Peoples Financial Services Corp. Reports $15M Net Income in Q1 2025, Driven by FNCB Acquisition

Peoples Financial Services Corp. reported a significant increase in financial performance for the first quarter of 2025, with net income rising to $15.0 million, or $1.49 per diluted share, compared to $3.5 million, or $0.49 per share, in the same period last year. This increase was primarily driven by a higher net interest income of $20.2 million, attributed to the acquisition of FNCB Bancorp, which expanded the company's earning assets. The net interest margin improved to 3.50%, reflecting a favorable shift in the yield on earning assets, which rose to 5.50% from 4.56% year-over-year.

Total assets decreased by $92.3 million, or 7.4% annualized, to $5.0 billion as of March 31, 2025, largely due to reductions in federal funds sold and maturities in the investment portfolio. Total loans remained relatively stable, decreasing slightly to $4.0 billion, while total deposits fell by $90.6 million to $4.3 billion, driven by seasonal reductions in municipal deposit balances. The company’s total stockholders’ equity increased to $481.9 million, bolstered by net income and a reduction in accumulated other comprehensive loss.

In terms of operational developments, the merger with FNCB has had a notable impact on the company's financial metrics. The acquisition, completed in July 2024, has enhanced the company's market share and branch network in northeastern Pennsylvania. The integration of FNCB has also contributed to a substantial increase in customer engagement, with total loans averaging $4.0 billion for the quarter, a 39.2% increase compared to the same period last year. The company reported a total of 9,995,482 shares outstanding as of May 1, 2025.

The allowance for credit losses stood at $41.1 million, or 1.03% of loans, reflecting a slight decrease from the previous quarter. Nonperforming assets increased to $23.7 million, or 0.47% of total assets, indicating a need for continued vigilance in credit risk management. The company’s provision for credit losses was $0.2 million for the quarter, down from $0.7 million in the prior year, suggesting improved asset quality.

Looking ahead, Peoples Financial Services Corp. remains focused on leveraging the benefits of the FNCB merger while managing interest rate risk and maintaining liquidity. The company has a robust capital position, with Tier 1 capital ratios exceeding regulatory requirements, and plans to continue its dividend policy, having declared a dividend of $0.6175 per share for the second quarter of 2025. The management anticipates that ongoing strategic initiatives will further enhance profitability and shareholder value in the coming quarters.