Peoples Financial Services Corp. Reports Third Quarter 2019 Earnings

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SCRANTON, Pa., Oct. 22, 2019 /PRNewswire/ -- Peoples Financial Services Corp. ("Peoples") PFIS, the bank holding company for Peoples Security Bank and Trust Company, today reported unaudited financial results at and for the three and nine months ended September 30, 2019.  Peoples reported net income of $7.1 million, or $0.97 per share for the three months ended September 30, 2019, compared to $6.7 million, or $0.91 per share for the comparable period of 2018. The increase in earnings for the three months ended September 30, 2019 is the product of higher net interest income of $1.3 million due to growth of $116.1 million in our average earning assets from the year ago period and a decrease of $0.4 million to the provision for loan losses when comparing the three months ended September 30, 2019 to the same period in 2018, partially offset by an increase of $1.5 million in noninterest expenses in the current period.

Peoples Financial Services Corp. Logo. (PRNewsFoto/Peoples Financial Services Corp.) (PRNewsFoto/PEOPLES FINANCIAL SERVICES CORP_)

Net income for the nine months ended September 30, 2019, totaled $20.7 million or $2.80 per share, an 11.7% increase when compared to $18.5 million or $2.50 per share for the same period last year.  The increase in earnings in the current period is the result of higher net interest income of $3.5 million due to our earning asset growth coupled with a $1.1 million decrease in the provision for loan losses when comparing the nine months ended September 30, 2019 to the same period in 2018. These positives were partially offset by an increase of $2.4 million in salaries and employee benefit expenses and $0.6 million in occupancy and equipment expenses in support of our growth initiative.

In addition to evaluating its results of operations in accordance with GAAP, Peoples routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible stockholders' equity and core net income ratios. The reported results included herein contain items, which Peoples considers non-core, namely gains and losses incurred within the investment securities portfolio and gains on the sale of other business lines. Peoples believes the reported non-GAAP financial measures provide information useful to investors in understanding its operating performance and trends. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure is provided in the accompanying tables. The non-GAAP financial measures Peoples uses may differ from the non-GAAP financial measures of other financial institutions.

Core net income, which we have defined to exclude losses or gains on investment securities and gains from other nonrecurring sources, for the three months ended September 30, totaled $7.1 million and $6.7 million in 2019 and 2018, respectively. Core net income per share for the three months ended September 30, 2019 was $0.97, an increase from $0.91 for the same period in 2018. The results in both 2019 and 2018 exclude a pre-tax $14 thousand gain in the value of our equity investment securities portfolio. 

Core net income for the nine months ended September 30, 2019 was $20.7 million or $2.80 per share, an increase of 13.1% compared to $18.3 million or $2.47 per share for the same period of 2018. Results for the nine months ended September 30, 2019 exclude a pre-tax gain of $23 thousand on the sale of debt securities and a pre-tax $6 thousand gain in the value of our equity investment securities portfolio. The 2018 results were impacted by a pre-tax $14 thousand gain in the value of our equity investment securities portfolio and the pre-tax gain of $291 thousand from the sale of our credit card portfolio.

NOTABLES

  • Loans, net growth of $101.6 million or 5.7% since September 30, 2018, with growth of $57.8 million or 4.2% annualized for the nine months ended September 30, 2019.
  • Deposit growth of $173.4 million or 9.5% compared to September 30, 2018. Deposits increased $126.3 million or 9.0% annualized for the nine months ended September 30, 2019.
  • Tangible book value per share improved to $31.27 at September 30, 2019 from $28.78 at December 31, 2018 and from $27.99 at September 30, 2018.
  • Tax-equivalent net interest income increased $3.5 million or 6.5% to $57.5 million for the nine months ended September 30, 2019 compared to $54.0 million for the same period in 2018.
  • Return on average assets was 1.21% and 1.19% for the three and nine months ended September 30, 2019 compared to 1.19% and 1.12%, respectively for the comparable periods in 2018. Return on average equity was 9.65% and 9.63% for the three and nine months ended September 30, 2019 compared to 9.81% and 9.21%, respectively for the three and nine months ended September 30, 2018.
  • The allowance for loan losses to loans, net was 1.19% at September 30, 2019, an increase from 1.17% at December 31, 2018 and 1.15% at September 30, 2018.

INCOME STATEMENT REVIEW

Calculated on a fully taxable equivalent basis ("FTE"), our tax-equivalent net interest margin for the three and nine months ended September 30 were 3.61% and 3.60% respectively in 2019, compared to 3.57% respectively for the same periods in 2018. The tax-equivalent yield on earning assets increased 17 and 26 basis points to 4.42% and 4.45% for the three and nine months ended September 30, 2019 from 4.25% and 4.19% during the same periods in 2018. At the same time, we experienced higher interest-bearing liability costs due to higher short-term market rates. Our cost of funds, which represents our average rate paid on total interest-bearing liabilities, increased 21 and 33 basis points to 1.10% and 1.14% respectively for the three and nine months ended September 30, 2019 when compared to 0.89% and 0.81% respectively for the same periods in 2018. Although the Federal Open Market Committee (FOMC) has decreased the federal funds rate target 50 basis points to a target range of 1.75% to 2.00%, the short end of the yield curve has remained elevated, resulting in higher deposit costs.

Tax-equivalent net interest income for the nine months ended September 30, increased $3.5 million or 6.5% to $57.5 million in 2019 from $54.0 million in 2018. The increase in tax equivalent net interest income was primarily due to a $110.8 million increase in average loans for the nine months ended September 30, 2019 when compared to the same period in 2018. The tax-equivalent yield on the loan portfolio increased to 4.75% for the nine months ended September 30, 2019, compared to 4.44% for the comparable period in 2018. Loans, net averaged $1.9 billion for the nine months ended September 30, 2019 and $1.7 billion for the comparable period in 2018. For the nine months ended September 30, the tax-equivalent yield on total investments decreased to 2.49% in 2019 from 2.60% in 2018. Average investments totaled $273.1 million in 2019 and $282.3 million in 2018. Average interest-bearing liabilities increased $49.3 million for the nine months ended September 30, 2019, compared to the corresponding period last year due to growth in average deposits.

The provision for loan losses totaled $2.1 million for the nine months ended September 30, 2019 and $3.2 million for the nine months ended September 30, 2018.  For the quarter ended September 30, the provision for loan losses was $0.7 million in 2019 and $1.1 million in 2018.

For the nine months ended September 30, noninterest income totaled $11.3 million in 2019, an increase from $10.5 million in 2018. Fee income generated by commercial loan interest rate swap transactions totaled $1.1 million in the nine months ended September 30, 2019 compared to $0.1 million during the corresponding period of 2018 while in the year ago period, a gain on the sale of our credit card portfolio of $291 thousand and bank owned life insurance income of $365 thousand were recognized. Increases in revenues from merchant services, income from fiduciary activities, and income generated from wealth management services more than offset a slight decrease in income from mortgage banking activities. For the three months ended September 30, noninterest income totaled $3.7 million in 2019, an increase from $3.3 million in 2018.  The increase was due to higher revenue related to commercial loan interest rate swaps, increases in revenues from merchant services, income generated from wealth management services, and income from mortgage banking activities partially offset by a slight decrease in income from fiduciary activities and life insurance investment income.

Noninterest expense increased $2.9 million or 7.4% to $42.0 million for the nine months ended September 30, 2019, from $39.1 million for the nine months ended September 30, 2018. Salaries and employee benefits increased $2.4 million or 11.3% due to annual merit increases and additional staffing in support of our organic growth strategy.  Occupancy and equipment expenses also increased due to our market expansion when comparing the nine months ended September 30, 2019 and 2018 as those expenses increased $0.6 million or 7.2%. In addition, during the nine months ended September 30, 2019, increases to other expenses and donations, were more than offset by decreases in professional fees and outside services, amortization expense recognized and FDIC insurance premiums and assessments. Noninterest expense increased $1.5 million or 12.3% to $14.1 million for the three months ended September 30, 2019, from $12.5 million for the three months ended September 30, 2018. Salaries and employee benefits increased $1.1 million or 16.0% due to annual merit increases and continued investment in our expansion. Occupancy and equipment expenses also increased due to our market expansion when comparing the three months ending September 30, 2019 and 2018 as those expenses increased $0.3 million or 11.8%. In the other noninterest expense categories, increases in professional fees and outside services, donations and other expenses were partially offset by decreases in amortization expense and FDIC insurance and assessments.

BALANCE SHEET REVIEW

At September 30, 2019, total assets, loans and deposits were $2.4 billion, $1.9 billion and $2.0 billion, respectively. Loans, net increased $57.8 million or 4.2% annualized from December 31, 2018. The growth in loans was primarily from commercial real estate and commercial and industrial loans. Total deposits increased $126.3 million or 9.0% annualized from December 31, 2018 due in part to seasonal inflows of public deposits and growth in commercial balances. Non-interest bearing deposits increased $30.3 million or 9.9% annualized while interest-bearing deposits increased $96.0 million or 8.8% annualized during the nine months ended September 30, 2019. The growth in deposits has allowed us to pay down short-term debt and resulted in a federal funds sold position of $10.1 million at September 30, 2019. Total investments were $276.9 million at September 30, 2019, including $268.8 million securities classified as available-for-sale and $7.8 million classified as held-to-maturity.

Stockholders' equity equaled $296.2 million or $40.08 per share at September 30, 2019, and $278.6 million or $37.66 per share at December 31, 2018. Tangible stockholders' equity improved to $31.27 per share at September 30, 2019, from $28.78 per share at December 31, 2018. Dividends declared for the nine months ended September 30, 2019 amounted to $1.02 per share, a 4.1% increase from the year ago period, representing a dividend payout ratio of 36.4%.

ASSET QUALITY REVIEW

Nonperforming assets were $11.5 million or 0.61% of loans, net and foreclosed assets at September 30, 2019, compared to $10.0 million or 0.55% of loans, net and foreclosed assets at December 31, 2018. The increase in nonperforming assets was primarily due to placing a $2.6 million commercial credit on non-accrual. The allowance for loan losses equaled $22.4 million or 1.19% of loans, net at September 30, 2019 compared to $21.4 million or 1.17% of loans, net, at December 31, 2018. Loans charged-off, net of recoveries, for the nine months ended September 30, 2019, equaled $1.1 million or 0.08% of average loans, compared to $1.7 million or 0.10% of average loans for the comparable period last year.

About Peoples:

Peoples Financial Services Corp. is the parent company of Peoples Security Bank and Trust Company, a community bank serving Bucks, Lackawanna, Lebanon, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Schuylkill, Susquehanna, Wayne and Wyoming Counties in Pennsylvania and Broome County in New York through 28 offices. Each office, interdependent with the community, offers a comprehensive array of financial products and services to individuals, businesses, not-for-profit organizations and government entities. Peoples' business philosophy includes offering direct access to senior management and other officers and providing friendly, informed and courteous service, local and timely decision making, flexible and reasonable operating procedures and consistently applied credit policies.

Safe Harbor Forward-Looking Statements:

We make statements in this press release, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results and/or other matters regarding or affecting Peoples Financial Services Corp., Peoples Security Bank and Trust Company, and its subsidiaries (collectively, "Peoples") that are considered "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, Peoples claims the protection of the statutory safe harbors for forward-looking statements.

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Peoples cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; our ability to identify and address cyber-security risks and other economic, competitive, governmental, regulatory and technological factors affecting Peoples' operations, pricing, products and services and other factors that may be described in Peoples' Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.

In addition to these risks, acquisitions and business combinations, present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may be significantly harder-or take longer-to achieve than expected. As regulated financial institutions, our pursuit of attractive acquisition and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues. Regulatory and/or legal issues related to the pre-acquisition operations of an acquired or combined business may cause reputational harm to Peoples following the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising as a result of those issues.

The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, Peoples assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

 [TABULAR MATERIAL FOLLOWS]

 

 

Summary Data

Peoples Financial Services Corp.

Five Quarter Trend

(In thousands, except share and per share data)




Sept 30


June 30


Mar 31


Dec 31


Sept 30




2019


2019


2019


2018


2018


Key performance data:

















Per share data:

















Net income


$

0.97


$

0.96


$

0.87


$

0.86


$

0.91


Core net income (1)


$

0.97


$

0.96


$

0.87


$

0.86


$

0.91


Cash dividends declared


$

0.34


$

0.34


$

0.34


$

0.33


$

0.33


Book value


$

40.08


$

39.41


$

38.46


$

37.66


$

36.89


Tangible book value (1)


$

31.27


$

30.58


$

29.61


$

28.78


$

27.99


Market value:

















High


$

48.38


$

45.41


$

46.74


$

44.06


$

48.10


Low


$

42.90


$

42.00


$

40.34


$

40.00


$

42.40


Closing


$

45.29


$

44.99


$

45.24


$

44.06


$

42.40


Market capitalization


$

334,637


$

332,885


$

334,733


$

326,002


$

313,720


Common shares outstanding



7,388,759



7,399,078



7,399,054



7,399,054



7,399,054


Selected ratios:

















Return on average stockholders' equity



9.65

%


9.98

%


9.26

%


9.21

%


9.81

%

Core return on average stockholders' equity (1)



9.63

%


9.97

%


9.26

%


9.21

%


9.79

%

Return on average tangible stockholders' equity



12.40

%


12.93

%


12.08

%


12.10

%


12.95

%

Core return on average tangible stockholders' equity (1)



12.38

%


12.91

%


12.08

%


12.10

%


12.93

%

Return on average assets



1.21

%


1.24

%


1.13

%


1.12

%


1.19

%

Core return on average assets (1)



1.21

%


1.24

%


1.13

%


1.12

%


1.19

%

Stockholders' equity to total assets



12.48

%


12.55

%


12.28

%


12.17

%


12.09

%

Efficiency ratio (2)



59.65

%


61.15

%


60.03

%


59.42

%


57.00

%

Nonperforming assets to loans, net, and foreclosed assets



0.61

%


0.68

%


0.76

%


0.55

%


0.65

%

Net charge-offs to average loans, net



0.05

%


0.11

%


0.07

%


0.02

%


0.05

%

Allowance for loan losses to loans, net



1.19

%


1.18

%


1.20

%


1.17

%


1.15

%

Interest-bearing assets yield (FTE) (3)



4.42

%


4.49

%


4.44

%


4.38

%


4.25

%

Cost of funds



1.10

%


1.17

%


1.14

%


0.99

%


0.89

%

Net interest spread (FTE) (3)



3.32

%


3.32

%


3.30

%


3.39

%


3.36

%

Net interest margin (FTE) (3)



3.61

%


3.62

%


3.58

%


3.63

%


3.57

%

 

(1)

See Reconciliation of Non-GAAP financial measures.

(2)

Total noninterest expense less amortization of intangible assets divided by tax-equivalent net interest income and noninterest income less net gains(losses) on investment securities available-for-sale.

(3)

Tax-equivalent adjustments were calculated using the federal statutory tax rate prevailing during the indicated periods of 21%.


 

 

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)




Sept 30


Sept 30


Nine Months Ended


2019


2018


Interest income:








Interest and fees on loans:








Taxable


$

61,684


$

54,546


Tax-exempt



3,274



2,660


Interest and dividends on investment securities:








Taxable



3,127



2,790


Tax-exempt



1,493



2,001


Dividends



60



51


Interest on interest-bearing deposits in other banks



50



131


Interest on federal funds sold



77





Total interest income



69,765



62,179


Interest expense:








Interest on deposits



11,090



6,135


Interest on short-term borrowings



1,491



2,317


Interest on long-term debt



923



936


Total interest expense



13,504



9,388


Net interest income



56,261



52,791


Provision for loan losses



2,100



3,150


Net interest income after provision for loan losses



54,161



49,641


Noninterest income:








Service charges, fees, commissions



6,650



5,856


Merchant services income



837



687


Commissions and fees on fiduciary activities



1,568



1,552


Wealth management income



1,142



1,048


Mortgage banking income



457



472


Life insurance investment income



567



568


Net gain on investment securities



29



14


Net gains on sale of credit card loans






291


Total noninterest income



11,250



10,488


Noninterest expense:








Salaries and employee benefits expense



23,688



21,291


Net occupancy and equipment expense



8,807



8,215


Merchant services expense






6


Amortization of intangible assets



557



670


Other expenses



8,946



8,932


Total noninterest expense



41,998



39,114


Income before income taxes



23,413



21,015


Provision for income tax expense



2,709



2,487


Net income


$

20,704


$

18,528


Other comprehensive income (loss):








Unrealized gain (loss) on investment securities available-for-sale


$

5,211


$

(4,394)


Reclassification adjustment for gains included in net income



(23)





Change in derivative fair value



659





Income tax related to other comprehensive income (loss)



1,228



(925)


Other comprehensive income (loss), net of income taxes



4,619



(3,469)


Comprehensive income


$

25,323


$

15,059


Per share data:








Net income


$

2.80


$

2.50


Cash dividends declared


$

1.02


$

0.98


Average common shares outstanding



7,397,768



7,397,373


 

 

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)




Sept 30


June 30


Mar 31


Dec 31


Sept 30


Three months ended


2019


2019


2019


2018


2018


Interest income:

















Interest and fees on loans:

















Taxable


$

20,940


$

20,641


$

20,103


$

19,806


$

18,798


Tax-exempt



1,066



1,109



1,099



1,006



919


Interest and dividends on investment securities available-for-sale:

















Taxable



1,092



1,025



1,012



1,009



998


Tax-exempt



411



520



562



620



639


Dividends



19



22



19



21



16


Interest on interest-bearing deposits in other banks



27



15



6



20



49


Interest on federal funds sold



77














Total interest income



23,632



23,332



22,801



22,482



21,419


Interest expense:

















Interest on deposits



3,966



3,713



3,411



3,211



2,342


Interest on short-term borrowings



83



595



813



421



809


Interest on long-term debt



347



296



280



302



315


Total interest expense



4,396



4,604



4,504



3,934



3,466


Net interest income



19,236



18,728



18,297



18,548



17,953


Provision for loan losses



700



350



1,050



1,050



1,050


Net interest income after provision for loan losses



18,536



18,378



17,247



17,498



16,903


Noninterest income:

















Service charges, fees, commissions



2,161



2,490



1,999



1,822



1,883


Merchant services income



182



457



198



122



128


Commissions and fees on fiduciary activities



569



492



507



484



570


Wealth management income



395



370



377



399



305


Mortgage banking income



172



137



148



155



163


Life insurance investment income



189



192



186



189



190


Net gain on investment securities



14



14



1






14


Total noninterest income



3,682



4,152



3,416



3,171



3,253


Noninterest expense:

















Salaries and employee benefits expense



8,056



8,037



7,595



7,116



6,946


Net occupancy and equipment expense



2,997



2,849



2,961



2,682



2,681


Amortization of intangible assets



183



182



192



211



220


Other expenses



2,843



3,361



2,742



3,364



2,690


Total noninterest expense



14,079



14,429



13,490



13,373



12,537


Income before income taxes



8,139



8,101



7,173



7,296



7,619


Income tax expense



991



957



761



904



902


Net income


$

7,148


$

7,144


$

6,412


$

6,392


$

6,717


Other comprehensive income (loss):

















Unrealized gain (loss) on investment securities available-for-sale


$

161


$

2,611


$

2,439


$

2,380


$

(1,179)


Reclassification adjustment for gains included in net income






(23)











Change in pension liability












(591)





Change in derivative fair value



153



443



63



246





Income tax related to other comprehensive income (loss)



66



637



525



429



(248)


Other comprehensive income (loss), net of income taxes



248



2,394



1,977



1,606



(931)


Comprehensive income


$

7,396


$

9,538


$

8,389


$

7,998


$

5,786


Per share data:

















Net income


$

0.97


$

0.96


$

0.87


$

0.86


$

0.91


Cash dividends declared


$

0.34


$

0.34


$

0.34


$

0.33


$

0.33


Average common shares outstanding



7,394,992



7,399,302



7,399,054



7,399,054



7,399,054


 

 

Peoples Financial Services Corp.

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)




Sept 30


June 30


Mar 31


Dec 31


Sept 30


Three months ended


2019


2019


2019


2018


2018


Net interest income:

















Interest income

















Loans, net:

















Taxable


$

20,940


$

20,641


$

20,103


$

19,806


$

18,798


Tax-exempt



1,348



1,404



1,391



1,274



1,162


Total loans, net



22,288



22,045



21,494



21,080



19,960


Investments:

















Taxable



1,111



1,045



1,031



1,047



1,062


Tax-exempt



520



659



711



785



811


Total investments



1,631



1,704



1,742



1,832



1,873


Interest on interest-bearing balances in other banks



27



17



6



3



1


Federal funds sold



77














Total interest income



24,023



23,766



23,242



22,915



21,834


Interest expense:

















Deposits



3,966



3,713



3,411



3,211



2,342


Short-term borrowings



83



595



813



421



809


Long-term debt



347



296



280



302



315


Total interest expense



4,396



4,604



4,504



3,934



3,466


Net interest income


$

19,627


$

19,162


$

18,738


$

18,981


$

18,368


Loans, net:

















Taxable



4.80

%


4.85

%


4.79

%


4.73

%


4.57

%

Tax-exempt



3.94

%


3.96

%


3.91

%


3.80

%


3.74

%

Total loans, net



4.74

%


4.78

%


4.72

%


4.66

%


4.51

%

Investments:

















Taxable



2.20

%


2.21

%


2.25

%


2.25

%


2.28

%

Tax-exempt



2.93

%


3.20

%


3.17

%


3.25

%


3.25

%

Total investments



2.39

%


2.51

%


2.55

%


2.60

%


2.62

%

Interest-bearing balances with banks



2.14

%


2.67

%


2.37

%


2.28

%


1.05

%

Federal funds sold



2.14

%













Total interest-bearing assets



4.42

%


4.49

%


4.44

%


4.38

%


4.25

%

Interest expense:

















Deposits



1.03

%


1.03

%


0.96

%


0.87

%


0.69

%

Short-term borrowings



2.62

%


2.69

%


2.70

%


2.56

%


2.23

%

Long-term debt



2.61

%


2.83

%


3.02

%


2.63

%


2.57

%

Total interest-bearing liabilities



1.10

%


1.17

%


1.14

%


0.99

%


0.89

%

Net interest spread



3.32

%


3.32

%


3.30

%


3.39

%


3.36

%

Net interest margin



3.61

%


3.62

%


3.58

%


3.63

%


3.57

%

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)




Sept 30


June 30


Mar 31


Dec 31


Sept 30


At period end


2019


2019


2019


2018


2018


Assets:

















Cash and due from banks


$

35,908


$

26,615


$

24,364


$

32,569


$

40,458


Interest-bearing balances in other banks



5,275



3,347



1,688



47



137


Federal funds sold



10,100














Investment securities:

















Available-for-sale



268,823



261,665



270,384



269,682



274,794


Equity investments carried at fair value



297



283



292



291



291


Held-to-maturity



7,808



7,969



8,162



8,361



8,551


Loans held for sale



1,390



831






749



98


Loans, net



1,881,090



1,858,799



1,849,602



1,823,266



1,779,445


Less: allowance for loan losses



22,392



21,930



22,105



21,379



20,413


Net loans



1,858,698



1,836,869



1,827,497



1,801,887



1,759,032


Premises and equipment, net



47,437



46,468



44,728



38,889



37,467


Accrued interest receivable



6,655



7,303



7,211



7,115



6,565


Goodwill



63,370



63,370



63,370



63,370



63,370


Other intangible assets, net



1,738



1,921



2,104



2,296



2,507


Other assets



65,200



67,625



68,144



63,737



64,573


Total assets


$

2,372,699


$

2,324,266


$

2,317,944


$

2,288,993


$

2,257,843


Liabilities:

















Deposits:

















Noninterest-bearing


$

440,582


$

419,995


$

432,830


$

410,260


$

404,293


Interest-bearing



1,560,703



1,456,804



1,435,400



1,464,762



1,423,571


Total deposits



2,001,285



1,876,799



1,868,230



1,875,022



1,827,864


Short-term borrowings






82,700



109,000



86,500



99,450


Long-term debt



52,509



52,980



37,446



37,906



48,461


Accrued interest payable



1,461



1,058



878



1,195



745


Other liabilities



21,277



19,146



17,821



9,756



8,352


Total liabilities



2,076,532



2,032,683



2,033,375



2,010,379



1,984,872


Stockholders' equity:

















Common stock



14,778



14,798



14,798



14,798



14,798


Capital surplus



135,106



135,384



135,393



135,310



135,226


Retained earnings



149,740



145,106



140,478



136,582



132,631


Accumulated other comprehensive loss



(3,457)



(3,705)



(6,100)



(8,076)



(9,684)


Total stockholders' equity



296,167



291,583



284,569



278,614



272,971


Total liabilities and stockholders' equity


$

2,372,699


$

2,324,266


$

2,317,944


$

2,288,993


$

2,257,843


 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)




Sept 30


June 30


Mar 31


Dec 31


Sept 30


Average quarterly balances


2019


2019


2019


2018


2018


Assets:

















Loans, net:

















Taxable


$

1,729,741


$

1,707,730


$

1,701,737


$

1,662,290


$

1,632,012


Tax-exempt



135,580



142,310



144,119



133,100



123,199


Total loans, net



1,865,321



1,850,040



1,845,856



1,795,390



1,755,211


Investments:

















Taxable



200,444



189,265



185,696



184,345



184,623


Tax-exempt



70,381



82,565



90,961



95,698



99,142


Total investments



270,825



271,830



276,657



280,043



283,765


Interest-bearing balances with banks



5,006



2,554



1,028



523



377


Federal funds sold



14,267














Total interest-bearing assets



2,155,419



2,124,424



2,123,541



2,075,956



2,039,353


Other assets



193,041



190,583



187,537



186,491



198,229


Total assets


$

2,348,460


$

2,315,007


$

2,311,078


$

2,262,447


$

2,237,582


Liabilities and stockholders' equity:

















Deposits:

















Interest-bearing


$

1,521,047


$

1,449,665


$

1,445,861


$

1,459,155


$

1,351,709


Noninterest-bearing



445,238



426,791



406,733



403,488



405,671


Total deposits



1,966,285



1,876,456



1,852,594



1,862,643



1,757,380


Short-term borrowings



12,563



88,792



121,954



65,192



144,162


Long-term debt



52,731



41,948



37,663



45,503



48,670


Other liabilities



22,900



20,773



17,977



13,794



15,609


Total liabilities



2,054,479



2,027,969



2,030,188



1,987,132



1,965,821


Stockholders' equity



293,981



287,038



280,890



275,315



271,761


Total liabilities and stockholders' equity


$

2,348,460


$

2,315,007


$

2,311,078


$

2,262,447


$

2,237,582


 

 

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)




Sept 30


June 30


Mar 31


Dec 31


Sept 30




2019


2019


2019


2018


2018


At quarter end

















Nonperforming assets:

















Nonaccrual/restructured loans


$

10,657


$

11,926


$

12,803


$

8,669


$

10,576


Accruing loans past due 90 days or more



387



341



829



923



584


Foreclosed assets



485



408



360



376



342


Total nonperforming assets


$

11,529


$

12,675


$

13,992


$

9,968


$

11,502



















Three months ended

















Allowance for loan losses:

















Beginning balance


$

21,930


$

22,105


$

21,379


$

20,413


$

19,573


Charge-offs



308



576



374



202



328


Recoveries



70



51



50



118



118


Provision for loan losses



700



350



1,050



1,050



1,050


Ending balance


$

22,392


$

21,930


$

22,105


$

21,379


$

20,413


 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)




Sept 30


June 30


Mar 31


Dec 31


Sept 30


Three months ended


2019


2019


2019


2018


2018


Core net income per share:

















Net income GAAP


$

7,148


$

7,144


$

6,412


$

6,392


$

6,717


Adjustments:

















Less: (gain) loss on investment securities



(14)



(14)



(1)






(14)


Add: (gain) loss on investment securities tax adjustment



(3)



(3)









(3)


Net income Core


$

7,137


$

7,133


$

6,411


$

6,392


$

6,706


Average common shares outstanding



7,394,992



7,399,302



7,399,054



7,399,054



7,399,054


Core net income per share


$

0.97


$

0.96


$

0.87


$

0.86


$

0.91


Tangible book value:

















Total stockholders' equity


$

296,167


$

291,583


$

284,569


$

278,614


$

272,971


Less: Goodwill



63,370



63,370



63,370



63,370



63,370


Less: Other intangible assets, net



1,738



1,921



2,104



2,296



2,507


Total tangible stockholders' equity


$

231,059


$

226,292


$

219,095


$

212,948


$

207,094


Common shares outstanding



7,388,759



7,399,078



7,399,054



7,399,054



7,399,054


Tangible book value per share


$

31.27


$

30.58


$

29.61


$

28.78


$

27.99


Core return on average stockholders' equity:

















Net income GAAP


$

7,148


$

7,144


$

6,412


$

6,392


$

6,717


Adjustments:

















Less: (gain) loss on investment securities



(14)



(14)



(1)






(14)


Add: (gain) loss on investment securities tax adjustment



(3)



(3)









(3)


Net income Core


$

7,137


$

7,133


$

6,411


$

6,392


$

6,706


Average stockholders' equity


$

293,981


$

287,038


$

280,890


$

275,315


$

271,761


Core return on average stockholders' equity



9.63

%


9.97

%


9.26

%


9.21

%


9.79

%

Return on average tangible equity:

















Net income GAAP


$

7,148


$

7,144


$

6,412


$

6,392


$

6,717


Average stockholders' equity


$

293,981


$

287,038


$

280,890


$

275,315


$

271,761


Less: average intangibles



65,200



65,406



65,570



65,772



65,987


Average tangible stockholders' equity


$

228,781


$

221,632


$

215,320


$

209,543


$

205,774


Return on average tangible stockholders' equity



12.40

%


12.93

%


12.08

%


12.10

%


12.95

%

Core return on average tangible stockholders' equity:

















Net income GAAP


$

7,148


$

7,144


$

6,412


$

6,392


$

6,717


Adjustments:

















Less: (gain) loss on investment securities



(14)



(14)



(1)






(14)


Add: (gain) loss on investment securities tax adjustment



(3)



(3)









(3)


Net income Core


$

7,137


$

7,133


$

6,411


$

6,392


$

6,706


Average stockholders' equity


$

293,981


$

287,038


$

280,890


$

275,315


$

271,761


Less: average intangibles



65,200



65,406



65,570



65,772



65,987


Average tangible stockholders' equity


$

228,781


$

221,632


$

215,320


$

209,543


$

205,774


Core return on average tangible stockholders' equity



12.38

%


12.91

%


12.08

%


12.10

%


12.93

%

Core return on average assets:

















Net income GAAP


$

7,148


$

7,144


$

6,412


$

6,392


$

6,717


Adjustments:

















Less: (gain) loss on investment securities



(14)



(14)



(1)






(14)


Add: (gain) loss on investment securities tax adjustment



(3)



(3)









(3)


Net income Core


$

7,137


$

7,133


$

6,411


$

6,392


$

6,706


Average assets


$

2,348,460


$

2,315,007


$

2,311,078


$

2,262,447


$

2,237,582


Core return on average assets



1.21

%


1.24

%


1.13

%


1.12

%


1.19

%


 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)




Sept 30


Sept 30


Nine Months Ended


2019


2018


Core net income per share:








Net income GAAP


$

20,704


$

18,528


Adjustments:








Less: Gain on sale of business line






291


Less: Gain on investment securities



(29)



14


Add: Gain on sale of business line tax adjustment






61


Add: Gain on investment securities tax adjustment



(6)



3


Net income Core


$

20,681


$

18,287


Average common shares outstanding



7,397,768



7,397,373


Core net income per share


$

2.80


$

2.47


 

SOURCE Peoples Financial Services Corp.

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