KBRA assigned a senior unsecured debt rating of BBB, a subordinated debt rating of BBB-, and a short-term debt rating of K3 to Peoples Financial Services Corp. on October 7, 2025. Additionally, its subsidiary, Peoples Security Bank and Trust Company, received deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2.
The Outlook for all long-term ratings is Stable. These ratings are supported by the company's strong funding profile, primarily comprised of core deposits, which reflects a favorable mix and results in slightly below peer average funding costs of 2.58% during Q1 2025.
KBRA noted that the recent acquisition of FNCB in Q3 2024 provided meaningful benefits to the net interest margin through purchase accounting accretion, balance sheet remixing, and expected cost-savings. Management anticipates return on average assets to return to a normalized level in the low-to-mid 1.0% range throughout 2025, with 1.19% reported for Q1 2025.
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