Did Peoples Financial beat earnings in Q4 2025?

PFIS missed EPS estimates by 22% ($1.19 vs $1.54 expected). However, core EPS of $1.36 excluded a $1.8M after-tax loss from strategic securities repositioning. The stock rose 2.3% as investors focused on NIM expansion.

What is PFIS net interest margin?

PFIS net interest margin (FTE) expanded to 3.60% in Q4 2025, up 35 basis points from 3.25% in Q4 2024, driven by higher loan yields and lower deposit costs following Fed rate cuts.

Did PFIS raise guidance?

PFIS does not provide formal guidance. However, CEO Gerard Champi expressed confidence in disciplined growth and operating efficiency heading into 2026, with the FNCB merger integration largely complete.

PEOPLES FINANCIAL SERVICES (PFIS)·Q4 2025 Earnings Summary

Peoples Financial Q4 Miss Overshadowed by NIM Expansion, Stock Rises 2%

January 30, 2026 · by Fintool AI Agent

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Peoples Financial Services Corp. (NASDAQ: PFIS) reported Q4 2025 earnings that missed consensus estimates on both EPS and revenue, but the stock rose 2.3% as investors looked past a one-time securities loss to focus on margin expansion and improved credit quality.

The Pennsylvania-based regional bank posted net income of $12.0 million, or $1.19 per diluted share, compared to $6.1 million, or $0.61 per share, in Q4 2024. Excluding a $2.2 million pre-tax loss ($1.8 million after-tax) from strategic securities repositioning, core EPS was $1.36.

Did Peoples Financial Beat Earnings?

No — PFIS missed on both EPS and revenue, but the market shrugged it off.

Metric	Actual	Consensus	Surprise
EPS (GAAP)	$1.19	$1.54*	-22.5%
Core EPS	$1.36	$1.54*	-11.4%
Net Interest Income	$43.0M	~$48.9M*	-12.0%

*Values retrieved from S&P Global

The miss was driven by the strategic decision to sell $78.6 million of low-yielding U.S. Treasury bonds (1.18% weighted average yield) and reinvest in higher-yielding securities averaging 4.67%. Management expects to recover the after-tax loss within approximately 10 months.

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What Drove the Results?

Net Interest Margin Expansion — The Bright Spot

Net interest margin (FTE) expanded 35 basis points year-over-year to 3.60%, the key metric that likely drove the positive stock reaction.

Metric	Q4 2024	Q4 2025	Change
NIM (FTE)	3.25%	3.60%	+35 bps
FTE Yield on Earning Assets	5.51%	5.56%	+5 bps
Cost of Funds	2.88%	2.55%	-33 bps
Cost of Interest-Bearing Deposits	2.75%	2.30%	-45 bps

The margin expansion was driven by a combination of stable asset yields and sharply lower funding costs following the Fed's 75 basis points of rate cuts in 2025.

Credit Quality Improvement

Nonperforming assets improved significantly, addressing a key concern following the FNCB merger:

Metric	Q4 2024	Q4 2025	Change
NPAs/Total Assets	0.45%	0.23%	-22 bps
NPAs/Loans + Foreclosed Assets	0.58%	0.30%	-28 bps
Allowance/Loans	1.05%	0.96%	-9 bps

Nonperforming assets fell from $23.0 million to $12.1 million, driven by an $11.7 million decrease in nonaccrual loans following resolution of several large commercial credit relationships.

What Did Management Say?

CEO Gerard Champi struck a confident tone despite the headline miss:

"We delivered solid full-year results in 2025, with net income of $59.2 million driven by strong net interest income and a lower provision for credit losses... While fourth-quarter earnings were impacted by a strategic $2.2 million pre-tax loss related to the repositioning of our available-for-sale securities portfolio, this action strengthens our balance sheet and positions us well for future periods."

Key forward-looking commentary:

Securities repositioning expected to recover the loss within ~10 months
Focus on disciplined growth, operating efficiency, and long-term shareholder value
FNCB merger integration largely complete with synergies flowing through

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How Did the Stock React?

PFIS rose 2.3% on earnings day, closing at $52.10 on above-average volume.

Metric	Value
Earnings Day Close	$52.10
Change	+$1.17 (+2.3%)
Volume	22,221 (above avg)
52-Week Range	$38.90 - $54.20
Market Cap	$521M

The positive reaction despite the miss suggests:

Expectations may have been low heading into the print
Investors viewed the securities loss as one-time and value-accretive long-term
NIM expansion and credit quality improvement were the more important signals

What Changed From Last Quarter?

Metric	Q3 2025	Q4 2025	Change
EPS (Diluted)	$1.51	$1.19	-21.2%
Core EPS	$1.51	$1.36	-9.9%
ROAE	12.02%	9.16%	-286 bps
NIM (FTE)	3.54%	3.60%	+6 bps
Efficiency Ratio	56.52%	59.53%	+301 bps

The sequential decline in profitability was almost entirely attributable to the securities repositioning loss. Excluding that, operating trends remained solid with continued NIM expansion.

Full Year 2025 vs. 2024

The year-over-year transformation is stark, reflecting the full integration of the FNCB merger:

Metric	FY 2024	FY 2025	Change
Net Income	$8.5M	$59.2M	+596%
EPS (Diluted)	$0.99	$5.88	+494%
Core EPS	$3.77	$6.07	+61%
NIM (FTE)	2.84%	3.58%	+74 bps
Efficiency Ratio	63.83%	56.45%	-738 bps

FY 2024 was distorted by $16.2 million in acquisition-related expenses and a $14.3 million Day 1 provision for acquired loans. Normalizing for these items, the underlying business improved materially.

Balance Sheet Highlights

Metric	Dec 31, 2024	Dec 31, 2025	Change
Total Assets	$5.09B	$5.27B	+3.5%
Total Loans	$3.99B	$4.07B	+1.8%
Total Deposits	$4.41B	$4.43B	+0.6%
Book Value/Share	$46.94	$52.01	+10.8%
Tangible Book Value/Share	$35.88	$41.64	+16.1%
Stockholders' Equity	$469M	$520M	+10.9%

Loan growth was modest at 1.8% for the year, but accelerated to 5.0% annualized in Q4 2025.

Capital & Liquidity

The bank maintained its well-capitalized position with ample liquidity:

Cash & Equivalents: $269.0 million (up from $135.9 million YoY)
Available Borrowing Capacity: $1.0 billion at FHLB + $349 million at Fed Discount Window
Uninsured Deposits: 34.3% of total deposits ($1.5B), with $494M collateralized by FHLB letters of credit
Dividends Declared: $2.47 per share for FY 2025 (4.7% yield at current price)

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Key Risks and Concerns

Rate Sensitivity: NIM benefited from lower funding costs, but further Fed cuts could pressure asset yields
Commercial Real Estate Concentration: CRE loans represent $2.33 billion of the $4.07 billion loan portfolio
Geographic Concentration: Operations primarily in northeastern Pennsylvania with 40 branches
Integration Execution: While FNCB integration is largely complete, continued focus on efficiency and system integration required

Forward Catalysts

Q1 2026 Earnings: ~April 2026 — Look for securities repositioning payback and continued NIM trends
Dividend: $0.6175 quarterly dividend maintained
Fed Policy: Further rate cuts could pressure NIM but support credit quality
M&A: With FNCB integration complete, potential for additional consolidation in fragmented PA market

Peoples Financial Services Corp. is the bank holding company for Peoples Security Bank and Trust Company, serving retail and commercial customers through 40 branches across Pennsylvania, New Jersey, and New York.

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