Plus: Taxable equivalent adjustment			1,666			1,440
Noninterest income (GAAP)			12,665			10,918
Less: Net losses on equity securities			155			(17)
Less: Gains on sale of available for sale securities			1			81
Net interest income (FTE) plus noninterest income (non-GAAP)		$	91,653		$	78,779
Efficiency ratio (non-GAAP)			64.21	%		62.38	%