Peoples Financial Services Corp. Successfully Completes $85 Million Private Placement for Enhanced Growth Strategy

Peoples Financial Services Corp. Completes $85 Million Private Placement

In a significant move to reinforce its financial standing, Peoples Financial Services Corp. (NASDAQ: PFIS) announced the completion of an oversubscribed private placement totaling $85 million in subordinated notes. This initiative, primarily executed to bolster the company’s balance sheet, demonstrates a robust investor appetite and strategic vision.

Key Financial Terms of the Notes

The issued notes, which bear an initial fixed interest rate of 7.75%, are due in 2035. From issuance until June 15, 2030, the company will pay interest semi-annually, with the first payment scheduled for December 15, 2025. After June 15, 2030, the interest rate will transition to a floating rate calculated as the Three-Month Term Secured Overnight Financing Rate plus an additional 411 basis points, payable quarterly from September 15, 2030.

Purpose of the Proceeds

The proceeds from this private placement are earmarked for general corporate purposes, including the redemption of existing subordinated debt. This approach aligns with the company’s strategy of maintaining a strong balance sheet while pursuing growth initiatives.

Leadership Insights

Gerard A. Champi, the company’s CEO, expressed his satisfaction regarding the successful completion of the offering, highlighting it as a reflection of strong market interest. He attributed this success to the firm foundation established following the merger with FNCB Bancorp, Inc. and the positive performance indicators from their first quarter results.

Thomas P. Tulaney, the company’s president, emphasized that this cost-effective capital issuance aligns with the disciplined approach to manage capital, ensuring both balance sheet strength and consideration for shareholders' interests.

Legal and Regulatory Framework

It is important to note that the issued notes have not been registered under the Securities Act of 1933 or any state securities laws, which restricts their sale in the United States without proper registration or an applicable exemption. This measure underlines the intricacies involved in capital markets and the regulatory environment surrounding financial instruments.

About Peoples Financial Services Corp.

Peoples Financial Services Corp. operates as a bank holding company for Peoples Security Bank and Trust Company. This independent community bank serves both retail and commercial clients through its extensive network of 39 banking offices across various counties in Pennsylvania, New Jersey, and New York, offering a wide array of financial products and services. The bank prides itself on its community integration philosophy, ensuring local decision-making and timely, customer-focused service.

Conclusion and Future Outlook

This successful capital raise positions Peoples Financial Services Corp. to pursue its growth objectives more vigorously while enhancing financial flexibility. With a keen focus on diligent capital management and leveraging strategic partnerships, the company is well-equipped to navigate the complexities of the financial landscape and capitalize on future opportunities as they arise. The company looks forward to maintaining its momentum and delivering value to both clients and shareholders in the years to come.