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PF

PEOPLES FINANCIAL SERVICES CORP. (PFIS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 EPS was $1.51, down sequentially from $1.68 and a slight miss vs consensus $1.535; operating performance benefited from lower interest expense YoY, but was offset by a $0.6M pre-tax loss on pending property sales and higher occupancy costs tied to the new HQ transition . EPS consensus from S&P Global: $1.535*; Actual EPS: $1.51*.
  • Revenue (S&P “Operating Revenue”) was $47.52M*, a modest miss vs consensus $48.85M*; net interest margin (FTE) remained healthy at 3.54% and above prior-year 3.26%, while ROAA/ROAE were 1.19%/12.02% . Revenue consensus from S&P Global: $48.85M*; Actual revenue: $47.52M*.
  • Asset quality continued to improve: nonperforming assets were 0.33% of total assets (vs 0.45% at 12/31/24) and ACL-to-loans declined to 0.99% (vs 1.05% at 12/31/24), with a $0.8M provision credit in Q3 .
  • Balance sheet optimization continued: brokered CDs were reduced by $94.2M YTD; deposit costs fell YoY (interest-bearing deposits cost 2.39% vs 2.76%), and diversified deposit base (retail 40.9%, commercial 36.4%, municipal 18.9%, brokered 3.8%) underpinned liquidity ($1.1B FHLB, $388.3M Fed window capacity) .
  • Dividend held at $0.6175 per share for Q4 2025 (payable Dec 15), signaling capital return stability amid integration progress following the FNCB merger .

What Went Well and What Went Wrong

What Went Well

  • Improved asset quality and provisioning: Nonperforming assets fell to 0.33% of total assets, and PFIS recorded a $0.8M credit to provision for credit losses, reflecting reduced specific reserves and lower model loss rates .
  • Cost of funds and deposit mix improved YoY: Interest-bearing deposit cost dropped to 2.39% (from 2.76%), and cost of total deposits decreased to 1.88% (from 2.33%), supported by noninterest-bearing deposits rising to 21.3% of total averages .
  • Management focus and execution: “We are extremely pleased with another strong quarter driven by disciplined credit quality and balance sheet management,” said CEO Gerard A. Champi, highlighting efficiency, customer service, and centralized operations at the new HQ .

What Went Wrong

  • EPS/revenue slight misses vs consensus: EPS of $1.51 missed the $1.535* consensus, and revenue $47.52M* missed $48.85M*; headwinds included a $0.6M loss on pending administrative property sales and higher occupancy/equipment expenses .
  • Efficiency ratio worsened YoY vs Q3 2024: Efficiency ratio (non-GAAP) rose to 56.52% from 53.14% in Q3 2024, reflecting elevated operating costs despite lower acquisition-related expenses this year .
  • Higher borrowing costs: Average borrowings cost increased 67 bps to 6.01%; subordinated debt refinanced into $85M notes at 7.75% fixed-to-floating (through June 2030), lifting interest expense on borrowings .

Financial Results

EPS and Revenue vs Prior Quarters and Wall Street Consensus

Values with asterisks come from S&P Global; include “Values retrieved from S&P Global.”

MetricQ1 2025Q2 2025Q3 2025
EPS Actual ($)$1.49 $1.68 $1.51
EPS Consensus Mean ($)*$1.325*$1.465*$1.535*
Beat/MissBeatBeatMiss
Revenue Actual ($USD Millions)*$44.75M*$48.68M*$47.52M*
Revenue Consensus Mean ($USD Millions)*$44.30M*$46.85M*$48.85M*
Beat/MissBeatBeatMiss

Values retrieved from S&P Global.

Margins and Returns

MetricQ1 2025Q2 2025Q3 2025
Net Interest Margin (FTE)3.50% 3.69% 3.54%
ROAA1.22% 1.36% 1.19%
ROAE12.70% 13.87% 12.02%
Efficiency Ratio (non-GAAP)55.77% 53.92% 56.52%

Operating Lines

Metric ($USD Thousands)Q1 2025Q2 2025Q3 2025
Net Interest Income39,548 42,197 41,183
Noninterest Income6,256 6,247 5,501
(Credit to) Provision for Credit Losses200 (239) (838)
Income Tax Expense3,242 3,465 3,598

KPIs and Asset Quality

KPIQ1 2025Q2 2025Q3 2025
Nonperforming Assets / Total Assets0.47% 0.34% 0.33%
Nonperforming Assets / Loans + Foreclosed0.59% 0.44% 0.42%
Net Charge-offs / Avg Loans, Net0.09% 0.00% 0.02%
ACL / Loans, Net1.03% 1.02% 0.99%

Segment/Portfolio Mix

Loans by Category ($USD Thousands)Q3 2025 Period-End
Commercial (Taxable + Non-taxable)861,084
Commercial Real Estate2,278,745
Residential Real Estate588,520
Consumer (Indirect Auto + Other)114,510
Equipment Financing173,508
Total Loans4,016,367
Deposits by Category ($USD Thousands)Q3 2025 Period-End% of Total
Retail1,756,627 40.9%
Commercial1,560,214 36.4%
Municipal810,678 18.9%
Brokered162,212 3.8%
Total Deposits4,289,731 100.0%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ4 2025$0.6175 (Q2/Q3 2025 run-rate) $0.6175 (payable Dec 15, 2025) Maintained
Revenue, Margins, OpEx, Tax rateN/ANot providedNot providedN/A

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was found in our document catalog. We synthesized themes across Q1–Q3 press materials.

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Net Interest MarginNIM rose to 3.50% in Q1; increased further to 3.69% in Q2 on higher asset yields and accretion .NIM at 3.54% with YoY improvement vs 3.26% in Q3’24 .Stable-to-strong; normalization after Q2 peak.
Deposit Costs/MixCost of interest-bearing deposits down to 2.46% in Q1; further to 2.41% in Q2; noninterest-bearing share up .Interest-bearing deposit cost 2.39%; total deposit cost 1.88%; noninterest-bearing 21.3% of averages .Improving cost/mix.
Brokered CDs$119M higher-rate brokered CDs replaced in H1; balances $198M at Q2 .Brokered CDs reduced by $94.2M YTD to $162.2M .De-risking, lower-cost funding.
Credit ProvisioningQ1 small provision ($0.2M); Q2 provision credit ($0.2M) aided by recoveries .Q3 provision credit ($0.8M); declining NPLs and model loss rates .Positive credit trend.
Borrowing Costs/Sub debtNew $85M sub notes at 7.75% in June; redeemed $33M notes repriced to 9.08% .Average borrowings cost up to 6.01%; sub debt avg cost 8.34% .Higher structural borrowing costs near-term.
LiquidityFHLB/Fed lines at Q1: $1.1B / $583M; Q2: $1.1B / $427M .$1.1B FHLB; $388.3M Fed window; cash/equivalents $179.9M .Robust but moderated Fed capacity.

Management Commentary

  • Strategic focus: “We are extremely pleased with another strong quarter driven by disciplined credit quality and balance sheet management… focus on efficiency, enhanced customer service and long-term growth as we centralize operations in our new corporate headquarters.” — Gerard A. Champi, CEO .
  • Post-merger execution (FNCB): Management cites higher interest-earning asset levels, transaction volumes, and purchase accounting accretion as drivers of NII and noninterest income year-to-date .
  • Deposit strategy and balance sheet optimization: Reduction of higher-rate brokered CDs and improved deposit cost dynamics underscored funding discipline .

Q&A Highlights

No Q3 2025 earnings call transcript was available in our catalog; Q&A highlights and any guidance clarifications cannot be provided based on primary sources. We searched earnings-call-transcript documents for PFIS and found none for the period.

Estimates Context

  • Coverage depth: Only two estimates for EPS and revenue in each quarter (Q1–Q3 2025), increasing the potential for volatility around reported results relative to consensus.*
  • Beat/miss summary: Q1 and Q2 delivered EPS and revenue beats; Q3 saw slight misses on both. Drivers of Q3 variance included the $0.6M loss on pending administrative property sales and higher occupancy/equipment expenses, partially offset by lower interest expense YoY and a provision credit .
  • Where estimates may adjust: Models likely lower for noninterest income in Q4 given property sale loss and transition costs; borrowing cost assumptions may rise (sub debt at 7.75%) while deposit cost trajectory remains favorable, supporting NIM resilience .

Values retrieved from S&P Global.

Detailed Estimates Tables

Values with asterisks come from S&P Global; include “Values retrieved from S&P Global.”

MetricQ1 2025Q2 2025Q3 2025
Primary EPS Consensus Mean*$1.325*$1.465*$1.535*
Primary EPS Actual*$1.51*$1.69*$1.51*
Primary EPS – # of Estimates*2*2*2*

Values retrieved from S&P Global.

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD Millions)*$44.30M*$46.85M*$48.85M*
Revenue Actual ($USD Millions)*$44.75M*$48.68M*$47.52M*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Slight Q3 miss amid transitory costs: EPS and revenue under-shot consensus marginally due to a one-time $0.6M property sale loss and higher occupancy/equipment expenses; the underlying credit and margin trends remain constructive .
  • Margin resilience: NIM (FTE) at 3.54% and cost-of-deposits down YoY signal continued spread support into Q4 despite higher structural borrowing costs from subordinated debt .
  • Credit tailwinds: Provision credit and lower NPLs bolster earnings quality; ACL-to-loans drifted down to 0.99%, consistent with improving risk metrics .
  • Funding optimization a catalyst: Further reduction in brokered CDs and stable noninterest-bearing deposit share should keep funding costs favorable and support NIM .
  • Liquidity strong and diversified: Significant FHLB/Fed capacity plus unencumbered securities provide flexibility for balance sheet actions and opportunistic growth .
  • Capital return steady: Dividend maintained at $0.6175 for Q4 2025; tangible book per share increased to $40.43, reflecting capital accretion and AOCL improvement .
  • Near-term modeling: Expect modest noninterest income normalization and elevated borrowing costs; continued progress on efficiency ratio seen as an incremental upside lever as HQ transition completes .

Additional source documents referenced:

  • Q3 2025 earnings press release and 8‑K (Item 2.02) .
  • Q2 2025 earnings press release (8‑K) .
  • Q1 2025 earnings press release .

Values retrieved from S&P Global.