PEOPLES FINANCIAL SERVICES CORP. Reports First Quarter 2020 Earnings

SCRANTON, Pa., April 24, 2020 /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 months ended March 31, 2020.  Peoples reported net income of $5.3 million, or $0.72 per share for the three months ended March 31, 2020, a decline of 17.6% when compared to $6.4 million, or $0.87 per share for the comparable period of 2019. Pre-provision net interest income increased $1.3 million when compared to the year ago period, the result of average earning asset growth of $166.7 million.  Noninterest income increased $0.1 million when comparing the three months ended March 31, 2020 to the same period in 2019 and noninterest expenses increased $0.2 million due primarily to continued investment in our market expansion.  The decrease in earnings for the three months ended March 31, 2020 was primarily due to an increase in our provision for loan losses of $2.4 million.  The increase in the provision resulted from the application of our allowance for loan losses methodology, and changes in qualitative factors relating to the adverse impact of the COVID-19 crisis on economic conditions.

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 in this release 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 March 31, totaled $5.2 million and $6.4 million in 2020 and 2019, respectively. Core net income per share for the three months ended March 31, 2020 was $0.70, a decrease from $0.87 for the same period in 2019.  The results in 2020 exclude a $267 thousand gain realized from the sale of a pool of low-yielding available-for-sale municipal bonds partially offset by a pre-tax loss in the value of our equity securities portfolio of $123 thousand. The 2019 results for the three months ended March 31 exclude a $1 thousand gain in the value of our equity securities portfolio.  

NOTABLES

  • Loans, net growth of $84.9 million or 17.6% annualized for the three months ended March 31, 2020.
  • Deposits grew $38.5 million or 7.9% annualized for the three months ended March 31, 2020.
  • Tangible book value per share improved to $32.86 at March 31, 2020 from $31.68 at December 31, 2019, and from $29.61 at March 31, 2019.
  • Tax-equivalent net interest income increased $1.2 million or 6.3% to $19.9 million for the three months ended March 31, 2020 compared to $18.7 million for the same period in 2019.
  • Provision for loan losses increased $2.4 million or 233.3% to $3.5 million for the three months ended March 31, 2020 from $1.1 million during the year ago period.  The increase is due to a higher qualitative factor related to economic decline resulting from the adverse impact of COVID-19, and, to a lesser extent, the growth of our loan portfolio. 
  • Opened a new community banking branch in Doylestown, Bucks County, Pennsylvania on March 9, 2020.

INCOME STATEMENT REVIEW

Calculated on a fully taxable equivalent basis ("FTE"), our tax-equivalent net interest margin for the three months ended March 31 was 3.50% in 2020, compared to 3.58% in 2019. The tax-equivalent yield on earning assets decreased 19 basis points to 4.25% during the three months ended March 31, 2020 from 4.44% during the three months ended March 31, 2019.  The decrease in yield is primarily due to decreases in market rates as the Federal Open Market Committee ('FOMC') cut the federal funds rate three times during the second half of 2019 in response to concerns of slowing economic growth, which affected new originations and refinancing activity, as well as existing adjustable rate loans. During the same period, we experienced lower interest-bearing liability costs due to the decrease in short-term market rates. Our cost of funds, which represents our average rate paid on total interest-bearing liabilities, decreased 13 basis points to 1.01% for the three months ended March 31, 2020 when compared to 1.14% for the three months ended March 31, 2019. In response to the COVID-19 global pandemic and the resulting economic slowdown, the FOMC took aggressive steps to fight a recession by cutting the federal funds rate 100 basis points to a target range of 0.00% to 0.25% during an emergency meeting March 15.  This followed an emergency 50 basis points cut in the funds rate March 3. We expect asset yields and funding costs to continue to reprice lower resulting in further net interest margin compression.

For the quarter ended March 31, the provision for loan losses was $3.5 million in 2020, an increase of $2.4 million from $1.1 million in 2019 due to national and regional economic decline that will have an adverse impact on both consumer and commercial borrowers.

For the three months ended March 31, noninterest income totaled $3.6 million in 2020, a 3.9% increase from $3.4 million in 2019. The largest increases were related to fee income from commercial loan interest rate swap transactions which was higher by $0.2 million and net gains generated from the available-for-sale investment securities portfolio of $0.1 million.  Smaller increases were recognized from revenue generated from wealth management services and life insurance investment income which were offset by decreases in merchant services, fiduciary activities and mortgage banking.

Noninterest expense increased $0.2 million or 1.2% to $13.7 million for the three months ended March 31, 2020, from $13.5 million for the three months ended March 31, 2019. Salaries and employee benefits increased $0.3 million or 3.4% due to annual merit increases and continued investment in our expansion with the opening of two new branches since the year ago period. The opening of the two new branches also contributed to the $0.1 million or 4.0% increase in occupancy and equipment expenses when comparing the three months ending March 31, 2020 and 2019.  Other noninterest expense was lower in the current period by $0.2 million primarily due to an FDIC small bank assessment credit recognized.

BALANCE SHEET REVIEW

At March 31, 2020, total assets, loans and deposits were $2.5 billion, $2.0 billion and $2.0 billion, respectively. Loans, net increased $84.9 million or 17.6% annualized from December 31, 2019. The growth in loans was primarily from commercial real estate and commercial and industrial loans. Total deposits increased $38.5 million or 7.9% annualized from December 31, 2019 due in part to the addition of $54.4 million of brokered deposits which more than offset the seasonal outflow of retail and public funds deposits. Non-interest bearing deposits increased $4.0 million or 3.5% annualized while interest-bearing deposits increased $34.5 million or 9.2% annualized during the three months ended March 31, 2020. Total investments were $310.7 million at March 31, 2020, including $302.9 million securities classified as available-for-sale and $7.5 million classified as held-to-maturity.

Stockholders' equity equaled $306.1 million or $41.68 per share at March 31, 2020, and $299.0 million or $40.47 per share at December 31, 2019. Tangible stockholders' equity improved to $32.86 per share at March 31, 2020, from $31.68 per share at December 31, 2019. Dividends declared for the three months ended March 31, 2020 amounted to $0.36 per share, a 5.9% increase from 2019, representing a dividend payout ratio of 50.0%.

ASSET QUALITY REVIEW

Nonperforming assets were $12.1 million or 0.60% of loans, net and foreclosed assets at March 31, 2020, compared to $10.5 million or 0.54% of loans, net and foreclosed assets at December 31, 2019.  The Company's allowance for loan losses increased $3.0 million or 13.3% in the first quarter of 2020, due largely to the adjustment of qualitative factors in our allowance for loan losses methodology, which reflect current economic decline and expectation of increased credit losses due to COVID-19's adverse impact on economic and business operating conditions. The allowance for loan losses equaled $25.7 million or 1.27% of loans, net at March 31, 2020 compared to $22.7 million or 1.17% of loans, net, at December 31, 2019. Loans charged-off, net of recoveries, for the three months ended March 31, 2020, equaled $0.5 million or 0.10% of average loans, compared to $0.3 million or 0.07% of average loans for the comparable period last year.

COVID-19 PANDEMIC

On March 11, 2020, the World Health Organization declared a coronavirus, identified as COVID-19, a global pandemic.   In the United States, the rapid spread of the COVID-19 virus invoked various Federal and State Authorities to make emergency declarations and issue executive orders to limit the spread of the disease. Measures included restrictions on travel, limitations on public gatherings, implementation of social distancing protocols, school closings, orders to shelter in place and mandates to close all non-essential businesses to the public. Concerns about the spread of the disease and its anticipated negative impact on economic activity, severely disrupted domestic financial markets prompting the Federal Reserve System's FOMC to aggressively cut the target Federal Funds rate to a range of 0% to 0.25%, including a 50 basis point reduction in the target federal funds rate on March 3, 2020 and an additional 100 basis point reduction on March 15, 2020. In addition, the Federal Reserve rolled out various market support programs to ease the stress on financial markets.

As the COVID-19 events unfolded throughout the first quarter of 2020, the Company implemented its pandemic plan and executed various strategies and protocols intended to protect its employees, maintain services for customers, assure the functional continuity of the Company's operating systems, controls and processes, and mitigate financial risks posed by changing market conditions. The Company imposed business travel restrictions, implemented quarantine and work from home protocols and physically separated, to the extent possible, the critical operations site workforce that are unable to work remotely. To limit the risk of virus spread, the Company implemented drive-thru only and by appointment operating protocols for its bank branch network. The Company also maintained active communications with its primary regulatory agencies and critical vendors in an effort to assure that all mission-critical activities and functions would be performed in line with regulatory expectations and the Company's service standards.

Our Asset Liability Management Committee held an interim meeting in early April to review our capital adequacy and liquidity contingency funding plan due to the high degree of uncertainty around the magnitude and duration of the economic impact of the COVID-19 pandemic. The Company's capital planning and capital management activities, coupled with its historically strong earnings performance and prudent dividend practices, have allowed us to build strong capital reserves. At March 31, 2020, all of the Company's regulatory capital ratios significantly exceeded all well-capitalized standards.

In addition, management believes the Company's liquidity position is strong. At March 31, 2020, the Company's cash and due from banks balances were $35.3 million and we maintained $188.5 million of availability at the Federal Reserve Bank's discount window. The Company also maintains an available-for-sale investment securities portfolio, comprised primarily of highly liquid U.S. Treasury and U.S. agency securities, highly-rated municipal securities and U.S. agency-backed mortgage backed securities. This portfolio serves as a ready source of liquidity and capital. At March 31, 2020, the Company's available-for-sale investment securities portfolio totaled $302.9 million, $236.5 million of which were unencumbered. Net unrealized gains on the portfolio were $9.2 million. The Bank's unused borrowing capacity at the Federal Home Loan Bank of Pittsburgh at March 31, 2020 was $422.7 million. The Company has also participated in the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), Paycheck Protection Program, a $350 billion specialized low-interest loan program funded by the U.S. Treasury Department and administered by the U.S. Small Business Administration. The Paycheck Protection Program ("PPP") provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related business operating costs. Through April 16, 2020, the Company has approved 836 PPP loans totaling $177.9 million. The Company anticipates high levels of customer utilization of the PPP loan program, and intends to utilize the Federal Reserve's Paycheck Protection Program Liquidity Facility ("PPPLF") to meet the funding requirements of its borrowers.

From a credit risk and lending perspective, the Company has taken actions to identify and assess its COVID-19 related credit exposures based on asset class and borrower type. With respect to the Company's lending activities, the Company implemented a customer payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19 related challenges. Through April 20, 2020, the Company granted payment deferral requests for up to four months to 180 business relationships and for up to six months to 320 consumer borrowers, representing $288.1 million of the Company's loan balances. Loans in deferment status will continue to accrue interest during the deferment period unless otherwise classified as nonperforming.

The COVID-19 crisis is expected to continue to impact the Company's financial results, as well as demand for its products and services during the second quarter of 2020 and potentially beyond. The short and long-term implications of the COVID-19 crisis, and related monetary and fiscal stimulus measures, on our future revenues, earnings results, allowance for loan losses, capital reserves, and liquidity are unknown at this time.

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 29 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.

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; the unfolding COVID-19 crisis and the governmental responses to the crisis: 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)







































Mar 31



Dec 31



Sept 30



June 30



Mar 31







2020



2019



2019



2019



2019



Key performance data:

































Per share data:

































Net income



$

0.72



$

0.68



$

0.97



$

0.96



$

0.87



Core net income (1)



$

0.70



$

0.67



$

0.97



$

0.96



$

0.87



Cash dividends declared



$

0.36



$

0.35



$

0.34



$

0.34



$

0.34



Book value



$

41.68



$

40.47



$

40.08



$

39.41



$

38.46



Tangible book value (1)



$

32.86



$

31.68



$

31.27



$

30.58



$

29.61



Market value:

































High



$

50.10



$

53.43



$

48.38



$

45.41



$

46.74



Low



$

35.60



$

44.46



$

42.90



$

42.00



$

40.34



Closing



$

39.74



$

50.35



$

45.29



$

44.99



$

45.24



Market capitalization



$

291,820



$

372,010



$

334,637



$

332,885



$

334,733



Common shares outstanding





7,343,240





7,388,480





7,388,759





7,399,078





7,399,054



Selected ratios:

































Return on average stockholders' equity





7.05

%



6.69

%



9.65

%



9.98

%



9.26

%

Core return on average stockholders' equity (1)





6.90

%



6.55

%



9.63

%



9.97

%



9.26

%

Return on average tangible stockholders' equity





8.99

%



8.55

%



12.40

%



12.93

%



12.08

%

Core return on average tangible stockholders' equity (1)





8.79

%



8.38

%



12.38

%



12.91

%



12.08

%

Return on average assets





0.86

%



0.83

%



1.21

%



1.24

%



1.13

%

Core return on average assets (1)





0.84

%



0.81

%



1.21

%



1.24

%



1.13

%

Stockholders' equity to total assets





12.03

%



12.08

%



12.48

%



12.55

%



12.28

%

Efficiency ratio (2)





57.88

%



57.63

%



59.65

%



61.15

%



60.03

%

Nonperforming assets to loans, net, and foreclosed assets





0.60

%



0.54

%



0.61

%



0.68

%



0.76

%

Net charge-offs to average loans, net





0.10

%



0.78

%



0.05

%



0.11

%



0.07

%

Allowance for loan losses to loans, net





1.27

%



1.17

%



1.19

%



1.18

%



1.20

%

Interest-bearing assets yield (FTE) (3)





4.25

%



4.30

%



4.42

%



4.49

%



4.44

%

Cost of funds





1.01

%



1.06

%



1.10

%



1.17

%



1.14

%

Net interest spread (FTE) (3)





3.24

%



3.24

%



3.32

%



3.32

%



3.30

%

Net interest margin (FTE) (3)





3.50

%



3.52

%



3.61

%



3.62

%



3.58

%



(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)





















Mar 31



Mar 31



Three Months Ended



2020



2019



Interest income:















Interest and fees on loans:















Taxable



$

20,917



$

20,103



Tax-exempt





1,031





1,099



Interest and dividends on investment securities:















Taxable





1,548





1,010



Tax-exempt





299





562



Dividends





23





19



Interest on interest-bearing deposits in other banks





24





8



Total interest income





23,842





22,801



Interest expense:















Interest on deposits





3,503





3,411



Interest on short-term borrowings





573





813



Interest on long-term debt





205





280



Total interest expense





4,281





4,504



Net interest income





19,561





18,297



Provision for loan losses





3,500





1,050



Net interest income after provision for loan losses





16,061





17,247



Noninterest income:















Service charges, fees, commissions





2,075





1,999



Merchant services income





114





198



Commissions and fees on fiduciary activities





506





507



Wealth management income





387





377



Mortgage banking income





137





148



Bank owned life insurance income





187





186



Net (loss) gain on investment securities





(123)





1



Net gain on sale of investment securities available-for-sale





267









Total noninterest income





3,550





3,416



Noninterest expense:















Salaries and employee benefits expense





7,856





7,595



Net occupancy and equipment expense





3,079





2,961



Amortization of intangible assets





154





192



Other expenses





2,562





2,742



Total noninterest expense





13,651





13,490



Income before income taxes





5,960





7,173



Provision for income tax expense





679





761



Net income



$

5,281



$

6,412



Other comprehensive income:















Unrealized gain on investment securities available-for-sale



$

7,629



$

2,439



Reclassification adjustment for gains included in net income





(267)









Change in derivative fair value





1,036





63



Income tax related to other comprehensive income





1,765





525



Other comprehensive income, net of income taxes





6,633





1,977



Comprehensive income



$

11,914



$

8,389



Per share data:















Net income



$

0.72



$

0.87



Cash dividends declared



$

0.36



$

0.34



Average common shares outstanding





7,379,438





7,399,054



 

 

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)







































Mar 31



Dec 31



Sept 30



June 30



Mar 31



Three months ended



2020



2019



2019



2019



2019



Interest income:

































Interest and fees on loans:

































Taxable



$

20,917



$

20,804



$

20,940



$

20,641



$

20,103



Tax-exempt





1,031





1,035





1,066





1,109





1,099



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

































Taxable





1,548





1,308





1,092





1,025





1,010



Tax-exempt





299





385





411





520





562



Dividends





23





24





19





22





19



Interest on interest-bearing deposits in other banks





24





15





27





15





8



Interest on federal funds sold











45





77















Total interest income





23,842





23,616





23,632





23,332





22,801



Interest expense:

































Interest on deposits





3,503





3,905





3,966





3,713





3,411



Interest on short-term borrowings





573





151





83





595





813



Interest on long-term debt





205





308





347





296





280



Total interest expense





4,281





4,364





4,396





4,604





4,504



Net interest income





19,561





19,252





19,236





18,728





18,297



Provision for loan losses





3,500





4,000





700





350





1,050



Net interest income after provision for loan losses





16,061





15,252





18,536





18,378





17,247



Noninterest income:

































Service charges, fees, commissions





2,075





2,376





2,161





2,490





1,999



Merchant services income





114





136





182





457





198



Commissions and fees on fiduciary activities





506





519





569





492





507



Wealth management income





387





382





395





370





377



Mortgage banking income





137





143





172





137





148



Bank owned life insurance income





187





188





189





192





186



Net (loss) gain on investment securities





(123)





126





14





(9)





1



Net gain on sale of investment securities available-for-sale





267

















23









Total noninterest income





3,550





3,870





3,682





4,152





3,416



Noninterest expense:

































Salaries and employee benefits expense





7,856





7,686





8,056





8,037





7,595



Net occupancy and equipment expense





3,079





3,104





2,997





2,849





2,961



Amortization of intangible assets





154





173





183





182





192



Other expenses





2,562





2,681





2,843





3,361





2,742



Total noninterest expense





13,651





13,644





14,079





14,429





13,490



Income before income taxes





5,960





5,478





8,139





8,101





7,173



Income tax expense





679





446





991





957





761



Net income



$

5,281



$

5,032



$

7,148



$

7,144



$

6,412



Other comprehensive income:

































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



$

7,629



$

(102)



$

161



$

2,611



$

2,439



Reclassification adjustment for gains included in net income





(267)

















(23)









Change in pension liability











639





















Change in derivative fair value





1,036





(218)





153





443





63



Income tax related to other comprehensive income 





1,765





67





66





637





525



Other comprehensive income, net of income taxes





6,633





252





248





2,394





1,977



Comprehensive income



$

11,914



$

5,284



$

7,396



$

9,538



$

8,389



Per share data:

































Net income



$

0.72



$

0.68



$

0.97



$

0.96



$

0.87



Cash dividends declared



$

0.36



$

0.35



$

0.34



$

0.34



$

0.34



Average common shares outstanding





7,379,438





7,388,488





7,394,992





7,399,302





7,399,054



 

 

Peoples Financial Services Corp.

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)







































Mar 31



Dec 31



Sept 30



June 30



Mar 31



Three months ended



2020



2019



2019



2019



2019



Net interest income:

































Interest income

































Loans, net:

































Taxable



$

20,917



$

20,804



$

20,940



$

20,641



$

20,103



Tax-exempt





1,305





1,311





1,348





1,404





1,391



Total loans, net





22,222





22,115





22,288





22,045





21,494



Investments:

































Taxable





1,571





1,332





1,111





1,047





1,029



Tax-exempt





378





487





520





659





711



Total investments





1,949





1,819





1,631





1,706





1,740



Interest on interest-bearing balances in other banks





24





15





27





15





8



Federal funds sold











45





77















Total interest income





24,195





23,994





24,023





23,766





23,242



Interest expense:

































Deposits





3,503





3,905





3,966





3,713





3,411



Short-term borrowings





573





151





83





595





813



Long-term debt





205





308





347





296





280



Total interest expense





4,281





4,364





4,396





4,604





4,504



Net interest income



$

19,914



$

19,630



$

19,627



$

19,162



$

18,738



Loans, net:

































Taxable





4.60

%



4.67

%



4.80

%



4.85

%



4.79

%

Tax-exempt





3.88

%



3.88

%



3.94

%



3.96

%



3.91

%

Total loans, net





4.55

%



4.62

%



4.74

%



4.78

%



4.72

%

Investments:

































Taxable





2.36

%



2.29

%



2.20

%



2.21

%



2.25

%

Tax-exempt





3.10

%



2.88

%



2.93

%



3.20

%



3.17

%

Total investments





2.48

%



2.42

%



2.39

%



2.51

%



2.55

%

Interest-bearing balances with banks





1.17

%



1.12

%



2.14

%



2.67

%



3.16

%

Federal funds sold











1.85

%



2.14

%













Total interest-bearing assets





4.25

%



4.30

%



4.42

%



4.49

%



4.44

%

Interest expense:

































Deposits





0.92

%



1.00

%



1.03

%



1.03

%



0.96

%

Short-term borrowings





1.62

%



2.00

%



2.62

%



2.69

%



2.70

%

Long-term debt





2.54

%



2.52

%



2.61

%



2.83

%



3.02

%

Total interest-bearing liabilities





1.01

%



1.06

%



1.10

%



1.17

%



1.14

%

Net interest spread





3.24

%



3.24

%



3.32

%



3.32

%



3.30

%

Net interest margin





3.50

%



3.52

%



3.61

%



3.62

%



3.58

%

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)







































Mar 31



Dec 31



Sept 30



June 30



Mar 31



At period end



2020



2019



2019



2019



2019



Assets:

































Cash and due from banks



$

22,181



$

26,943



$

35,908



$

26,615



$

24,364



Interest-bearing balances in other banks





13,146





4,210





5,275





3,347





1,688



Federal funds sold

















10,100















Investment securities:

































Available-for-sale





302,884





330,478





268,823





261,665





270,384



Equity investments carried at fair value





299





423





297





283





292



Held-to-maturity





7,520





7,656





7,808





7,969





8,162



Loans held for sale





270





986





1,390





831









Loans, net





2,023,155





1,938,240





1,881,090





1,858,799





1,849,602



Less: allowance for loan losses





25,686





22,677





22,392





21,930





22,105



Net loans





1,997,469





1,915,563





1,858,698





1,836,869





1,827,497



Premises and equipment, net





48,619





47,932





47,437





46,468





44,728



Accrued interest receivable





7,283





6,981





6,655





7,303





7,211



Goodwill





63,370





63,370





63,370





63,370





63,370



Other intangible assets, net





1,411





1,565





1,738





1,921





2,104



Other assets





79,320





69,220





65,200





67,625





68,144



Total assets



$

2,543,772



$

2,475,327



$

2,372,699



$

2,324,266



$

2,317,944



Liabilities:

































Deposits:

































Noninterest-bearing



$

467,315



$

463,238



$

440,582



$

419,995



$

432,830



Interest-bearing





1,542,680





1,508,251





1,560,703





1,456,804





1,435,400



Total deposits





2,009,995





1,971,489





2,001,285





1,876,799





1,868,230



Short-term borrowings





164,150





152,150











82,700





109,000



Long-term debt





32,250





32,733





52,509





52,980





37,446



Accrued interest payable





1,336





1,277





1,461





1,058





878



Other liabilities





29,978





18,668





21,277





19,146





17,821



Total liabilities





2,237,709





2,176,317





2,076,532





2,032,683





2,033,375



Stockholders' equity:

































Common stock





14,670





14,777





14,778





14,798





14,798



Capital surplus





133,159





135,251





135,106





135,384





135,393



Retained earnings





154,806





152,187





149,740





145,106





140,478



Accumulated other comprehensive loss





3,428





(3,205)





(3,457)





(3,705)





(6,100)



Total stockholders' equity





306,063





299,010





296,167





291,583





284,569



Total liabilities and stockholders' equity



$

2,543,772



$

2,475,327



$

2,372,699



$

2,324,266



$

2,317,944



 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)







































Mar 31



Dec 31



Sept 30



June 30



Mar 31



Average quarterly balances



2020



2019



2019



2019



2019



Assets:

































Loans, net:

































Taxable



$

1,830,455



$

1,766,373



$

1,729,741



$

1,707,730



$

1,701,737



Tax-exempt





135,260





134,040





135,580





142,310





144,119



Total loans, net





1,965,715





1,900,413





1,865,321





1,850,040





1,845,856



Investments:

































Taxable





267,179





231,079





200,444





189,265





185,696



Tax-exempt





49,046





67,208





70,381





82,565





90,961



Total investments





316,225





298,287





270,825





271,830





276,657



Interest-bearing balances with banks





8,263





5,317





5,006





2,554





1,028



Federal funds sold











9,629





14,267















Total interest-bearing assets





2,290,203





2,213,646





2,155,419





2,124,424





2,123,541



Other assets





193,507





192,121





193,041





190,583





187,537



Total assets



$

2,483,710



$

2,405,767



$

2,348,460



$

2,315,007



$

2,311,078



Liabilities and stockholders' equity:

































Deposits:

































Interest-bearing



$

1,524,265



$

1,549,978



$

1,521,047



$

1,449,665



$

1,445,861



Noninterest-bearing





462,508





459,248





445,238





426,791





406,733



Total deposits





1,986,773





2,009,226





1,966,285





1,876,456





1,852,594



Short-term borrowings





142,121





30,018





12,563





88,792





121,954



Long-term debt





32,477





48,468





52,731





41,948





37,663



Other liabilities





21,096





19,452





22,900





20,773





17,977



Total liabilities





2,182,467





2,107,164





2,054,479





2,027,969





2,030,188



Stockholders' equity





301,243





298,603





293,981





287,038





280,890



Total liabilities and stockholders' equity



$

2,483,710



$

2,405,767



$

2,348,460



$

2,315,007



$

2,311,078



 

 

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)







































Mar 31



Dec 31



Sept 30



June 30



Mar 31







2020



2019



2019



2019



2019



At quarter end

































Nonperforming assets:

































Nonaccrual/restructured loans



$

10,760



$

9,699



$

10,657



$

11,926



$

12,803



Accruing loans past due 90 days or more





423





378





387





341





829



Foreclosed assets





903





450





485





408





360



Total nonperforming assets



$

12,086



$

10,527



$

11,529



$

12,675



$

13,992





































Three months ended

































Allowance for loan losses:

































Beginning balance



$

22,677



$

22,392



$

21,930



$

22,105



$

21,379



Charge-offs





798





3,809





308





576





374



Recoveries





307





94





70





51





50



Provision for loan losses





3,500





4,000





700





350





1,050



Ending balance



$

25,686



$

22,677



$

22,392



$

21,930



$

22,105



 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)







































Mar 31



Dec 31



Sept 30



June 30



Mar 31



Three months ended



2020



2019



2019



2019



2019



Core net income per share:

































Net income GAAP



$

5,281



$

5,032



$

7,148



$

7,144



$

6,412



Adjustments:

































Less: (gain) loss on investment securities





(144)





(126)





(14)





(14)





(1)



Add: (gain) loss on investment securities tax adjustment





(30)





(26)





(3)





(3)









Net income Core



$

5,167



$

4,932



$

7,137



$

7,133



$

6,411



Average common shares outstanding





7,379,438





7,388,488





7,394,992





7,399,302





7,399,054



Core net income per share



$

0.70



$

0.67



$

0.97



$

0.96



$

0.87



Tangible book value:

































Total stockholders' equity



$

306,063



$

299,010



$

296,167



$

291,583



$

284,569



Less: Goodwill





63,370





63,370





63,370





63,370





63,370



Less: Other intangible assets, net





1,411





1,565





1,738





1,921





2,104



Total tangible stockholders' equity



$

241,282



$

234,075



$

231,059



$

226,292



$

219,095



Common shares outstanding





7,343,240





7,388,480





7,388,759





7,399,078





7,399,054



Tangible book value per share



$

32.86



$

31.68



$

31.27



$

30.58



$

29.61



Core return on average stockholders' equity:

































Net income GAAP



$

5,281



$

5,032



$

7,148



$

7,144



$

6,412



Adjustments:

































Less: (gain) loss on investment securities





(144)





(126)





(14)





(14)





(1)



Add: (gain) loss on investment securities tax adjustment





(30)





(26)





(3)





(3)









Net income Core



$

5,167



$

4,932



$

7,137



$

7,133



$

6,411



Average stockholders' equity



$

301,243



$

298,603



$

293,981



$

287,038



$

280,890



Core return on average stockholders' equity





6.90

%



6.55

%



9.63

%



9.97

%



9.26

%

Return on average tangible equity:

































Net income GAAP



$

5,281



$

5,032



$

7,148



$

7,144



$

6,412



Average stockholders' equity



$

301,243



$

298,603



$

293,981



$

287,038



$

280,890



Less: average intangibles





64,879





65,022





65,200





65,406





65,570



Average tangible stockholders' equity



$

236,364



$

233,581



$

228,781



$

221,632



$

215,320



Return on average tangible stockholders' equity





8.99

%



8.55

%



12.40

%



12.93

%



12.08

%

Core return on average tangible stockholders' equity:

































Net income GAAP



$

5,281



$

5,032



$

7,148



$

7,144



$

6,412



Adjustments:

































Less: (gain) loss on investment securities





(144)





(126)





(14)





(14)





(1)



Add: (gain) loss on investment securities tax adjustment





(30)





(26)





(3)





(3)









Net income Core



$

5,167



$

4,932



$

7,137



$

7,133



$

6,411



Average stockholders' equity



$

301,243



$

298,603



$

293,981



$

287,038



$

280,890



Less: average intangibles





64,879





65,022





65,200





65,406





65,570



Average tangible stockholders' equity



$

236,364



$

233,581



$

228,781



$

221,632



$

215,320



Core return on average tangible stockholders' equity





8.79

%



8.38

%



12.38

%



12.91

%



12.08

%

Core return on average assets:

































Net income GAAP



$

5,281



$

5,032



$

7,148



$

7,144



$

6,412



Adjustments:

































Less: (gain) loss on investment securities





(144)





(126)





(14)





(14)





(1)



Add: (gain) loss on investment securities tax adjustment





(30)





(26)





(3)





(3)









Net income Core



$

5,167



$

4,932



$

7,137



$

7,133



$

6,411



Average assets



$

2,483,710



$

2,405,767



$

2,348,460



$

2,315,007



$

2,311,078



Core return on average assets





0.84

%



0.81

%



1.21

%



1.24

%



1.13

%



 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)





















Mar 31



Mar 31



Three Months Ended



2020



2019



Core net income per share:















Net income GAAP



$

5,281



$

6,412



Adjustments:















Less: Gain on investment securities





(144)





(1)



Add: Gain on investment securities tax adjustment





(30)









Net income Core



$

5,167



$

6,411



Average common shares outstanding





7,379,438





7,399,054



Core net income per share



$

0.70



$

0.87



 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/peoples-financial-services-corp-reports-first-quarter-2020-earnings-301046953.html

SOURCE Peoples Financial Services Corp.

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