Peoples Financial Corporation reported third‑quarter 2025 net income of $643,000, a $14.8 million decline from $15.4 million in the same period last year, and earnings per share of $0.14 versus $3.31 in Q3 2024. The drop was driven largely by a $15.2 million tax‑benefit reversal that had been recorded in Q3 2024, as well as a $920,000 decline in total interest income to $6.91 million and a $217,000 decline in interest expense to $2.33 million.
The bank’s net interest margin compressed as interest income fell while interest expense also decreased, reflecting lower yields on securities and overnight funds. Pre‑tax income fell $548,000 to $786,000, and the first nine months of 2025 net income totaled $3.20 million, down $16.98 million from $20.18 million in 2024.
Deposits declined $83.15 million to $637.58 million, largely due to the loss of several large public‑fund accounts during competitive bid processes. Despite the deposit outflow, the bank’s leverage ratio remained strong at 15.19 % and liquidity resources were unchanged, with no indication of a need to sell securities to support cash flow.
The earnings decline, coupled with the sharp drop in EPS and the loss of significant deposit balances, signals a material deterioration in profitability for the quarter. While the bank’s capital position remains robust, the results raise concerns about the impact of rising interest rates and deposit volatility on future earnings and may prompt investors to reassess the company’s short‑term outlook.
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