PEOPLES FINANCIAL SERVICES CORP. Reports First Quarter 2021 Earnings

SCRANTON, Pa., April 23, 2021 /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, 2021. Peoples reported net income of $9.5 million, or $1.31 per diluted share for the three months ended March 31, 2021, a 79.5% increase when compared to $5.3 million, or $0.71 per share for the comparable period of 2020. The increase in earnings over the year ago period is a result of a $4.0 million decrease to the provision for loan losses, a $1.2 million increase to pre-provision net interest income from lower interest expense, and a $1.0 million decrease to noninterest expenses, offset by a higher income tax provision of $2.0 million.

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. 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 gains or losses from our investment securities portfolio, for the three months ended March 31, totaled $9.5 million and $5.2 million in 2021 and 2020, respectively. Core net income per share for the three months ended March 31, 2021 was $1.31, an 87.1% increase from $0.70 reported for the same period in 2020. Core net income in the current period excludes a pre-tax $21 thousand unrealized gain on our equity investment portfolio. Core net income for the 2020 period excludes a $267 thousand realized gain on the sale of a pool of municipal securities and an unrealized loss of $123 thousand on our equity investment portfolio.

NOTABLES

  • Record quarterly net income of $9.5 million or $1.31 per diluted share.
  • First quarter dividend of $0.37 per share represents a 2.8% increase from the first quarter of 2020.
  • Return on average assets was 1.32% for the three months ended March 31, 2021 compared to 1.13% for the three months ended December 31, 2020, and 0.86% for the comparable period in 2020. Return on average equity was 12.00% for the three months ended March 31, 2021 compared to 10.32% for the three months ended December 31, 2020 and 7.05% for the comparable period in 2020.
  • Paycheck Protection Program ("PPP") commercial loans outstanding at March 31, 2021 total $200.8 million, including $100.8 million remaining from round one of the program and $100.0 million originated in 2021 under round two.
  • Loans in deferral at March 31, 2021 totaled $1.3 million or 0.1% of total outstanding loan balances, excluding PPP loans. At December 31, 2020 loans in deferral totaled $6.1 million or 0.3% of total outstanding loans, excluding PPP loans. At June 30, 2020 loans in deferral totaled $330.1 million or 16.7% of total outstanding loan balances, excluding PPP loans.
  • Deposits grew $540.4 million or 26.9% for the twelve months ended March 31, 2021 and grew $113.3 million during the three months ended March 31, 2021.
  • Tax-equivalent net interest income increased $1.2 million or 6.0% to $21.1 million for the three months ended March 31, 2021 compared to $19.9 million for the same period in 2020.
  • Provision for loan losses decreased $4.0 million from the comparable period in 2020, the product of a $0.5 million release from the allowance for loan losses in the current period and a $3.5 million provision for loan losses in the year ago period.
  • Efficiency ratio improved to 50.8% for the three months ended March 31, 2021, compared to 57.9% in the year ago period.

 INCOME STATEMENT REVIEW

Calculated on a fully taxable equivalent basis ("FTE"), our tax-equivalent net interest margin for the three months ended March 31, 2021 was 3.15%, an increase of 15 basis points when compared to the three months ended December 31, 2020, and a decrease of 35 basis points when compared to 3.50% for the same three month period in 2020.  The increase in net interest margin from the prior three month period is primarily due to interest and fees on PPP loans and lower deposit costs.  The tax-equivalent yield on interest-earning assets increased 6 basis points to 3.55% during the three months ended March 31, 2021 from 3.49% during the three months ended December 31, 2020, and decreased 70 basis points when compared to 4.25% for the three months ended March 31, 2020.    The decrease in net interest margin and yield from the year ago period is due to lower market rates, the result of the Federal Open Market Committee ("FOMC") cutting the federal funds rate 150 basis points in the first three months of 2020 resulting from the uncertain economic impact of the coronavirus pandemic. The decrease in market rates resulted in lower rates on our existing adjustable rate loans and affected rates on new originations. However, we have experienced lower interest-bearing liability costs due to lower market rates, partially offset, however, by the additional interest expense on subordinated debt we issued during the second quarter of 2020. Our cost of funds, which represents our average rate paid on total interest-bearing liabilities, decreased 10 basis points to 0.57% for the three months ended March 31, 2021 when compared to 0.67% during the three months ended December 31, 2020, and has decreased 44 basis points when compared to the same three month period in 2020.

First Quarter 2021 Results – Comparison to Prior-Year Quarter

Tax-equivalent net interest income for the three months ended March 31, increased $1.2 million or 6.0% to $21.1 million in 2021 from $19.9 million in 2020. The increase in tax equivalent net interest income was largely due to lower interest expense of $1.6 million, as continued focus has been on lowering deposit and borrowing costs in the current and expected low market rate environment. Partially offsetting the lower interest expense, was lower interest income of $0.4 due to a negative rate variance, as asset yields continued to reprice lower. The increase to total average earning assets of $426.7 million partially offset the lower yields. PPP loans averaged $195.5 million in the three-month period ended March 31, 2021 with interest and net fees totaling approximately $2.5 million. The tax-equivalent yield on the loan portfolio decreased to 4.09% for the three months ended March 31, 2021, compared to 4.55% for the comparable period in 2020 due to lower market rates. Loans, net averaged $2.2 billion for the three months ended March 31, 2021 and $2.0 billion for the comparable period in 2020. For the three months ended March 31, the tax-equivalent yield on total investments decreased to 2.15% in 2021 from 2.48% in 2020. Average investments totaled $332.4 million in 2021 and $316.2 million in 2020. Average interest-bearing liabilities increased $232.8 million for the three months ended March 31, 2021, compared to the corresponding period last year due primarily to deposit growth from higher customer savings rates, strong organic deposit growth of new customer relationships and the federal governments' stimulus funding.

For the three months ended March 31, 2021, the provision for loan losses was negative $0.5 million, due to improved credit quality and a slight decrease in non-PPP loan balances, and was $4.0 million less than the provision for loan losses in the year ago period, which reflected an adjustment of qualitative factors in our allowance for loan losses methodology due to the onset of the coronavirus pandemic and its uncertain economic impact.

Noninterest income for the three months ended March 31, 2021 and 2020 was $3.5 million.  Mortgage banking revenue was $0.2 million higher in the current period due to increased refinance activity from low market rates which resulted in a higher volume of loans sold into the secondary market.  Revenue from commercial loan interest rate swap transactions was $0.3 million higher in the current period due to a higher credit valuation adjustment.  Service charges, fees, commissions and other are lower in the current period by $0.4 million due to lower service charges on consumer and commercial deposit accounts and an accrual adjustment to a bank owned life insurance benefit.  The year ago period included a net gain of $0.1 million from a sale of a pool of municipal securities, offset by an unrealized loss related to our equity portfolio.

Noninterest expense decreased $1.0 million or 7.5% to $12.6 million for the three months ended March 31, 2021, from $13.6 million for the three months ended March 31, 2020. Salaries and employee benefits decreased $1.3 million or 16.4% as higher salaries were more than offset by lower benefits expenses and deferred costs on loan originations which are recorded as a contra-salary expense.  Occupancy and equipment expenses were higher by $0.2 million due to information technology investments related to mobile/digital banking solutions in the current period. Other expenses were higher by $0.1 million due primarily to an increase in FDIC insurance assessments in the current period primarily attributed to the receipt of a credit in the year ago period related to the Deposit Insurance Fund's (DIF) minimum reserve ratio assessment.

The provision for income tax expense increased $2.0 million for the three months ended March 31, 2021 compared to the year ago period due to higher levels of book taxable income and a $0.6 million deferred tax adjustment related to prior periods.

 BALANCE SHEET REVIEW

At March 31, 2021, total assets, loans and deposits were $3.0 billion, $2.2 billion and $2.5 billion, respectively. Loans balances increased slightly from December 31, 2020 as loan demand, exclusive of PPP loans, was soft to begin the year. The slight growth in loans was primarily due to a net increase in PPP loans resulting from our participation in the second round of the Small Business Administration ("SBA") administered PPP, and to a lesser extent in commercial real estate loans.  During the first quarter of 2021, we funded an additional 885 loans totaling $100.0 million under the SBA's second PPP loan program.   Total deposits increased $113.3 million or 4.6% from December 31, 2020 due to organic growth of customer relationships throughout all our markets, PPP loan proceeds retained coupled with additional deposits by our commercial borrowers and federal government stimulus payments. Non-interest bearing deposits increased $38.8 million or 6.2% and interest-bearing deposits increased $74.5 million or 4.1% during the three months ended March 31, 2021. Total investments were $341.1 million at March 31, 2021, including $333.8 million securities classified as available-for-sale and $7.2 million classified as held-to-maturity.

Stockholders' equity equaled $317.3 million or $44.00 per share at March 31, 2021, and $316.9 million or $43.92 per share at December 31, 2020. The increase in stockholders' equity from December 31, 2020 is attributable to net income, partially offset by a decrease to accumulated other comprehensive income ("AOCI") resulting from a decrease to the unrealized gain on investment securities and dividends paid to shareholders.  Tangible stockholders' equity improved to $35.10 per share at March 31, 2021, from $35.00 per share at December 31, 2020. Dividends declared for the three months ended March 31, 2021 amounted to $0.37 per share, a 2.8% increase from the 2020 period, representing a dividend payout ratio of 28.2%.

ASSET QUALITY REVIEW

Nonperforming assets were $8.4 million or 0.38% of loans, net and foreclosed assets at March 31, 2021, compared to $10.5 million or 0.48% of loans, net and foreclosed assets at December 31, 2020.  The decrease in non-performing assets from the previous quarter was primarily due to the payoff of a non-accrual commercial loan and the sale of a foreclosed property.  The Company's allowance for loan losses decreased $0.6 million or 2.1% in the first quarter of 2021, due to a $0.5 million release from the allowance for loan losses in the current period resulting from improved credit quality and a slight decrease in non-PPP loan balances.  The allowance for loan losses at March 31, 2021 continued to reflect the provisions added during 2020 from our adjustment of qualitative factors in our allowance for loan losses methodology, due to economic decline and expectation of increased credit losses from COVID-19's adverse impact on economic and business operating conditions. The allowance for loan losses equaled $26.8 million or 1.23% of loans, net at March 31, 2021 compared to $27.3 million or 1.26% of loans, net, at December 31, 2020.   Excluding PPP loans which do not carry an allowance for losses due to a 100% government guarantee, the ratio equaled 1.35% at March 31, 2021.  Loans charged-off, net of recoveries, for the three months ended March 31, 2021, equaled $0.1 million or 0.01% of average loans, compared to $0.5 million or 0.10% of average loans for the comparable period last year.

Impact of COVID-19

Operationally, as COVID-19 events unfold, our continued priority is the health and safety of our customers and employees. We recently worked with local government and health professionals and have had opportunities to offer our eligible employees and their family members appointments to receive the COVID-19 vaccine.  We continue to follow the recommendations of our state governments as to conducting business and have maintained safety protocols. Currently all our offices have returned to pre-pandemic operating hours with limited lobby access.

From a lending perspective, organic loan growth, with the exception of PPP loans, was soft as we began 2021, however, loan activity improved at the end of the quarter.  We participated in the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), PPP, a $350 billion specialized low-interest loan program funded by the U.S. Treasury Department and administered by the SBA.  During 2020, we had approved 1,450 PPP loans totaling $217.5 million. Substantially all of the loans were made to existing customers, funded under the two year PPP loan program, and the loan proceeds initially were deposited with our institution.  PPP loan forgiveness commenced during the fourth quarter of 2020 and we continue to process loan forgiveness applications.  At March 31, 2021, we have 468 loans totaling $100.8 million remaining compared to 1,304 loans totaling $189.7 million at December 31, 2020. We expect the majority of the remaining $100.8 million to be forgiven during 2021. During the first quarter of 2021, we funded an additional 885 loans totaling $100.0 million under the SBA's second PPP loan program.   The application process for the second PPP loan program ends May 31, 2021. 

From a credit risk perspective, we took actions to identify and assess our COVID-19 related credit exposures based on asset class and borrower type. From the onset of the crisis, we worked to proactively monitor our loan portfolio by contacting many of our borrowers to evaluate the impact of the pandemic on them, their businesses and the underlying collateral for our loans. 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.  At the start of the pandemic, the Company granted payment deferral requests for up to six months to a total of 481 commercial loans with outstanding loan balances of $306.9 million and to 505 consumer loans with outstanding balances of $23.3 million. At March 31, 2021, the majority of loans are no longer in deferral as borrowers have begun to make their regular payments. Outstanding loan balances remaining in deferral at March 31, 2021 totaled $1.3 million, a decrease of $4.8 million from the $6.1 million at December 31, 2020, and a decrease of $328.8 million from the $330.1 million in deferral at June 30, 2020. As a percentage of total loan balances, excluding PPP loans, loans in deferral represented less than 0.1% of loans outstanding at March 31, 2021 compared to 0.3% of loans outstanding at December 31, 2020, and 16.7% of loans outstanding at June 30, 2020. At March 31, 2021, commercial loan balances remaining in deferral total $1.0 million while consumer loans total $0.3 million. Loan deferrals and modifications have been executed consistent with the guidelines of the CARES Act. Pursuant to the CARES Act, loan deferrals are not included in our nonperforming loans disclosed above. Loans in deferral status will continue to accrue interest during the deferral period unless otherwise classified as nonperforming.

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, and Wyoming Counties in Pennsylvania and Broome County in New York through 26 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. and Peoples Security Bank and Trust Company (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 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







2021



2020



2020



2020



2020



Key performance data:

































Share and per share amounts:

































Net income



$

1.31



$

1.13



$

1.14



$

1.03



$

0.71



Core net income (1)



$

1.31



$

1.10



$

1.09



$

1.03



$

0.70



Cash dividends declared



$

0.37



$

0.36



$

0.36



$

0.36



$

0.36



Book value



$

44.00



$

43.92



$

43.30



$

42.55



$

41.68



Tangible book value (1)



$

35.10



$

35.00



$

34.40



$

33.74



$

32.86



Market value:

































High



$

47.34



$

40.40



$

39.38



$

39.40



$

50.10



Low



$

36.02



$

34.47



$

32.51



$

30.24



$

35.60



Closing



$

42.24



$

36.76



$

34.76



$

38.19



$

39.74



Market capitalization



$

304,605



$

265,231



$

251,743



$

280,042



$

291,820



Common shares outstanding





7,211,293





7,215,202





7,242,326





7,332,856





7,343,240



Selected ratios:

































Return on average stockholders' equity





12.00

%



10.32

%



10.58

%



9.87

%



7.05

%

Core return on average stockholders'

equity (1)





11.98

%



10.05

%



10.12

%



9.83

%



6.90

%

Return on average tangible

stockholders' equity





15.02

%



12.96

%



13.34

%



12.49

%



8.99

%

Core return on average tangible

stockholders' equity (1)





14.99

%



12.62

%



12.76

%



12.44

%



8.79

%

Return on average assets





1.32

%



1.13

%



1.21

%



1.13

%



0.86

%

Core return on average assets (1)





1.32

%



1.10

%



1.16

%



1.12

%



0.84

%

Stockholders' equity to total assets





10.59

%



10.99

%



11.18

%



11.56

%



12.03

%

Efficiency ratio (2)





50.83

%



56.35

%



55.94

%



54.01

%



57.88

%

Nonperforming assets to loans, net, and

foreclosed assets





0.38

%



0.48

%



0.52

%



0.62

%



0.60

%

Net charge-offs to average loans, net





0.01

%



0.05

%



0.26

%



0.10

%



0.10

%

Allowance for loan losses to loans, net





1.23

%



1.26

%



1.21

%



1.24

%



1.27

%

Interest-bearing assets yield (FTE) (3)





3.55

%



3.49

%



3.73

%



3.90

%



4.25

%

Cost of funds





0.57

%



0.67

%



0.76

%



0.75

%



1.01

%

Net interest spread (FTE) (3)





2.99

%



2.81

%



2.97

%



3.15

%



3.24

%

Net interest margin (FTE) (3)





3.15

%



3.00

%



3.19

%



3.36

%



3.50

%





(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



2021



2020



Interest income:















Interest and fees on loans:















Taxable



$

20,900



$

20,917



Tax-exempt





870





1,031



Interest and dividends on investment securities:















Taxable





1,243





1,548



Tax-exempt





390





299



Dividends





23





23



Interest on interest-bearing deposits in other banks





2





24



Interest on federal funds sold





49









Total interest income





23,477





23,842



Interest expense:















Interest on deposits





2,092





3,503



Interest on short-term borrowings





71





573



Interest on long-term debt





103





205



Interest on subordinated debt





443









Total interest expense





2,709





4,281



Net interest income





20,768





19,561



Provision for loan losses





(500)





3,500



Net interest income after provision for loan losses





21,268





16,061



Noninterest income:















Service charges, fees, commissions and other





1,184





1,605



Merchant services income





93





114



Commissions and fees on fiduciary activities





533





506



Wealth management income





358





387



Mortgage banking income





312





137



Increase in cash surrender value of life insurance





219





187



Interest rate swap revenue





797





470



Net gain (loss) on investment securities





21





(123)



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











267



Total noninterest income





3,517





3,550



Noninterest expense:















Salaries and employee benefits expense





6,570





7,856



Net occupancy and equipment expense





3,267





3,079



Amortization of intangible assets





125





154



Other expenses





2,667





2,562



Total noninterest expense





12,629





13,651



Income before income taxes





12,156





5,960



Provision for income tax expense





2,678





679



Net income



$

9,478



$

5,281



Other comprehensive income:















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



$

(7,749)



$

7,629



Reclassification adjustment for gains included in net income











(267)



Change in derivative fair value





242





1,036



Income tax related to other comprehensive income





(1,576)





1,765



Other comprehensive income, net of income taxes





(5,931)





6,633



Comprehensive income



$

3,547



$

11,914



Share and per share amounts:















Net income - basic



$

1.31



$

0.72



Net income - diluted





1.31





0.71



Cash dividends declared



$

0.37



$

0.36



Average common shares outstanding - basic





7,210,952





7,379,438



Average common shares outstanding - diluted





7,246,016





7,405,703



 

 

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



2021



2020



2020



2020



2020



Interest income:

































Interest and fees on loans:

































Taxable



$

20,900



$

20,705



$

20,901



$

21,160



$

20,917



Tax-exempt





870





888





876





941





1,031



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

































Taxable





1,243





1,111





1,250





1,420





1,548



Tax-exempt





390





304





280





295





299



Dividends





23





26





23





25





23



Interest on interest-bearing deposits in other banks





2





4





4





5





24



Interest on federal funds sold





49





47





12





6









Total interest income





23,477





23,085





23,346





23,852





23,842



Interest expense:

































Interest on deposits





2,092





2,614





2,758





2,864





3,503



Interest on short-term borrowings





71





91





82





102





573



Interest on long-term debt





103





127





139





231





205



Interest on subordinated debt





443





444





443





148









Total interest expense





2,709





3,276





3,422





3,345





4,281



Net interest income





20,768





19,809





19,924





20,507





19,561



Provision for loan losses





(500)





1,050





1,050





1,800





3,500



Net interest income after provision for loan losses





21,268





18,759





18,874





18,707





16,061



Noninterest income:

































Service charges, fees, commissions and other





1,184





2,187





1,584





1,433





1,605



Merchant services income





93





101





137





472





114



Commissions and fees on fiduciary activities





533





551





575





493





506



Wealth management income





358





392





272





231





387



Mortgage banking income





312





658





488





312





137



Increase in cash surrender value of life insurance





219





202





192





193





187



Interest rate swap revenue





797





374





1,228





249





470



Net gain (loss) on investment securities





21





76





2





39





(123)



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











194





457











267



Total noninterest income





3,517





4,735





4,935





3,422





3,550



Noninterest expense:

































Salaries and employee benefits expense





6,570





7,400





7,831





7,048





7,856



Net occupancy and equipment expense





3,267





3,588





3,131





3,042





3,079



Amortization of intangible assets





125





144





154





154





154



Other expenses





2,667





2,869





2,858





2,998





2,562



Total noninterest expense





12,629





14,001





13,974





13,242





13,651



Income before income taxes





12,156





9,493





9,835





8,887





5,960



Income tax expense





2,678





1,308





1,523





1,311





679



Net income



$

9,478



$

8,185



$

8,312



$

7,576



$

5,281



Other comprehensive income:

































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



$

(7,749)



$

(305)



$

(639)



$

2,094



$

7,629



Reclassification adjustment for gains included in net income











(194)





(457)











(267)



Change in benefit plan liabilities











(1,398)





















Change in derivative fair value





242





(41)





(137)





(543)





1,036



Income tax related to other comprehensive income 





(1,576)





(407)





(260)





326





1,765



Other comprehensive income, net of income taxes





(5,931)





(1,531)





(973)





1,225





6,633



Comprehensive income



$

3,547



$

6,654



$

7,339



$

8,801



$

11,914



Share and per share amounts:

































Net income - basic



$

1.31



$

1.13



$

1.14



$

1.03



$

0.72



Net income - diluted





1.31





1.13





1.14





1.03





0.71



Cash dividends declared



$

0.37



$

0.36



$

0.36



$

0.36



$

0.36



Average common shares outstanding - basic





7,210,952





7,222,810





7,277,189





7,341,636





7,379,438



Average common shares outstanding - diluted





7,246,016





7,257,874





7,312,253





7,376,700





7,405,703



 

 

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



2021



2020



2020



2020



2020



Net interest income:

































Interest income

































Loans, net:

































Taxable



$

20,900



$

20,705



$

20,901



$

21,160



$

20,917



Tax-exempt





1,101





1,124





1,109





1,191





1,305



Total loans, net





22,001





21,829





22,010





22,351





22,222



Investments:

































Taxable





1,266





1,137





1,273





1,445





1,571



Tax-exempt





494





385





354





374





378



Total investments





1,760





1,522





1,627





1,819





1,949



Interest on interest-bearing balances in other banks





2





4





4





5





24



Federal funds sold





49





47





12





6









Total interest income





23,812





23,402





23,653





24,181





24,195



Interest expense:

































Deposits





2,092





2,614





2,758





2,864





3,503



Short-term borrowings





71





91





82





102





573



Long-term debt





103





127





139





231





205



Subordinated debt





443





444





443





148









Total interest expense





2,709





3,276





3,422





3,345





4,281



Net interest income



$

21,103



$

20,126



$

20,231



$

20,836



$

19,914



Loans, net:

































Taxable





4.13

%



3.98

%



4.04

%



4.19

%



4.60

%

Tax-exempt





3.56

%



3.80

%



3.70

%



3.75

%



3.88

%

Total loans, net





4.09

%



3.97

%



4.02

%



4.16

%



4.55

%

Investments:

































Taxable





1.97

%



2.03

%



2.09

%



2.24

%



2.36

%

Tax-exempt





2.78

%



3.30

%



3.56

%



3.46

%



3.10

%

Total investments





2.15

%



2.25

%



2.30

%



2.41

%



2.48

%

Interest-bearing balances with banks





0.06

%



0.06

%



0.08

%



0.16

%



1.17

%

Federal funds sold





0.10

%



0.10

%



0.11

%



0.14

%







Total interest-bearing assets





3.55

%



3.49

%



3.73

%



3.90

%



4.25

%

Interest expense:

































Deposits





0.46

%



0.57

%



0.65

%



0.72

%



0.92

%

Short-term borrowings





0.57

%



0.72

%



0.65

%



0.44

%



1.62

%

Long-term debt





2.88

%



2.70

%



2.59

%



1.13

%



2.54

%

Subordinated debt





5.38

%



5.38

%



5.37

%



5.38

%







Total interest-bearing liabilities





0.57

%



0.67

%



0.76

%



0.75

%



1.01

%

Net interest spread





2.98

%



2.81

%



2.97

%



3.15

%



3.24

%

Net interest margin





3.15

%



3.00

%



3.19

%



3.36

%



3.50

%

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)

 









































Mar 31



Dec 31



Sept 30



June 30



Mar 31



At period end



2021



2020



2020



2020



2020



Assets:

































Cash and due from banks



$

30,786



$

29,287



$

42,940



$

27,146



$

22,181



Interest-bearing balances in other banks





8,432





15,905





20,972





14,788





13,146



Federal funds sold





264,100





183,000





102,300





10,000









Investment securities:

































Available-for-sale





333,753





295,911





247,404





287,709





302,884



Equity investments carried at fair value





159





138





341





338





299



Held-to-maturity





7,166





7,225





7,297





7,401





7,520



Loans held for sale





458





837





2,161





1,939





270



Loans, net





2,179,534





2,177,982





2,188,463





2,181,909





2,023,155



Less: allowance for loan losses





26,783





27,344





26,584





26,957





25,686



Net loans





2,152,751





2,150,638





2,161,879





2,154,952





1,997,469



Premises and equipment, net





46,777





47,045





47,926





48,378





48,619



Accrued interest receivable





8,206





8,255





8,595





8,368





7,283



Goodwill





63,370





63,370





63,370





63,370





63,370



Other intangible assets, net





835





960





1,104





1,257





1,411



Bank owned life insurance





42,530





42,316





37,099





35,412





35,224



Other assets





36,146





38,915





62,274





39,366





44,096



Total assets



$

2,995,469



$

2,883,802



$

2,805,662



$

2,700,424



$

2,543,772



Liabilities:

































Deposits:

































Noninterest-bearing



$

661,262



$

622,475



$

579,196



$

575,206



$

467,315



Interest-bearing





1,889,154





1,814,638





1,777,688





1,634,918





1,542,680



Total deposits





2,550,416





2,437,113





2,356,884





2,210,124





2,009,995



Short-term borrowings





51,980





50,000





50,000





50,000





164,150



Long-term debt





14,264





14,769





20,269





60,938





32,250



Subordinated debt





33,000





33,000





33,000





33,000









Accrued interest payable





1,120





736





1,289





872





1,336



Other liabilities





27,358





31,307





30,597





33,446





29,978



Total liabilities





2,678,138





2,566,925





2,492,039





2,388,380





2,237,709



Stockholders' equity:

































Common stock





14,423





14,414





14,468





14,649





14,670



Capital surplus





128,854





129,291





130,038





133,002





133,159



Retained earnings





177,836





171,023





165,437





159,739





154,806



Accumulated other comprehensive gain (loss)





(3,782)





2,149





3,680





4,654





3,428



Total stockholders' equity





317,331





316,877





313,623





312,044





306,063



Total liabilities and stockholders' equity



$

2,995,469



$

2,883,802



$

2,805,662



$

2,700,424



$

2,543,772



 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)

 







































Mar 31



Dec 31



Sept 30



June 30



Mar 31



Average quarterly balances



2021



2020



2020



2020



2020



Assets:

































Loans, net:

































Taxable



$

2,054,120



$

2,068,600



$

2,059,357



$

2,032,852



$

1,830,455



Tax-exempt





125,352





117,650





119,202





127,624





135,260



Total loans, net





2,179,472





2,186,250





2,178,559





2,160,476





1,965,715



Investments:

































Taxable





260,238





223,333





241,904





260,160





267,179



Tax-exempt





72,177





46,361





39,591





43,466





49,046



Total investments





332,415





269,694





281,495





303,626





316,225



Interest-bearing balances with banks





13,260





26,232





20,250





12,595





8,263



Federal funds sold





191,720





185,874





45,439





17,480









Total interest-bearing assets





2,716,867





2,668,050





2,525,743





2,494,177





2,290,203



Other assets





197,178





204,348





199,433





210,017





193,507



Total assets



$

2,914,045



$

2,872,398



$

2,725,176



$

2,704,194



$

2,483,710



Liabilities and stockholders' equity:

































Deposits:

































Interest-bearing



$

1,833,661



$

1,829,248



$

1,690,440



$

1,605,841



$

1,524,265



Noninterest-bearing





634,806





596,880





587,448





574,194





462,508



Total deposits





2,468,467





2,426,128





2,277,888





2,180,035





1,986,773



Short-term borrowings





50,470





50,000





50,038





93,447





142,121



Long-term debt





14,509





18,699





21,354





82,117





32,477



Subordinated debt





33,000





33,000





33,000





11,074









Other liabilities





23,371





28,946





30,454





28,798





21,096



Total liabilities





2,589,817





2,556,773





2,412,734





2,395,471





2,182,467



Stockholders' equity





320,228





315,625





312,442





308,723





301,243



Total liabilities and stockholders' equity



$

2,910,045



$

2,872,398



$

2,725,176



$

2,704,194



$

2,483,710



 

 

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)

 















































Mar 31



Dec 31



Sept 30



June 30



Mar 31







2021



2020



2020



2020



2020



At quarter end

































Nonperforming assets:

































Nonaccrual/restructured loans



$

8,073



$

9,799



$

10,692



$

12,214



$

10,760



Accruing loans past due 90 days or more





172





71





52





291





423



Foreclosed assets





131





632





649





964





903



Total nonperforming assets



$

8,376



$

10,502



$

11,393



$

13,469



$

12,086





































Three months ended

































Allowance for loan losses:

































Beginning balance



$

27,344



$

26,584



$

26,957



$

25,686



$

22,677



Charge-offs





195





522





1,542





617





798



Recoveries





134





232





119





88





307



Provision for loan losses





(500)





1,050





1,050





1,800





3,500



Ending balance



$

26,783



$

27,344



$

26,584



$

26,957



$

25,686



 

 

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



2021



2020



2020



2020



2020



Core net income per share:

































Net income GAAP



$

9,478



$

8,185



$

8,312



$

7,576



$

5,281



Adjustments:

































Less: gain on investment securities





(21)





(270)





(459)





(39)





(144)



Add: gain on investment securities tax adjustment





4





57





96





8





30



Net income Core



$

9,461



$

7,972



$

7,949



$

7,545



$

5,167



Average common shares outstanding - basic





7,210,952





7,222,810





7,277,189





7,341,636





7,379,438



Core net income per share



$

1.31



$

1.10



$

1.09



$

1.03



$

0.70



Tangible book value:

































Total stockholders' equity



$

317,331



$

316,877



$

313,623



$

312,044



$

306,063



Less: Goodwill





63,370





63,370





63,370





63,370





63,370



Less: Other intangible assets, net





835





960





1,104





1,257





1,411



Total tangible stockholders' equity



$

253,126



$

252,547



$

249,149



$

247,417



$

241,282



Common shares outstanding





7,211,293





7,215,202





7,242,326





7,332,856





7,343,240



Tangible book value per share



$

35.10



$

35.00



$

34.40



$

33.74



$

32.86



Core return on average stockholders' equity:

































Net income GAAP



$

9,478



$

8,185



$

8,312



$

7,576



$

5,281



Adjustments:

































Less: gain on investment securities





(21)





(270)





(459)





(39)





(144)



Add: gain on investment securities tax adjustment





4





57





96





8





30



Net income Core



$

9,461



$

7,972



$

7,949



$

7,545



$

5,167



Average stockholders' equity



$

320,228



$

315,625



$

312,442



$

308,723



$

301,243



Core return on average stockholders' equity





11.98

%



10.05

%



10.12

%



9.83

%



6.90

%

Return on average tangible equity:

































Net income GAAP



$

9,478



$

8,185



$

8,312



$

7,576



$

5,281



Average stockholders' equity



$

320,228



$

315,625



$

312,442



$

308,723



$

301,243



Less: average intangibles





64,268





64,402





64,551





64,704





64,879



Average tangible stockholders' equity



$

255,960



$

251,223



$

247,891



$

244,019



$

236,364



Return on average tangible stockholders' equity





15.02

%



12.96

%



13.34

%



12.49

%



8.99

%

Core return on average tangible stockholders' equity:

































Net income GAAP



$

9,478



$

8,185



$

8,312



$

7,576



$

5,281



Adjustments:

































Less: gain on investment securities





(21)





(270)





(459)





(39)





(144)



Add: gain on investment securities tax adjustment





4





57





96





8





30



Net income Core



$

9,461



$

7,972



$

7,949



$

7,545



$

5,167



Average stockholders' equity



$

320,228



$

315,625



$

312,442



$

308,723



$

301,243



Less: average intangibles





64,268





64,402





64,551





64,704





64,879



Average tangible stockholders' equity



$

255,960



$

251,223



$

247,891



$

244,019



$

236,364



Core return on average tangible stockholders' equity





14.99

%



12.62

%



12.76

%



12.44

%



8.79

%

Core return on average assets:

































Net income GAAP



$

9,478



$

8,185



$

8,312



$

7,576



$

5,281



Adjustments:

































Less: (gain) loss on investment securities





(21)





(270)





(459)





(39)





(144)



Add: (gain) loss on investment securities tax adjustment





4





57





96





8





30



Net income Core



$

9,461



$

7,972



$

7,949



$

7,545



$

5,167



Average assets



$

2,914,045



$

2,872,398



$

2,725,176



$

2,704,194



$

2,483,710



Core return on average assets





1.32

%



1.10

%



1.16

%



1.12

%



0.84

%



 

 

 

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



2021



2020



Core net income per share:















Net income (GAAP)



$

9,478



$

5,281



Adjustments:















Less: Gain on investment securities





(21)





(144)



Add: Gain on investment securities tax adjustment





4





30



Net income Core



$

9,461



$

5,167



Average basic common shares outstanding





7,210,952





7,379,438



Average diluted common shares outstanding





7,246,016





7,405,703



Core net income per share - basic



$

1.31



$

0.70



Core net income per share - diluted



$

1.31



$

0.70



 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)

 



The following table reconciles the non-GAAP financial measures of FTE net interest income for the three and twelve

months ended December 31, 2020 and 2019:

















Three months ended March 31



2021



2020



Interest income (GAAP)



$

23,477



$

23,842



Adjustment to FTE





335





353



Interest income adjusted to FTE (non-GAAP)





23,812





24,195



Interest expense





2,709





4,281



Net interest income adjusted to FTE (non-GAAP)



$

21,103



$

19,914



















 

The efficiency ratio is noninterest expenses, less amortization of intangible assets, as a percentage of FTE net interest

income plus noninterest income less gains on equity securities and gains on sale of assets. The following table reconciles

the non-GAAP financial measures of the efficiency ratio to GAAP for the three and twelve months ended December 31,

2020 and 2019:



















Three months ended March 31



2021



2020



Efficiency ratio (non-GAAP):















Noninterest expense (GAAP)



$

12,629



$

13,651



Less: amortization of intangible assets expense





125





154



Noninterest expense adjusted for amortization of assets expense (non-GAAP)





12,504





13,497



















Net interest income (GAAP)





20,768





19,561



Plus: taxable equivalent adjustment





335





353



Noninterest income (GAAP)





3,517





3,550



Less: net gains (loss) on equity securities





21





(123)



Less: net gains on sale of securities











267



Net interest income (FTE) plus noninterest income (non-GAAP)



$

24,599



$

23,320



















Efficiency ratio (non-GAAP)





50.83

%



57.88

%

















 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/peoples-financial-services-corp-reports-first-quarter-2021-earnings-301276060.html

SOURCE Peoples Financial Services Corp.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress ReleasesBanking/Financial Services
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!