Peoples Financial Services Corp. reported significant changes in its financial performance for the third quarter and the nine months ended September 30, 2024, primarily driven by its recent acquisition of FNCB Bancorp, Inc. The merger, completed on July 1, 2024, added approximately $1.8 billion in total assets, $1.2 billion in loans, and $1.4 billion in deposits to the company’s balance sheet.
As of September 30, 2024, total assets surged to $5.36 billion, a 43.3% increase from $3.74 billion at the end of 2023. Total loans reached $4.07 billion, up from $2.85 billion, reflecting a 42.5% increase. This growth included substantial contributions from commercial and industrial loans, which rose to $699.9 million, and real estate loans, which increased to $2.86 billion.
Despite the growth in assets and loans, the company reported a net loss of $4.34 million for the third quarter of 2024, compared to a net income of $6.75 million for the same period in 2023. The loss per share was $(0.43), a significant decline from earnings of $0.95 per share in the prior year. For the nine months ended September 30, 2024, net income fell to $2.41 million, down 89.9% from $23.75 million in the same period in 2023.
The decline in profitability was attributed to increased noninterest expenses, which rose by $18.4 million to $35.5 million in Q3 2024, largely due to $9.7 million in merger-related costs. The provision for credit losses also increased significantly, totaling $14.5 million for the quarter, compared to a credit of $0.2 million in Q3 2023.
Total interest income for the third quarter was $68.3 million, up from $39.2 million in Q3 2023, driven by a higher volume of earning assets and an improved net interest margin of 3.26%, compared to 2.44% in the prior year. The yield on loans increased to 6.09%, reflecting the impact of the FNCB merger and higher rates on new loans.
Total deposits increased to $4.64 billion, a 41.4% rise from $3.28 billion at the end of 2023, with interest-bearing deposits growing significantly. The company declared a fourth-quarter dividend of $0.6175 per share, representing a 50.6% increase from the previous year.
Overall, while the merger has positioned Peoples Financial Services Corp. for future growth, the immediate financial results reflect the challenges of integration and increased costs associated with the acquisition.
About PEOPLES FINANCIAL SERVICES CORP.
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