PEOPLES FINANCIAL SERVICES CORP.

Item 8.01 Other Events. On December 23, 2025, Peoples Financial Services Corp. (the “Company”), bank holding company for Peoples Security Bank and Trust Company, completed a repositioning of a portion of its investment securities portfolio. The Company sold lower-yielding, available-for-sale (“AFS”) U.S. treasury bonds with a book value of approximately $78.6 million, a weighted average yield of 1.18% and weighted average life of approximately 1.2 years. The sale of the bonds resulted in a realized after-tax loss of approximately $1.85 million which will be recognized during the fourth quarter of 2025. Net proceeds of approximately $76.1 million from the sale were used to purchase higher-yielding investment securities that have been classified as AFS. The investment securities purchased consisted of approximately $38.2 million of U.S. agency mortgage-backed securities and approximately $37.9 million of discounted tax-exempt municipal bonds. The AFS investment securities purchased had an average book yield of approximately 4.67% and duration of 10.5 years as of the date of purchase. The repositioning is estimated to improve interest income from the securities portfolio by approximately $2.8 million over the next 12 next months. The Company currently expects to recover the approximately $1.85 million after-tax loss on the sale of investment securities in approximately 10 months. The transaction had no impact on stockholders’ equity or book value per share as of the date of the sale, as unrealized losses on the AFS investment securities are accounted for as a deduction to stockholders’ equity. The capital levels of the Company and Peoples Security Bank and Trust Company remain well in excess of those required to be categorized as well-capitalized by their bank regulators.