Earnings release
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1 Exhibit 99.1 NEWS RELEASE TO BUSINESS EDITOR: PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited Second Quarter and Year to Date 2026 Earnings 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 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 ● On a linked quarter basis, total loans increased $112.6 million, or 10.8% annualized, to $4.3 billion at June 30, 2026 from $4.2 billion at March 31, 2026 and increased $305.3 million, or 7.6%, from $4.0 billion at June 30, 2025. ● On a linked quarter basis, total deposits increased $83.5 million, or 7.6% annualized to $4.5 billion at June 30, 2026 from $4.4 billion at March 31, 2026, and increased $221.5 million, or 5.2%, from $4.3 billion at June 30, 2025.
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2 ● Book value per common share at June 30, 2026, increased to $53.56 from $49.44 at June 30, 2025. Tangible book value per common share, a non-GAAP measure1, increased to $43.51 at June 30, 2026, compared to $38.75 at June 30, 2025. INCOME STATEMENT REVIEW ● Net interest margin (“NIM”), calculated on a fully taxable equivalent (“FTE”) basis, a non-GAAP measure1, for the three months ended June 30, 2026, improved 15 basis points to 3.82% from 3.67% for the three months ended March 31, 2026, and 13 basis points as compared to 3.69% for the three months ended June 30, 2025. For the six months ended June 30, the FTE NIM, a non-GAAP measure1, improved 15 basis points to 3.75% in 2026 from 3.60% in 2025. ● The FTE yield on interest-earning assets, a non-GAAP measure1, increased 13 basis points to 5.64% for the three months ended June 30, 2026, from 5.51% for the three months ended March 31, 2026, but decreased 4 basis points from 5.68% for the same three months ended June 30, 2025. For the six months ended June 30, 2026, the FTE yield on interest-earning assets, a non-GAAP measure1, was 5.57%, a decrease of 2 basis points from 5.59% for the same period of 2025. ● The cost of funds, which represents the average rate paid on total interest-bearing liabilities, decreased 1 basis point to 2.40% for the three months ended June 30, 2026, from 2.41% for the three months ended March 31, 2026, and 20 basis points from 2.60% for the three months ended June 30, 2025. For the year-to-date period, the cost of funds was 2.41% in 2026, a reduction of 18 basis points compared to 2.59% for 2025. ● The cost of interest-bearing deposits decreased 2 basis points for the three months ended June 30, 2026, to 2.14% from 2.16% for the three months ended March 31, 2026, and 27 basis points from 2.41% for the three months ended June 30, 2025. For the six months ended June 30, 2026, the cost of interest- bearing deposits decreased 29 basis points to 2.15% from 2.44% for the six months of 2025. ● The cost of total deposits, which includes the impact of noninterest-bearing deposits, was 1.68% for the second quarter of 2026, a decrease of 2 basis points compared to 1.70% for the first quarter of 2026, and a decrease of 23 basis points from 1.91% for the second quarter of 2025. The cost of deposits for the six months ended June 30, 2026 was 1.69%, a decrease of 24 basis points from 1.93% for the comparable period of 2025. ● The efficiency ratio, a non-GAAP measure1, was 55.16% for the quarter ended June 30, 2026, an increase, as compared to 53.92% for the same quarter of 2025, but an improvement as compared to 57.09% for the quarter ended March 31, 2026. For the six months ended June 30, the efficiency ratio, a non-GAAP measure1, was 56.10% in 2026 and 54.81% in 2025. 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 1 See reconciliation of non-GAAP financial measures on pg.14-15.
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3 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 1 See reconciliation of non-GAAP financial measures on pg.14-15.
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4 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.
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5 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.
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6 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. 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
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7 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. [TABULAR MATERIAL FOLLOWS]
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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%.
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9 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
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10 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%.
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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
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11 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%.
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12 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.
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13 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
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14 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.
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15 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%